Editorial: Sorrell's £60m bonus is out of step with the times

How valuable is Sir Martin Sorrell to WPP? Very, according to the company, which has persuaded shareholders to approve a scheme that could enable its chief executive to earn up to £60 million in performance-related bonuses over the next five years.

Even allowing for the fact that Sorrell has some very tough targets to hit before he could collect his cash, £60 million is still a breathtaking amount of money.

This isn't to say Sorrell may not be worth such a generous incentive. No marcoms holding company boss apart from Publicis Groupe's Maurice Levy plays so symbolic a role. Like Levy, it is Sorrell who has the key client contacts and does the big deals. Both are indefatigable and have undoubtedly been responsible for pulling in revenues far in excess of Sorrell's potential bonus. And both are the main reasons why WPP and Publicis Groupe respectively continue to add value to their operating subsidiaries.

Indeed, it's been argued that, should Sorrell ever decide to go, WPP's raison d'etre would disappear with him. The problem isn't so much that WPP has attempted to set a value on Sorrell's contribution to the company but in its lousy timing. Ever since the astonishing brass neck displayed by the former RBS chief Sir Fred Goodwin over his pension payout, any seemingly excessive rewards to industry leaders have sparked outrage among the public in general and investors, in particular.

In WPP's case, it has to be asked what signal does such an offer to Sorrell send, coming as it does against a background of deteriorating trading conditions and the announcement of 7,200 job losses in the wake of reduced client adspends.

No matter that the incentive scheme covering Sorrell and 20 other WPP executives is more demanding than any offered before, or that WPP will have to outperform its biggest rivals before it kicks in. The fact is that these attempts at justification don't cut much ice in the prevailing climate where remuneration packages for senior executives are increasingly being seen as unjustified.

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