WPP Shareholders Oppose Bonus Scheme

Shareholders at marcoms giant WPP are opposing a scheme which could result in CEO Sir Martin Sorrell receiving up to £59.7m ($95m) worth of free shares during the next five years.

The scheme rewards senior managers who invest in company shares with up to five times as many free shares, if the firm meets performance targets. Sorrell can invest up to £11.9m ($19m) in shares during the period, based on the current share price.

Both the Association of British Insurers and the Pension Investment Research Consultants strongly oppose the scheme and have recommended that members follow suit.

However, sources say that the firm is confident that US shareholders will push through the multi-million pound bonus scheme at an extraordinary general meeting on 2 June, because of the support of RRev, which advises a number of large US investors. US shareholders collectively hold a 38% stake in the group, with other overseas investors having a 32% stake.

A WPP spokesman defended the proposal: 'Unlike most other schemes, WPP executives have to make an investment and take a financial risk, just like any other shareholder. If the management ever achieves the headline five-times equity match, shareholders will have seen their investment outperform the peer group every year for 10 years.'

WPP completed the takeover of market research firm TNS last October in a deal worth £1.6 billion. The group recently announced plans to make 6% of its global workforce redundant resulting in the loss of 7,200 posts in all this year.

Web sites: www.wpp.com and www.kantargroup.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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