MAM
Martin Sorrell fails to win shareholders support against pay hike
MUMBAI: Global advertising giant WPP CEO Sir Martin Sorrell was in for a rude shock as 59.5 per cent shareholders voted
Wednesday against the proposed 60 per cent hike in his annual pay package at the company’s annual general meeting held in Dublin on 13 June.
The proposed hike would have increased Sorrell’s pay to ?6.8 million.
Sorrell’s proposed pay hike had been the topic of debate for the past week as many advisory groups and leading stockholders deemed that the new wage is not in sync with investor returns.
In his defence, Sorrell said that his role in transforming WPP into an advertising force in 108 countries justified the proposed pay packet of ?6.8 million. According to media reports, his pay package is made up of ? 1.3 million basic salary, ?2 million annual bonus, ?3 million deferred shares and other benefits.
WPP shares have risen more than 11 per cent this year and despite the on-going financial crisis, the company’s stocks are up over 21 per cent from 5 years ago.
Over the past year, a lot of companies have faced dissent over CEO’s pay and the shareholders’ views on it. Earlier in the month, British insurer Aviva CEO Andrew Moss was forced to step down after shareholders voted against his remuneration plans.
In 1985 Sorrell left Saatchi & Saatchi and bought 15 per cent stake in WPP with the intention of building a global advertising business. Over the years, he has continued to make personal investment in the company to the tune of an estimated ?40 million.
Sorrell‘s stake in the company is worth ?140 million, accounting for less than two per cent holding in modern-day WPP.
The disagreement by shareholders was not entirely unexpected as last year too, 41 per cent of them voted against his pay hike. Eventually, Sorrell managed to get a hike of 30 per cent and his maximum potential bonus was inflated as well.
In a related development, nearly 20 per cent plus shareholders voted against the re-election of three directors who are part of the pay committee – Jeffrey Rosen, head of the pay committee (21.8 per cent), and non-executives Ruigang Li (28.7 per cent) and Koichiro Naganuma (29.7 per cent).
Industry experts are of the opinion that such indicators of non-confidence in the company’s management may in the long run threaten shareholder’s distrust in the way the company is run.
Brands
Reserve Bank of India cancels Paytm Payments Bank licence
Central bank cites compliance failures; curbs tighten as wind-up looms
MUMBAI: India’s banking watchdog delivered its sharpest blow yet to Paytm Payments Bank, cancelling its licence and effectively ending its ability to operate as a bank under the law.
The Reserve Bank of India said the entity can no longer conduct banking business under the Banking Regulation Act, citing concerns that its affairs were not being run in the interest of depositors or the public and that it had failed to meet licence conditions.
The move escalates a crackdown that has been building for months. The bank had already been barred from onboarding new customers since March 11, 2022, and later faced restrictions on deposits, credit and wallet top-ups. In January 2024, the central bank ordered it to stop accepting fresh deposits, pointing to persistent non-compliance, including lapses in customer due diligence, use of funds and technology systems.
Operationally, the bank is now on a tight leash. It may process withdrawals of existing deposits and facilitate loan referrals through banking correspondents, but it cannot take fresh deposits.
The central bank said it would apply to the high court to wind up the bank.
Paytm sought to ringfence the fallout. In a regulatory filing, it said the licence cancellation applies to Paytm Payments Bank Limited, a separate entity, and should not be attributed to One 97 Communications. It added that there is no exposure or material business arrangement with the bank and that it operates independently, without Paytm’s board or management involvement.
“As informed earlier, Paytm (One 97 Communications Limited) and its services, which have been operating without interruption, will continue to operate uninterrupted. These include the Paytm app, Paytm UPI, Paytm Gold and all other services offered by its subsidiaries and associated companies,” the company said.
The distinction may reassure users of the app ecosystem, but the regulator’s verdict is unequivocal. After years of warnings, caps and curbs, the payments bank experiment at Paytm is being shut down—decisively, and with little room left to manoeuvre.
