Ad titan Sorrell quits amid misconduct claims

Andrew Cummings
April 15, 2018

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

As 2012, WPP has compensated Mr. Sorrell 210 million pounds, making him the best paid chief executive of any company listed in the FTSE.

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

WPP said the investigation, which regarded financial impropriety, had concluded.

Sorrell, 73, will step aside immediately, according to a statement late on Saturday by WPP, the world's largest advertising company. The allegations do not involve amounts which are material to WPP as the holding company. The independent law firm in charge of investigation was due to deliver its findings to the board by next Friday but details of the misconduct allegation and the outcome of the probe will now not be made public.

Despite the misconduct investigation, some commentators said it was the fact that the company had lost a third of its value over the past 12 months - in the face of competition from the likes of Google and Facebook - that cost Sorrell his post.

He worked closely with the brothers Saatchi (Charles and Maurice) and helped fashion its rapid growth, before going solo and acquiring a shopping basket manufacturer Wires & Plastic Products (WPP).

"I will particularly miss the daily interactions with everyone across the world and want to thank them and their families for all they have done, and will do, for WPP".

"His departure will leave the company he built virtually from ‎scratch facing profound questions about its future direction", he said.

Mr. Sorrell, a frenetic, loquacious man, looms like a giant of this advertisements world.

Some multinational advertisers, including P&G, which owns ‎Ariel and Gillette, have signalled their intention to take more of their marketing services activity in-house, reducing the lucrative work for which they are charged by external agencies. The Company has four segments: Advertising and Media Investment Management; Consumer Insight (formerly Information, Insight & Consultancy); Public Relations & Public Affairs, and Branding & Identity, Healthcare and Specialist Communications, which includes WPP Digital and direct, digital, promotional and relationship marketing.

WPP has seen its ‎shares fall by almost a third during the last 12 months, although it still has a market capitalisation of more than £15bn.

The migration of advertising online and the encroachment into market research of consultancies such as Accenture have compounded the pressures.

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