Sorrell Wins Bonus Scheme Vote as Kantar Revenues Fall

At today's AGM, WPP shareholders gave the thumbs up to a scheme which could see CEO Sir Martin Sorrell receive a £60m bonus over the next five years. Meanwhile Sorrell announced a 6.7% dip in like-for-like revenues for the first four months of the year, which sent shares tumbling 4.8% to 456.25p.

Under the scheme, Sorrell has to put aside £12.5m ($19m) in WPP shares between 2010 and 2015. He is then eligible to receive five times that amount in free shares if WPP meets performance targets. These would be received on top of his £3m a year annual salary and cash bonus.

Other senior executives who have bought shares could also receive five times as many free shares if WPP outperforms its main rivals over the next five years.

The bonus scheme proposal, known as Leadership Equity Acquisition Plan (LEAP), was backed by 83.06% of shareholders.

WPP, whose Kantar market research arm includes TNS, BMRB, Millward Brown, Research International and others, issued a trading update at the AGM saying that its information, insight and consultancy units had been most affected by the economic downturn during the first four months of 2009.

As in the first quarter, the economic pressure was most keenly felt in the US, and Sorrell said that this has now spread to the UK and Europe, although Eastern Continental Europe still shows revenue growth for the first four months of 2009.

First quarter revised forecasts show that, on a like-for-like basis, revenues are likely to decline in the mid-single digits. As a result, the group's operating companies are reducing headcount and associated staff costs in line with the forecast revenue decline. In the first four months of 2009 the number of people in the group fell by almost 4,300 or 3.7%, although Sorrell said that more than half of the people who left, did so on a voluntary basis.

He added that for the remainder of 2009, WPP's focus would be on 'balancing staff costs and headcount, against the fall in revenues'. In the longer term, the firm intends to increase operating profit by 10% to 15% per annum and increase operating margins by a half to one margin point per annum.

Web site: www.wpp.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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