WPP Execs To Reap Bigger Bonuses

WPP chief executive Martin Sorrell claimed victory last Friday as shareholders overwhelmingly approved a controversial executive bonus plan that drew rebuke from U.K. activist groups.

“This is all about investing in talent,” said Sorrell. “Having a competitive incentive plan is an important part of this.”

Under the new Leadership Equity Acquisition Plan, the company will match by up to five to one the shares that 19 top execs buy in WPP, depending on performance measured against corporate peers. Sorrell could receive stock incentives of up to $80 million during the next nine years. The group of 19 could reap up to $201 million combined in stock.

The holding company did not disclose who the participants are, but sources said that along with Sorrell, they include the company’s other executive directors: group finance director Paul Richardson, chief talent officer Beth Axelrod and Howard Paster, who oversees the PR and public affairs companies.

In recent years, activist groups in the U.K. have gone after remuneration plans that deliver the kind of lucrative executive compensation packages common in the U.S. While the media had hyped Friday’s session as a potential bloody shareholder revolt, the meeting lasted just 15 minutes and proceeded without one question: 79.8 percent of investors voted in favor, 15.5 percent against and 5 percent abstained.

“We still think the scheme offers excessive rewards for the performance required,” said David Somerlinck, a rep for Pensions Investment Research Consultants. “What we find difficult is reconciling the voting outcome with public views of other U.K. shareholder bodies.”

At Interpublic Group, meanwhile, 2003 bonuses for the company’s 4,000 staffers will total more than $40 million, sources said.