Jessica Fino 8 Jun 2017 01:48pm

One fifth of WPP shareholders reject CEO's pay package

The advertising giant is facing a shareholder revolt against its chief executive Martin Sorrell's £48m pay package after more than 21% of shareholders either voted against or abstained on the approval of the compensation committee report

Sorrell has previously seen similar revolts against his salary. Last year 34% voted against his pay package for 2015.

His 2016 salary will be 32% smaller than the previous year, when the CEO received a record £70.4m.

The vote was only advisory, but the remuneration policy, which was binding, received 90.06% in favour.

Sorrell said during the annual general meeting that the approval of the new remuneration policy “reflects a view that these are better plans from a governance point of view”.

The Equality Trust found earlier this year that the UK’s top chief executives earn 386 times the National Living Wage (NLW).

While an individual being paid the NLW will currently earn £13,662 per year, Sorrell earned £70,416,000 in 2015.

Recent years have seen a spate of backlashes against remuneration, in particular in 2012 during the so-called "shareholder spring".

That year saw 60% of WPP’s shareholders voted against the CEO’s remuneration package.

Deborah Gilshan, governance and stewardship director at Standard Life Investments, said after the meeting, “[Succession] remains the key governance risk to our long-term investment in WPP. As another annual meeting passes, the time to address succession for the chief executive shortens and the necessity to do so becomes more pressing.”

Standard Life manages 19 million shares in WPP.

In March this year, Crest Nicholson has said it would go ahead with its directors’ remuneration policy despite more than half of its shareholders voting against it.

The FTSE 250 company said it was “disappointed” the advisory vote for this year's remuneration report was not carried. However, because the vote was symbolic and non-binding, the payments will still go ahead.