* 59.5 pct of votes at AGM oppose remuneration report
* Shares extend losses, down 2.3 pct
* Company says 2012 started well
By Lorraine Turner and Paul Hoskins
DUBLIN/LONDON, June 13 Investors in the world's
biggest advertising agency WPP rejected Chief Executive
Martin Sorrell's 6.8 million pound ($10.6 million) pay award,
after he sought to defend a big rise unlike some other British
bosses who have taken cuts.
Almost 60 percent of shareholders voted against WPP's
remuneration report at an annual meeting in Dublin on Wednesday,
in the latest example of opposition to excessive boardroom pay
that has been dubbed Britain's "Shareholder Spring."
The backlash has cost some executives such as Aviva
boss Andrew Moss, and Sly Bailey, head of newspaper group
Trinity Mirror, their jobs.
However Sorrell, who has built a business with 160,000
employees across 108 countries and has much of his personal
wealth tied up in it, is expected to survive given that
investors widely accept the success of his leadership.
Votes against remuneration reports are not binding but they
can be deeply embarrassing for board members and critics hope
they will add to pressure to give shareholders more control over
"Ultimately, the market will decide. The shareholders have
spoken, obviously we're disappointed with the vote. We're taking
the result into consideration and the board will be consulting
with shareholders and share owners again," Sorrell said.
Business minister Vince Cable has spoken of "ludicrous"
levels of executive pay that are "way out of line with
performance" and is proposing to enhance the voting rights of
investors, including introducing an annual binding vote on
future remuneration policy.
A number of advisory groups and leading shareholders at WPP
had criticised Sorrell's pay deal because it far exceeds the
scale of returns enjoyed by investors.
But Sorrell argued that he deserved his 60 percent pay rise
last year given a track record that had seen him turn WPP into
the world's leading advertising group.
He has also noted that he has much of his personal wealth
tied up in WPP in the form of a 1.4 percent stake worth over 130
million pounds ($202 million) and argued that his pay should be
in line with CEOs at other major global media groups. John Wren,
the chief executive of the world's second-largest advertising
group Omnicom was paid $15.4 million in 2011.
Sorrell's pay rise comes after bosses at major British
retailers Sainsbury and Tesco took pay cuts
and follows shareholder revolts at Barclays, Inmarsat
Shares in WPP, which had been trading 1.4 percent lower
ahead of the result, extended their losses to trade down 2.3
percent at 750.5 pence by 1522 GMT and were underperforming a
flat FTSE 100 bluechip index.
"The message from shareholders was unambiguous and cannot be
ignored," said Guy Jubb, Global Head of Governance & Stewardship
at Standard Life Investments which is among WPP's 10 biggest
shareholders. "It is now in the compensation committee's gift to
reach out to WPP's leading shareholders to address their
WPP, which is expanding rapidly in faster-growing emerging
markets with a steady stream of acquisitions, said on Wednesday
that it had made a strong start to the year.
"2012 has started well with all geographies and sectors
growing revenues," Chairman Philip Lader told shareholders.
"Operating profit is above budget and last year and the
increase in margin is in line with the group's full-year margin
target of 0.5 margin points improvement."