Pay row hits William Hill and WPP
‘Shareholder spring’ engulfs bookie as Cable summons fund managers
Investor discontent has caught up with bookies William Hill (Mike Hewitt)
INVESTORS are set to turn their guns on Britain’s biggest bookie, the maker of Marmite and the agency behind Argentina’s controversial Falklands advertisement as the revolt over “fat cat” pay gathers strength.
William Hill, ‘Unilever and WPP are braced for rebellions over lavish boardroom rewards at their annual meetings over the coming weeks.
Vince Cable, the business secretary, has called the heads of the biggest institutional investors to a meeting in Whitehall this week.
He said last night that the uprisings were the “right way to deal with excesses in executive pay”, but that investors need greater powers to curb “payments for failure”.
“Shareholders are beginning to flex their muscles, but it’s unlikely to be sustained unless they feel their votes count,” said Cable, who wants to empower them with a binding vote on pay.
The “shareholder spring” has already claimed high-profile scalps, including Sly Bailey and David Brennan, the bosses of newspaper publisher Trinity Mirror and drugs giant Astra Zeneca. Michael Queen of 3i, the underperforming investment firm, is standing down.
Aviva last week suffered a humiliating 54% vote against its remuneration scheme, raising questions over its chief executive, Andrew Moss.
Robert Talbut, head of the Association of British Insurers’ investment committee, said: “Companies would be wrong if they believe ‘no’ votes simply reflect poor communication, when in fact they reflect calls for fundamental reform.”
One of Aviva’s top investors said the chairman, Lord Sharman, should pay the price for the “embarrassment” and resign now rather than retiring next month as planned.
Investors are this week set to protest against William Hill’s pay plan for a third year, this time because of a £1.2m “retention bonus” and 8.3% rise for Ralph Topping, chief executive. One big investor said boardroom perks, such as Topping’s loyalty payment, had been an “ongoing issue”. William Hill said: “[Topping] has been instrumental in reviving the company’s fortunes.”
At Unilever, concerns centre on a possible 6% rise for Paul Polman, the chief executive, which would take him to £975,000.
However, some investors think the group has performed well, and Unilever noted that Polman had not had a pay rise since joining three years ago.
The most serious revolt is likely at WPP, which had to apologise last week over an advert created by its Buenos Aires bureau showing an Argentine Olympic hopeful training in the Falklands.
Sir Martin Sorrell, chief executive, had a 30% pay rise last year, lifting his salary to £1.3m. WPP also increased the maximum he can earn in annual bonuses to 500% of his basic pay.
Sorrell took home almost £13m last year, including £5.5m from the long-term incentive plan. His backers argue that his base pay has been increased just once before over the past decade.