Article 3S69H WPP shareholders revolt over pay following Sir Martin Sorrell's departure - as it happened

WPP shareholders revolt over pay following Sir Martin Sorrell's departure - as it happened

by
Graeme Wearden
from Economics | The Guardian on (#3S69H)

Almost one in three WPP investors fail to back pay report, but Sir Martin Sorrell will still leave with 19m of share options despite investigation into personal conduct.

2.12pm BST

Time for a recap, as shareholders stream home:

Advertising giant WPP has faced irate investors at its AGM, two months after CEO Sir Martin Sorrell suddenly quit amid allegations of improper conduct.

I know that questions remain, but there is really and simply nothing further we can legally disclose."

Private shareholder says it's disappointing that AGM didn't kick off with a tribute to Sorrell and his work to build the company. "I hope he has a very good retirement." Gets some light applause. #WPPAGM @WPP

WPP annual meeting: Pay chief Sir John Hood says the maximum multiple of short and long term incentives for the new CEO, if all criteria are met, is 8x base remuneration. "Too high", mutters one shareholder.

We have over 130,000 amazing people around the world. All of whom create brilliant work with beating hearts - @wpp https://t.co/9mv2IBhhAA

WPP shareholders stage pay revolt at annual meeting https://t.co/I1ewYVdXPM

1.15pm BST

WPP shareholders have had their say, so we're onto voting on this year's resolutions.

Of course, we already know that nearly 30% investors have rebelled over the pay report - as WPP released the 'proxy' votes at the start of the AGM.

1.11pm BST

Another WPP investor asks an excellent question about WPP's share buyback scheme

Q: How much cheaper would it be to have bought last year's shares this year?

WPP says would have been about 100mn cheaper to do its share buyback now rather than when it was done last year

1.09pm BST

Another shareholder has spotted that WPP's annual report mentions a cyber attack. What happened, and what was the damage?

COO Mark Read says WPP fell victim to a cyber attack in June 2017, which initiated in Ukraine.

@WPP AGM told deliberate cyberattack in Ukraine last year hit European systems but vast majority of network was back within weeks and no client work missed. pic.twitter.com/1r7eCPDTwh

1.02pm BST

Another shareholder asks about the pay on offer to WPP's next CEO under its new share incentive scheme.

Apparently s/he can earn up to eight times basic pay, if all performance targets are hit.

Maximum bonus for new WPP chief exec will be 8 times base salary. Someone shouts out "too much"#Sorrell

Director in charge of pay at WPP says Max bonus for any new WPP chief exec will be 8 times base salary. Cries of "too high" among shareholders at AGM.

12.59pm BST

Quarta has defended his position as chairman of two FTSE 100 companies (he also chairs medical group Smith & Nephew).

Great question - WPP executive Chairman asked if he has enough time to also be chairman of another big company Smith & Nephew - asked by man who said he owns shares in both.

12.56pm BST

Q: Do you accept that succession planning at WPP was inadequate?

Chairman Quarta says the company had made some preparations for life after Sorrell, but it simply didn't have "visibility" on when its founder and CEO might step down.

12.51pm BST

Q: Would Sorrell still have been granted 'good leaver status', if the board had been aware of the revelations about his (alleged) use of company money?

Chair Roberto Quarta says he isn't in a position to comment.

12.49pm BST

Q: How will WPP cope without Sorrell?

COO Mark Read says Sorrell did a great job turning WPP into an advertising giant, but he thinks the business can succeed without him.

12.48pm BST

One private shareholder criticises Roberto Quatra for not opening the AGM with a tribute to Sir Martin Sorrell.

He's disappointed that Sorrell has quit over "highly immaterial issues" (!!), and is happy that he has held onto his LTPI share awards.

12.39pm BST

After a brief discussion about advertising strategy, another shareholder brings the AGM back to the issue of its former CEO:

Q: Surely it is gross misconduct for Sorrell to launch a competitor? Can't we pull the plug on his stock options now?

12.38pm BST

The pay revolt at WPP is big, but it could have been bigger...

Here's some instant reaction:

Wallop! Adland giant @WPP suffers bloody nose over boardroom pay - including 20m for former boss Sir Martin Sorrell - with nearly 30% of shareholder proxy votes failing to back its plans. That's before any questions re Sir Martin's controversial departure...

BIG protest vote against WPP pay report - 27 per cent of voting shareholders vote against it. Almost 30 per cent of all shareholders abstain

Here are the proxy votes at WPP's annual meeting. 27% oppose pay report and 15.5% vote against chairman Roberto Quarta. WPP will see that as a win, just about, i'd say. pic.twitter.com/MLnXjUa7Zi

12.33pm BST

Onto shareholder questions.

The first comes from Hermes Equity Ownership Services, who say WPP's board has become "more effective" since Roberto Quarta became chairman in 2015.

12.28pm BST

Boom! Nearly 30% of WPP shareholders have failed to approve this year's pay report.

That's a bloody nose for the advertising giant, as investors show their displeasure over the 19m of share options which Sir Martin Sorrell left with.

WPP survives shareholder revolt at AGM - 27% oppose remuneration report, 15.5% vote against chairman Roberto Quarta pic.twitter.com/m5gnjaaVmV

12.24pm BST

WPP COO Mark Read is now speaking about the business now, saying the company hopes to do well at the Cannes Lions festival next week.

Read also touches on the challenges facing the group, with data and technology are increasingly part of the future.

We need an inclusive culture for our people. That is what is most critical to us.

12.21pm BST

Chairman Quarta tries to direct shareholders' attention to the future, saying that the process of appointing a new CEO is well advanced.

Some critics have said WPP did not have good succession plans in case of the sudden departure of CEO Sir Martin Sorrell, who built the company into the world's largest advertising firm over 33 years. Chairman Roberto Quarta insists "we were ready for it".

12.16pm BST

Chairman Roberto Quarta now turns to the allegations of workplace bullying published by the FT this week.

Everyone is entitled to be "treated with respect", Quarta says. Everyone at WPP should feel able to raise concerns and to have them listened and acted upon.

12.14pm BST

Quarta now turns to the 19m of stock options which Sir Martin Sorrell left with in April.

WPP received "very clear" legal advice that there was no basis to cancelling Sorrell's entitlement to shares which were due to vest in the next five years, Quarta says.

12.11pm BST

Quarta turns to the resignation of Sir Martin Sorrell, following an allegation of personal misconduct.

He says WPP took a "robust" approach to the allegations, treating him "just like any other employee would have been treated".

We take this responsibility very very seriously indeed... There is really and simply nothing we can legally disclose.

WPP chair Roberto Quarta on #Sorrell: "The board has acted in accordance with unequivocal legal advice...I appreciate some will find this unsatisfactory"

12.07pm BST

WPP chairman Roberto Quarta is opening the AGM now, introducing the board.

Quarta says the clients he has met in recent weeks "recognise the quality of the talent that WPP have across the globe."

12.05pm BST

The AGM is getting underway now. No sign of the WPP's most famous shareholder yet, though....

WPP's AGM starting any moment. Lots of funky colours and uplifting music, but no Mr. Sorrell. #tictocnews pic.twitter.com/0IjPaIQzjB

At the WPP annual meeting - the first since the departure of Martin Sorrell from the company - and it's standing room only

12.03pm BST

WPP have just released a trading statement to the City, ahead of the AGM.

It shows that revenues are down in the first few months of this year, although they're actually up if you strip out currency moves.

12.00pm BST

Calm before a storm? WPP chairman arrives at his company's annual general meeting pic.twitter.com/KIB8LwHej1

11.59am BST

The Financial Times piled fresh pressure on Martin Sorrell and WPP earlier this week, when it published an investigation into his departure.

The FT alleged that:

EXCLUSIVE sneak peek: the gripping inside story of why sir Martin Sorrell left WPP in a double page opening spread @FT pic.twitter.com/Yr0g68OWQ8

11.46am BST

I'll be live tweeting the WPP annual shareholder meeting in the wake of the resignation of Sir Martin Sorrell, who built the company before resigning, beset by claims of misuse of company funds, bullying and a visit to a sex worker in a London red light district. Busy already. pic.twitter.com/uSjytFvVvr

11.46am BST

Roberto Quarta

11.46am BST

WPP shareholders will push the board about the allegations of workplace bullying levelled against Sorrell in recent days. Is there a cultural problem at the heart of the ad giant?

They will also want to know why the ex-CEO is still getting share awards worth millions, and why WPP has botched the succession plan so badly. The failure to tie Sorrell down with a non-compete clause looks like another blunder --- allowing him to launch a new company that could compete with WPP.

Related: The questions WPP's board can expect to face over Sir Martin Sorrell

11.34am BST

WPP shareholders are massing at London's Southbank, for today's annual general meeting.

Related: WPP boss tells staff to 'expect respect' as group launches review

WPP has been embarrassed by a string of allegations - strenuously denied by Sorrell - that have leaked into the public domain about the advertising and marketing guru's behaviour.

Claims have emerged that WPP staff said they witnessed the 73-year-old entering a premises used by sex workers, leading to concerns that the alleged visit was paid for with company money.

Good start to the @WPP AGM. Security at the @southbankcentre, where it is being held, are preventing press photographers from doing their jobs. Very heavy-handed behaviour from an arts venue with nothing to lose by allowing the media to document a FTSE100 firm's annual meeting.

11.16am BST

Gig economy news: A heating engineer has won his claim against Pimlico Plumbers, establishing that he was a worker and not self-employed.

Related: Gig economy: heating engineer wins claim against Pimlico Plumbers

10.44am BST

Peter Dowd MP, Labour's Shadow Chief Secretary to the Treasury, points out that inflation is still running over the government's target - and eating into pay packets.

Dowd is calling for more help for workers, especially those earning the minimum wage:

"This is the sixteenth consecutive month in which inflation remains higher than the Bank of England's target, and working people are still struggling with real earnings continuing to be lower than in 2010, following eight years of Tory economic failure. Yet the Government refuses to act in any meaningful way.

"The next Labour government will introduce a 10 per hour Real Living Wage to tackle the squeeze on wages, and build a high wage, high skill economy for the many, not the few."

10.42am BST

We have fresh evidence that London's housing market is cooling.

Private rental costs in the capital have fallen over the last year, by 0.2%. That's the first annual decline since September 2010, after Britain plunged into recession.

10.32am BST

The jump in transport costs is a blow to anyone planning a trip abroad.

Martin Lane, Managing Editor of money.co.uk, explains:

"The rising cost of fuel prices has really taken its toll on our finances and had one of the biggest impacts on keeping inflation put. The cost of air and sea fares being on the rise month on month - not great for those looking to book a last minute summer holiday.

10.18am BST

Suren Thiru, head of economics at the British Chambers of Commerce (BCC), predicts that inflation could rise in the coming months - but probably not for long.

"It is possible that inflation may start to drift upwards in the coming months as the recent spike in oil prices filters through supply chains and into higher consumer prices.

However, any pick-up in inflation would be relatively short-lived, with price growth likely to resume its downward path later in the year as the pressure from oil prices eases.

10.16am BST

UK households should be relieved that inflation isn't higher.

City economists had expected CPI to rise to 2.5% last month, meaning inflation would be taking an even bigger chunk of our pay packets (reminder, basic pay grew by 2.8% over the last year).

With UK CPI stuck at 2.4% despite rising petrol prices and higher airfares, the release confirms the underlying weakness of the UK economy. Today's data follows yesterday's lower than expected wage growth and Monday's weak manufacturing data.

10.11am BST

Computer game prices fell in May, helping to keep inflation down.

The ONS explains:

Prices for these games are heavily dependent on the composition of bestseller charts, often resulting in large overall price changes from month to month.

9.52am BST

9.51am BST

Torsten Bell, head of the Resolution Foundation, says fuel prices are the main driver of inflation right now:

CPI inflation unchanged at 2.4%, CPIH up marginally to 2.3%. Big picture is still falls from highs of around 3% in the Autumn. Worth noting the near 5p per litre petrol price rise between April and May 2018 - only real upward pressure https://t.co/gxOZy42y0z pic.twitter.com/PK2btQIFWg

9.49am BST

Mel Stride MP, financial secretary to the Treasury, has responded to the inflation data:

"Since last year inflation has fallen from its 3.1% peak but we recognise the cost of living is still a challenge for some families.

"That is why we are freezing fuel duty at the pumps, cutting income taxes for 31 million people and increasing the National Living Wage."

9.44am BST

Today's inflation report also shows that Britain's drivers are suffering higher prices at the pumps.

Petrol prices hit a three and a half-year high last month, as motorists faced the impact of higher crude oil.

Petrol prices rose by 4.6 pence per litre between April and May 2018 to stand at 125.3 pence per litre in May, the highest average price since October 2014. This compares with a 1.0 pence per litre fall between the same two months of 2017 to stand at 116.4 pence per litre in May 2017.

Similarly, diesel prices rose by 4.7 pence per litre between April and May 2018 compared with a 1.6 pence per litre fall between the same two months a year ago.

9.33am BST

Newsflash: Britain's inflation rate was unchanged at a one-year low last month, despite the pressure from higher energy prices.

The Consumer Prices Index rose by 2.4% in May, matching April's rate. Inflation hasn't been lower since March 2017.

9.28am BST

As a WPP shareholder himself, Sir Martin Sorrell could attend today's AGM and ask a few searching questions.

That's unlikely, though, as Sorrell signed a non-disclosure agreement when he left WPP in April.

Sir Martin signed a non-disclosure agreement when he stepped down which precludes him from discussing any of the circumstances surrounding his departure. He has rigidly adhered to this obligation and will continue to do so."

9.22am BST

Most WPP shareholders have already cast their votes ahead of today's AGM.

Sky News's Mark Kleinman has heard that one in four are opposing the pay report -- presumably due to concern that Sorrell walked away with bonuses worth up to 19m.

Revealed: More than a quarter of WPP investors have cast votes against its pay report ahead of marketing services group's AGM on Wednesday, amid anger at the remuneration arrangements for former CEO Sir Martin Sorrell. 1/3...

Revealed: WPP chairman Roberto Quarta will suffer a more limited revolt, with up to 20% of shareholders opposing his re-election to the board. Company's AGM is nevertheless expected to be a heated affair. 2/3...

I've obtained details of the likely outcomes of the key votes at the WPP AGM, with board members likely to face searching questions about reports in the Wall Street Journal and Financial Times about the circumstances which led to Sorrell's exit. 3/3

9.06am BST

Shareholder advisory group Glass Lewis is also lining up against Roberto Quarta, by advising investors to vote against the chairman's re-election.

9.02am BST

America's second-largest public pension fund will vote against the re-election of Roberto Quarta at WPP's annual meeting today.

California-based Calstrs said it would vote against Mr Quarta's re-election, as well as the re-election of non-executive director Hugo Shong. The FT has more details.

8.53am BST

The Times also predicts a lively shareholder meeting:

WPP AGM today.#lively pic.twitter.com/jmDM7mtJpL

8.47am BST

My colleague Rob Davies has pulled together a list of questions which WPP should answer at today's AGM regarding Sir Martin Sorrell's shock departure earlier this year:

8.32am BST

The BBC predicts that around 25% of WPP shareholders will oppose the decision to hand Sorrell up to 19m in bonuses over the next four years.

Those payments are due because the company agreed to treat their departing CEO as a "good leaver", despite the investigation into his conduct.

8.28am BST

The front-runner to succeed Martin Sorrell at WPP has launched a review of the company's codes of conduct.

Mark Read, chief executive of WPP's digital marketing agency Wunderman, wrote to all staff yesterday to remind staff of the company's "values".

"When I come to work I expect to be treated with respect by my colleagues, and every one of you reading this has the right to expect the same."

"You will no doubt have read the press coverage this week about WPP and Martin Sorrell, including allegations about his behaviour towards people at the parent company.

Here's the email that WPP's chief operating officer Mark Read sent to staff re Sir Martin Sorrell. Note he omits the 'Sir' and specifically refers to "allegations about his behaviour towards people at the parent company". pic.twitter.com/psUPljo63t

7.58am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Britain's cost of living squeeze is in the spotlight this morning, as we get new inflation figures showing how price changed in May.

Related: Fall in UK wage growth reduces pressure for interest rate rise

Later today: @ONS releases UK #inflation data for May. Consensus for yoy change in CPI according to #Bloomberg @economics: 2.4%. We expect annual rate to have dropped to 2.3% pic.twitter.com/QiJiTopBIA

Related: Martin Sorrell's WPP exit came amid bullying and sex worker allegations

#FTSE100 called to open flat at 7705 as investors turn from the Singapore summit to central bank updates, the Fed tightening further, and the ECB potentially discussing QEnd pic.twitter.com/sSoRJobwXx

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