Almost a third of WPP investors have failed to support the firm’s pay plans, which could see former boss Sir Martin Sorrell pick up almost £20m over the next five years, depending on company performance.
The advertising giant’s AGM in London was shown the results of proxy votes on the remuneration report, indicating 30% had either voted against or abstained.
A number of individual investors registered their protest at the long-term awards due to ex-chief executive Sir Martin over five years despite his shock departure in April from the firm he founded.
In addition to the nearly £20m possible payout he could get over the next five years, Sir Martin is also in line to receive £14m from WPP, having received £48.1m the year before.
He quit as the company completed an investigation into allegations of personal misconduct – claims he denied.
But chairman Roberto Quarta, who also faced opposition to his re-election from shareholders, said the company’s hands were tied over the payment plan because it was in Sir Martin’s contract.
Around 16% of investors in the FTSE 100 firm rejected his re-election, for failing to adequately prepare for Sir Martin’s replacement and for over-committing with other roles.
Image: Shareholders attend the AGM of WPP
He further said, in his opening remarks, that he was unable to expand on the company’s investigation because of legal advice concerning data protection laws.
He told shareholders: “I would like to address some of the questions – and occasional misconceptions – about the resignation of our former chief executive at the conclusion of an investigation into an allegation of personal misconduct.
“The process that the board followed in response to the allegation against Sir Martin was robust both from a governance and legal perspective.
“It treated him just as any other employee would have been treated in the same circumstances.
“Although we have confirmed that the matter was financially wholly immaterial to WPP, we understand why some would like the company to disclose or confirm further details of the allegation.
“However, right from the outset, the board has acted in accordance with unequivocal legal advice that data protection law prohibits us from doing so.
“And as a group entrusted with our client and employee data, we take that responsibility very seriously.”
Quarta also raised allegations made by the Financial Times about what he called “Martin’s behaviour towards employees”.
He said: “While we are not able to comment on individual cases or specific allegations, I want to make clear that at WPP… everyone is entitled to be treated with respect.
Sir Martin has dismissed all allegations about his behaviour, with a spokesman saying he “strenuously” denies them.
Since his departure from WPP, the 73-year old has begun a new business venture.
Mr Quarta told shareholders at the AGM in London that Sir Martin had given assurances he would not be competing against WPP.
But the communications group is relying heavily on confidentiality agreements to stop any potential competition with Sir Martin, who earlier this month confirmed he was heading a newly formed “multinational communication services business” named S4.
When asked about why a full non-compete clause was never drawn up, the chairman said the board had run out of time when Sir Martin’s surprise departure took place.
“We were working on but we didn’t get to it, and by the time this occurred we just weren’t there yet.”
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“As I’ve said – we’re all bound by confidentiality agreements and certainly Martin has an awful lot of knowledge about our business, how our operations are, about our people and so forth,” Mr Quarta said.
“And as I said I don’t think he’d want to jeopardise that going forward.”
Source: Sky