The committee's work during 2007 included:
- a review of the total compensation packages of the Group's most senior executives relative to marketplace benchmarks to ensure competitiveness;
- a review of the total compensation package of the Group's chief executive officer;
- approving for submission to share owner approval at the EGM in December 2007, the request from the Group's chief executive officer to defer receipt of certain awards that would otherwise have vested in 2008;
- a review of the implications of significant changes in US tax regulations on compensation and adjusting the terms of several of the Group's share incentive plans to avoid our US employees being subject to a 20-point increment in tax rates;
- reviewing the total compensation packages of WPP's executive directors to evaluate their appropriateness in various circumstances, including termination of employment;
- the approval of bonuses, payable in cash and in shares for senior executives throughout the Group; and
- looking ahead to the final year (2008) of Renewed LEAP and considering what changes, if any, should be made in the long-term incentive plan that will replace it in 2009.
The changes in US tax regulations (passed in late 2007 to take effect in 2008) resulted in several ad hoc meetings of the committee, in addition to the eight regularly scheduled meetings held during the year.
The committee's discussions are frequently supported by the attendance of the Group's chief executive officer, the chief talent officer (Mark Linaugh), the director of compensation and benefits (Adrian Jackson) and the Company Secretary. We appreciate their contributions to the committee's deliberations. In addition, external advisors assisted the committee on issues relevant to its responsibilities by providing information and analyses to inform its decisions. The external advisors who have assisted the committee during the past year are referred to in the Advisors to the Compensation Commitee section.
Christopher MacKenzie retired from the committee in June 2007 after six years of service. The committee members join me in appreciation for his thoughtful contributions to the committee's deliberations during his tenure. I am also grateful for the time and support given by my fellow committee members, Philip Lader and Esther Dyson, and the ongoing advice and counsel of Bud Morten, the former chairman of the committee.
Chairman of the Compensation Committee
24 April 2008