UK

Sir Martin Sorrell Suffers Humiliating Pay Revolt By WPP Shareholders

13/06/2012 15:20 BST

Advertising boss Sir Martin Sorrell has suffered a major rebuke in one of the biggest pay revolts of the current "shareholder spring".

Some 59.5% of proxy investor votes went against WPP's remuneration report, which includes a £6.8 million package for Sir Martin, which he defended as a reward for "performance, not failure".

The vote, revealed at WPP's annual meeting in Dublin, is not binding and will not force WPP to reset its pay policy for last year.

Louise Rouse, director of engagement at investment campaigner FairPensions, who attended the meeting, said: "It is difficult to know whether the WPP board underestimated the level of shareholder anger or simply chose to ignore it."

The meeting in Dublin followed months of shareholder ire over executive pay with the likes of Aviva, Trinity Mirror, Barclays, William Hill, Xstrata and Premier Foods all facing significant votes against their pay reports.

Shareholder advisory groups, including the Association of British Insurers (ABI) and Pensions Investment Research Consultants (Pirc), had urged members not to back WPP's "excessive" remuneration report.

Pirc said "concerns lie in excessiveness and the balance between reward and incentive".

Writing in the Financial Times last week, Sir Martin issued a robust defence of his pay, warning that if Britain wanted high achievers in the private sector, it needed to pay competitively.

He told the paper: "The compensation debate in the UK now seems to have shifted from undeserving bankers paid for failure and from payment for performance to what is fair pay."

However, chairman Philip Lader, a former White House deputy chief of staff, took a more conciliatory approach and said all pay deals were open to further "deliberations".

Other casualties of the so-called shareholder spring have included Andrew Moss, who quit as chief executive of Aviva, and Sly Bailey, who will leave her post as boss of Trinity Mirror.

Business Secretary Vince Cable is currently drawing up plans to give greater power to shareholders but is understood to be considering watering down proposals for a binding annual vote in favour of a poll every three years.

It had been feared that a binding annual vote would make investors less inclined to protest in case they destabilised management teams and would add to bureaucracy.