WPP Profits Reward Sorrell: Best-Paid CEO In Advertising

Martin-SorrellWPP had record revenue and profits in 2012 and company CEO Martin Sorrell received a generous pay bump -- nearly $28 million in total remuneration, up almost 48% from the prior year. That made him the highest-paid holding company CEO in Adland, dethroning Miles Nadal, CEO of MDC Partners, who had the top pay for 2011.

The huge payday for Sorrell came despite protests from major WPP shareholders that Sorrell’s compensation was too high by executive pay standards for the UK, where the company is based. Last year, nearly 60% of WPP shareholders voted against the company’s 2011 executive pay plan in a non-binding vote.

But in a bid to assuage investors, WPP reported in its 2012 Annual Report and Accounts that the CEO’s remuneration package has been reduced going forward. Effective at the start of 2013, Sorrell’s base salary has been reduced by about 12% to approximately $1.8 million.

Also being cut back are contributions to Sorrell’s pension, as well as opportunities under the company’s short- and long-term incentive plans. Most of Sorrell’s 2012 pay package was derived from the latter two pieces of compensation. Short-term incentives totaled roughly $4.9 million, down from about $7.9 million in 2011. But long-term incentives amounted to about $18 million, up from about $5.1 million the prior year.

“Overall, the impact of the changes is a reduction in the CEO target pay to result in it being at a level similar to that received from 2007 to 2010,” the WPP report stated. In 2010, Sorrell’s total remuneration was about $6.5 million; in 2007 it was a little more than $7.1 million.

The company also said it was making several changes to the makeup of its compensation committee, including the departure of Jeffrey Rosen, who will step down as chairman of the committee in December of this year.

Whether the changes will be enough to satisfy investors remains to be seen. They will vote on the new executive compensation package at WPP’s upcoming annual meeting next month.

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1 comment about "WPP Profits Reward Sorrell: Best-Paid CEO In Advertising".
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  1. philip aronson from aronson consutling group, May 9, 2013 at 9:06 a.m.

    Large compensation packages for CEOs who deliver on their mission- maximizing shareholder wealth in an ethically responsible manner- are the norm.

    However, WPPs stock performance over the last 10 years has been dismal. When compared to other media holding companies the WPP story becomes much worse.

    It is a mystery why Mr Sorrell has held his CEO title and why the Board believes he is worth such excessive remuneration.

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