Maja Pawinska Sims 14 Jun 2018 // 11:37PM GMT
LONDON — WPP shareholders expressed their disquiet around executive pay and how the marketing holding group has handled the departure of former CEO Sir Martin Sorrell at the holding company’s AGM this week.
Nearly 30% of shareholders voted against the company’s executive pay report, and, in a smaller protest, 16.6% voted against reappointing WPP chairman Robert Quarta to the board.
The AGM — WPP’s first without Sorrell for 33 years — was reported as being “lively”, with questions raised around Sorrell’s alleged misconduct, including payment of sex workers in petty cash and mistreatment of junior staff. Sorrell strenuously denies the allegations.
Quarta said that due to legal reasons he could not say anything more on the matter, although he added that the company was reviewing its policies around appropriate behaviour towards employees.
Sir John Hood, who heads WPP’s pay committee, told the meeting that bonuses would be capped at eight times base remuneration, leading to shouts from some shareholders that it was “too high”. Others queried Sorrell’s termination package from WPP, as well as his 2016 salary package, worth around £70 million, with one shareholder reported as calling it “obscene”.
After resigning in April, Sorrell announced this month that he was setting up a new venture, S4 Capital, which would be an international communications services company. Quarta noted at the AGM that Sorrell had said he would not compete directly with WPP.
Quarta also said that the search for a successor to Sorrell was “rapidly” moving ahead but it was unlikely there would be an announcement this month. It is thought that Mark Read, currently WPP’s co-chief operating offer, is the front runner for the job.
In response to ongoing speculation about the break-up of WPP, Read and Quarta both insisted that the £15.4bn company could continue in its current form. Read said at the meeting that WPP needed to find a “new beating heart” and would succeed without Sorrell.
Read also sent a note to all WPP employees this week with the emphasis on creating a workplace where there was mutual respect at all levels of the business. In the memo he said: "Although we can’t comment on specific allegations, I feel we should remind ourselves of and reinforce the kind of values we want and need to have within every part of our business: values of fairness, tolerance, kindness and – again – respect... We all want WPP and its agencies to continue to be home to the world’s best talent, which means creating a positive, supportive and inclusive culture in every office."