Sir Martin Sorrell, CEO of the world's largest advertising agency group, has been witnessing immense criticism centering his £60 million superfluous bonus deal. His payment under WPP's Leap Scheme will surpass last year's payment of £43 million. The pay package will even leave far behind the average annual salary for FTSE 100 chief executives of £4.96 million with a huge margin.
The WPP founder will be awarded with 3.55 million shares subject to meeting targets dating back five years. Value of the shares has been estimated to £55.5 million at Sunday's price.
He will be also entitled to receive a short-term incentive of £3.6 million and dividend equivalent payment of £5.6 million. Combining incentives and other payments with his basic salary and pension contributions, his total pay package has been estimated to £66 million, reports This is Money.
His pay package is going to be announced at the start of the AGM season for the UK's stock market-listed companies. During this period of year, generous pay rises, over-stretched directors and boardroom succession planning appear as the main topic for discussion. However, the so called Leap Scheme may get postponed through a share holder rebellion witnessed in 2012. More than 60% investors have voted against a similar deal in that year, according to a report published in The Guardian. Pay packet reaching £70 million for a year's contribution cannot possibly offer good value for share holders. Executive pay has reached sky high levels at many FTSE companies, but WPP's move has exceeded the pale. WPP is probably ignoring the shareholders' protests suggesting a worrying disregard for their views, reports Business Insider quoting Catherine Howarth, chief executive of ShareAction, a lobby group which promotes responsible investment. Meanwhile, a WPP's emailed statement reveals that Sir Martin Sorrell's remuneration for 2015 is not due to be disclosed until publication of the Annual Report at the end of April. However, the statement hints that majority of the remuneration figure will relate to a five years' co-investment scheme. The scheme is wholly performance based and aligned with shareholders' interests, cites the statement. WPP's share prices have been witnessed to rise by 98% between 2011 and 2015 while 5.8% increase in FTSE 100 has been recorded, argues WPP in support of the pay package. The pay package is scheduled to be announced later this week.
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