Well lots of shareholders think he isn’t, 40 per cent of them voting against the WPP reuneration committee’s decision to award digital supremo and main board director Mark Read a boost in his base salary and a big bonus last year, bringing his pay to £872,000.
They weren’t very happy either about finance director Paul Richardson trousering £2.18m (base salary of £600,000 odd plus a bonus) especially as this included a wholly mysterious item for ‘fees’ of £100,000. When you’re paid £600,000 basic why on earth should you be able to charge ‘fees?’ And what precisely are they?
CEO Sir Martin Sorrell, who left his base salary where it was at £1m, took away £4.2m, but he got off lightly with the shareholders.
This all emerged at WPP’s annual meeting in the Grafton Hotel in Dublin yesterday (WPP moved to Ireland a couple of years ago for tax reasons). Unfortunately the dissenting shareholders didn’t turn up so it was all over with rather quickly despite the 40 per cent opposition to WPP pay.
But why did they pick on Read?
I’ve met Read a couple of times and he seems a capable guy, basically he’s WPP’s brainbox on the board, a role formerly occupied by Eric Salama who now runs WPP’s Kantar research division.
As head of WPP’s digital operations he’s quite clearly crucial to the future fortunes of the world’s biggest advertising group, charged with making WPP a bigger force in digital even though he hasn’t much of a transfer budget to play with (the aforementioned shareholders still feeling bruised by Sorrell’s expensive £1.1bn buy of research firm TNS in 2008).
What he isn’t is a CEO in waiting. So disaffected shareholders will take a pop at him rather than at the great man himself, Sir Martin Sorrell.
What shareholders would like is for WPP to beat the market as comprised by its competitors Omnicom, Publicis Groupe, Interpublic, Dentsu and Havas. But it’s probably too big and too diverse to do this, it goes up and down with the market.
So is Read worth the money? He’s certainly worth a bit more than his former base salary of £400,000 or so (he has Sir Martin to deal with after all).
But WPP bonuses are another matter entirely.
Why aren’t they linked to the share price? If they were no-one would get anything.