Key Insights
- WPP to hold its Annual General Meeting on 23rd of May
- CEO Mark Read's total compensation includes salary of UK£1.14m
- The total compensation is similar to the average for the industry
- WPP's EPS declined by 1.8% over the past three years while total shareholder loss over the past three years was 27%
Shareholders will probably not be too impressed with the underwhelming results at WPP plc (LON:WPP) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 23rd of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.
Check out our latest analysis for WPP
Comparing WPP plc's CEO Compensation With The Industry
At the time of writing, our data shows that WPP plc has a market capitalization of UK£6.5b, and reported total annual CEO compensation of UK£3.8m for the year to December 2024. We note that's a decrease of 15% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£1.1m.
In comparison with other companies in the British Media industry with market capitalizations ranging from UK£3.0b to UK£9.0b, the reported median CEO total compensation was UK£4.6m. So it looks like WPP compensates Mark Read in line with the median for the industry. Moreover, Mark Read also holds UK£6.8m worth of WPP stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | UK£1.1m | UK£1.1m | 30% |
| Other | UK£2.7m | UK£3.4m | 70% |
| Total Compensation | UK£3.8m | UK£4.5m | 100% |
Talking in terms of the broader industry, salary and other compensation roughly make up 50% each, of the total compensation. WPP sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at WPP plc's Growth Numbers
Over the last three years, WPP plc has shrunk its earnings per share by 1.8% per year. The trailing twelve months of revenue was pretty much the same as the prior period.
Its a bit disappointing to see that the company has failed to grow its EPS. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has WPP plc Been A Good Investment?
Since shareholders would have lost about 27% over three years, some WPP plc investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for WPP that investors should be aware of in a dynamic business environment.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
Valuation is complex, but we're here to simplify it.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.