8th Jun 2016 13:59
LONDON (Alliance News) - Holders of over a third of WPP PLC shares failed to back Chief Executive Martin Sorrell's controversial pay package at the company's annual general meeting Wednesday, as the company said revenue rose in its first four months.
Excluding holders who opted not to vote, 33.5% of investors failed to back the pay deal at the meeting. Including abstentions, 34.2% of WPP investors failed to support the pay report.
Sorrell's pay package for 2015 is set to jump by more than 60% to GBP70.4 million, compared to GBP42.7 million the year before, making him by far the best paid chief executive in the FTSE 100. This predominantly is a result of a big step up in long-term incentives, as his base salary package remained at GBP1.15 million.
Shareholders have rebelled against Sorrell's pay in the past. In 2012 60% of shareholders voted against his remuneration package, which led to the company to cut Sorrell's base salary and pension. Whilst that seems to have quelled some shareholders opposition, there remains a substantial portion of investors who are unhappy.
Ahead of the meeting, Standard Life Investments, with nearly 17 million shares in WPP, or 1.3%, had said it would vote against the remuneration report. It said in a statement that the current policy could result in a chief executive receiving fifteen times his base salary of more than GBP1 million pounds, should all performance conditions be met.
With Sorrell approaching the point where he will be leaving the role, Standard Life Investments said the current policy is "more than would be required to recruit, retain or motivate even someone with the redoubtable talents of Mr Sorrell."
Shareholder Hermes also said it would not support the pay package ahead of the meeting, as although it acknowledged WPP's strong performance, it said the legacy incentive plan that was introduced in 2009 has "once again led to what we regard as an excessive level" of chief executive remuneration.
In a statement ahead of the meeting, WPP said its revenue rose nearly 11% in the first four months of 2016, with its pattern of revenue and net sales generally the same as in the first quarter of the year alone, but with April "marginally softer".
The media buying giant said revenue rose 10.7% to GBP4.18 billion in the first four months from a year before, or up 8.8% at constant currency due to the weakness of sterling against the dollar and euro.
On a like-for-like basis, stripping out acquisitions and currency fluctuations, revenue was up 4.3%, WPP said.
WPP said April was "marginally softer" as its advertising, data investment management and branding and identity businesses were slightly slower, albeit against a very strong comparative the previous year.
The first four months saw like-for-like revenue and net sales growth in all of WPP's regions and business sectors, with continued strong growth in the US and Latin America "improving markedly" in the month.
WPP reiterated its forecasts for its full year, seeing like-for-like revenue growth up well over 3%, and net sales growth over 3%.
Additionally, WPP reiterated that it now expects to reach its newly targeted pay-out ratio of 50% a year ahead of schedule, to be achieved by the end of 2016.
Shares in WPP were down 0.2% at 1,595.50 pence Wednesday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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