WPP is facing an investor backlash over the terms of Sir Martin Sorrell's departure which puts him in line for a £20 million (NZ$39 million) windfall. One investor told The Telegraph that they were "furious" the business was allowing the advertising tycoon to pocket up to £20m in share bonus awards over the next five years following an allegation of personal misconduct.
Sorrell has denied any wrongdoing.
"We are going to be looking at it all – why he is allowed to leave with such [generous terms] and the lack of a non-compete agreement," the shareholder said.
Pressure is expected to mount on the company to release details of the alleged offence. Sources say only lawyers on both sides and WPP's 11-person board have been made privy to the details, leaving the City in the dark about the investigation as its annual general meeting looms in June.
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Sir Martin was understood to have reacted furiously over the board's handling of the probe. He terminated his contract "at will" – meaning he could leave immediately.
Although he is not entitled to a payoff, he is in line for share awards related to the company's performance between 2014 and 2022.
"Sir Martin would have to await the end of each five-year performance cycle before being awarded any shares," a WPP spokesman said. The board was already being strong-armed by investors to lower Sir Martin's pay following criticism that the amount in previous years was far too high.
He was Britain's highest paid chief executive, pocketing £70m in 2015 through a share scheme that was later scrapped following a shareholder rebellion.
- The Telegraph