Despite public calls for pension funds to vote against WPP's remuneration report at its AGM this week (8th June) the resolution was passed with 33.5% dissent - higher than 2015's 22.2% protest vote.

ShareAction had condemned the chief executive's (CEO) Sir Martin Sorrell’s £70m pay packet, which makes him the highest paid CEO in the FTSE 100. The responsible investment charity said that the government’s automatic enrolment reforms mean that the vast majority of working people in the UK now save or are due to begin saving for a pension. Millions of workers, including a large proportion of low paid employees, are now invested in the stock market via their savings and many of those employees would question the logic of their savings supporting a £70m pay deal. To support its campaign ShareAction ran an online tool to enable savers to email their pension fund managers directly, asking them not to endorse the pay deal.

Roger Jeary, a trustee of ShareAction, attended the AGM to question the board on the pay deal and highlighted the fact that £70 million would take someone earning the Living Wage nearly 4,394 years to earn.

Prior to the meeting Catherine Howarth, Chief Executive at ShareAction said: “Sir Martin Sorrell is a brilliant but greedy individual, whose pay regularly brings his company, and big companies as a whole, into disrepute. That’s bad news for the entire system upon which UK private pensions depend. £70m for a year’s work is an outrageous sum and shareholders should vote it down at the AGM.”

The Local Authority Pension Fund Forum (LAPFF) advised its 70 member funds to vote against WPP’s remuneration report due to what it believed were the company’s excessive payments offered to Sorrell.

Kieran Quinn, LAPFF Chairman, said: ‘Most shareholders will, in the main, accept what they consider a reasonable level of pay for performance. However, with WPP, we consider there are several aspects of the payment which do not reflect this, and we are advising our member funds to oppose the remuneration report on this basis’.

Manifest's remuneration analysis has consistently graded WPP's executive pay at E (with the lowest grade being F). Manifest's analysis stated that historic payout levels, when viewed against company performance, suggested that stretching long-term incentive plan targets have generally not been set while remuneration packages were excessively weighted towards performance-pay. Manifest also found that the CEO pay ratio compared to all employees as well as the next highest paid director are significantly out of line with peers. Manifest also found that annual bonus and LTIP caps and that benefit arrangements go beyond what is considered standard and could be considered excessive - particularly in the absence of a persuasive explanation from the company. WPP   has acknowledged that there had been concern about executive remuneration and said it would continue to engage with investors ahead of the next binding remuneration policy vote in 2017.