What a fascinating and in many ways emblematic situation is unfolding concerning the compensation of Sir Martin Sorrell, the chief executive of the public relations and advertising firm WPP. Sixty percent of shareholders reportedly voted to reject his 13 million Euro ($16.3 million dollar) compensation package. The Independent reports that Sir Martin owns 1.4% of the firm, and that he built the firm over 27 years. Shareholders may reasonably reply that he has already been well compensated in the past for his past successes, that 1.4% is significantly less than a majority of shares, and that $16.3 million a year is a bit rich for a firm of its size whose share price hasn't appreciated much over the past dozen years (though there have been dividends).
WPP owns big advertising firms like Ogilvy & Mather, Young & Rubicam, and J Walter Thompson, which spend a lot of money in the newspapers and magazines that ordinarily might enthusiastically cover a story like this. It also owns some of the lobbying and public relations firms that are important sources for those same newspapers and magazines: the Glover Park Group, Hill & Knowlton, Burson-Marsteller, Penn Schoen Berland. If Goldman Sachs shareholders had rejected Lloyd Blankfein's pay, it would be a front-page story. When it's the advertising business, maybe not so much. The chairman of WPP is Philip Lader, a longtime friend of Bill Clinton who President Clinton appointed ambassador to Great Britain.