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Martin Sorrell leaves WPP amidst allegations of misconduct

Sorrell’s departure comes in the wake of allegations of misconduct that were being investigated by the board at WPP.

, ET Bureau|
Last Updated: Apr 16, 2018, 07.21 AM IST
MUMBAI: Sir Martin Sorrell, CEO of WPP, the world’s largest marketing communications holding company, has decided to step down. The 73-yearold Sorrell is credited with building a conglomerate that includes marquee creative agencies JWT, O&M and Grey; media giant GroupM which includes Mindshare and WaveMaker and digital specialists like AKQA. The team that succeeds him at WPP includes executive chairman Roberto Quarta and joint chief operating officers Mark Read (CEO, Wunderman and WPP Digital) and Andrew Scott (WPP corporate development director and chief operating officer, Europe).

Sorrell’s departure comes in the wake of allegations of misconduct that were being investigated by the board at WPP.

A statement from WPP says “the previously announced investigation into an allegation of misconduct against Sorrell has concluded. The allegation did not involve amounts that are material.” However, at the time of going to press, reports in the international media pegged the investigation as still under way.

His departure also comes in the wake of WPP’s worst year since 2009. Sorrell was quoted as blaming the poor performance on “Probably the long-term impact of technological disruption and more the short-term focus of zerobased budgeters, activist investors and private equity.”

In a statement about his departure he said, “I see that the current disruption we are experiencing is simply putting too much unnecessary pressure on the business, our over 200,000 people and their 500,000 or so dependants, 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 share owners, both big and small, and in the interest of all our other stakeholders, it is best for me to step aside.”

A statement from WPP said “In accordance with his at-will employment agreement, Sir Martin will be treated as having retired on leaving WPP, as detailed in the directors’ compensation policy. His share awards will be prorated in line with the plan rules and will vest over the next five years, to the extent group performance targets are achieved.”

Considering his outsized impact on the ad business, news of his departure has sent shock waves.

Besides being famous for an aggressive acquisition strategy, Sorrell pioneered initiatives like bespoke teams, culled together from different agency brands within his group to service key clients like Ford and Colgate-Palmolive.

Much more than his contemporaries Michael Roth of Interpublic Group, John Wren of Omnicom and Arthur Sadoun of Publicis Groupe, Sorrell’s forceful outgoing personality has been one of the building blocks of the holding company.

He is also famous for taking frequent jibes at his competitors and his compensation package — a report pegged his total compensation over the last five years at over £200 million pounds, with a 42 million payout last year.

Asenior executive at a rival network in India admits, “He was a formidable opponent. Even in India he was extremely hands-on. There have been businesses that have been retained or won by WPP solely with his intervention. He was known to fly down to meet many a client personally to swing the business his way, much to the chagrin of the other networks who haven’t had the same level of involvement from their global CEOs.” The executive concludes, “Now we’ll have fair competition. Hopefully the replacement may not have the same stature.”

Adds Sam Balsara, chairman, Madison World and a one-time partner with WPP agency Mediacom, “To my mind, it is unfortunate that a person like him who has worked unceasingly for decades at building WPP had to finally end his career and connection with it in this manner. He should be given a hero’s send off for what he has achieved for himself and WPP. If he has built a rock solid organisation, it will continue to grow from strength to strength.”
(Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

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