It has been revealed that Sir Martin Sorrell, chief executive of WPP, is set to take a £150,000 pay cut, as well as a 20 per cent reduction in potential bonus, as part of a radical boardroom shake-up which was predicted this morning.
Jeffrey Rosen, the chair of WPP's remuneration committee, said: "The changes we have made were designed to be responsive to an environment in which moderation of executive compensation is considered necessary and appropriate.
"This reduction in no way reflects the committee's or the board's view of the importance of the chief executive to the company and its success and his unique mix of skills, and for which numerous share owners have expressed their appreciation."
It was revealed that under the new system, his bonus and annual pension payment will drop, with the deal to be agreed by shareholders at the annual general meeting in June.
The news comes after 60 per cent of shareholders voted last year not to give Sorrell a pay rise, although in 2012 he received 47.6 per cent more than he did in 2011, with a base salary of £1.3m and a cash-and-shares bonus of almost £3.1m.