Omar Oakes
Mar 18, 2019

Sorrell pockets £2.5m from WPP, a year after abrupt exit

Former chief executive would have got an estimated £5m more if WPP's share price had not dropped.

Sorrell pockets £2.5m from WPP, a year after abrupt exit

Despite leaving WPP almost a year ago, Sir Martin Sorrell is still pocketing a seven-figure bonus from the company.

Sorrell is in line to receive a £2.5 million (US$3.32 million) bonus from WPP’s long-term incentive plan this year, which is dependent on the share-price performance of the company and dividends.

However, because WPP’s share price has halved over the past two years, Sorrell’s payment this year is likely to be a about a third of what it would have been in previous years. 

The amount is small compared with the £70 million ($93 million) Sorrell received in 2015 under WPP’s previous remuneration scheme, known as Leap.

The current incentive scheme, the Executive Performance Share Plan, operates over five-year cycles, which means Sorrell will be paid further bonuses (in decreasing amounts) over the next three years.

A source close to WPP confirmed Sorrell would get his entitlement under the EPSP scheme.

"From yesterday’s stock market announcement on the other executive directors, you can deduce that the entitlement would be one-third of [Sorrell’s] maximum, which as last year’s annual report would indicate, after time apportionment, a max of 250,000 shares," the source added.

A bonus based on 250,000 shares would entitle Sorrell to an award of £2.13 million ($2.83 million) but, with dividends owed to Sorrell, who still owns 1.5% of WPP, the total amount is closer to £2.5 million ($3.32 million). 

Sorrell, who became well known outside the ad industry for being the highest-paid chief executive in the FTSE 100 group of companies, was the target of shareholder revolts in his latter years at WPP. In 2012, 60% of shareholders voted against the company’s remuneration report, when Sorrell’s pay package was £12.9 million ($17.14 million).

Sorrell’s bonus is due despite WPP threatening to withhold his bonus last year after he quickly set up a rival company and allegedly used information from his time running the group. 

Last April, Sorrell resigned after 33 years as chief executive amid a company investigation into his conduct. He denied wrongdoing.

At the end of May, he launched S4 Capital and in July announced the £265m acquisition of content production agency MediaMonks after outbidding WPP.

WPP expressed anger at Sorrell’s decision to pursue MediaMonks because he had looked at buying the Dutch agency when he was WPP chief executive, Campaign reported at the time. 

Sorrell, meanwhile, denied breaking a confidential agreement and dismissed threats to withhold bonuses as a "weak and feeble attempt to destablise the [MediaMonks] bid."

SEE ALSO

Exclusive: Watch Martin Sorrell's Q&A at Campaign360
Front Stage Pass: On March 5 at Campaign360, the executive chairman of S4 Capital answered live questions about past decisions at WPP, his strategy now at S4, his regrets, his digital ad habits and much more.

Source:
Campaign UK

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