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.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers