Omnicom has suffered an investor protest over John Wren’s $70 million annual pay package, as nearly half of shareholders voted against its new compensation policy.
More than 43% opposed the board’s decision to give Wren, the chairman and chief executive, a total of four million share options as part of an incentive scheme that runs from 2025 to 2028.
The US agency group still won approval for the policy, as nearly 57% of shareholders were in favour at the annual stockholder meeting. The vote was “advisory”.
Institutional Shareholders Services, a leading proxy advisory group, criticised Wren’s share options package, saying it was “front-loaded” and “lacks pre-set performance criteria”, and recommended investors oppose the policy ahead of the vote.
The Omnicom chief is due to receive options worth a total of $310 million over three and a half years. He became eligible for the first portion, notionally worth $69.3 million, last year, with the remainder due to vest in equal amounts over the period. His total package, including benefits, was $69.9 million in 2025.
He has the right to “exercise” the option to buy stock at a pre-agreed price of $77.60 per share, but will profit only on the amount that Omnicom’s share price rises above that level. Omnicom’s stock has recently been trading below that price and stood at about $72 earlier this week.
Wren, who has been CEO since 1997, previously earned a $1 million salary, plus bonuses, and an annual package of more than $20 million in recent years. He reduced his salary to just $1 and received the share options as part of a new employment agreement that is meant to align the CEO’s remuneration with shareholders’ interests, following the $9 billion takeover of Interpublic, and to keep him in the job until the end of 2028. Then he is due to step down as CEO and become executive chairman.
ISS said Omnicom’s financial performance last year had been “mixed” and it had given only a “limited” rationale for creating the share options package over three and a half years.
“Such a practice limits the board's ability to meaningfully adjust future pay opportunities in the event of unforeseen events,” ISS said. “Furthermore, while acknowledging that the stock options have an inherent incentive to increase stock price, time-vesting vehicles are not considered strongly performance-based, and the grant results in CEO pay lacking any pre-set performance criteria for multiple years.”
ISS added it had “concerns” about some bonus targets for other senior Omnicom executives which it described as “non-rigorous”.
A protest by 43% of shareholders is considered significant. A year earlier, almost 90% of Omnicom shareholders voted in favour of the compensation policy and only 10% were against.
Omnicom declined to comment about the shareholder vote or the criticism from ISS, which is known for its rigorous views on corporate governance. The annual meeting was held virtually on 5 May and the results were published later in a stock market filing.
Ahead of the meeting, Omnicom said it had contacted investors, representing 75% of the shareholder base, and spoke with 30% of them to get input on governance.
Separately, WPP faced pushback over executive pay earlier this month as about 25% of its shareholders voted against the remuneration report and a new compensation policy at its annual meeting. Cindy Rose, the chief executive, will be able to earn a potential annual package of $14.90 million compared with $11.55 million for her predecessor, Mark Read. The company said its executive directors were underpaid versus competitors, notably Omnicom.
WPP acknowledged support of “less than 80%” was a threshold in the UK corporate governance code and said it “will engage with any major shareholders who did not support the resolutions [on remuneration] to understand the reasons behind their voting decision” and report back within six months, according to a stock market filing.
