Advertising industry kingpin Sir Martin Sorrell has hit back at the company he founded, WPP, after it announced it would not be paying him share incentive awards dating back up to five years.
In its annual report, published on Thursday, WPP – which Sir Martin co-founded in 1985 and ran until 2018 – said its compensation committee had “exercised its discretion” to make ‘malus’ adjustments.
These have become commonplace in British boardrooms during the last decade and effectively work in the opposite way to a bonus – with incentive awards being adjusted lower before they become payable if a company deems a current or former executive to have caused it reputational damage, to have been guilty of misconduct, or to have misreported financial results.
WPP added: “The compensation committee… determined that the 2016 and 2017 Executive Performance Share Plan awards granted to Sir Martin Sorrell, the former group chief executive, will lapse as a result of Sir Martin Sorrell’s disclosure of confidential information belonging to WPP and certain of its clients to the media during his tenure as a WPP director.”
Sir Martin accused WPP of being petty and said his lawyers would deal with it.
He told Reuters: “Just another case of peanut envy. It’s a bit rich that they’re accusing me of leaks, given their own over the last three years.
“They’ve had to go back several years to try and find an excuse to deny me what’s mine. I’ve left it to my lawyers to deal with.”
The move intensifies the bad feeling between Sir Martin and the company he built from scratch to become the world’s biggest advertising and marketing business with 130,000 employees in 112 countries.
Sir Martin left WPP in April 2018 after allegations of personal misconduct that he continues to deny.
Shortly afterwards, he launched a new digital-only marketing company called S4 Capital, putting one over on WPP when, that July, he bought the Dutch digital agency MediaMonks for €300m in the face of a rival offer from his former business.
WPP subsequently wrote to Sir Martin, threatening to strip him of £20m worth of share awards, on the basis that he had been speaking to MediaMonks about acquiring the business while he was still at WPP.
The company alleged S4 Capital’s subsequent acquisition of MediaMonks amounted to “an unlawful diversion of a maturing business opportunity for WPP”.
WPP’s compensation committee is chaired by Jasmine Whitbread, a former chief executive of Save The Children International, who went on to run the lobby group London First and who is currently chair of the building materials supplier Travis Perkins.
She has also served on the board of BT and is also currently a non-executive director of the Africa and Asia-focused bank Standard Chartered.
Other directors on WPP’s compensation committee include the private equity executive Jacques Aigrain, the telecoms industry executive Sandrine Dufour, the tech entrepreneur Tom Ilube, Cindy Rose, the former chief of Microsoft’s UK business, and Nicole Seligman, a lawyer whose clients have included the former US president Bill Clinton.
It also includes Bob Quarta, WPP’s chairman, an Italian-American who has been nicknamed ‘Spare No Quarta’ and ‘Bob The Knife’ in the City for his hard-driving approach.
Mr Quarta, who famously sacked 2,000 employees shortly after becoming chief executive of the industrial conglomerate BBA in 1992, had a tricky relationship with Sir Martin when the two were both at WPP.
He famously cut Sir Martin’s annual pay package from £70m to £48m following a shareholder revolt at the 2016 annual meeting and later oversaw the putsch that removed him from the company.
More recently, bad blood between the two sides has intensified, with Sir Martin telling The Sunday Times in September last year that WPP’s advertising holding company model was “past its sell-by date and not fit for purpose”.