WPP PLC (LON:WPP) saw over 20% of investors at its annual general meeting today vote against the pay package of the advertising giant’s chief executive, Martin Sorrell, according to media reports, but the level was the lowest for seven years.
The Guardian’s website reported that a total of 21.3% of WPP shareholders either voted against Sorrell’s £48m pay package or abstained at the company’s 45th annual meeting.
READ: WPP boss Martin Sorrell receives final payout from controversial share scheme
The newspaper site, however, pointed out that that was the lowest level of unrest over Sorrell’s pay since 2010, when 20.79% voted against and about 0.5% abstained.
The vote against Sorrell’s pay was much smaller than last year’s 34%, with WPP having moved to significantly tighten the chief executive’s pay package based on the controversial Leap bonus scheme.
In 2012, nearly 60% of investors rejected Sorrell’s pay award, one of the biggest-ever UK shareholder revolts.
Long-running succession issue for WPP highlighted
The other main questions asked at the AGM concerned the long-running succession issue at WPP, with Sorrell currently aged 72.
WPP shareholders and funds, including Standard Life Investments, questioned the group’s chairman, Robert Quarta about the plans for life after Sorrell.
In a statement, Deborah Gilshan, stewardship and governance director at Standard Life Investments, said: “[Succession] remains the key governance risk to our long term investment in WPP.
“As another annual meeting passes, the time to address succession for the chief executive shortens and the necessity to do so becomes more pressing.”
Force Sorrell to extend his notice period
Standard Life Investments, which holds a 1.5% stake in WPP, challenged the board to force Sorrell to extend his notice period.
Gilshan added: “Unusually, the CEO’s service contract may be terminated by either the company or Sir Martin without any notice.
“Given this, we suggest the board consider what lead time would be required to ensure an orderly succession and discuss this with Sir Martin.”
The Guardian reported that Quarta had said WPP’s succession planning had become even more focused and detailed over the past year.
WPP net sales and profits well above budget
The only official comment from WPP came in an AGM trading update, published at midday, in which the ad firm said its revenue continued to benefit from the weakness of the pound in the first four months, with net sales and profits well above budget and ahead of last year.
WPP said its revenue for the first four months of 2017 rose by 15.9% to £4.846bn, although the increase was only 3.4% at constant currency rates.
The FTSE 100-listed firm said the pattern of revenue growth was generally the same in the past four months compared to the first quarter of 2017.
However, WPP noted that April had seen strong revenue growth, particularly in the UK, Asia Pacific, Latin America, Africa & the Middle East, and Central & Eastern Europe.
But it added that Western Continental Europe was weaker, with marginally softer net sales growth.
In early afternoon trading, WPP shares were 2.3%, or 39p lower at 1,682p.