Reuters - Video

Edition: US | UK | IN | CN | JP

video Finance Videos

WPP shareholders reject Sorrell's $10.6 million pay

Wednesday, June 13, 2012 - 03:37

June 13 - Investors in the world's biggest advertising agency WPP rejected Chief Executive Martin Sorrell's $10.6 million pay award, after he sought to defend a big rise unlike some other British bosses who have taken cuts. Ciara Sutton reports.

▲ Hide Transcript

View Transcript

It wasn't the most high profile event in Dublin - a Catholic Convention took that honour. But the annual general meeting of advertising group WPP did embroil one of Europe's highest profile businessmen in the row over executive pay. Martin Sorrell is founder and chief executive of the agency and on the table was an offer to increase his pay by 60 percent Several advisory groups and leading shareholders said ahead of the meeting that the award was out of sync with the returns made to investors REPORTER TO CAMERA Martin Sorrell set up WPP in 1985 and he hasn't shyed away from the fight over his pay. He says his 10 and half million dollar salary is in line with US rivals and he deserves it for turning WPP into the world's leading advertising group. It's headquarters are here in Dublin - he moved it from London for tax reasons - and it now has 160,000 employees in 108 countries. The backlash over executive pay stems from earlier controversy over the level of pay awarded to bankers. But the so-called "shareholder spring" has now become a global phenomenum - fuelled by poor share prices. Five companies in the UK have been hit by investor revolts. And Andrew Moss, the chief executive of British insurer Aviva, stepped down after shareholders voted against his remuneration plans. Michael Ingram is from BGC Partners in London. SOUNDBITE: Michael Ingram, Market analyst, BGC Partners, saying (English): "You've got to separate the financial performance of the company from the market performance. FTSE100 companies last year in aggregate earned 17% more than they did the previous year and if you factor in companies which are executing turnarounds it was 28%, so you know is this rise execessive, I think that's actually arguable." But a new survey by Manifest has also reignited the row in the UK. The total remuneration packages of FTSE 100 chief executives has risen by 10 percent - that's 3 percent less than last year but five times the average increase in earnings across the economy. In 1998 their pay was 47 times their employee's average earnings. In 2011 it was 139 times bigger. Sarah Wilson is Chief Executive of Manifest. SOUNDBITE: SARAH WILSON, CHIEF EXECUTIVE, MANIFEST, SAYING (English): "Shareholders really do not like being taken advantage of, and that's the problem that Martin Sorrell is facing today., is that he really underestimated what shareholders think about this issue. He's blamed virtually everybody apart from the shareholder company relationship." Martin Sorrell is reportedly among the top three earners -- behind Barclay's boss Bob Diamond and slightly ahead of AstraZeneca's David Brennan. He announced his early departure in April after shareholder disquiet. After meeting in Dublin for several hours 60 percent of shareholders voted against Sorrell's pay award. It's not binding so he may still get his increase. But WPP has promised to take note of the revolt. This is one spring which could stretch into summer and beyond. Ciara Sutton, Reuters.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

WPP shareholders reject Sorrell's $10.6 million pay

Wednesday, June 13, 2012 - 03:37