WPP's Annual Meeting in Dublin Is Likely to Draw Protesters
Martin Sorrell, CEO of the world's largest communications powerhouse, WPP Group, is expected to face protestors at the company's annual general meeting in Dublin tomorrow.
A number of pressure groups plan to travel to Dublin to attend the meeting, including Fair Pensions, an organization that campaigns for responsible investment, and Libcon, which describes itself as a "British left-wing news, opinion, activism and conspiracy-mongering" group.
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 Michael Roth.
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 Bank.
Jeffrey Rosen, chairman of WPP Group's remuneration committee, faces a vote for reappointment at the AGM tomorrow.