Published: Mon, April 16, 2018
Global Media | By Jackie Banks

WPP shares plunge as Sir Martin Sorrell quits

WPP shares plunge as Sir Martin Sorrell quits

Sir Martin Sorrell has ended his 30-year stint with WPP by stepping down as the chief executive officer of advertising goliath with immediate effect.

WPP said the probe had concluded, adding that "the allegation did not involve amounts that are material".

From the company's office in Farm Street, Mayfair, he watched as Sorrell pulled off a string of takeovers before building his own profile by growing its digital operations.

In March WPP reported its weakest annual results since the financial crisis, with Sir Martin describing 2017 as "not a pretty year" for the company even though pre-tax profits were just over £2bn.

"That is why I have decided that in your interest, in the interest of our clients, in the interest of all share owners, both big and small, and in the interest of all our other stakeholders, it is best for me to step aside".

Whoever replaces Sorrell however will face longer-term questions as to whether a group that was built in his mold should remain intact after his departure.

"Shareholders were getting restless", he wrote, and Sorrell "had lost the unanimous backing of the board".

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

Sir Martin's future will also be watched with interest - his parting message to staff was "back to the future" and the FT reported that he had never signed a non-compete agreement, leaving him free to being a new advertising venture. "During this time, the company has been successful because it has valued and nurtured outstanding talent at every level - within and well beyond our leadership teams", he said.

Sorrell denied any wrongdoing after the allegations surfaced earlier this month, but said he understood the company had to investigate.

The son of an electronics retailer who was educated at the University of Cambridge, Mr Sorrell made his name as the finance director of the start-up British ad agency Saatchi & Saatchi.

Brian Wieser, advertising analyst at Pivotal Research, said WPP had the right assets but it had not packaged them properly in recent years and the fact it was more fragmented than Omnicom and Publicis meant it was now harder to reposition.

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. The holding group employs over 200,000 people in more than 400 companies across 112 countries.

He previously worked at Saatchi & Saatchi, and was knighted in the Queen's New Year honours list in 2000.

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