Our views

Investors press WPP to plan for a post-Sorrell future

Ashley Hamilton Claxton, Corporate Governance Manager

7 June 2017

There is no doubt that WPP has become the media powerhouse it is today thanks to the hard work and dedication of Sir Martin Sorrell. The question for investors is how the business will look when he inevitably retires.

Together with other investors, including Standard Life, we have pressed the Chairman into making real progress with succession planning. We are pleased that the board is taking this task seriously, by conducting more rigorous sourcing of potential internal candidates from group companies. Planning for succession is, however, still the biggest risk facing the company in our view, and there is still work to be done to assure shareholders of an orderly and stable transition when Sir Martin steps down.

Executive pay at WPP continues to look excessive. Whilst we acknowledge that the reduction in the total long-term bonuses and incentives available to executives under the new remuneration policy is a step in the right direction, the sheer scale of these remains exceptionally high, at over nine times the salary for the CEO. As with previous years we will be voting against WPP’s remuneration report and also this year’s new remuneration policy.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.