Photo: World Economic Forum
Sir Martin Sorrell, chief executive of WPP, has taken home tens of millions of pounds from the advertising firm he started more than 25 years ago.The Sunday Times estimates his total wealth at £174m, putting him among the top 500 richest Britons. Sorrell started the WPP empire in 1985 when he bought a 15% stake in a company then called Wire & Plastic Products after quitting as finance director of the advertising company Saatchi & Saatchi.
The bulk of his payouts came through a long-term performance scheme called the leadership equity acquisition plan, which began in 1992 when the firm was struggling. Sorrell invested £1.7m in the plan, which has paid out spectacularly, and he banked £50m in 2004-05.
At the time, he told the Guardian: “What I did was truly entrepreneurial. It means taking a risk and putting your money where your mouth is.I am hard pressed to find any comparison like it.”
He has received tens of millions in salary and from further performance-related deals since then. During 2011, he received almost £13m, including £5.5m from a long-term incentive plan.
Sorrell, 67, argues the rewards are justified as he borrowed the £250,000 to buy in to a supermarket basket-maker and turn it into an advertising industry acquisition vehicle. To name a few, WPP owns JWT and Ogilvy & Mather, the buyers Mediacom, Kantar market researchers and the public relations firms Hill & Knowlton and Finsbury.
He also points out that he rarely sells shares, has invested almost £40m in WPP and has a stake worth £140m – about 2%, a sizable stake for a director. One notable exception was in 2005, when he sold £12m of shares to fund his £30m divorce. He handed over £23m, a Georgian town house and two parking spaces at Harrods as part of the deal.
He told the Observer two years ago: “You know the [Bill] Shankly quote [on football]: ‘It is not a matter of life and death, it is more important.’ And that is what WPP is, more important.”
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