That annual entertainment ‘the battle of Sir Martin’s money’ is on its way with WPP boss Sir Martin Sorrell’s base pay set to rise from £1m to £1.25m which, in turn, will trigger much larger bonuses as these are based (via a number of obscure formulae) on base pay.
WPP is due to report its first quarter numbers on Friday which are expected to show growth slightly lagging 2011’s 5.3 per cent but respectable all the same. Media buyer Aegis is expected to report rather better 7.8 per cent organic growth.
So does Sir Martin deserve a rather belated base pay rise (it last went up about ten years ago)? If you look at what his peers earn you’d have to say yes: Interpublic’s Michael Roth is due to trouser around $12m in salary and bonuses this year and Omnicom’s john Wren around $22m, although much of this comes from share awards. Sorrell receives much more than £1.25m a year ($2m) from other awards but hardly looks overpaid in relation to his peers.
Come the day he finally steps down (Sorrell is 67) his successor, most likely an American, is certain to earn a much higher base salary, possibly with bonuses to match. Google’s Eric Schmidt, who stepped as CEO in favour of co-founder Larry Page recently, will earn $101m in salary ($330,000), bonuses and stock awards for last year’s labours.
Comparisons aside, this is still a delicate issue for WPP as a significant number of shareholders took umbrage last year at WPP digital boss Mark Read’s pay rise to £700,000. But any protests at Sorrell’s pay rise are likely to be more muted.
What shareholders will be looking for on Friday is some hard evidence that WPP’s massive research operation Kantar is delivering the goods. Kantar has lagged the rest of WPP since buying research giant TNS Sofres for £1.1bn in 2008. The aforementioned shareholders will be well aware of the surge in Aegis’s performance since it offloaded research business Synovate to Ipsos for £525m last year.