WPP’s Sir Martin Sorrell (below) is doing his bit for the workers, leading the 17 per cent drop in FTSE100 CEO pay by receiving just £48.1m in 2016, down from £70.4m in 2015. We wait to see what his “compensation” (as they say in the US) will be for 2017.
WPP reports its half-year results on August 23 so that might provide a clue.
New figures from the Chartered Institute of Personnel and Development and the High Pay Centre, a UK think tank, also show that women remain unrepresented and underpaid in the high echelons of British business with just six women FTSE100 CEOs, earning much less than most of their male counterparts. Even so the average pay of an FTSE CEO is 160 times that of a UK worker earning the national average of £28,000.
Sorrell, as he likes to remind us, is a special case as he founded and built the company thirty years ago. Over the last decade he has rebuilt a substantial shareholding, the main part of his near-£500m wealth. WPP, whose shares have fallen nearly five per cent over the past year, is worth £19.7bn.
All of which is a poser for WPP’s board as it weighs Sorrell’s pay for this year although much of this is already determined by existing plans. All the big marcoms companies are struggling for growth as clients cut back and new players, such as the big consultancies, succeed in eating some of their lunch. Media agencies have contributed the biggest part of their profits in recent years but they’re under particular pressure as the aforementioned clients review their digital spend and what agencies charge for administering it.
Procter & Gamble recently cut $140m from its quarterly digital spend and saw its profits rise. WPP recently merged media agency Maxus into MEC although it is trying to build a new fourth leg to its media agency business with digital specialist Essence.
So it’s a tricky market and Sorrell’s pay, although much reduced in absolute terms, is looking more not less out of kilter with his peers. WPP has grown solidly over the past decade and Sorrell will move heaven and earth to ensure that it continues to do so this year.
But no-one can defy gravity for ever.