UPDATE: WPP Avoids Major Pay Revolt, Revenue Still Struggling

LONDON (Alliance News) - Advertising giant WPP PLC on Wednesday avoided a serious shareholder ...

Alliance News 13 June, 2018 | 4:47PM
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LONDON (Alliance News) - Advertising giant WPP PLC on Wednesday avoided a serious shareholder revolt against its compensation report shortly after it announced a further decline in revenue in the first four months of 2018, hit by currency exchange rates and weak regional performance.

WPP had expected to face serious investor pressure on its controversial pay award for founder and former Chief Executive Officer Martin Sorrell.

Sorrell left the company in mid-April after the conclusion of an investigation into what WPP called "an allegation of misconduct" which it said did not "involve amounts that are material" to the company.

Sorrell is in line to receive GBP14 million from WPP, having received GBP48.1 million the year before. He will also hoover up nearly GBP20 million in payouts from WPP over the next five years as part of an exit deal with the firm.

Sorrell's pay award has been a sore point with WPP shareholders for several years, long before his recent departure.

At its annual general meeting on Wednesday, 27.2% of valid votes cast opposed its compensation committee report with 72.8% in favour.

This was only a slightly weaker support for the report than WPP experienced the year before. At its June 2017 AGM, 20.8% of valid votes cast were opposed to the report with 79.2% in favour.

Earlier on Wednesday, the FTSE 100-listed WPP said revenue in the four months to the end April declined 3.4% to GBP4.82 billion, although it increased 2.7% at constant currency. At actual currency rates, revenue was hit by the strengthening of sterling against the dollar, euro and other major currencies.

On a like-for-like basis - stripping out acquisitions and currency fluctuations - revenue rose 1.4% in the four months compared to the prior year. In the first quarter, WPP revenue by the same measure declined 0.1% on the year, suggesting WPP had a good April.

WPP noted April had seen strong revenue growth, particularly in Western Continental Europe, Latin America and Central & Eastern Europe. North America was weaker, particularly in the advertising and data investment management businesses.

On a regional basis, North America continued to be the weakest performing region with like-for-like revenue less pass-through costs was down 2.4% for the year to date.

Performance in the UK in the four months was slightly weaker when compared with the first quarter alone, due to a fall in advertising & media investment management and brand consulting.

Asia Pacific, Latin America, Africa & the Middle East and Central & Eastern Europe remained the best performing regions, with four-month like-for-like revenue less pass-through costs growth of 2.1%. However, this was down slightly when compared with the first quarter growth of 2.3%.

Looking ahead, the company said it intends to focus on improving revenue less pass-through costs growth and concentrating on meeting its operating margin objective.

Shares in WPP were closed 0.6% lower at 1,239.04 pence on Wednesday, 26% lower compared to a year ago.

By Evelina Grecenko; evelinagrecenko@alliancenews.com; updated by Ahren Lester; ahrenlester@alliancenews.com.

Copyright 2018 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
WPP PLC 1,211.00 GBX 0.21
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