The word on the street is that WPP head Sir Martin Sorrell is getting a huge pay raise, which could stir up controversy over executive pay. It’s an issue that’s rearing its head at a number of companies, particularly at banks. (Mediapost has info about executive pay at other holding companies.)
At Barclays, 27 percent of shareholders voted against a $19.5 million pay package for CEO Robert Diamond. Andrew Moss, CEO of insurance company Aviva, has turned down a pay raise after shareholders expressed anger.
Shareholders at Credit Suisse have overwhelmingly voted against the bank’s pay package plans, with one attendee at the recent investor meeting saying, “You should be ashamed of yourselves for taking so much money away from us. We are the owners of this bank, and you are our employees. We should be the ones who decide what you earn.”
And Citibank investors voted against the pay packagees for CEO Vikram Pandit and four other executives. The Christian Science Monitor notes that it’s institutional investors that got angry about Citibank’s plans.
A new Web tool that allows Brits to contact companies when they think pay has gotten too high will surely only fuel the backlash further.
Companies, like BP, have argued that the only way to hang on to good people is to pay them well. But shareholders are demanding results. The economic recession continues to take a toll and the fears of a repeat performance of the financial meltdown in 2008 linger. To hang on to their shareholders’ good will (or what’s left of it), companies are going to have to cut back on executive salaries. And executives will have to make do with fewer millions.
[Image of Barclays protest via]