British businessman Sir Martin Sorrell is the highest paid CEO in the FTSE100, with a staggering £70 million pay packet. Last year the WPP plc CEO’s pay deal was £27 million less at £43 million. ShareAction, a responsible investment charity, has slammed the pay deal news ahead of the company’s Annual General Meeting (AGM) tomorrow.
Shareholder advisory groups PIRC, Glass Lewis and ShareSoc have recommended that investors oppose the pay deal. Glass Lewis described it as “extremely outsized relative to the company’s UK and European peers.”
Almost £60 million of the deal consists of bonus awards. This amounts to 58 times Sir Martin’s basic salary, a ratio which according to PIRC “far exceeds the acceptable ratio of 200% of salary”. PIRC also points out that the ratio between CEO and average employee pay is “highly excessive” at 196:1.
ShareAction is running an online tool to enable savers to email the people managing their pension funds directly, to ask them not to endorse the pay deal.
Roger Jeary, a trustee of ShareAction, will attend the AGM to question the board on the pay deal. He will highlight the fact that £70 million would take someone earning the Living Wage nearly 4,394 years to earn.
The government’s automatic enrolment reforms mean that the vast majority of working people in the UK now save or are due to begin saving for a pension. Millions of workers, including a large proportion of low paid employees, are now invested in the stock market via their savings. Many of those employees would question the logic of their savings supporting a £70 million pay deal, believes ShareAction.
Lisa Nathan, who leads ShareAction’s programme of work with investors to promote the Living Wage said: “We would like WPP shareholders, particularly pension funds, to consider seriously whether this deal is in the best interests of their beneficiaries.”
Catherine Howarth, Chief Executive at ShareAction said: “Sir Martin Sorrell is a brilliant but greedy individual, whose pay regularly brings his company, and big companies as a whole, into disrepute. That’s bad news for the entire system upon which UK private pensions depend. £70 million for a year’s work is an outrageous sum and shareholders should vote it down at the AGM.”