UPDATED: At WPP, Sorrell's $95 Mil. Pay Package Gathers More Foes -- But Passes Anyway

UPDATE: The opposition of PIRC and ABI were not enough to stop Sorrell’s pay package going through, in a vote today. WPP also reported a decline in revenues of 6.7 percent.

Investor watchdog Pensions and Investments Research Consultants has come out against WPP chief Martin Sorrell’s $95 million pay package proposal. PIRC joins the Association of British Insurers, which also urges shareholders to vote against it. BNET readers first learned of Sorrell’s self-enrichment scheme on May 23.

The 12-page contract would allow Sorrell to invest £12.5 million in WPP shares. If he meets certain goals, he gets five times this amount in five years’ time. Of course, £12.5 million sounds like a lot but for someone as rich as Sorrell, this is a mere bagatelle considering the outsize rewards: Remember, no single WPP shareholder could possibly hope to gain such a return by investing in Sorrell’s company.

The other important thing to note is that it does not reward him for making WPP stock go up. Rather, all WPP has to do is outperform its peers (IPG, OMC, etc). If all the advertising stocks went down but WPP went down the least, Sorrell would still cash in. In other words, WPP shareholders could still lose their shirts by investing with Sorrell, and yet in five years’ time Sorrell would nonetheless come out a gazillionaire.

In the meantime, as WPP holders consider whether to allow this scheme to go ahead, here’s a recap of some of Sorrell’s recent achievements:

He was asleep at the wheel on Spot Runner deal, he was hoodwinked on the George Patterson acquisition, he laid off 7,000 of his staff, he doubled WPP’s debt, he embarrased the company with the Enfatico climbdown, he used his holdings of WPP stock to guarantee personal loans, and he moved WPP’s HQ to Ireland to avoid its UK tax obligations. Sorrell also predicts revenues will be down for the year.

This item was originally published on May 29, 2009.

• See previous coverage of WPP:
• WPP’s Sorrell Wants $95 Million Pay Package; Sparks Protest at “Unnecessarily Complex” Scheme
  
• WPP Alleges “Secret Payments” Spoiled Deal With George Patterson, Communications Group
• WPP’s Sorrell Dusts Off Latest Wacky Recovery Metaphor: “An Italic L, Flipping Up”
• Sorrell Prepares to Leave WPP Amid 7,000 Layoffs
• WPP Q1: Debt Doubles; “It’s All Lehman Brothers’ Fault”
• WPP Accuses Spot Runner of $54 Million Scam; Was Sorrell Asleep at the Wheel?
• The Enfatico Fiasco: Isn’t This All Dell’s Fault?
• WPP’s Sorrell Calls Publicis’ Levy “Callous” in Remarks on Recession
• Sorrell’s Interest in Branded Content Is Explained by WPP’s Finances
• WPP’s Layoffs Plan Explained — Wall Street Doesn’t Believe Sorrell’s Rosy View of the Future
• WPP Q4: Lower Profits Increase Likelihood of More Layoffs