WPP To End Salary Sacrifice For Top Agency Executives
WPP is to end voluntary salary sacrifice for about 3,000 of its senior agency executives after three months.
The agency giant announced temporary salary reductions of between 10% and 20% at the end of March “to protect profitability, where possible, from a decline in revenue” because of the Coronavirus crisis.
Different WPP agencies implemented the pay cuts at various points during April and the reductions are due to be phased out across July, depending on when each agency first introduced them.
It is understood that a decision on whether to end salary reductions for board members, including Mark Read, WPP chief executive, is still under review.
A WPP spokesman declined to comment. However, a person with knowledge of WPP’s thinking said the company felt staff had worked hard during lockdown and “gone the extra mile” to help with cost reductions, and now deserved respite.
“Over 3,000 people with salaries above certain levels” agreed “to give up 10-20% of their salary for an initial three-month period”, the company said in April.
“While we continue to protect our people as much as possible from redundancy, as well as ensure our ability to serve clients and grow when markets recover, we have had to reduce headcount in certain areas,” WPP said at the time.
WPP employs about 100,000 people.
The group’s move to end the pay cuts after only three months will send a signal that the worst of the crisis is easing and could reassure talent.
Most agency groups have introduced some form of salary sacrifice, often in return for shorter working hours, for higher-earning executives.
Some rival groups plan to keep pay reductions for six months.
John Wren, chairman and chief executive of Omnicom, announced in April that senior executives would give up one-third of salary and he waived 100% of his pay until September.
Arthur Sadoun, chief executive and chairman of Publicis Groupe, has taken a 30% salary cut and other top executives accepted 20% reductions for the second and third quarters.