WPP Setback

Yesterday saw the biggest sign yet that the so-called Shareholders' Spring is actually having an effect on excessive remuneraion in British business. At the AGM of the advertising group WPP just less than two-thirds of the company's shareholders voted down the remuneration committee's recommendation that the Chief Executive, Sir Martin Sorrell, should receive a 30 percent increase in his base salary and other benefits that would take his annual take-home package to nearly 13 million pounds. Among the investors against the proposed increases for Sir Martin were Standard Life, Scottish Widows and Co-operative Asset Management. This was the sixth major shareholder revolt against remuneration in major companies this year and it may signal that government and media pressure on company directors to show greater awareness of the current economic crisis and its adverse financial effect on millions of people is woirking. The shareholders of WPP showed dissatisfaction last year by a 42 percent vote against increased remunerations and may have felt yesterday that more notice should have been taken of that warning.

In 25 years Martin Sorrell has made WPP one of the most successful advertising and market services company in the world, operating in 107 companies. He reacted to the shareholders' vote by saying “It's a democracy” but also by noting that the meeting had approved his re-election as CEO by 98 percent.