Omnicom big boss John Wren has faced investor backlash over his A$108.5 million annual pay package, with nearly half of shareholders voting against the agency group’s new compensation policy.
As reported by Campaign UK, more than 43% of shareholders opposed the board’s decision to give Wren, Omnicom’s chairman and chief executive, four million share options as part of an incentive scheme running from 2025 to 2028.
The policy was still approved, with almost 57% of shareholders voting in favour at Omnicom’s annual stockholders’ meeting. The vote was advisory.
Investor pushback
Institutional Shareholder Services, a leading proxy advisory group, criticised Wren’s share options package ahead of the vote, calling it “front-loaded” and “lacking pre-set performance criteria.”
ISS recommended that investors oppose the policy.
Wren is due to receive options worth around A$480.5 million over three and a half years.
He became eligible for the first portion, notionally worth A$107.4 million, last year, with the remainder due to vest in equal amounts over the period. His total package for 2025, including benefits, was A$108.3 million.
How the pay plan works
Wren has the right to exercise the option to buy stock at a pre-agreed price of A$120.28 per share, but will only profit on the amount that Omnicom’s share price rises above that level.
Omnicom’s stock has recently been trading below that price, at about A$111.60 earlier this week. Wren, who has been CEO since 1997, previously earned an A$1.55 million salary plus bonuses, with annual packages of more than A$31 million in recent years.
He reduced his salary to A$1 and received the share options as part of a new employment agreement designed to align his remuneration with shareholder interests following Omnicom’s A$14 billion takeover of Interpublic.
The package is also intended to keep him in the role until the end of 2028, when he is due to step down as CEO and become executive chairman.
ISS flags governance concerns
ISS said Omnicom’s financial performance last year had been “mixed” and that the company had provided only a “limited” rationale for creating the share options package.
“Such a practice limits the board’s ability to meaningfully adjust future pay opportunities in the event of unforeseen events,” ISS said. The proxy adviser added that while the stock options include an incentive to increase the share price, time-vesting vehicles are not considered strongly performance-based.
ISS also raised concerns about some bonus targets for other senior Omnicom executives, describing them as “non-rigorous.”
WPP also faces pay pressure
The Omnicom close call arrives after WPP also faced pushback over executive pay earlier this month.
About 25% of WPP shareholders voted against its remuneration report and new compensation policy at the company’s annual meeting.
WPP CEO Cindy Rose can earn a potential annual package of A$20.3 million, compared with A$15.7 million for her predecessor Mark Read.
WPP said it would engage with major shareholders who did not support the remuneration resolutions and report back within six months.
Arthur Sadoun remains the lowest-paid holdco CEO amongst rivals WPP and Omnicom.
Publicis Group plans to increase its base compensation by 20% to A$2.3 million after finding out that it’s the lowest-paid CEO among foes WPP and Omnicom.
If approved by the board, the proposed increase would take Sadoun’s total potential package, including bonuses, to about A$17.1 million.
Top image: John Wren