WPP Shareholders Block Executive Bonus Scheme
Shareholders in advertising giant WPP have forced the company to make an abrupt U-turn on a proposed bonus scheme for executives worth up to £112m over five years.
The scheme would have netted chief executive Sir Martin Sorrell around £44 million, although shareholders have become increasingly vocal in their opposition to the plans, forcing the company to admit defeat and scrap the proposals.
Many shareholder groups claimed that the bonus scheme was too weak, allowing the company’s executives access to high pay-outs in reward for meeting minimal targets.
The scrapping of the plan has also meant that the company’s extraordinary general meeting, due to formally endorse the scheme, has been put back from 7th April to the 16th.
According to today’s Financial Times, the company’s incentive scheme aimed to reward those senior executives who had invested their own money in the company, matching their investment by anything up to 500%.
Earlier this year Sir Martin Sorrell indicated that an end to the worst advertising downturn in memory is in sight as the company posted a solid 18% increase in pre-tax profit to more than £473 million for 2003 (see WPP Takes Bullish Stance As Pre-Tax Profits Rise).
WPP: 020 7408 2204 www.wpp.com
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