The possibility of a substantial number of shareholders voting
against Mr. Sorrell's remuneration -- which awards him a total pay
package of $20 million -- is becoming more real as the meeting
approaches. There is a possibility that his package could be
modified as a result of the gathering, which is held in Ireland
because WPP Group moved its corporate headquarters from London to
Dublin in 2008 in order to minimize its tax bill.
A growing group of advisory bodies are expressing their
opposition to the level of WPP Group executive pay. These include
Pensions Investment Research Consultants, which advised members to
oppose the entire WPP Group directors' remuneration report because
of "serious concerns over excessiveness in the policy." A statement
from P.I.R.C. said, "The poor acquisition record of WPP shows that
the company has been better at enriching the shareholders of the
companies and partnerships it has bought, rather than the
shareholders of WPP."
P.I.R.C. added, "Management are being awarded new shares at such
a rate that it has the effect of making up for prior year
underachievement on those that they already hold. This is not an
alignment of interest with ordinary public shareholders."
In addition, the Association of British Insurers has expressed
its disapproval to members by issuing a "red top" warning over the
WPP Group pay report -- its strongest mark of disapproval.
WPP Group, however, has so far stood firm in its defense of Mr.
Sorrell's remuneration. In response to criticism from the
Institutional Shareholders Services, the company said in a
statement, "We are disappointed that the I.S.S. has chosen to view
the remuneration report domestically with no regard to the global
market in which WPP operates."
WPP has been swept up in a broader U.K. shareholder's revolt, in
which Mr. Sorrell's compensation is being compared to other U.K.
ceos, rather than to his peer group of well-paid holding company
leaders such as Omnicom Group's CEO John Wren and Interpublic CEO
The Manifest/MM&K Executive Director Total Remuneration
Survey 2012 shows that Martin Sorrell is the second highest-paid
executive in the U.K., behind Bob Diamond, CEO of Barclays
Jeffrey Rosen, chairman of WPP Group's remuneration committee,
faces a vote for reappointment at the AGM tomorrow.