WPP To Pay Sorrell Bonus -- WSJ
By Nick Kostov
WPP PLC said it would pay its former Chief Executive Martin Sorrell shares worth more than 2 million pounds, or $2.65 million, as part of his long-term bonus, despite having threatened to withhold the payment following his departure from the firm.
The decline of WPP's shares over the past two years left Mr. Sorrell with about a third of the maximum payment granted under the company's long-term bonus program. An independent legal review commissioned by the company's board found there was no basis for withholding the payment, a person familiar with the matter said.
The decision to pay Mr. Sorrell marks a potential detente in the feud between the high-profile ad executive and the company he founded decades ago, building it into an advertising behemoth. The dispute erupted after the company launched an internal probe into an allegation of personal misconduct that Mr. Sorrell denied.
Mr. Sorrell resigned from WPP and quickly founded a rival, albeit smaller, ad firm, which outbid WPP for MediaMonks, a Dutch digital-production shop. Mr. Sorrell touted the move as the first step in his plans to build a "new era, new age" marketing group focused on data, technology and content creation.
WPP's lawyers wrote to Mr. Sorrell's lawyers in July to warn him that he was "likely to be in breach of his confidentiality undertakings" over his pursuit of MediaMonks, The Wall Street Journal reported at the time. The letter stated that Mr. Sorrell could lose share awards worth millions of pounds that were part of his long-term incentive program with WPP.
In January, The Wall Street Journal reported that WPP contacted Mr. Sorrell late last year, seeking repayment for what it determined to be personal expenses, including travel for his spouse and items for his apartment in New York's Gramercy Park neighborhood. Mr. Sorrell paid the company back.
WPP has since asked for further sums which Mr. Sorrell has also reimbursed, according to a person familiar with the matter.
Mr. Sorrell's pay at WPP was a source of controversy for years. He received 48.1 million pounds ($63.76 million) in 2016, and $93.32 million in 2015, largely as a result of the company's previous long-term incentive plan.
WPP said Mr Sorrell would be entitled to receive approximately 250,000 shares under its incentive plan for the period between 2014 and 2018, as well as dividends associated with the shares. He will continue to be paid under the plan for three more years.
Write to Nick Kostov at Nick.Kostov@wsj.com