(Updates with Vince Cable letter in fourth paragraph.)
April 30 (Bloomberg) -- WPP Plc Chief Executive Officer Martin Sorrell earned 29.8 million pounds ($50.2 million) last year, a 70 percent increase that makes the leader of the world’s largest advertising agency one of Britain’s best-paid executives.
Sorrell saw his payout rise from 17.6 million pounds a year earlier, thanks to a long-term incentive plan based on WPP shares over five years, according to the company’s annual report released today. That plan, called LEAP, was discontinued last year, yet payments will continue for the the next several years.
Sorrell’s agency includes companies such as Ogilvy & Mather and Grey Group. His remuneration has caused controversy in recent years. Investors in 2012 voted against his package, which had included a 56 percent increase. At the time, Sorrell’s payout including incentives was worth 11.6 million pounds, which made him the second-highest paid company head in Britain’s FTSE 100.
U.K. Business Secretary Vince Cable last week urged FTSE 100 companies and banks to curb excessive remuneration packages or face new legislation that could limit pay. In a letter to the U.K.’s biggest listed companies, before the season of annual general meetings, Cable said he would be “vigilant in assessing” boardroom responses to rules he introduced requiring companies to give investors a binding vote on pay packages.
Shareholders this June must again approve Sorrell’s payout and it is unclear whether they will again revolt or let the package pass because changes were made last year.
WPP investors approved a new long-term incentive plan in 2013 that cut the maximum value of shares Sorrell could get over a five-year period to 11.2 million pounds from 22.75 million pounds. It also included a 150,000-pound pay cut to his annual salary to 1.15 million pounds.
WPP’s share price increased 55.4 percent in 2013.