Standard Life and Royal London have used their shareholder power in WPP to urge the advertising giant to rethink its executive pay and succession plans.
Royal London holds £106m worth of shares in the firm, a 0.48 per cent stake. Standard Life’s interest is three times that level, at 1.5 per cent.
At WPP’s annual general meeting today, the firms were among a number of investors to push the company towards change on issues like executive pay and succession.
WPP chief executive Martin Sorrell was paid a total of £48m in 2016.
At the AGM, 21 per cent of shareholders either rebelled against the pay deal or abstained.
Royal London Asset Management corporate governance manager Ashley Hamilton Claxton said the firm is voting against WPP’s remuneration report.
She says: “Executive pay at WPP continues to look excessive. Whilst we acknowledge that the reduction in the total long term bonuses and incentives available to executives under the new remuneration policy is a step in the right direction, the sheer scale of these remains exceptionally high.”
Royal London also urged the company to make sure an adequate succession plan is in place for Sorrell’s departure, as “the biggest risk facing the company”.
In a letter to WPP’s chairman, Standard Life Investments governance and stewardship director Deborah Gilshan writes: “As a long term shareowner in WPP, we acknowledge the success that Sir Martin Sorrell and all of the team at the company, past and present, have achieved and the ensuing benefits of that success to our clients.
“Unusually, the chief executive’s service contract may be terminated by either the company or Sir Martin without any notice. Given this, we suggest that the board consider what lead time would be required to ensure an orderly succession and discuss this with Sir Martin. We would like the board to come to an agreement with him that, other things being equal, he will provide sufficient warning to meet this timeframe.”