WPP To Unveil Sweeping Boardroom Shake-Up
WPP, the world's biggest marketing services group, is poised to unveil a boardroom shake-up as part of an attempt to avert a shareholder revolt over executive pay for the second year running.
City sources say that WPP will announce tomorrow that Jeffrey Rosen, the non-executive director who chairs its remuneration committee, is to step aside from the role later this year.
Mr Rosen will remain on the company's board but will no longer have responsibility for setting the pay of senior management. His exit from the key boardroom role will comply with corporate governance guidelines that deem non-executives to forsake their independence after nine years.
It will also come as WPP prepares to unveil a revamped pay structure for Sir Martin Sorrell, the chief executive who has orchestrated its rise to become the global leader in the provision of advertising, digital and public relations services.
The group owns agencies such as JWT and Ogilvy & Mather.
Last year, roughly 60pc of WPP's shareholders failed to back its remuneration report amid protests about Sir Martin's £11.9m total pay package for 2011.
Sky News can reveal tonight that WPP will also announce the appointment of four new non-executive directors and the departure of several long-standing non-executive board members.
Leading investors in the company said tonight that they understood that Jacques Aigrain, chairman of the clearing house LCH.Clearnet, and Hugo Shong, a Chinese venture capitalist, would be among the new directors.
The identity of Mr Rosen's successor as chair of the remuneration committee is yet to be determined and is likely to be thrashed out in the coming weeks, institutional investor sources said.
The boardroom shake-up, which has been assembled by Philip Lader, the former US ambassador to the UK who chairs WPP, is designed to demonstrate to shareholders that it is responding to concerns about the dearth of new faces on the board.
It will be announced alongside the publication of WPP's annual report, which will unveil Sir Martin's total pay, including about £11m awarded in shares for performance over a five-year period, for 2012.
Reports at the weekend said that Sir Martin would take a £100,000 cut to his base salary of £1.3m and that a lucrative incentive plan would be scrapped.
One major investor quoted by The Times today said: "They have listened - not just Sir Martin, but the whole board. They've made some good concessions."
Another shareholder briefed on the new deal said it would still result in potentially-large sums being paid to Sir Martin but would toughen the criteria governing the award of big share bonanzas.
Allies of Sir Martin point to the huge returns he has generated for investors during the 27 years he has been at the helm of WPP, whose share price has soared to an all-time high in recent months. It has won substantial new business from companies such as Nestle and Gillette this month.
Shareholders will vote on the company's executive pay plans at its forthcoming annual meeting although they will not have a binding say until after Government reforms are introduced later this year.
WPP refused to comment on Monday.