So, the CEO of the world’s biggest advertising firm failed to pitch his own pay deal to WPP’s investors.
Wednesday’s vote against the remuneration report which grants Martin Sorrell a 6.8 million pound pay award means shareholders can claim another victory in their (non-binding) efforts to wean executives off pay deals they consider excessive.
Sorrell has resigned himself to some horse-trading between the Board and shareholders in the wake of a vote which was notable for his robust defence of his worth. But of course, it isn’t Sorrell that’s the problem; it’s the possibility of his absence that really worries investors.
Evidence of that can be seen in the largely unnoticed votes against re-election of WPP directors. Nils Pratley in the Guardian did pick up on the numbers as Jeffrey Rosen, the head of the remuneration committee, and non-execs Ruigang Li and Koichiro Naganuma all saw protest votes of 20-30%. Pratley speculates that this is evidence that investors doubt whether the Board really has a handle on how to cope with a post-Sorrell world. WPP’s AGM was always about more than pay, and it serves as an indication of wider disquiet around compliant Boards at companies dominated by a single personality.
There may be a more prosaic reason in the case of Naganuma (22% protest in 2011, 30% in 2012), chairman of Japan’s third largest advertising and communications company, ADK. The answer, one major shareholder tells me, lies deep in the annual report.