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WPP's Sorrell defends £70m pay package

Do Not UseDo Not Use 28/04/2016
Martin Sorrell pointing on a stage © Reuters Martin Sorrell pointing on a stage

WPP chief executive Sir Martin Sorrell has defended his pay package worth up to £70m.

Martin Sorrell pointing on a stage © Reuters Martin Sorrell pointing on a stage

Sir Martin, who has previously faced shareholder revolts over his pay, said he was "not embarrassed" by the success of the company he founded.

He said his pay was based on the performance of WPP, the world's largest advertising group.

His comments came as WPP reported a 5.1% increase in quarterly revenues to £3.1bn compared with last year.

Sir Martin told BBC Radio 4's Today programme: "I'm not embarrassed about the growth of the company from two people in one room in Lincoln's Inn Fields in 1985 to 190,000 people in 112 countries and a leadership position in our industry, which I think is important."

Meanwhile, Royal London Asset Management said on Thursday it would vote against the 2015 remuneration reports at Standard Chartered and Reckitt Benckiser.

Ashley Hamilton Claxton, corporate governance manager at Royal London, said investors were objecting to plans to award bumper packages in the face of underwhelming performance.

Profile: Sir Martin Sorrell

Sir Martin's pay has previously sparked controversy at WPP, with nearly 60% of shareholders voting against his proposed remuneration package, worth £6.8m, in 2012.

His latest package makes him the best-paid chief executive on the FTSE 100, with much of the £70m payment consisting of a £62.8m long-term bonus.

Sir Martin's annual salary was £1.15m, with the rest consisting of short-term bonuses and other benefits.

WPP, which employs about 190,000 people worldwide, has expanded rapidly in recent years. It brought in $1.8bn worth of revenue from new advertising customers in the first three months of this year.

Growth has been particularly pronounced in the US, UK and western Europe, the company said.

Shareholder revolts

Shareholders of other companies have also expressed anger about executive pay.

On Thursday, 72% of shareholders of engineering firm Weir Group voted against the firm's pay policy.

The company's board now intends to discuss alternative plans with shareholders.

Also on Thursday, 49% of investors at Shire voted against a 25% pay increase for chief executive Flemming Ornskov.

Last month 59% of BP shareholders voted against a 20% pay rise for chief executive Bob Dudley, that would have netted him £14m.

The vote against the increase was non-binding, but BP's chairman said at the annual meeting that the sentiment would be reflected in future pay deals.

Last week, Anglo American said it would be "mindful" of concerns about executive pay after more than two fifths of investors voted against a remuneration deal that included £3.4m for chief executive Mark Cutifani.

During the financial crisis, 90% of shareholders at Royal Bank of Scotland rebelled against then chief executive Fred Goodwin's pension package.

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