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.
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