WPP chief executive Cindy Rose is facing investor opposition over a proposed pay package that could see her earn up to A$20.7 million a year.
As reported by the Financial Times, proxy advisory groups Institutional Shareholder Services and Glass Lewis have recommended shareholders vote against the remuneration plan at WPP’s annual meeting next week.
Why shareholders are being urged to vote no
Rose, a former Microsoft executive, took over from Mark Read, who stepped down in September last year. Read had been in line for a maximum payout of about A$16.2 million before his departure.
Mark Read
ISS said Rose’s proposed remuneration was “out of proportion to the company’s market positioning and its financial performance”. It also said there was “no sufficient justification” for setting her total pay package at a premium to Read’s.
Glass Lewis also recommended investors reject the plan. It cited the size of Rose’s salary on appointment, the balance of financial and non-financial bonus metrics, and the decision to grant long-term incentive awards at maximum level despite a sharp fall in WPP’s share price.
WPP under pressure after share price slide
The vote comes after a difficult period for WPP. Shares in the advertising group have more than halved over the past 12 months, with investors concerned about client losses and the impact of AI tools on parts of its traditional agency work.
WPP lost its place in the FTSE 100 in December after a prolonged decline in its market value. Its shares are now trading at a 17-year low, despite recent client wins including Estée Lauder.
Borders to Coast, the UK’s largest local government pension scheme asset manager, told the Financial Times it would vote against the proposed pay deal. The group owns 0.23 per cent of WPP.
Rose’s turnaround plan
Rose has begun a strategic overhaul of the global agency network. The plan includes cutting about A$943 million in annual costs by 2028 and selling non-core businesses.
The Financial Times previously reported that Burson, WPP’s PR agency, was among the businesses being considered for sale.
ISS said WPP had not sufficiently demonstrated how the proposed pay framework would support the company’s strategy or help deliver a meaningful turnaround.
WPP said it had undertaken extensive consultation with shareholders on the proposed changes, with “strong support indicated from the vast majority”.
The company added that the changes were “essential to align us with global peers, restore growth and position WPP as a company fit for the future and built to win”.