Keyfindings from WPP's Annual Report: Mark Read's Compensation Adjustment, DEI Discretion, and Various Noteworthy Points
Let's Dive into WPP's 2024 Annual Report:
The year 2024 wasn't exactly peachy for WPP, but the annual report gives a raw look into the ups and downs faced by the U.K.-based holding company. After disappointing investors with weaker-than-anticipated earnings, WPP decided to bare it all, offering insights into a turbulent yet eventful year.
2024 brought about consolidation and restructuring across WPP's leading agencies, including VML and GroupM. The firm grappled with a sluggish performance in China, losses from clients like Pfizer and Sky Media, but was fortunate enough to secure wins with Amazon and Johnson & Johnson.
ADWEEK has pulled out a few key takeaways from the 210-page document. Among them is an update on CEO Mark Read's pay cut, the revision of diversity, equity, and inclusion (DEI) language, and details on WPP's AI strategy.
1. Mark Read's paycheck took a hit
CEO Read's total remuneration fell 15% to £3.8 million ($4.9 million) in 2024. This reduction echoes previous years, with Read's earnings dropping significantly in response to subpar financial results. In 2022, Read pocketed close to £6.7 million ($8.6 million), but by the end of 2023, his pay declined a whopping 33% to £4.5 million ($5.8 million). The latest drop marks another 15% decrease year-on-year.
2. The buzzword 'DEI' vanished
Following President Trump's instruction to terminate DEI programs and with giants like Amazon, Ford, and Target scaling back theirs, WPP's annual report ditched all references to "diversity, equity, and inclusion," "DE&I," and "DEI" for 2024. In 2023, the term was used 20 times, with WPP referring to itself as a "diversity leader" three times.
This year, the phrase was transformed into "people and culture." Despite the language change, WPP asserted that the criteria for executives' short-term bonus packages remained unchanged. Read highlighted the complexity of the current socio-political landscape and WPP's aim to create a culture where employees feel seen and valued, irrespective of their political leanings.
WPP is not the only company revising its language – over 200 of the U.S.'s largest corporations have scrubbed mentions of DEI and related terms from their annual reports.
3. Six agencies dominate WPP's revenue
The first year of operation for the newly amalgamated VML (2.0) was a significant one, combining VMLY&R and Wunderman Thompson under a single roof. Media linchpin GroupM, which Read is banking on for growth, underwent restructuring in 2024, including the hiring of InfoSum boss Brian Lesser as its new CEO.
WPP declared that a leaner business model allowed it to serve clients through six key agency networks: AKQA, Burson, GroupM, Hogarth, Ogilvy, and VML. These networks collectively generated over 90% of WPP's revenues for the year.
4. AI investment on the rise
Like GroupM, WPP is banking on AI to help it outpace competitors and recover from stagnation. The company reported that the number of employees utilizing its AI-powered operating system, WPP Open, increased from 10,000 in 2023 to 33,000 in 2024. WPP attributed the tool, which automates media planning and content creation at scale, for securing wins from brands like Amazon and Unilever. Read announced that the company's annual investment in WPP Open will increase from £250 million to £300 million in 2025.
- In 2024, WPP's CEO Mark Read's remuneration decreased by 15%, a response to subpar financial results.
- The phrase "diversity, equity, and inclusion" was replaced with "people and culture" in WPP's 2024 annual report, despite the criteria for executives' bonus packages remaining unchanged.
- Six agencies, including the amalgamated VML (2.0) and GroupM, collectively generated over 90% of WPP's revenues for the year.
- WPP plans to increase its annual investment in its AI-powered operating system, WPP Open, from £250 million to £300 million in 2025.
- The consolidation and restructuring of WPP's leading agencies, such as VML and GroupM, were key events detailed in the 2024 annual report.
