Business

Martin Sorrell Steps Down As CEO, WPP

Martin Sorrell Steps Down As CEO, WPP

He took centre stage in 1985, buying a stake in a small manufacturing firm Wire and Plastic Products Plc to use it as a public vehicle to buy communications groups around the world.

The question now for his successor, WPP's investors and its tens of thousands of clients is whether the £15bn group can survive the departure of its founder and the dramatic changes the internet is bringing to the traditional world of advertising.

The development comes after Sorrell denied allegations that he misused company funds - a charge that prompted the company's board to investigate allegations of "personal misconduct" and misuse of company assets. These are methods his successor can not hope to be allowed to employ.

In a parting memo to WPP's 200,000 employees obtained by AdAge, Sorrell explained that the firm's "current disruption" has come from "putting too much unnecessary pressure on the business".

The longest-serving CEO on the FTSE 100 blue chip index, Sorrell built WPP into one of Britain's biggest companies by three decades of relentless dealmaking.

The initial task will fall to Chairman Roberto Quarta, who described Sorrell as the "driving force" behind WPP, and executives Mark Read and Andrew Scott who will be joint chief operating officers while the company seeks a new CEO.

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In a statement from Sorrell's personal PR firm Project Associates, he said: "Obviously I am sad to leave WPP after 33 years". It said the allegation "did not involve amounts that are material".

The company said Sorrell would be available to assist with the transition, and the man synonymous with the British marketing group told the staff they would come through this hard time.

Sir Martin said his position at WPP had been a passion for so long but it was in "the best interests of the business" for him to resign. "Most of my wealth, if not all of it, is and has been for the last 31 years tied up in the success of WPP".

He has made headlines in recent years regarding his sizeable pay at a time when traditional advertising groups struggle against fierce competition from the likes of Google and Facebook. "Good fortune and Godspeed to all of you ... now Back to the Future".

As of a year ago, Sorrell was said to have a net worth of 495 million pounds, or over $700 million. His share awards will be pro-rated in line with the plan rules and will vest over the next five years, to the extent that performance targets are met. Sorrell is one of the largest shareholders of WPP, with a 1.46% stake, according to data compiled by Bloomberg.

Chairman Roberto Quarta takes over as executive chairman.


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