WPP CEO Sorrell Gets $50.6 Million Award After Stock GainsBy and
Reward is maximum available to CEO, still drops 34% from 2016
Advertising chief has met criticism over his pay package
WPP Plc Chief Executive Officer Martin Sorrell received 41.6 million pounds ($50.6 million) of stock as an annual award under the advertising company’s remuneration plan, benefiting from rising earnings and share price.
The award was the maximum available for Sorrell under a reward program that started in 2012 and ended in 2016, WPP said in a statement Thursday. The CEO’s reward declined 34 percent from 62.8 million pounds a year earlier.
The payout was based on an incentive plan linked to financial targets. WPP, whose agencies include Ogilvy & Mather and Young & Rubicam, says the amounts paid to Sorrell and other company executives reflect the superior returns generated for investors. WPP’s shares rose 169 percent over a five-year period, beating the 28 percent gain by the FTSE 100 index, WPP said.
Sorrell, Britain’s highest-paid CEO in several years, has become the focus of investor concerns over executives’ pay, with activists campaigning against some remuneration arrangements they deem excessive. Last year, about 33 percent of shareholders of the world’s biggest advertising company voted against Sorrell’s total pay package, which topped 70 million pounds.
Stefan Stern, director of the U.K.’s High Pay Centre, said the large reduction in Sorrell’s 2016 bonus payment poses questions about the way some of the performance-based awards are put together. “Was he really 30 million pounds or so worse this year than last year? What is the rationale for such a large variation in pay?” he said.
Sorrell’s award declined because he had pledged fewer shares for the incentive program than for the previous year, WPP said.