Sir Martin Sorrell took home a staggering £43m last year, 43% higher than in 2013 and more than double his nearest FTSE 100 rival in the high pay stakes, Shell boss Ben van Beurden, who was paid €24.2m (£17.8m). With that in mind, outgoing WPP chairman Philip Lader was gushing, as he undertook the ‘unwelcome, but understandable spring ritual’ of defending the media mogul’s wages.
‘As I am soon to depart, let me take the liberty of a personal, up-close aside,’ he said (we’re all reaching for the tissues). ‘Some observers might prefer a CEO to opine less on politics, to be less available to media and conference rostrums, and to resist requests to comment on compensation.’ (Sorrell is unapologetic about his fat pay packets.)
‘WPP, however, is a marketing business, and few can match Sir Martin Sorrell in capturing media attention, coining a substantive phrase, or promoting their companies.’
‘Few would deny a certain ‘Sorrellcentricity’ to the Group; pronounced even among founders. This CEO, at heart and in practice, acts as an owner-entrepreneur, within the governance requirements of public ownership,’ Lader spouted, with the obligatory regulatory nod.
And therein lies one of the problems. Sorrell is no longer an owner-entrepreneur, but accountable to WPP’s shareholders, who in 2012 voted down the controversial share incentive scheme that contributed £36m of his pay in 2014. For the last two years almost a quarter of investors have voted down the world's largest ad group’s remuneration or abstained. That’s despite its share price rising more than 43% in the last two years, while the FTSE 100 has gone up 7.9%.
The second problem is the throne Sorrell has carved out for himself – and how anyone will fill it when the 70-year-old finally steps down. ‘Whoever follows Martin, whenever, will inevitably have a different style, different strengths and different organisational structure requirements,’ Lader said. ‘Ultimately confronting the ‘succession elephant’ will be part science, part art.’
Of course, any good CEO needs a careful eye on their legacy and successor. But with Sorrell having said publicly he has no intention of stepping aside any time soon, no doubt incoming chairman Roberto Quarta will have many more spring rituals ahead of him.