Embattled Sorrell exits CEO post at WPP

Gladys Abbott
April 16, 2018

Sir Martin Sorrell has stepped down from WPP with immediate effect.

The era of advertising Sorrell ushered in has been about scale as a handful of big players - WPP, France's Publicis and Havas, Japan's Dentsu and New York-based Interpublic and Omnicom - have hoovered up smaller agencies.

One of UK's top-paid executives.

Mark Read, chief executive of Wunderman and WPP Digital, and Andrew Scott, WPP corporate development director and chief operating officer for Europe, have been appointed as joint chief operating officers of WPP.

Roberto Quarta, chairman of WPP, becomes executive chairman until the appointment of a new CEO.

However, Sorrell will assist with the transition as the company seeks a new leader.

WPP stunned the market last week when it said it had appointed lawyers to investigate alleged misconduct by Sorrell, aged 73. The allegations do not involve amounts which are material to WPP as the holding company.

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He had been under investigation by WPP but had rejected any claim of financial impropriety.

He added: "As a significant share-owner, my commitment to the company, which I founded over 30 years ago, remains absolute - to our people, our clients, our shareholders and all of our many stakeholders". He has denied the allegations.

However, by resigning, he is likely to be deemed a "good leaver" by WPP's board, meaning that the investigation against him will be concluded without the details being made public.

But beyond the investigation that leaked this month, there were other signs Sorrell was losing his magic touch.

Sorrell, who built WPP into a global brand during his 33 years at the helm, had been accused of misusing company assets.

The marketing services industries are being buffeted by accelerating trends such as zero-based budgeting, which has led to many consumer-facing companies abandoning increases in marketing spending. Some of its biggest clients include Unilever and Procter & Gamble.

However, the firm has struggled in the previous year, with shares falling back from heights above £19 in February to less than £12 at the close of markets last Friday. JP Morgan maintained the shares of WPP in report on Tuesday, November 21 with "Overweight" rating.

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