It was said to be one of the chief reasons WPP’s board showed Martin Sorrell the door 12 months ago and now the 74-year-old’s massive pay packets and bonus schemes are back causing shareholder consternation.
Influential British shareholder advisory groups ISS and Glass Lewis have raised concerns about proposed bonus schemes at Sorrell’s new venture, S4 Capital.
According to a valuation of the mooted packages, the two have described them as “unlimited remuneration” before adding they had “severe reservations” about what was being put forward for shareholders to vote on.
British media sites have reported over the weekend that a report sent to investors ahead of S4 Capital’s first annual meeting on May 29, Glass Lewis has urged voters to reject the firm’s pay report and policy. Likewise, ISS has advised a vote against it.
Glass Lewis said what had been put forward ran contrary to shareholders’ interests, as executives could receive compensation that was “not strictly tied” to performance. Instead, it recommended that S4 should set and disclose caps on all of its bonus plans.
For its part, S4 said its executives received salaries well below the market average and that its remuneration policy was performance-driven.
An S4 spokesperson said in a statement: “The S4 Capital remuneration scheme and policy are consistent with the UK corporate governance provision of promoting long-term shareholdings by executive directors, aligned with long-term shareholders’ interests.”
As reported on B&T in late April, Sorrell paid himself – as CEO of S4 – a mere £140,000 ($A256,000) for the 12 months in 2018.
That was certainly a significant drop from the largesse of his WPP days where his 2015 salary topped £70 million ($A128 million).