WPP boss Sir Martin Sorrell receives £36m pay boost
WPP boss Sir Martin Sorrell will receive £36m from the advertising giant's controversial incentive plan.
Sir Martin, and 16 senior executives, were allowed to buy shares under WPP's management incentive scheme.
They were then given up to five times the total, dependent on how the firm performed from 2010 to 2014.
WPP's market capitalisation increased by 133% compared with the FTSE 100's 21.3% rise over the period, meaning executives received the maximum payout.
The scheme was closed to new share purchases in 2012 after shareholders protested, but executives who bought shares before this remain eligible for the scheme's rewards.
The share payout means Sir Martin is set to receive more than £40m in total pay and awards for 2014, and could stoke anger over executive pay.
"This is a dangerously excessive amount of money," says Luke Hildyard, deputy director of the independent think tank, the High Pay Centre. "It is vital fund managers hold WPP to account when they get a chance to vote on this award on behalf of company shareholders."
However, Mr Hildyard acknowledges that any shareholder revolt will be limited thanks to the strong performance of WPP shares.
WPP chairman Philip Lader said the reward scheme "required substantial personal, long-term investment by the participants" as well as "exceptional corporate performance over five years".
"[The scheme] was approved by an 83% supporting vote of share owners. The awards were determined by the arithmetic application of this 2009 plan and are aligned with the £12.8bn share owner value creation over this period derived from share price appreciation, dividends and share buy-backs," he added.
WPP said Sir Martin had sold 48% of his shares award in order to cover tax liabilities on the plan.
The firm said its shares had continued to perform strongly since the end of last year, rising a further 16.3% to give a market capitalisation of £20.73bn ($30.56bn).
Earlier this month, WPP reported record annual profits for last year despite what it called "strong currency headwinds".
It reported a 12% rise in 2014 pre-tax profit to £1.45bn, on revenues that rose 4.6% to £11.5bn.
The giant group owns a host of agencies around the world, including JWT and Ogilvy & Mather, and employs some 175,000 people.