The chief executive of WPP, Sir Martin Sorrell, collected £2.42m last year, a 14% rise on the year before, according to the advertising giant's annual report.

Sir Martin's pay rise came thanks to a 23% increase in his bonus entitlements, which rose to £1.55m from £1.26m in 2003.

His basic salary of £840,000 was unchanged, along with £25,000 in benefits including healthcare, life assurance, car and housing allowances and club membership fees.

Sir Martin, who has built WPP into the world's second-largest advertising group over the past two decades, also had £321,000 added to his pension pot.

On top of his annual remuneration, Sir Martin is sitting on nearly £100m of shares in the company.

According to the annual report, he owned 15.63m shares in WPP on May 10, worth £92m at current market prices.

The company's next best paid director last year was the US-based finance director, Paul Richardson, who earned £814,000, down slightly on 2003.

Two other US-based executives - WPP's chief talent officer, Beth Axelrod, who resigned in March this year, and PR boss Howard Paster - earned £615,000 and £584,000 respectively in 2004.

In all, the WPP board earned £5.19m last year, up 9% from 2003, with the chairman, Philip Lader, taking home £213,000.

The report also confirmed that Sir Martin has given up his controversial rolling contract and is set to adopt a new "at will" deal in line with best practice guidelines in September.

His new contract will not give him a special payout if the company changes hands, a provision in his current contract that irked some investors.

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