WPP Shareholders Revolt Over Sir Martin’s Scandal
The shareholders of WPP have challenged the board of directors of the firm because of the manner it handled the departure of its founder, Sir Martin Sorrell. Close to a third of the shareholders failed to support the company’s pay,and bonus scheme and about seventeen percent was unable to back the re-election of Chairman Roberto Quarta.
The shareholders also demand or more transparency concerning Sir Martin’s departure. Sir Martin resigned in April from the biggest advertising agency in the world amid misconduct allegations. In the thirty years he served in the company, Sir Martin who is now 73 changed WPP from a small wire baskets maker into a business worth £20bn at one point.
Sir Martin’s resignation came in the wake of allegations of payments made to a sex worker as well as poor treatment of staff which he denies. He was once the highest paid FTSE 100 chief executive in Britain and is also due to receiving £19m over the next five-year period.
A calculation of proxy votes indicates that 29.5 percent were voted against the remuneration report. The votes by the shareholders were announced during the firm’s annual shareholder meeting. The Chairman, Mr. Quarta defended the huge role of the advertising agency in the departure of Sir Martin.
Mr. Quarta has continuously faced criticism that he failed to prepare for the departure of Sir Martin but he told the annual shareholder’s meeting that there was the appropriate conduct of the board throughout. One shareholder asked the Chairman on why he had failed to thank Sir Martin in his speech. Interestingly, he did not answer the question and moved on to the next questions. Another shareholder wondered about the future direction of the company because Sir Martin was still “so key” and “so crucial.”Mr. Quarta, however, asserted that everyone had contributed to the business and WPP would succeed without Sir Martin.
An internal inquiry investigated the allegations raised against Sir Martin, but the report is yet to be published because WPP argues that it would breach the data protection rules. The chairman told the AGM in London that the procedure followed by the board in response to the allegations was robust from both a governance and legal point of view.
Earlier this week, a Financial Times report raised questions about Sir Martin’s treatment of the staff. The Chairman asserted that it was not possible to comment on the specific allegations, but everyone in WPP just like in any other workplace deserves to be treated with respect.