Angry WP shareholders rebelled on Wednesday at an annual meeting dominated by differences over the departure of the advertising firm's former chief executive Martin Sorrell.
The most famous advertising executive in the world quit the marketing giant he built from scratch in April following an allegation of personal misconduct, prompting concerns among some investors over the handling of his departure.
This was reflected in voting at the AGM, where nearly 30 per cent of WPP shareholders opposed its executive pay proposal. This included share awards to Sorrell which could be worth £20 million (€16.9 million), although they are expected to be well below that due to WPP's recent underperformance.
Almost 17 per cent of investors also declined to back the re-election of its chairman Roberto Quarta, under whose watch, Sorrell left with the share awards and without a non-compete clause. The 73-year-old almost immediately set up a new venture.
The departure of one of Britain’s best known businessmen rekindled arguments that have long dogged WPP meetings - that it paid him too much and did not prepare for his succession.
Elephant in the room
Sorrell earned around £200 million in the last five years alone. In 2016, a third of WPP’s investors refused to back his £70 million pay package.
Described by one private investor as the “elephant in the room”, Sorrell dominated the debate with investors asking why he had left, why the company had not prepared for his departure and why he had been allowed to keep his share awards.
“What will the strategy be because Martin was so key to this, and he’s no longer here?” another private investor asked, while a third questioned why the chairman had not launched the meeting with a tribute to WPP’s founder.
Quarta told reporters after the hour-long meeting that he had acknowledged Sorrell on his departure and “didn’t think it was necessary” to do so again.
“No one man is the company,” he added.
The nature of the complaint against Sorrell has not been disclosed. He has denied any wrongdoing and the chairman said there was nothing more he could say on the matter.
“I know that questions remain, but there is simply nothing further we can legally disclose,” Quarta told investors.
Quarta defended the company’s response to the allegation, saying it was robust from a governance and legal perspective.
In a trading update, it said its key measurement of four-month net sales was marginally up, an improvement on the 0.1 per cent fall in net sales in the first quarter.
Liberum analysts said the improvement should give investors confidence that WPP can meet its guidance for flat sales and margins this year. Shares in WPP were down 0.8 per cent. – Reuters