PARIS (Reuters) - WPP (WPP.L) boss Martin Sorrell struck a more conciliatory tone on Thursday, after shareholders voted against a multi-million pound pay award he had vigorously defended, saying he understood income inequality sparked strong feelings in a recession.
Sorrell became the latest executive to clash with investors over pay on Wednesday when 60 percent of shareholders rejected his 2011 pay package of 6.8 million pounds ($10.6 million) in a non-binding vote at an annual general meeting in Dublin.
Far from shirking a fight, Sorrell had used the issue in the run up to the meeting to defend high pay as a reward for performance and argue that appropriate remuneration was needed if companies wanted to attract and keep the right talent.
Speaking at the Reuters Global Media and Technology Summit a day after the snub, Sorrell sounded more conciliatory and signaled WPP would try to find a compromise in future.
“Obviously we were disappointed with the vote. We understand the implications and the shareholders have spoken. The chairman and others will be talking to shareholders about their concerns,” he said.
Asked if he was offended by the very public rebuttal at a company he founded in 1985, Sorrell said no.
“People are concerned because there is a recession, they’re concerned about inequality, inequality of wealth and incomes. At times of recession people become more concerned about that, you see that politically.
“And it is a reflection of that,” he said in reference to the wider backlash against shareholder pay in Britain that has been dubbed a “shareholder spring”.
Sorrell is one of Britain’s most high-profile businessman, having built his company to become the world’s leading advertising group with 160,000 employees across 108 countries, and shareholder anger was clearly about pay, and not the man.
Of the votes cast, 98 percent supported his re-election as chief executive - a ringing endorsement of his leadership.
WPP has benefited in recent years from its early expansion into emerging markets and digital marketing, seeing it through the downturn, and it expects the second half of 2012 to be boosted by the London Olympics and U.S. election.
Like many, Sorrell is cautious about 2013 as Europe and the United States continue to grapple with a debt crisis.
However, that stance goes against the position of WPP rival Publicis (PUBP.PA) and its chief executive Maurice Levy, who told Reuters on Tuesday of his optimism for the year ahead and how he expects a stronger 2013 than 2012.
“I don’t quite follow that because we don’t know. We have no data (for 2013),” Sorrell said when asked about the positive stance shown by Publicis on 2013.
“The U.S. deficit continues to enlarge and they have to deal with that. There are no events, there are no UEFA Championships or London Olympics and traditionally the first year of the quadrennial is the more difficult year and that’s all we’re saying.”
The threat of a country such as Greece exiting the euro zone is also looming large with a key election there this weekend.
“From a personal point of view I hope the Greeks don’t exit, from a purely practical point of view I hope they don’t exit,” Sorrell said.
“I think the uncertainties that would be created by a Greek exit would be so great and the anomalies and uncertainties would be so great you would hope it didn’t happen.”
($1 = 0.6418 British pounds)
Reporting by Kate Holton; Editing by Mark Potter