Investors force WPP to reduce executive share incentive deal

WPP has been forced to backtrack on its share incentive scheme, known as Leap, after shareholder pressure.

Changes to the scheme could see 19 of its senior executives receive less generous bonus packages. These include the group chief executive, Sir Martin Sorrell; Ogilvy & Mather's chief executive, Shelly Lazarus, Young & Rubicam Brands' chief executive, Ann Fudge, and J. Walter Thompson's chief executive, Bob Jeffrey.

The scheme was planned to be similar to the one set up in 1999 that will conclude in September with large pay-outs to WPP directors. However, WPP revealed last month that, for the second Leap scheme, it would change the weighting of the competing advertising company stocks it would be judging itself against.

This led to fears among investors that the share performance for rival companies would have a greater role in deciding the size of the pay-out than others. WPP has agreed to change the weighting back to an equal basis.

Under the scheme's terms, executives invest their own money in WPP shares, which are then matched by up to five times by WPP, depending on how well the company performed against its rivals. WPP had proposed that 19 executives would be paid £112 million over the next five years, with the largest slice of up to £44 million going to Sorrell.

WPP has postponed an extraordinary general meeting, which was intended to endorse the new scheme, from 7 April until 16 April to allow time for more talks.

However, it has refused calls for a shareholder vote on the terms of Sorrell's individual remuneration package.

Sorrell was last year forced to abandon his three-year employment contract after 46 per cent of WPP investors refused to back his pay deal.

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