WPP chief executive Mark Read was awarded at least £3.7m in 2018, the holding company's annual report reveals.
The total includes a "special award" of £1.5m made to Read in June last year, when he was acting joint chief operating officer. The award was given by the board of WPP in recognition of "the importance and scale of the additional responsibilities that were being undertaken" as it searched for the successor to Sir Martin Sorrell. It will be paid in three equal instalments on 1 May 2019, 2020 and 2021.
Read was paid £965,000 for his four months as chief executive of WPP, including his base salary and bonuses.
He also received a bonus of £1.25m related to his performance as chief executive of Wunderman and then joint chief operating officer. WPP is not obliged to make this figure public, but said it was doing so in the interests of transparency.
These three figures come to just over £3.7m – but this does not include Read's base salary before his appointment as chief executive of WPP.
For his four months as chief executive, Read was paid a base salary of £325,000 – equivalent to £975,000 a year. On top of this, he received £244,000 in short-term incentive payments – 75% of the maximum he was entitled to – and £327,000 in long-term incentive payments.
Sorrell, meanwhile, made £3.09m for his final three-and-a-half months as WPP’s chief executive. Had he stayed on and earned at the same rate throughout the year, his pay would have been down slightly on 2017’s figure of £13.9m – which was 71% lower than the £48.1m he was paid in 2016.
Sorrell’s compensation consisted of £2.52m long-term incentive payments, £391,000 base salary and £172,000 benefits and pension, but no short-term incentive payment. It is this component of WPP’s compensation model that largely accounted for Sorrell’s plummeting income in 2017, after the business missed targets in 2016.
Campaign reported last month that because WPP’s long-term Executive Performance Share Plan operates over five-year cycles, Sorrell would continue to be paid bonuses for the next three years.
In a statement opening the report, Read alluded to the drama around Sorrell’s exit, writing that "2018 was in many ways a turbulent and difficult year for WPP, for well-documented reasons". But he added that it was "also a year of renewal and much-needed change".
WPP reported revenue of £15.6bn for 2018, down from £15.8bn in 2017. Profit before tax totalled £1.5bn last year compared with £2.1bn in the previous period. In the UK, revenue reached £2.2bn, up slightly from £2.1bn in 2017.
Outlining WPP’s intention to become a "creative transformation company", Read added: "Our clients want our creativity, which is what makes us special and differentiates us from other professional services firms.
"They want us to help them transform their business in a world fundamentally changed by technology. And they want us to be a true company, to work as one on their behalf. Gone are the days when we could operate as a loose federation of independent agencies, overseen by a financial holding group."