WPP share price: Shareholders approve ad giant’s pay policy

on Jun 25, 2014
Updated: Oct 21, 2019

iNVEZZ.com, Wednesday, June 25: WPP Plc (LON:WPP), the world’s largest advertising group, faced some pressure at its annual general meeting (AGM) today, but ultimately got approval from shareholders for its remuneration policy. More than 70 percent of WPP shareholders voted in favour of the plan, effectively making the company’s chief executive officer Martin Sorrell one of the highest-paid CEOs of a FTSE 100 company.

WPP also issued a trading update for the first five months of the year, revealing that it had a stronger start to the year compared with 2013.
In today’s trading, WPP shares were down one percent at 1,236.00p as of 14:17 BST. The company’s stock has fallen 10.4 percent since the start of the year.
**Pay package**
Sixteen percent of WPP shareholders voted against the company’s pay policy, which combined with abstentions resulted in an overall protest vote of 27 percent – about the same level as last year. The resistance to the plan was significantly smaller than in 2012, when 60 per cent of WPP shareholders voted down its remuneration policy. The revolt prompted WPP to make changes to its pay policy, such as cutting Sorrell’s base salary and pension and setting tougher targets for his long-term incentives. However, historical entitlements remained unaffected by the changes.

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Sorrell’s total pay package soared 70 percent last year to £29.8 million, mainly because he was awarded £22.6 million in shares under WPP’s long-term incentive plan, which is linked to company performance. The UK ad giant was the seventh-best performing stock in Britain’s benchmark FTSE 100 Index over the period from 2009 to 2013.

Proxy advisory service ISS recommended ahead of the vote that shareholders should give “qualified support” to WPP’s remuneration policy, saying it “aligns with shareholder interests via a five-year performance period for the long-term scheme”. The Local Authority Pension Fund Forum, however, advised voters to oppose the plan.
**Trading update**

Meanwhile, WPP updated shareholders on its current trading performance, saying that it had achieved a 7.6-percent increase in like-for-like sales in the first five months of the year. On a constant exchange rate basis, the company’s revenue rose 9.8 percent in the period. However, the strength of the pound had an 8.6-percent negative impact on reported revenues, which rose only 1.2 percent to £4.4 billion.

**Analysts on WPP**
According to The Financial Times, the 28 analysts offering 12 month price targets for WPP have a median target of 1,470p, with a high estimate of 1,600p and a low estimate of 1,100p. As of Jun 20, 2014, the consensus forecast amongst 47 polled investment analysts covering WPP advises that the company will outperform the market. The same consensus forecast has been maintained since the sentiment of investment analysts improved on Oct 16, 2009.
**As of 15:02 BST buy WPP shares at 1,238.00p**
**As of 15:02 BST sell WPP shares at 1,237.00p**


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