Sir Martin Sorrell steps down from WPP following claims of personal misconduct

Daniel Fowler
April 16, 2018

The Board of WPP has appointed independent counsel to conduct an investigation in response to an allegation of personal misconduct against Sir Martin Sorrell, Chief Executive Officer of WPP.

The move follows an investigation into allegations of improper behavior and misuse of assets. Sorrell has denied the allegations, details of which have yet to publicly surface.

The ad business has changed a lot since Sorrell launched WPP.

"Obviously I am sad to leave WPP after 33 years".

Its constituent parts, especially the health and digital divisions, are worth far more than WPP's current share price, he added, which has fallen by more than 40% from its February 2017 peak. "Good fortune and Godspeed to all of you ... now Back to the Future". A new generation of management, led by Mark Read and Andrew Scott (who have each been at WPP for approximately 20 years), are well qualified and experienced in the Board's opinion, to deal with the geographic and technological opportunities and challenges our industry faces.

The resignation preempts what could have been an inglorious departure. It said in a statement that "the allegations do not involve amounts which are material to WPP". "However, there will be great interest in resolving the full-time CEO role as soon as possible".

He formed it from a shell company, Wire and Plastic Products, re-establishing what had been a wire baskets manufacturer as a marketing services group in 1986.

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For years, the board supported his outsize pay packages amid shareholder complaints because he delivered.

As of a year ago, Sorrell was said to have a net worth of 495 million pounds, or over $700 million.

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

"Yes he was relentless and richly rewarded - but let's not forget Sir Martin Sorrell built a global advertising empire from nothing", said Lionel Barber, editor of the Financial Times newspaper.

In a statement to employees at WPP - more than 200,000 of them - Sorrell described the company as a "family" and praised its growth over the last three decades. Sir Martin will be treated as having retired... His share awards will be pro-rated in line with the plan rules and will vest over the next five years, to the extent Group performance targets are achieved.

Chairman Roberto Quarta takes over as executive chairman.

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