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World Martin Sorrell resigns as chief of WPP advertising agency

Martin Sorrell has resigned amid an investigation into alleged misconduct as the chief executive of WPP, the world’s largest advertising group, the company said Saturday, abruptly ending his decadeslong run leading the agency he helped found.

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Martin Sorrell Resigns as Chief of WPP Advertising Agency play

Martin Sorrell Resigns as Chief of WPP Advertising Agency

(NY Times)

In a statement, the London-based advertising behemoth said the change would take effect immediately.

Roberto Quarta, the chairman of WPP, was named executive chairman until the company could appoint a new chief executive. The company said Sorrell would be “available to assist with the transition.”

The company’s statement also said that Sorrell, 73, would be “treated as having retired” and that his share awards would vest.

“The previously announced investigation into an allegation of misconduct against Sir Martin has concluded,” the statement said. “The allegation did not involve amounts that are material.”

The statement did not provide any additional details about the investigation, its findings or what role, if any, it played in Sorrell’s resignation.

On April 3, the board of WPP said it had appointed an independent counsel to investigate an allegation of what it called “personal misconduct” against Sorrell.

Richard Oldworth, a spokesman for WPP, said Saturday that he could not comment beyond the company statement.

But in a separate statement to employees Saturday, Sorrell made note of a “current disruption” that he argued “is simply putting too much unnecessary pressure on the business.”

“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,” he said. “We have weathered difficult storms in the past. And our highly talented people have always won through, always.”

David Rigg, a spokesman for Sorrell, said Saturday that he had “nothing further to add.”

Sorrell, a frenetic, loquacious man, looms as a giant of the advertising world. He is a fixture on the London and European social circuit, is a regular at the World Economic Forum in Davos, Switzerland, and jets to business events around the globe. Queen Elizabeth II knighted him in 2000 with a tap of her sword on his shoulders, the highest honor among a raft of awards he has received for his business acumen throughout the years.

A first-generation Jewish immigrant in Britain whose parents came from Kiev, Ukraine, Sorrell got his big break in advertising when he joined Saatchi & Saatchi in 1975. He quickly worked his way up and became so entwined with the agency’s founding siblings that he became known in the industry as “the third brother.”

In 1985, he struck out on his own with an improbable business gamble: He bought part of a British shopping basket manufacturer, Wire and Plastic Products, and proceeded to transform it into a global advertising behemoth, acquiring 18 advertising-related companies in just three years.

In 1989, he surprised the advertising world with a hostile $825 million takeover of Ogilvy & Mather, then one of the most influential ad agencies, and continued to snap up competitors, including Young & Rubicam, a global marketing and communications company.

Sorrell shaped WPP with an iron grip and fashioned it in his own image. (He is renowned for holding conversations while texting with clients and friends.) Today, WPP is an advertising behemoth with 130,000 employees in 112 countries, and a market valuation of around 22 billion pounds, or about $31 billion.

Yet as he fashioned himself as a superstar executive, Sorrell also came under sharp scrutiny — especially for his increasingly lavish pay packages, which came to symbolize boardroom excess in Britain.

Since 2012, WPP has paid Sorrell 210 million pounds, making him the highest paid chief executive of any company listed on the FTSE. Despite gains for WPP’s investors, a backlash emerged two years ago, when he pocketed a 70 million-pound payout.

Since then, shareholders have balked at backing similarly large pay packages, and turned up criticism over WPP’s governance and the leader-centric corporate culture Sorrell appeared to have created.

His pay was capped at 19 million pounds, and last year, he agreed to a 13 million-pound limit on his annual salary starting in 2021.

This article originally appeared in The New York Times.

MATT STEVENS and LIZ ALDERMAN © 2018 The New York Times

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