Martin Sorrell steps down as head of WPP advertising agency

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    Boss of worlds largest marketing group stairs aside amid investigation into personal misconduct

    Sir Martin Sorrell has fallen on his sword resigning from WPP, the world’s largest ad group he has operated since founding it over three decades ago, ahead of the findings of an investigation into alleged personal misconduct.

    The 73 -year-old, who acquired a small Kent-based maker of wire baskets in 1985 and built it into the world’s largest marketing services group, told staff that for him WPP and its future is” more important than a matter of life or death “.

    Quick guide

    Timeline: Martin Sorrell’s career

    1975

    It may not seem like it but Sir Martin Sorrell had a job before WPP. His affair with ad began as Saatchi& Saatchi’s first finance director

    1985

    Sorrell built his first step toward world dominance at persons under the age of 40, investing in a small Kent-based maker of wire baskets called Wire& Plastic Products

    1987

    Sorrell announces himself on the global stage by buying J Walter Thompson, the world’s oldest ad organization and an iconic US brand for $566 m. In 1988 he listed on NASDAQ exchange in New York

    1989

    WPP’s closest call with fatality came following an audacious debt-fuelled move to buy Ogilvy& Mather for $864 m

    1991

    Sorrell paid too much for O& M and as the recession-hit WPP almost went out of business, a profit warning in 1990 sent the market share tumbling from 650 p in 1989 to 115 p. The company made a life-saving fiscal restructure but the close call damaged Sorrell’s reputation as a bargain maker

    2005

    Sorrell buys Ed Meyer’s Grey Global for PS845m

    2007

    Sorrell launches a libel action against two former colleagues for allegedly labelling him and a female executive” the mad dwarf and the nympho schizo” while circulating a “vicious” email image of them. Sorrell accepts a settlement of PS1 20,000 damages

    2008

    He moves WPP’s tax domicile to Ireland in protest at the prospect of” doubled taxation” of overseas profits – once abroad and once again in the UK. It moves back to the UK 5 years later after the government enacted legislation embracing the taxation of foreign profits

    2012

    The rising upheaval at unbridled boardroom pay boiled over into a series of investor rebellions, with Sorrell one of its most high-profile scalps. This was the year of the biggest of a series WPP investor insurrections with 60% repudiating his annual pay bundle

    2015

    Sorrell’s PS7 0.4 m paid in full is one of the biggest pay deals in UK corporate history. By the end of 2016 he has made more than PS2 00 m over a period of five years

    2017

    WPP suffers its worst annual performance since the advertising recession of 2009, sending its share price tumbling by more than a third

    2018

    Sorrell’s iron grip operating WPP goes under threat after the members of the security council hires a statute firm to investigate allegation of personal misconduct. He stepped down on 14 April

    Photograph: Eric Gaillard/ X00102

    ” As I look ahead, I see that the current disruption we are experiencing is simply putting too much unnecessary pressure on the business ,” said Sorrell.

    ” That is why I have decided that in your interest, in the interest of our clients, in the interest of all share proprietors, both big and small, and in the interest of all our other stakeholders, it is best in order to be allowed to step aside.

    ” As a founder, I can say that WPP is not just such matters of life or death, it was, is and will be more important than that. Good fortune and Godspeed to all of you … now Back to the Future .”

    Sorrell, one of Britain’s best-known business leaders, and the longest-serving FTSE 100 chief executive, has been under increasing pressure since the accusation of personal misconduct was made public by WPP’s board earlier this month.

    WPP’s board, which had appointed independent legal counsel to investigate the accusation, was expected to receive the findings of the investigation at the end of next week.

    Roberto Quarta, the WPP chairman, has taken the role of executive chairwoman until a substitution for Sorrell can be found.

    WPP has moved to appoint longstanding WPP executives from ad group Wunderman- Mark Read and Andrew Scott- as joint chief operating officers to run day-to-day operations.

    WPP said that Sorrell will be” available to assist with the transition “.

    ” For the past 33 times, I have expended every single day thinking about the future of WPP ,” mentioned Sorrell.

    ” We have had a succession plan in place for some time. We have weathered difficult blizzards in the past. And our highly talented people have always won through, always. As some of you know, their own families has expanded recently, WPP will always be my child too .”

    Quarta has said there is an” exceptional team of potential candidates” from WPP’s top handling, as well as a” constantly refined list of external candidates “. Nonetheless, investors and analysts is argued that, given the scale of WPP, Sorrell’s successor must be an external candidate.

    WPP applies over 200,000 staff in more than 400 separate advertising enterprises working in over 3,000 agencies in 112 countries.

    Whoever takes on WPP knows where to find continuing the sprawling empire- autocratically run with an iron hand with “whats being” dubbed “Sorrellcentricity”- intact perhaps an impossible task.

    Observers is argued that Sorrell’s departure will have rapid and catastrophic ramifications for WPP and the wider global advertising eco-system.

    ” Martin falls, WPP falls ,” said one top advertise executive at a competitive world holding company.” There is likely to be chaos. The industry is not prepared, patrons are not prepared. In the short term “theres been” chaos. The advertising industry is run like show business, it’s all about short-termism and that’s their own problems .”

    Sorrell has come under increasing pressure in the past year as WPP, which has a market capitalisation of PS15bn, has struggled ensuing in the market share cost falling more than a third- wiping PS9bn off the value of the business.

    WPP lately reported its worst performance since the advertising recession in 2009, which Sorrell described as” not a pretty year “.

    Sorrell is one of the UK’s best-paid business leaders earning more than PS200m from pay and lucrative- and highly controversial- reward schemes in the last five years alone. His PS70m payout in 2015 was one of the biggest in UK corporate history.

    In 2012, an investor uprising in the so-called ” shareholder springtime” understood 60% of disgruntled share owneds vote against Sorrell’s pay deal, a humbling result and at the time one of the largest rebellions in UK plc history.

    Sorrell and his family trust owns a stake of about 1.8% in WPP, merit about PS250m.

    Martin Sorrell’s full statement

    To everyone at WPP,

    For the past 33 times, I have expended every day thinking about the future of WPP.

    Over those decades, our family has grown and prospered.

    We greeted J. Walter Thompson, Ogilvy, Young& Rubicam, Grey, 24/7 Real Media, Taylor Nelson Sofres, among so many others.

    We generated GroupM, including Xaxis and Essence.

    We set the focus on Asia-Pacific, Latin America, Africa and the Middle East and Central Eastern Europe, the home of the next billion consumers. We embarked on the early developed at digital capabilities; and the evolution of a firm-wide integrated client and country-centered approach.

    Our holding company was recognized as the world’s best and most effective through the Cannes Lions and Effie Awards year after year after year.

    We pioneered Atticus Awards for original written envisioning …. the WPP Fellowship Awards to realise promising flair …. the Partnership and Practice Awards for client endorsed integrated market and occurrence surveys.

    Our Stream digital meetings have attracted the best in the digital business for more than a decade.

    Our Annual Sustainability and Pro Bono Reports highlight the unique social, environmental and public policy work that we do day in, period out across the globe.

    As I look ahead, I see that the current interruption we are experiencing is simply putting too much unnecessary pressure on the business, our over 200,000 people and their 500,000 or so dependents, and the clients we serve in 112 countries.

    That is why I have decided that in your interest, in the interest of our clients, in the interest of all shareowners, both big and small, and in the interest of all our other stakeholders, it is best for me to step aside.

    We have had a succession plan in place for some time. A new generation of management, led by Mark Read and Andrew Scott( who have each been at WPP for approximately 20 times ), are well qualified and experienced in the Board’s opinion, to deal with the geographic and technological opportunities and challenges our industry faces.

    We have weathered difficult storms in the past. And our highly talented people have always won through, always.

    Nobody, either direct challengers or newly-minted ones can beat the WPP team, as long as you work closely together, whether by client and/ or country or digitally.

    In the coming period, I will be available to the Board and any of you, should you crave help with anything, anywhere. I shall miss all of you greatly. You have given me such exhilaration and energy and I wanted to thank you for everything you have done and will do for WPP and me.

    As some of you are familiar, my family has expanded lately, WPP will always be my newborn too.

    As a Founder, I can say that WPP is not just such matters of life or death, it was, is and will be more important than that. Good luck and Godspeed to all of you…now Back to the Future.

    Thank you

    Read more: https :// www.theguardian.com/ business/ 2018/ apr/ 14/ martin-sorrell-steps-down-as-head-of-wpp-advertising-agency

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