Shareholders revolt over executive pay rise at WPP
03 Jun 2011
A shareholder revolt has seen over 40 per cent of the investors reject executive pay hikes awarded by Sir Michael Sorrel's UK advertising conglomerat, WPP, to its directors last year.
Around 42 per cent of shareholders who voted before yesterday's AGM in Dublin refused to endorse WPP's remuneration report, which saw company directors receive a total of £7.88 million in 2010. The dissenters ire mostly stemmed from one director receiving a pay rise of more than 30 per cent for this year.
Mark Read, the chief executive of WPP Digital, was awarded a 30.7 per cent pay hike by the company's remuneration committee, which took his basic salary from £325,000 to £425,000. Read, whose remuneration package was £872,000 which included a £219,000 bonus last year, was deemed to have an "uncompetitive" salary in comparison to his peers in the market place.
Payouts took off at WPP last year with the recovery in the global economy, that led to a 28-per cent rise in pre-tax profits, with CEO Sir Martin's package soaring more than 70 per cent to £4.5 million, thanks to a £1.9-million bonus.
Jeffrey Rosen, chairman of the compensation committee, said in WPP's 2010 annual report published in April, "Given the increased importance of digital strategy to the group and Mr Read's personal development, an increase to his remuneration was in order."
This was Read's first pay rise since 2009.
