WPP PLC's chief executive and founder, Martin Sorrell, is set for another large pay cut after the ad firm said it would aim to appease shareholders' anger by capping his annual compensation.
Under the proposed changes, the CEO will see his annual pay package limited to GBP13.2 million ($17 million). That is a substantial drop from the GBP48.1 million Mr. Sorrell made in 2016, and the GBP70.4 million he collected in 2015.
WPP has been under pressure to reduce Mr. Sorrell's remuneration after a series of pay revolts by shareholders in recent years.
Mr. Sorrell declined to comment, saying only "it's all in the annual report." In the past he has argued that his pay is commensurate reward for masterminding the acquisition spree that helped transform a manufacturer of shopping baskets into the world's biggest advertising company by sales.
WPP owns ad agencies such as Grey and Ogilvy & Mather, and its clients include Ford Motor Co., Unilever and Procter & Gamble Co.
If approved by shareholders in June, the new rules wouldn't affect Mr. Sorrell's pay until 2021. That is because WPP had already approved a pay plan that is scheduled to come into force this year.
The CEO's 2016 pay package is the last under a controversial plan dubbed Leap that was approved by shareholders in 2009.
A previously approved plan is set to reduce Mr. Sorrell's total annual pay to around GBP20 million from 2017 by capping his compensation at 9.74 times salary. The latest proposal would go further by limiting his total package to six times salary.
"Notwithstanding the company's superior performance, we understand share owners' increasing discomfort with the levels of our programs' reward opportunities for outstanding performance," said John Hood, chairman of WPP's compensation committee.
Excessive pay awarded through complex schemes has attracted increasing protests from politicians, the public and, at times, investors in recent years. Almost 34% of shareholders at WPP's annual meeting last June rejected the firm's compensation plan.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
April 28, 2017 14:32 ET (18:32 GMT)