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WPP chief Sir Martin Sorrell takes £22m pay cut as he warns of threats to global economy

Sir Martin Sorrell is still the best paid FTSE 100 boss with total remuneration of £48m - © 2015 Bloomberg Finance
Sir Martin Sorrell is still the best paid FTSE 100 boss with total remuneration of £48m - © 2015 Bloomberg Finance

Sir Martin Sorrell, the boss of advertising giant WPP, took a £22m pay cut last year despite the business he founded delivering a giant increases in fees, revenues and profits.

Details of his remuneration were revealed in the £55bn-a-year company’s annual report, in which Sir Martin warned about the dangers of short-termism and global uncertainty. He also admitted that “residents of the Davos bubble (of which I am one) misjudged the public mood”.

Sir Martin Sorrell - Credit: Keystone/AP
Sir Martin says he is a member of 'the Davos bubble' Credit: Keystone/AP

Sir Martin’s total pay and bonuses fell to £48.1m for 2016 from £70.4m the previous year. The decline was down to a smaller share incentives award, which declined from £62.7m last time to £41.6m. His base salary remained at £1.15m.

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He remains the FTSE 100’s best paid boss, and the controversial incentive scheme which boosts his total pay means his combined remuneration over the past five years has exceeded £200m.

Sorrell Pay
Sorrell's pay

At last year’s annual meeting, a third of WPP shareholders rejected the company’s remuneration report, and a less generous scheme was put in place.

In his chief executive’s letter, Sir Martin warned that “boards and investors have become ultra-conservative, and companies have been reluctant to invest” since the financial crisis, resulting in “consolidation on a massive scale, widespread stockpiling of cash and a boom in share buy-backs".

He added: “What all this tells us is that companies lack the will or confidence to invest in their own growth and development, and prefer instead the seemingly risk-free approach of returning funds to shareholders or retaining ever-larger cash balances.”

Dodging risk means companies are “piling up far greater dangers for the future” by failing to invest for the future, according to Sir Martin.

Lehmans
Since the global crash and thee collapse of Lehman Brothers, companies have become unwilling to invest for the future

He also takes a swipe at City pundits and the financial media, saying they “obsess over the minutiae of quarterly results as if they were the key to a company’s entire future, rather than a snapshot of its fortunes over a mere three months”.

Sir Martin admits he - along with the global elite who attended the World Economic Forum at Davos - was caught out by the wave of populism that resulted in the vote for Brexit and election of Donald Trump.

“Not for the first time, residents of the Davos bubble had misjudged the public mood, failing at the previous meeting to predict the result of either the US election or the Brexit vote.”

Donald Trump
Donald Trump is riding a wave of populism, according to SSir Martin

The US president has “translated celebrity into votes” and continues to “tap that well of public discontent” with policies of controlling immigration, job creation and job repatriation, according to the advertising boss.

However, he warns that despite Mr Trump making a “bogeyman out of globalisation, there are other perhaps more fundamental, threats to employment”. These include robots replacing human workers and massive tech giants having relatively few employees compared with traditional companies of similar size.

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