At WPP’s Annual General Meeting last week, chairman Roberto Quarta faced increasing pressure from shareholders to provide more clarity and disclosure in the holding company’s succession plan for CEO Martin Sorrell, Campaign reports. That meeting, of course, also saw 33.5% of investors vote against Sorrell’s colossal pay package for 2015, approximately equivalent to the New York Mets’ payroll for its 25-man roster.
As you may recall, back in April WPP announced that it had begun an internal and external search for Sorrell’s successor, with Quarta stating that WPP has “already begun to identify internal and external candidates who should be considered” for the position after Sorrell’s eventual departure, “Whether…that happens tomorrow, in one, two, three, four or five years, or even over a longer period.”
That nebulous statement was apparently not satisfactory to some WPP investors.
Hans-Christoph Hirt, executive director of Hermes EOS and a top shareholder, said he appreciated how “succession risk has risen up the company’s agenda” over the past year and a half but requested that Quarta “enhance” disclosure.
Standard Life head of stewardship Euan Stirling, meanwhile, suggested that clearer succession planning would “improve the risk profile” of the holding company and that if WPP wasn’t so reliant on Sorrell they could afford to pay its CEO less.
Quarta responded by promising “further dialogue over the coming months” and assuring investors that WPP carries out “a continuous and constant assessment of individuals both internally and externally” for over 100 senior positions, including CEO.
Sorrell himself said “The fact that it’s not played out in the pages of Campaign doesn’t mean that something doesn’t happen.” Ouch.
As to when we can expect Sorrell to step down, Quarta said, “There is no set timeframe for CEO succession.”
“I’ve said I’ll carry on until they cart me out to the glue factory,” Sorrell added.