Sir Martin Sorrell has defended WPP’s controversial long-term share scheme, from which he recently received a £36m payout.
Asked whether he felt guilty about his pay package at the Advertising Week Europe conference on Tuesday, the WPP chief executive said: “It is not a question of guilt. It is a question about the way the system works.”
The payout from the Leap incentive plan is likely to take Sorrell’s total pay for last year to about £40m, including his salary and short-term bonus. His total earnings from WPP over the past 11 years now amount to about £184m.
Sorrell defended the scheme, arguing that he was not the only one who benefited from the rise and rise of WPP’s financial performance.
“It is not one man, it is 17 people who participate [in the Leap plan],” he said. “Last year the total incentives paid were about £350m. It’s pay for performance. You forget [WPP’s] market capitalisation has increased by £10bn over the five years [of the Leap performance plan]. If people think there is something wrong with the system they can change it.”
Sorrell also said the volatile world of advertising has had to deal with figures such as Jeremy Clarkson in the past.
“We’ve had Jeremy Clarksons and they’ve gone,” he said. “I know nothing about the ins and outs of Clarkson’s case. But if you say ‘do you have difficult decisions to make?’ [then yes] at some point in time you have to make those difficult decisions.”
Sorrell sympathised with the difficulty that the BBC has faced over what to do about Clarkson’s behaviour – the presenter has been on a final warning since apparently uttering the N-word last year – acknowledging that it is natural to avoid the “evil day” of potentially having to fire someone.
“When taking difficult decisions with people the natural tendency of human beings is when they have difficult decisions to make they delay them,” he said. “When you have a difficult decision to make the natural tendency of any human being, human being the operative word, is to avoid the evil day. Sometimes it is very difficult to avoid it, it depends on the individuals involved.”
