Martin Sorrell Steps Down As CEO, WPP

Martin Sorrell circa 1985

Martin Sorrell circa 1985

WPP stunned the market last week when it said it had appointed lawyers to investigate alleged misconduct by Sorrell, aged 73.

The news is likely to impact the share price of WPP as well as have wider implications for the advertising industry, including WPP AUNZ.

One of UK's top-paid executives.

"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", he said in the statement.

According to a statement from WPP, Chairman Roberto Quarta, has taken over as the executive chairman until the appointment of a new CEO. It said the allegation "did not involve amounts that are material". He denied the allegations but in a letter to WPP staff published late on Saturday he said the "current disruption" was "putting too much unnecessary pressure on the business".

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.

David Ogilvy
David Ogilvy

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.

The reasons for his departure have not been made public, although the investigation, which was only revealed at the start of the month, has now finished.

As the architect of the global empire which began in the humble form of the cash shell Wire and Plastic Products, Sir Martin has amassed rich rewards from his success. "I leave the company in very good hands, as the board knows", Sorrell said. "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".

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.

That has left WPP and its peers - the French group Publicis and Interpublic of the U.S. - being buffeted by headwinds which also include the disintermediation of digital platforms such as Facebook.

Shares in WPP are expected to fall tomorrow when the markets open.

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