WPP's Sorrell is 4th Highest Paid CEO in the U.K.
WPP's debt is basically junk. CEO Martin Sorrell has laid off 7,800 people from his agencies. Revenues are down 8 percent. He's planning even more layoffs at Ogilvy & Mather, JWT, Grey Group et al. And his company's stock trades at $44.14, down 42 percent from a high of about $76 from two years ago.
Yet Sorrell is better paid than the boss of Tesco, one of the UK's biggest supermarket chain. He's better paid than the head of GlaxoSmithKline. Here's a chart from The Guardian, which put together an analysis of Sorrell's pay:
(Click to enlarge.)
His compensation has actually declined. Here's a snapshot of its recent progress:
- 2009: £19.7m
- 2008: £23.4m
- 2005: £52m.
Sorrell's near-£20m pay package in the context of thousands of job losses, is just part of the controversy surrounding the ad man's pay. This year he saw off an investor revolt against a controversial bonus scheme that could see him pocket £60m over the next five years.That revolt was spurred in part by the fact that Sorrell's new pay scheme -- in which he must buy and hold WPP stock, in return for a chance to be rewarded five-fold if WPP comes out ahead of competing stocks -- offers Sorrell potential returns that no actual WPP investor could ever hope to get. As BNET noted previously, it does not reward him for making WPP stock go up. Rather, all WPP has to do is outperform its peers (IPG, OMC, etc). If all the advertising stocks went down but WPP went down the least, Sorrell would still cash in. In other words, WPP shareholders could still lose their shirts by investing with Sorrell, and yet in five years' time Sorrell would nonetheless come out a gazillionaire.
And as WPP has paid Sorrell £100 million over the last five years, asking him to invest £12.5 million as part of his own compensation package isn't much of a bet.
- See previous coverage of WPP:
- Sorrell to Ax "Ludicrous" Back-Office Ops at 5 Largest Ad Agencies
- WPP Q2: 7,800 Jobs Gone; More Layoffs Promised; "Apocalypse Averted"
- WPP Is at "the Brink of Junk," Says Moody's; Sorrell Pushing Debt Envelope
- Sorrell Between Rock, Hard Place as He Balances Debt, Stock and His Own Pay
- Did You Check Out WPP's Line of Bath and Kitchen Products?
- Wall Street Downgrades WPP on Debt Fears; Has Sorrell Reached His Credit Limit?
- Citi Cuts WPP to "Sell"; Sorrell Defends "Suicide Pact" on Pay; Attacks Obama on Taxes
- Sorrell's Comments on Procurement Reveal Opacity of Agency Billing Practices
- WPP: Sorrell Sees No New Client Dollars; Layoffs Possible in Europe; Zimbabwe Eyes an Opportunity
- Sorrell Prepares Exit From WPP Amid 7,000 Layoffs