WPP's compensation philosophy

Our mission statement and our six business objectives shape our compensation philosophy. Broadly, our Executive Remuneration Policy is determined by three guiding principles:

  • performance driven reward;
  • competitiveness; and
  • alignment with share owner interests.

Specifically, our six business objectives are reflected in the design of our compensation plans as set out below:

WPP's six business objectives Alignment with compensation structure

1

Continue to improve operating margins on revenue and gross margin (net sales) Short-term incentive measure for the Group chief executive and Group finance director

2

Increase flexibility in the cost structure Short-term incentive measure for the Group finance director

3

Use free cash flow to enhance share owner value and improve return on capital TSR, EPS growth and average ROE are long-term incentive measures for the executive directors

4

Continue to develop the value added by the parent company Short-term incentive measures (parent company-led efficiency projects) for the Group finance director

5

Emphasise revenue growth more as margins improve Short-term incentive measures for the Group chief executive and Group finance director (Group) and Chief executive, WPP Digital (Digital)

6

Improve still further the creative capabilities and reputation of all our businesses Short-term incentive measure for the Group chief executive

The Executive Remuneration Policy is designed to attract and retain the best-in-class talent. The policy looks to incentivise the directors to develop the skills of the Group's employees in order to consistently exceed our clients' expectations. The policy's objective is to drive and reward sustainable and exceptional performance, thereby producing long-term value for share owners. In applying this policy, the committee takes into account the pay and conditions elsewhere in the Group, which in turn are informed by general market conditions and internal factors such as the performance of the Group or relevant business unit.

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