The boss of marketing, advertising and public relations giant WPP PLC (LON:WPP) is facing a shareholder revolt this week over the size of his pay packet.
The Local Authority Pension Fund Forum (LAPFF), an association of 70 UK-based public sector pension funds, has advised its members to oppose WPP’s remuneration report at its annual meeting on Wednesday, citing “excessive” payments offered to chief executive Martin Sorrell.
WPP said in April Sorrell would receive £70.4mln in cash and shares in 2015, taking his earnings to £190mln since 2009.
The company acknowledged the scale of the award, but said it reflected outstanding returns for shareholders.
But LAPFF said it was twice the year-on-year average increase in the company's total shareholder return over the same period and more than 58 times Sorrell’s £1.15mln basic salary.
That is the highest in the sector peer group and among the top 10 highest chief executive salaries in the FTSE 100 Index, according to Reuters.
But Sorrell gained the support of Institutional Shareholder Services (ISS), which last month asked WPP’s shareholders to accept it.
LAPFF chairman Kieran Quinn said most shareholders would, in the main, accept what they consider to be a reasonable level of pay for performance.
"However, with WPP, we consider there are several aspects of the payment which do not reflect this and we're advising our member funds to oppose the remuneration report on this basis,” the Guardian quoted him as saying.
Executive pay has become a thorny issue, with some investors voicing concern that it has ceased to reflect company performance.
In April, BP shareholders opposed chief executive Bob Dudley's US$20mln pay deal for 2015 after the oil giant racked up record annual losses.