June 12, 2013 / 12:20 PM / 5 years ago

WPP shareholders acquiesce in Sorrell pay row

LONDON (Reuters) - The majority of investors in the world’s biggest advertising agency, WPP, on Wednesday backed a 17.6 million pound ($27.6 million) pay package for Chief Executive Martin Sorrell which had drawn fire from critics of lavish boardroom pay.

Some 81 percent of shareholders voted for the 2012 executive pay packages, while 19 percent were against. A figure for abstentions was not immediately available.

Sorrell’s total remuneration was almost double the 11.94 million pounds he received on an equivalent basis in 2011 when 60 percent of WPP shareholders rejected the company’s remuneration plan.

This year has not seen a repeat of the “shareholder spring” of 2012 that saw pay packages and executives alike jettisoned at London shareholder meetings.

The structure of Sorrell’s pay had been adjusted to decrease the fixed element, but the long term incentive award, based on the group’s performance against its peers over five years, was 3.5 times higher than the previous year.

Shareholders also voted 83 percent in favor of changes to how the long term incentive awards were calculated, to take into account return on equity and earnings per share. It means that from 2013 Sorrell can earn a maximum of 9.7 times his 1.15 million pound salary in long term awards.

Shares in WPP were up 0.64 percent at the market close.

In a trading update issued before the meeting the firm said its organic revenue growth picked up in April, led by branding activities and digital communications.

The British company said revenue rose 2.3 percent on a like-for-like basis in the first four months of the year, an improvement on the 2.1 percent growth seen in the first quarter.

The numbers are adjusted for the impact of acquisitions and currency fluctuations.

Asia-Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe were the strongest performing regions, the company said on Wednesday.

The United States and Western Europe continued the trend of slower growth established in 2012, it said, although Britain was an exception, with strong growth.

Operating profit was above budget and well ahead of last year, it added.

Analysts at Citi said the numbers implied that organic revenue grew 2.9 percent in April, but fell back to trend in May, with 2.3 percent growth.

They said the trading update in general, and in particular the outlook for growth and margins, was supportive of the company’s share price, but ultimately did not substantially change the investment case.

“The improvement in April is welcome, but the implication is that some of this has evaporated in May,” they said.

($1 = 0.6411 British pounds)

Reporting by Christine Murray and Paul Sandle; editing by Tom Pfeiffer and Mark Potter

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