WPP, the world's second largest advertising and marketing company, will next week ask its investors to approve a controversial new award scheme which could see its chief executive Sir Martin Sorrell earn $95m (£60m) in bonuses over the next five years.

The proposed scheme prompted the Association of British Insurers to issue its highest-level "red top" warning about the proposed five-year bonus scheme for the WPP boss ahead of its AGM in Ireland on 2 June.

The WPP scheme would replace a previous five-year package introduced in 2004 and allow Sorrell to set aside $19m in shares in WPP between 2010 and 2015, the value of which could then multiply up to five times should WPP meet a demanding set of criteria to outperform nine other leading advertising groups worldwide in each year of the next five.

However, if the company performs poorly executives might not receive a payout from the scheme.

The insurers' association suggested investors look closely at the scheme before approving it, according to the Times, with the API adding that "some shareholders have expressed concern at the proposal".

The scheme comes as shareholder anger over remuneration and bonuses at large companies has intensified.

Shareholder activists last week demanded that Royal Dutch Shell directors return their bonuses and called for the resignation of Sir Peter Job, the former senior Reuters executive who chairs the energy multinational's remuneration committee.

WPP said the scheme, which could be extended to up to 20 other executives, offered large payouts but its five-year performance term was longer than most companies and required the company to perform very well before payouts were made.

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