WPP braces for Sorrell and shareholder showdown

So it’s the eagerly-awaited gunfight at the Four Seasons Hotel in Dublin tomorrow, hardly Dodge City but the leafy Ballsbridge suburb in the Irish capital has probably also seen a few disagreements in its time.

And at 12pm WPP founder and CEO Sir Martin Sorrell will confront his revolting shareholders at WPP’s AGM, unless chairman Phil Lader can sweet talk them round in the meantime, or persuade CEO Sorrell to water down his earning requirements.

Shareholders are revolting over Sorrell’s £13m pay package: whether or not this is because they really think it’s too much or, in ‘shareholder spring’ they’re just making a point to over-mighty CEOs, is a moot point.

Sorrell will get his £13m anyway, a shareholder vote against won’t mean he has to give back any of his 2011 package. But a vote against would hardly help the relationship between the boss of the company and its owners.

One doubts that Sorrell, as many admen would do in the same circumstances, has been having quiet chats with WPP global creative boss John O’Keefe about setting up Sorrell O’Keefe & Partners in a rented office somewhere in Soho. His former lawyers surely wouldn’t let him go near a WPP client for the next ten years or so for a start (although he says he hasn’t a contract, so maybe he could).

But such a spectacular disagreement may incline the great man to consider a future outside WPP; maybe as the executive chairman of a big listed FTSE100 company (at 67 he’s a bit old to be appointed CEO). Embattled UK oil giant BP’s shareholder owners must be wondering if newish CEO Bob Dudley is cutting the mustard following a number of post-Deepwater Horizon setbacks like the collapse of its joint venture in the huge Russian oil market. BP is an even bigger fish than WPP and running it is a more about PR than drilling oil wells.

As for WPP’s shareholders, they should be careful what they wish for. Does anybody apart from Sorrell really understand what WPP, which owns hundreds of companies, is all about?

At some stage someone else will have to, of course, but running WPP is a bit like being emperor of Rome. Augustus pulled the Roman empire together, keeping the local bosses and their troops in order, his authority overriding their ability to rebel or generally make trouble. But when Augustus went the empire went from bad to worse with Tiberius, Claudius and then Nero.

It’ll probably all be quite polite at the Four Seasons (five stars, cheapest room €149) but the real drama could take longer to unfold.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.

One comment

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    With this showdown and Leveson, you are really spoiling us…!
    Yes, its a lot of money. But then the whole pyramid is pretty well remunerated, isn’t it?
    I’m not sure I agree with the numbers involved – SMS clearly has a point of view on his relative importance in that company and does notoriously seem to work harder than anyone else at times – but the principle is correct that he should be rewarded more for good performance. I’m a strong advocate that there should be more of a performance culture in agency businesses, in my experience there are too many six-figure comfy jobs where performance is not measured in any meaningful way, and even when you wanted to be more accountable there’s usually little more than anecdotal evaluations in place, not good enough.
    If you don’t mind me sharing it, I did a little blog post last year on creating an agency performance culture and would love to hear thoughts on this topic. I’m our experience clients want agencies to be more accountable and our hypothesis is that this has to be translated down to an individual level to be realistic.