Sir Martin Sorrell could make almost £20m from WPP shares over the next five years despite stepping down as chief executive of the world’s biggest advertising group on Saturday.
Although Sir Martin gets no payoff or pension under his contract terms, he is entitled to share bonus awards.
The maximum number of shares Sir Martin may be awarded if WPP meets certain targets is 1.65 million.
They are worth about £19m. WPP’s shares opened down about 4%.
Sir Martin and his family own about 2% of the company – a stake worth about £300m.
After peaking at almost £19 in February 2017, WPP shares have since fallen sharply and closed on Friday at £11.88, valuing it at £15bn.
Some analysts believe WPP, which comprises about 400 separate businesses, including Ogilvy & Mather, Kantar Group, Hogarth Worldwide and Young & Rubicam, could be broken up.
Alex deGroote, at Cenkos Securities, said divisions such as Kantar, a market research business, could be sold and be worth as much as £3.5bn.
Marc Mendoza, founder of 360 Degree Media, told BBC Radio 4’s Today programme a sell-off was inevitable.
“When you’re that strong a personality leader within that field and you command such loyalty – a little bit of fear with it as well – you’re impossible to replace with one individual, so the parts must be sold off now to create value for shareholders.”
In March WPP reported its weakest annual results since the financial crisis, with Sir Martin describing 2017 as “not a pretty year” for the company even though pre-tax profits were just over £2bn.
Meanwhile, the Financial Times reported that the 73-year-old is free to start a rival company because he never had a non-compete agreement, according to WPP insiders.
Sir Martin departed following claims of personal misconduct. WPP had also hired a law firm to investigate claims of financial impropriety against him, but the company said that probe had concluded.
Brian Wieser, a senior analyst at Pivotal, told Today that it is unlikely that we will find out exactly why Sir Martin was being investigated.
“A lot of people will want to know what it was, just because a lot of people do know Sir Martin, but at a pragmatic business level, it’s more about who’s going to succeed him, what’s the shape of the company,” he said.
Mr Wieser said that the advertising industry as a whole had been hit hard by “package-based marketers” seeking to “cut costs aggressively”.
He said: “WPP’s been hit harder than most – they had some unusually large account losses. AT&T was one, Volkswagen was another. But there is nothing that far away from the overall industry average that was affecting WPP at the time.”