WPP’s Martin Sorrell in pay windfall

WPP’s Martin Sorrell, head of the world’s largest advertising company, has raked in more £120 million (€155m) in the past six years in annual pay — but his biggest windfall is yet to come.

WPP’s Martin Sorrell in pay windfall

Already Britain’s highest-paid chief executive, Mr Sorrell will get almost £70m in bonus and salary for 2015, according to a person familiar with the matter.

Most of the total sum, set to be announced this week, consists of a controversial incentive plan which triggered protests from some shareholders and public interest groups monitoring executive compensation.

Called LEAP, the Leadership Equity Acquisitions Plan is based on share investments and WPP’s performance over five-year targets.

“You have to wonder how it’s possible to generate a figure like this,” said Stefan Stern, director of the UK’s High Pay Centre, an independent think tank in London.

“This takes him out of sight of the rest of workforce and I hope it isn’t a benchmark,” he said.

The pay package reveals the limitations in shareholders’ arsenal to curb executive pay.

Investors in 2012 voted against Mr Sorrell’s pay package and the next year passed a new incentive plan that limits the number of shares eligible for long-term compensation programs.

But they were powerless to undo LEAP, because the long-term stock and option plan was already in place. It will wind down this year.

WPP, whose agencies include Ogilvy & Mather and Young & Rubicam, says the high amounts paid to Mr Sorrell and other company executives reflects the superior returns generated for investors.

“Later this week WPP will confirm the LEAP allocation for the 15 executive participants who invested at the start of the performance period in 2011,” the company said in an e-mailed response to questions.

“It will reflect another very significant outperformance by WPP of both its comparator group and the FTSE 100,” the statement said.

Shares of WPP have more than doubled in the past five years, while the FTSE 100 index has gained less than 10%.

The new plan, the Executive Performance Share Plan, caps Mr Sorrell’s total annual compensation at £19.3m.

Other high earners in Britain this year — though none come close to the projected payout Sorrell will earn — include Berkeley Group’s Tony Pidgley at £23m and BP CEO Bob Dudley at £19.6m and Sky’s Jeremy Darroch at £16.8m, according to the High Pay Centre.

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