THE WORLD’S largest advertising group by revenue, WPP, saw off a shareholder rebellion to win approval for an executive bonus scheme yesterday at its first annual general meeting to be held in Dublin since the company relocated its headquarters to Ireland.
Under the scheme, which was approved by 83 per cent of shareholders, senior WPP managers who invest in the company’s shares could be rewarded with up to five times as many free shares if they meet certain performance targets.
British corporate governance organisation Pirc last week urged investors in WPP to oppose the bonus scheme, saying the rewards could be excessive. The scheme could be worth up to £60 million to WPP chief executive Martin Sorrell if he invests the maximum £12.5 million allowed in WPP shares.
WPP moved to Ireland last year in protest at planned changes to the British tax system and to take advantage of Ireland’s low corporation tax rate, which, it says, will save the company up to £80 million a year.
The company invited a “quorum” of shareholders to the agm in the Four Seasons Hotel in Dublin, which was transmitted live via video link back to shareholders in London. All resolutions put forward were passed without any questions from shareholders.
However, the approval of the scheme was overshadowed by a weaker-than-expected trading update. Like-for-like revenues fell 6.7 per cent in the first four months of the year.
WPP, which employs more than 130,000 people worldwide, said it had let go 4,300 people so far in 2009, but that much of the reduction in headcount was simply a reversal of the 4,000 new jobs that were added in 2008.
Mr Sorrell denied that there were any signs that the marketing spend of its clients would improve in the immediate future. “While hearts and minds may be a bit better, we haven’t seen that in terms of chequebooks,” he said. Recovery may come in the first half of 2010, he added.
WPP said it was working on the integration of its consumer research group Kantar with TNS, the firm it purchased last year. Kantar/TNS is now the second largest research group in the world, behind Nielsen.
