UK - A lucrative new incentive scheme which could net the chief executive of advertising giant WPP more than £34m has split corporate governance experts.
Sir Martin Sorrell is in line for a record payout if shareholders approve the leadership equity acquisition plan at an extraordinary general meeting.
The plan – which could pay out £112.5m between 19 senior executives – is designed to reward long-term financial commitment to the company.
But investor lobby group Pensions Investment Research Consultants is calling on funds to block the plan which it claims offers “excessive rewards” and does not align the interests of participants and shareholders.
But the National Association of Pension Funds recommended members support the plan – although it acknowledged the payouts were “the biggest by UK standards”.
An NAPF spokesman said: “Although the plan is unique because of the size of the potential payouts, it is also unique in the amounts executives have to put in to qualify. It rewards four or five-year investment and longer-term financial performance and we are recommending a vote in favour at the EGM.”
Sir Martin will have to invest around £7m of his own money in the scheme but could receive returns in excess of £34m if he meets the most ambitious targets over the next five years.
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