Yahoo Finance WPP Confirms Succession Plan For £70m Sorrell
WPP (LSE: WPP.L - news) has started identifying possible successors to its chief executive Sir Martin Sorrell - also confirming he received the second-biggest payday in history for the boss of a UK-listed company.
The world’s biggest marketing services company, which Sir Martin, now 71, founded in 1986, said in its annual report it was looking both inside and outside the firm for candidates as Sky News first reported on Thursday .
Roberto Quarta, the industrialist who became chairman of WPP last year, said that while the process had begun there was no timescale involved.
He said of the retirement-planning exercise: "Whether, in Sir Martin's case, that happens tomorrow, in one, two, three, four or five years, or even over a longer period, we have already begun to identify internal and external candidates who should be considered."
The process reflects a desire among some City investors for greater clarity about the company’s plans for life after Sir Martin.
The WPP chief, who undertakes a famously intensive schedule of international travel across its global network, has no intention of retiring.
However, the most closely watched aspect of WPP’s annual report was its section on boardroom pay, which confirmed Sir Martin was awarded a total package for 2015 of just over £70m.
The vast majority of that will be from a long-term incentive scheme called Leap, which was approved by a majority of WPP shareholders in 2009 but which is being phased out after subsequent investor feedback.
The report said: "While the value of Sir Martin Sorrell's award is very large, it was the result of an outstanding set of returns to share owners."
Some investors have grumbled privately about Sir Martin’s huge pay deals while supporting resolutions on remuneration because of the consistent rise in dividend payouts that they have enjoyed.
This week, the WPP chief again defended his remuneration, saying that he made no apology for the company’s continued success.
Sir Martin’s pay deal is nevertheless a sensitive issue - despite WPP’s record performance in 2015 - because of the hardening mood in the City to multimillion-pound packages for public company bosses.
On Thursday, Weir Group (Other OTC: WEIGF - news) , an oil and gas engineering firm, saw more than 70% of investors vote down its forward-looking pay policy over its plans to award share bonuses with no link to the company’s performance.
Shire (Xetra: S7E.DE - news) , the pharmaceuticals group, won an advisory vote on last year’s pay package for chief executive Flemming Orskov by the narrowest of margins.
In recent weeks, BP and Smith & Nephew (LSE: SN.L - news) have been among the FTSE-100 companies which have witnessed humiliating pay rebellions.
Under WPP’s new executive pay scheme, which will kick in in 2018, the maximum potential payout to Sir Martin will be reduced to roughly £20m each year.
