Sorrell is paid £3m but risks missing out on bonus

by Staff, Brand Republic 07-Jun-06, 08:40

LONDON - Sir Martin Sorrell, the chief executive of WPP Group, saw his pay packet hit £3.3m, but he faces missing out on bonuses worth more than £40m because of the poor performance of the advertising firm's shares.

The bonus is part of a five-year scheme that would give Sorrell £33m if WPP's share price hit a certain level.

However, WPP's share price has underperformed and been below average, according to the group's annual report, which said it was "below median for both the 2004 and 2005 performance periods".

At £3.3m, Sorrell's remuneration was down slightly on last year's £3.37m. The £3.3m includes a bonus of £1.6m, and an annual £859,000 salary, annual pension contributions of £343,000 and a further £798,000 as part of another stock-based bonus scheme.

Sorrell still has time to pick up the multi million pound bonus, which could be worth as much as £44m, because the scheme, Renewed Leadership Equity Acquisition Plan, runs for five years.

For Sorrell to receive it, WPP's share price must improve over the next three years and come in ahead of rivals Omnicom, Publicis Groupe and Interpublic Group.

The scheme was fiercely criticised by shareholders last year because it meant Sorrell picked up as much as £50m in shares.

However, the scheme was announced as Sorrell last year faced a costly divorce that forced the WPP chief to cash in £12m in shares as his wife Lady Sandra Sorrell was awarded a £3.25m Georgian townhouse, two Harrods underground car parking spaces worth £200,000, £2m in bank deposits, £23.4m in cash, plus thousands in stocks and shares.

Despite the huge divorce settlement and the sell-off of shares, Sorrell is estimated to have a stake in WPP of over £80m.

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