UK pension fund group asks members to reject WPP chief’s pay

WPP founder and CEO Martin Sorrell, speaks at the British chambers of Commerce annual conference in London Britain, March 3, 2016. REUTERS/Peter Nicholls/File photo

BENGALURU: A group of UK-based public sector pension funds urged its members to vote against WPP Plc’s remuneration report at the advertising company’s annual meeting, citing excessive pay offered to chief executive Martin Sorrell.

Sorrell’s pay has come under scrutiny, with some shareholder advisory groups asking investors to reject his compensation at the company’s annual general meeting on June 8.

Local Authority Pension Fund Forum (LAPFF) said Sorrell’s pay rose by 56% over the past five years to £70.4mil (RM414.7mil), which is twice the year-on-year average increase in the company’s total shareholder return over the same period.

Sorrell’s total variable pay is more than 58 times his £1.15mil (RM6.77mil) salary, the group said, adding that he was among the top 10 highly paid CEOs of the FTSE 100 companies.

LAPFF represents 70 pension funds.

“Martin Sorrell’s remuneration is derived from the formulaic application of long-term co-investment scheme approved by an 83% vote in favour by shareholders in 2009,” a WPP spokesman told Reuters.

The company does not comment on individual shareholder advisory bodies’ recommendations, he said.

Campaign group ShareAction also disapproved Sorrell’s pay on Monday, while PIRC, an advisory firm and LAPFF’s research partner, asked WPP shareholders last week to oppose it.

However, proxy advisory firm Institutional Shareholder Services (ISS) asked shareholders last month to vote in favour of the remuneration report.

A number of big British companies are facing opposition from shareholders to executive pay packages this year in a resurgence of investor activism against excessive boardroom salaries.

In April, BP shareholders voted against chief executive Bob Dudley’s US$20mil pay deal for 2015 after the company made a record annual loss.

WPP’s stock was up 0.44% at 1,588 pence at 1326 GMT on Monday on the London Stock Exchange. - Reuters