7 months ago| article
Agency giant claimed Sorrell was responsible for “disclosure of confidential information” to the media
Apr 30, 2021 04:13:00 AM | Article | Gideon Spanier Share -
The war between WPP and its founder and former CEO Sir Martin Sorrell continues.
WPP revealed in its annual report, released on Thursday (April 29), that it will not pay out two final long-term bonus payments to which Sorrell was entitled after exiting the company in 2018.
The company said it withheld the payments because of “disclosure of confidential information” during his time as CEO.
Sorrell immediately hit back, accusing WPP of “blind rage” and looking for “an excuse to deny me what’s mine”.
The WPP long-term incentive plan, known as the EPSP, paid bonuses in the form of share awards after five years. Sorrell was due two final payments, covering 2016 and 2017.
“The Compensation Committee exercised its discretion under the terms of the EPSP to make malus adjustments,” the WPP annual report said.
“It determined that the 2016 and 2017 EPSP Awards granted to Sir Martin Sorrell, the former Group Chief Executive, will lapse as a result of Sir Martin Sorrell’s disclosure of confidential information belonging to WPP and certain of its clients to the media during his tenure as a WPP director.”
A WPP spokesperson would not give any further comment about the nature of the alleged leaks of information by Sorrell.
It is understood the 2016 award would have been around £200,000 ($278,000).
The 2017 bonus would have been calculated at the end of 2021, but it is likely that it would’ve been slightly higher.
The bonuses could have hypothetically paid out millions of pounds in shares, depending on the financial company’s performance, but WPP suffered four years of revenue decline between 2016 and 2020.
The share price fell by a third from £19 to £11 in his final year in charge and stands today at around £10.
Sorrell stepped down after an allegation of personal misconduct, which he denied, and he has repeatedly criticised the company and its chairman, Roberto Quarta, since then.
In response to the end of his bonus scheme, Sorrell, now executive chairman of S4 Capital, said: “Just another case of peanut envy. First, WPP tried to outbid S4 for MediaMonks, offering at the death up to an eye-watering €1.5 billion in an earn-out, when we won the company for €300 million.
“Next, WPP blew $1 billion by selling their 20% stake in Globant at 52p (it now trades at over 220p), because it was associated with the Ancien Regime. Now, this petty move, three years after I left, over a relatively small number of shares and with WPP's recent poor share price performance. It’s nonsense.”
He continued: “It’s a bit rich that they’re accusing me of leaks, given their own over the last three years. They’ve had to go back several years to try and find an excuse to deny me what’s mine. I’ve left it to my lawyers to deal with. It seems like blind rage is driving them, not peanut or even coconut envy.”
WPP declined to comment on Sorrell’s statement.
The report also revealed that WPP CEO Mark Read’s compensation package for 2020 was £1.1 million ($1.5 million), down from £2.6 million ($3.6 million) in 2019.
Chief financial officer John Rogers, who joined WPP in February 2020, had a bigger package of £4.4 million ($6.1 million), including a total of £3.6 million ($5 million) in buy-out awards for "the forfeiture of incentive awards from his previous employer," Sainsbury's Group.
Both Read and Rogers took a 20% base salary cut for four months in 2020 and received no annual cash bonuses as part of emergency cost-saving measures during the pandemic.