Directors’ remuneration and other statutory information

The following tables and information are either required by statute or recommended by best practice guidelines. All information in this section has been audited.


Executive directors’ emoluments

The value of salary and fees, benefits, pension contributions and annual incentives paid both in cash (under the STIP) and shares (ESAs) for the year ending 31 December 2010 are set out in the table below. The table also shows comparative numbers for 2009. In the case of the STIP and ESAs, the figures shown are the value of the awards in respect of the year in question (although they were received in the following year). Benefits include such items as healthcare, life assurance, spouse travel and allowances for cars and housing. Both Sir Martin Sorrell and Paul Richardson currently receive part of their remuneration in pounds sterling and part in US dollars. Any US dollar amounts received in 2010 have been converted into sterling at an exchange rate of $1.5461 to £1 ($1.5667 for 2009).

 Salary and feesOther benefitsShort-term
incentive plans
(annual bonus)		Value of ESAsTotal annual
remuneration		Pension
contributions
 2010
£000		2009
£000		2010
£000		2009
£000		2010
£000		2009
£000		2010
£000		2009
£000		2010
£000		2009
£000		2010
£000		2009
£000
Executive directors                        
Sir Martin Sorrell1,2,3 1,009 1,007 374 345 1,900 406 950 546 4,233 2,304 400 401
Paul Richardson 637 630 106 101 682 290 757 389 2,182 1,410 191 189
Mark Read 325 325 2 1 219 117 293 157 839 600 33 33
Total remuneration 1,971 1,962 482 447 2,801 813 2,000 1,092 7,254 4,314 624 623
1
During 2010 an amount of £6,813 was paid to Sir Martin Sorrell in respect of tax liabilities incurred by him on expenditure on various items considered by the UK Tax authorities as benefits in kind but which the committee consider to be essential to his ability to deliver his services successfully to the Group (£8,323 in 2009).
2
Payments made in accordance with the approval granted by share owners of amounts equal to the dividends that would be payable (totalling £1,081,172) were made to Sir Martin Sorrell during 2010 (£856,687 during 2009) in respect of the shares reflected in the UK and US Deferred Stock Units Awards Agreements (which are the agreements that now comprise the awards granted under the Capital Investment Plan in 1995).
3
Benefits include other items such as healthcare, life assurance, spouse travel, allowance for cars and housing.

Policy on directors’ service contracts, notice periods, termination payments and external appointments

The Company’s policy is that contracts should be on a rolling basis and will not include either a fixed term or liquidated damages provisions. Sir Martin Sorrell’s service contract may be terminated by the Company or by Sir Martin without, in either case, notice needing to be given – a so-called ‘contract at will’. This means that the Company may terminate Sir Martin’s service contract without the need to pay compensation for any notice period.

Executive directorEffective from Notice period
Sir Martin Sorrell 19 Nov 2008 ‘At will’
Paul Richardson 19 Nov 2008 12 months
Mark Read 19 Nov 2008 6 months

Executive directors are permitted to serve as non-executives on the boards of other organisations. If the Company is a share owner in that organisation, non-executive fees for these roles are waived. However, if the Company is not a share owner in that organisation, any non-executive fees can be retained by the office holder.

Options held by executive directors

The options held by Mark Read at 31 December 2010 were granted prior to him becoming a director of the Company.

 Grant/
award date		End of
exercise
period		Exercise
price		At 1 Jan
2010 (no. of
shares)		Granted
(lapsed)
2010 (no. of
shares)		Exercised
2010 (no. of
shares)		Share price
on exercise		Value on
exercise		At 31 Dec
2010 (no. of
shares)		Share price
31 Dec 20101
Mark Read 17.11.2003 17.11.2013 £5.595 10,615 – – – – 10,615 £7.895
  29.10.2004 29.10.2014 £5.535 9,879 – – – – 9,879 £7.895
1
Share price 12-month high/low: £7.95/£5.725.

ESAs and Restricted Stock Awards held by executive directors

All awards made under the Restricted Stock Plan are made on the basis of satisfaction of previous performance conditions and are subject to continuous employment until the vest date. The table includes awards that vested during 2010, awards that remained outstanding during 2010 and, by way of additional information, awards that have been granted since 31 December 2010.

  Award
date		Share
plan		Share/ADR
price on
grant date		No. of
shares/
ADRs
originally
awarded		Value on
grant day
000		Additional
shares
granted
in lieu of
dividends		Total
shares
vesting		Vesting
date 		Share
price on
vesting		Value
on
vesting
£000
Sir Martin Sorrell 2007 ESA Award 03.03.08 ESA £5.9025 149,851 £885 10,582 160,433 06.03.10 £6.455 1,036
  2008 ESA Award 09.03.09 ESA £3.83625 196,285 £753 – – 06.03.11 – –
  2009 ESA Award 04.05.10 ESA £6.7775 80,560 £546 – – 06.03.13 – –
  2010 ESA Award 31.03.11 ESA £7.6825 123,657 £950 – – 06.03.13 – –
Paul Richardson 2007 ESA Award 03.03.08 ESA £5.9025 96,094 £567 6,785 102,879 06.03.10 £6.455 664
  2008 ESA Award 09.03.09 ESA £3.83625 143,369 £550 – – 06.03.11 – –
  2009 ESA Award1 04.05.10 ESA $51.59 11,813 $609 – – 06.03.13 – –
  2010 ESA Award1 31.03.11 ESA $61.76 19,121 $1,181 – – 06.03.13 – –
Mark Read Def Bonus 2005 16.03.06 Deferred bonus £6.7950 3,601 £24 1,2802 4,881 16.03.10 £6.5452 32
  Def Bonus 2006 27.04.07 Deferred bonus £7.4775 9,526 £71 – – 16.03.11 – –
  2007 ESA Award 03.03.08 ESA £5.9025 43,202 £255 3,050 46,252 06.03.10 £6.455 299
  2008 ESA Award 09.03.09 ESA £3.83625 59,954 £230 – – 06.03.11 – –
  2009 ESA Award 04.05.10 ESA £6.7775 23,164 £157 – – 06.03.13 – –
  2010 ESA Award 31.03.11 ESA £7.6825 38,138 £293 – – 06.03.13 – –
1
Paul Richardson’s 2009 and 2010 ESA Awards were granted in respect of ADRs.
2
Represents the combined total of matching shares and shares granted in lieu of dividends.

Other Long-Term Incentive Plan Awards

Renewed Leadership Equity Acquisition Plan

Name Grant/
award
date		 Investment
and
performance
period		 Number of
investment
shares		 Share
price
on
grant
date		 Maximum
number of
matching
units at
1 Jan 2010		 During 2010 Maximum
number
of
matching
units at
31 Dec 2010		 Share
price on
vest/
deferral
date		 Value
on vest/
deferral
date
Granted/
(lapsed)
units		Additional
dividend
shares		Vested or
deferred
shares
Sir Martin Sorrell 15.12.05 01.01.05-31.12.09 203,394 £6.175 1,016,970 (508,485) 53,760 562,245 – £6.455 3,629
  15.11.06 01.01.06-31.12.10 156,536 £6.84 782,680 – – – 782,680 – –
  11.12.07 01.01.07-31.12.11 148,742 £6.23 743,710 – – – 743,710 – –
  31.10.08 01.01.08-31.12.12 218,596 £3.749 1,092,980 – – – 1,092,980 – –
Paul Richardson 15.12.05 01.01.05-31.12.09 81,358 £6.175 406,790 (203,395) 21,504 224,899 – £6.455 1,452
  15.11.06 01.01.06-31.12.10 66,102 £6.84 330,510 – – – 330,510 – –
  11.12.07 01.01.07-31.12.11 59,497 £6.23 297,485 – – – 297,485 – –
  31.10.08 01.01.08-31.12.12 109,298 £3.749 546,490 – – – 546,490 – –
Mark Read 15.12.05 01.01.05-31.12.09 10,170 £6.175 50,850 (25,425) – 25,425 – £6.455 164
  15.11.06 01.01.06-31.12.10 16,525 £6.84 82,625 – – – 82,625 – –
  11.12.07 01.01.07-31.12.11 14,874 £6.23 74,370 – – – 74,370 – –
  31.10.08 01.01.08-31.12.12 21,859 £3.749 109,295 – – – 109,295 – –

The vesting schedules used for the various awards under Renewed LEAP are shown in the following tables. When actual performance falls between these positions, the match is calculated on a proportionate basis.

 

Awards granted in 2006 and 2007
Rank compared toNumber of
matching
1 5
2 5
3 4.5
4 3.5
5 2.5
Median 1.5
Below median 0
Awards granted in 2008
Rank compared toNumber of
matching
1 5
2 5
3 4
4 3
Median 1.5
Below median 0

Leadership Equity Acquisition Plan III

Name Grant/
award
date		 Investment
and
performance
period		 Number of
investment
shares		 Number of
investment
options		 Share
price
on
grant
date		 Maximum
number
of
matching
units at
1 Jan 2010		 During 2010 Maximum
number
of

matching
units at
31 Dec 2010		 Share
price
on
vest/
deferral
date		Value
on vest/
deferral
date
Granted/
(lapsed)
units		Additional
dividend
shares		Vested or
deferred
shares
Sir Martin
Sorrell		 15.12.09 01.01.09- 31.12.13 365,878 – £6.1025 1,829,390 – – – 1,829,390 – –
  24.11.10 01.01.10- 31.12.14 416,666 – £7.2475 – 2,083,330 – – 2,083,330 – –
Paul
Richardson		 15.12.09 01.01.09- 31.12.13 103,423 – £6.1025 517,115 – – – 517,115 – –
  24.11.10 01.01.10- 31.12.14 100,968 – £7.2475 – 504,840 – – 504,840 – –
Mark
Read		 15.12.09 01.01.09- 31.12.13 27,406 – £6.1025 137,030 – – – 137,030 – –
  24.11.10 01.01.10- 31.12.14 25,281 – £7.2475 – 126,405 – – 126,405 – –

The vesting schedule used for the awards under LEAP III is shown in the following table. When actual performance is not exactly equal to a percentile in the table below, but is more than 50% and less than 90%, the percentage of Matching Shares will be determined on a straight-line basis between the relevant figures.


Awards granted in 2009 and 2010
Aggregate market
capitalisation percentile		Number of
matching shares
90th percentile 500%
80th percentile 420%
70th percentile 330%
60th percentile 240%
50th percentile 150%
40th percentile 0%
30th percentile 0%
20th percentile 0%
10th percentile 0%
Bottom 0%

Comparator Groups

The comparator groups used for the awards under Renewed LEAP (2006, 2007, 2008) and LEAP III (2009, 2010) are shown in the following table. Where a company that delists during a performance period has an undisturbed share price for less than 40% of that performance period, the Compensation Committee would usually exclude that company from the comparator group for the award in question. Otherwise, the company would usually be deemed to be disposed of and the proceeds reinvested, in respect of LEAP III, in a market capitalisation weighted index, and in respect of Renewed LEAP in a non-market capitalisation weighted index, both of which track the TSR of the remaining comparator companies.

Grant yearComparator group
2006 Aegis, Arbitron, Dentsu, GfK, Havas Advertising, Interpublic, Ipsos, Omnicom Group, Publicis and Taylor Nelson Sofres
2007 Aegis, Arbitron, Dentsu, GfK, Havas Advertising, Interpublic, Ipsos, Omnicom Group, Publicis and Taylor Nelson Sofres
2008 Aegis, Arbitron, Dentsu, GfK, Havas Advertising, Interpublic, Ipsos, Omnicom Group and Publicis
2009 Aegis, Arbitron, Dentsu, GfK, Havas, Interpublic, Ipsos, Omnicom Group and Publicis
2010 Aegis, Arbitron, Dentsu, GfK, Havas, Interpublic, Ipsos, Omnicom Group and Publicis

Non-executive directors’ remuneration

The fees paid to non-executive directors (NEDs) are normally reviewed every two years and any changes are approved by the Board. Other than the Audit Committee chairman, the fee levels shown below have been effective since 1 January 2007. Accordingly, the Compensation Committee recommended, and the Board determined, that the existing structure should be adjusted as follows:

Position/roleFrom 1 January
2011		2010 fees
(effective from
1 January 2007)
Chairman £425,000 £300,000
Senior independent director £20,000 £10,000
Non-executive director £65,000 £60,000
Chairmanship of Audit and Compensation Committee £40,000 £20,0001
Chairmanship of Nominations Committee £15,000 £10,000
Member of Audit and Compensation Committee £20,000 £5,000
Member of Nominations Committee £5,000 £5,000
1
Fee for chairmanship of Audit Committee effective from 1 January 2009.

From 1 January 2011, the chairman is not entitled to any further fees or salary for either chairmanship or membership of any of the Company’s committees. UK-based NEDs who are required to travel outside the UK to consider Company-related matters at meetings called at short notice will be paid £1,000 for attendance at each of those meetings. The fees detailed above are the only payments receivable by NEDs. Mr Morten will also be paid a fee of £20,000 for additional services that he provides to the Board.

The table below shows actual fees paid for the year 2010. The notice period for all NEDs is two months.

DirectorDate of
original
contract		Expiry of
current
contract		Committee membership2010
£000		2009
£000
P Lader 26.02.01 05.10.11 Chairman of the Company, chairman of Nomination Committee and member of Compensation Committee 315 315
C Day 25.07.05 05.10.11 Member of Audit Committee and member of Compensation Committee from
1 December 2010		 65 65
E Dyson 29.06.99 05.10.11 Member of Compensation Committee and member of Nomination Committee 70 70
O Gadiesh 28.04.04 05.10.11 Member of Nomination Committee 65 65
R Li 11.10.10 11.10.13 Appointed to the Board in October 2010 14 n/a
S W Morten 02.12.91 05.10.11 Senior Independent Director until April 2010 and ex officio member of all Committees 701 71
K Naganuma2 23.01.04 05.10.11   – –
L Olayan3 18.03.05 05.10.11 Member of Nomination Committee – –
J A Quelch4 10.07.91 05.10.11   94 85
J Rosen 20.12.04 05.10.11 Chairman of Compensation Committee, member of Audit Committee and Senior Independent Director since April 2010 82 75
T Shriver 06.08.07 05.10.11 Member of Audit Committee until 29 June 2010 and member of Compensation Committee from 29 June 2010 65 65
P Spencer 28.04.04 05.10.11 Chairman of Audit Committee 80 80
S Trujillo 12.10.10 12.10.13 Appointed to the Board in October 2010, member of Audit Committee from
12 October 2010		 15 n/a
1
Fee includes ex officio payment of £6,000.
2
Received no fees in 2009 and 2010.
3
Waived fees in 2009 and 2010.
4
Fee includes £34,038 (£24,515 in 2009) for consulting services.

Directors’ interests

Directors’ interests in the Company’s ordinary share capital, all of which were beneficial (unless otherwise stated), are shown in the following table. Save as disclosed in this table and in the report of the Compensation Committee, no director had any interest in any contract of significance with the Group during the year. Each executive director has a technical interest as an employee and potential beneficiary in shares in the Company held under the ESOPs. As at 31 December 2010, the Company’s ESOPs (which are entirely independent of the Company and have waived their rights to receive dividends) held in total 22,083,378 shares in the Company (24,941,529 in 2009). Further details of the long-term incentive plans are given in the Other Long-Term Incentive Plan Awards  and the notes below.

  At 1 Jan 2010
or appointment
date		   Shares acquired through
long-term incentive
plan awards in 2010		 Movement
during 2010
inc. shares
purchased
in 2010		 At 31 Dec
2010
or earlier
retirement or
resignation		   Shares acquired through
long-term incentive
plan awards in 2011		 Other
movements
since
31 Dec 2010		 At
18 Apr 2011		 Shares contributed to charity 2007 – 2011 (and no longer beneficially owned)
 Vested(Sold) Vested(Sold)
C Day 5,240   – – 10,000 15,240   – – – 15,240 –
E Dyson 35,000   – – – 35,000   – – – 35,000 –
O Gadiesh –   – – – –   – – – – –
P Lader 11,950   – – – 11,950   – – – 11,950 –
R Li –   – – – –   – – – – –
S W Morten 20,000   – – – 20,000   – – – 20,000 –
K Naganuma1 –   – – – –   – – – – –
L Olayan –   – – – –   – – – – –
J A Quelch 12,000   – –   12,000   – – – 12,000 –
M Read2 79,272   71,677 (56,698) 2,875 97,126   139,782 (139,782) 6,355 103,481 –
P W G Richardson2,3 330,907   327,778 (164,219) 324 494,790   456,926 (415,926) – 535,790 –
J Rosen 12,000   – – – 12,000   – – – 12,000 –
T Shriver 5,000   – – 5,000 10,000   – – – 10,000 –
P Spencer 10,000   – – – 10,000   – – – 10,000 –
S Trujillo –   – – 10,000 10,000   – – – 10,000 –
Sir Martin Sorrell2,4,5,6,7 16,405,342   722,678 (122,536) (147,883) 16,857,601   930,262 – (264,000) 17,523,863 805,9368
1
K Naganuma is a director of Asatsu-DK, which at 18 April 2011 had interests in 31,295,646 shares representing 2.47% of the issued share capital of the Company.
2
Interests include investment shares committed to the 2007, 2008, 2009 and 2010 awards under the LEAP plans but do not include matching shares from these plans, if any.
3
In September 2010, AIB Group (UK) plc released from its charge to Paul Richardson 256,319 shares in the Company. These shares and 203,471 WPP ordinary shares also owned by Paul Richardson were converted into 91,958 WPP American Depositary Receipts. In September 2010, Paul Richardson agreed to charge 91,958 ADRs to Bank of America, N.A. as security for bank facilities being made available to him.
4
Includes 3,790,489 shares pursuant to the vesting of the 2004 and 2005 awards and part of the 2006 award granted under LEAP. The receipt of these awards has been deferred until November 2017.
5
Includes 3,636,950 shares which originally formed part of the Capital Investment Plan (an award in respect of 4,691,392 shares in total, some of which have been received by Sir Martin Sorrell) and comprised the UK and US Deferred Stock Units Awards Agreements.
6
In September 2010, Sir Martin Sorrell and the trustees of two family life interest trusts of Sir Martin Sorrell charged to HSBC Private Bank Limited 984,770 and 3,863,147 ordinary shares in the Company respectively as security for facilities. These shares were previously charged to AIB Group (UK) plc as security for facilities, but were released in September 2010. In September 2010, JMS Financial Services Limited Retirement Benefit Scheme transferred 3,001,073 ordinary shares in the Company to Sir Martin Sorrell. Sir Martin Sorrell charged these shares to HSBC as further security of the facilities made available to him. These shares were previously charged to AIB Group (UK) plc as security for facilities, but were released from the charge in September 2010.
7
In March 2011, Sir Martin Sorrell gifted 264,000 ordinary shares to the JMMRJ Sorrell Charitable Foundation.
8
The JMMRJ Sorrell Charitable Foundation, of which Sir Martin Sorrell is a joint trustee, is interested in 805,396 WPP plc shares. Sir Martin has no beneficial interest in these shares.

Jeffrey Rosen
Chairman of the Compensation Committee on behalf of the Board of Directors of WPP plc
18 April 2011


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