WPP CEO Sorrell paid £42m in 2016, Shell chief gets 54% pay rise
Sir Martin Sorrell, CEO of advertising firm WPP, was awarded £42m in pay in 2016, bringing his pay for the last five years to £210m.Ben van Beurden, CEO of Shell, received a 54% pay rise in 2016, taking his pay since taking over the company in 2014 to £35m. Rolls-Royce was also revealed to have paid an annual bonus, of £916,000, to its CEO, Warren East, for the first time in three years. There is increasing scrutiny of executive pay as a result of pressure from investors concerned about the value and effectiveness of massive payouts. 

The scale of pay deals on offer in FTSE 100 boardrooms has been illustrated by the latest payout to Sir Martin Sorrell, who was awarded more than £40m in 2016 taking the total payout to the chief executive of marketing and advertising company WPP in the past five years to more than £200m.

The long-term bonus payments to Sorrell were published alongside the latest pay deals at oil company Shell, which revealed its chief executive’s pay had risen 54% in 2016. Ben van Beurden received €8.6m (£7m) in 2016, taking his pay since he took the helm of the Anglo-Dutch company in 2014 to £35m.

Major stock market listed companies are revealing the pay of their top executives at a time of renewed scrutiny of corporate Britain since the vote for Brexit and the warning by Theresa May that she would curb boardroom excess.

Some companies have already heeded attempts by shareholders to respond to the political backdrop, notably Imperial Brands, the maker of Gauloises and John Player cigarettes, which scrapped a pay rise for chief executive Alison Cooper in the face of a potential protest at its annual meeting in January.

Among other companies publishing details of pay deals on Thursday was Rolls-Royce, which paid annual bonuses to its executive for the first time in three years. Its chief executive, Warren East, who is leading the clean-up operation of the engine-maker after its £671m charge to settle bribery and corruption charges with the Serious Fraud Office and authorities in the US and Brazil, received a £916,000 bonus taking his total pay to £2m.

After Royal Bank of Scotland revealed on Wednesday it had handed £16m in bonuses to its top executives, Barclays disclosed its top management had been granted £9m in future bonuses and shared £13.6m from bonuses paid out in the past.

The pay of WPP’s Sorrell has been a flashpoint in the past. In 2012 - during what became known as the shareholder spring - nearly 60% of investors rejected his annual pay package for the previous year.

It sparked changes to his pay deals which were generated by the leadership equity acquisition plan (Leap) which has payed out multi-million pound share deals for Sorrell.

The latest £41.6m payout is the last from the Leap scheme, which will be replaced with a less generous deal which investors expect to pay out less than £20m. The near £42m will be added to Sorrell’s salary, bonus and other extras when WPPpublish its annual report and will probably push his full remuneration for 2016to closer to £50m.

WPP said the payout from the Leap is down 34% on the £62.8m he received last year.

Since 2012, Sorrell has received close to £210m in total remuneration, which has consistently ranked him the highest-paid chief executive in the FTSE 100.Despite WPP’s pledge to overhaul executive pay, shareholders have continued to issue rebukes: in 2014, 30% refused to endorse Sorrell’s remuneration and last year, a third refused to back the £70.4m he received, one of the biggest pay cheques in UK corporate history.

“This is the final outcome of the wholly performance-related Leap scheme which was replaced in 2013 with a new long-term scheme with a much-reduced opportunity approved by share owners,” said a WPP spokesman.

Last year, Sorrell defended his pay package arguing he had put three decades of his life into building WPP from a maker of wire baskets into a £21bn global marketing business.

“I’m not a Johnny come lately who picked a company up and turned it round [for a big payday],” he said. “If it was one five-year plan and we buggered off, fine [to criticise my pay]. Over those 31 years … I have taken a significant degree of risk. [WPP] is where my wealth is. It is long effort over a long period of time.”

In December, the chair of WPP’s pay committee, Sir John Hood, told MPs that Sorrell was not on a “superstar” salary.



The annual report for Shell shows that van Beurden’s €8.6m follows €5.5m in 2013 and €24.1m in 2014, his first year at the helm when his pay was inflated by by pension payments and “tax equalisation” handouts. It shows that 10% of future bonuses will be linked to managing greenhouse gas emissions.

Shell also reveals the debate going on among some investors who want to end the current system of long-term incentive plans, paying out over three years, with awards of restricted shares which do not have performance criteria. The oil company is not yet doing this because of the lack of agreement among shareholders.

Rolls-Royce, which recently reported the biggest annual loss in its history – £4.6bn - revealed that some of its shareholders thought the executive bonuses should be bigger.