Founder and the legendary boss of the world’s largest ad group, Sir Martin Sorrell, is resigning from WPP, the group he has run over three decades, ahead of the findings of an investigation into alleged personal misconduct.
The 73-year-old CEO told staff that for him WPP and its future is “more important than a matter of life or death”.
“As I look ahead, I see that the current disruption we are experiencing is simply putting too much unnecessary pressure on the business,” said Sorrell.
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“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.
“As a founder, I can say that WPP is not just a matter of life or death, it was, is and will be more important than that. Good fortune and Godspeed to all of you … now Back to the Future.”
Last week, on April 4, the agency said its board had appointed an independent counsel to conduct an investigation. The firm said in a statement
“The allegations do not involve amounts which are material to WPP.”
In responding, Sorrell said he rejected any allegation of financial impropriety “unreservedly”.
Sorrell, one of Britain’s best-known business leaders, and the longest-serving FTSE 100 chief executive has been under increasing pressure since the allegation was made public by WPP’s board.
The findings of the investigation expected to receive at the end of next week.
The firm said in a statement: “The previously announced investigation into an allegation of misconduct against Sir Martin has concluded. The allegation did not involve amounts that are material.”
WPP which now has 3,000 offices in 112 countries have started in 1985 when Sorrell acquired a small Kent-based maker of wire baskets and built it into over 200,000 staff in more than 400 separate advertising businesses.
“Martin falls, WPP falls,” said one top advertising executive at a rival global holding company to The Guardian. “There will be chaos. The industry is not prepared, clients are not prepared. In the short term there will be chaos. The advertising industry is run like show business, it’s all about short-termism and that’s the problem.”
Martin Sorrell’s full statement
To everyone at WPP,
For the past 33 years, I have spent every single day thinking about the future of WPP.
Over those decades, our family has grown and prospered.
We welcomed J. Walter Thompson, Ogilvy, Young & Rubicam, Grey, 24/7 Real Media, Taylor Nelson Sofres, among so many others.
We created GroupM, including Xaxis and Essence.
We put the focus on Asia-Pacific, Latin America, Africa and the Middle East and Central Eastern Europe, the home of the next billion consumers. We embarked on the early development of digital capabilities; and the evolution of a firm-wide integrated client and country-centered approach.
Our holding company was recognized as the world’s best and most effective through the Cannes Lions and Effie Awards year after year after year.
We pioneered Atticus Awards for original written thinking…. the WPP Fellowship Awards to recognize promising talent…. the Partnership and Practice Awards for client endorsed integrated market and case studies.
Our Stream digital conferences have attracted the best in the digital business for more than a decade.
Our Annual Sustainability and Pro Bono Reports highlight the unique social, environmental and public policy work that we do day in, day out across the globe.
As I look ahead, I see that the current disruption we are experiencing is simply putting too much unnecessary pressure on the business, our over 200,000 people and their 500,000 or so dependents, and the clients we serve in 112 countries.
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.
We have had a succession plan in place for some time. 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.
We have weathered difficult storms in the past. And our highly talented people have always won through, always.
Nobody, either direct competitors or newly-minted ones can beat the WPP team, as long as you work closely together, whether by client and/or country or digitally.
In the coming period, I will be available to the Board and any of you, should you want help with anything, anywhere. I shall miss all of you greatly. You have given me such excitement and energy and I wanted to thank you for everything you have done and will do for WPP and me.
As some of you know, my family has expanded recently, WPP will always be my baby too.
As a Founder, I can say that WPP is not just a matter of life or death, it was, is and will be more important than that. Good fortune and Godspeed to all of you…now Back to the Future.
About Sir Martin Sorrell
Sir Martin Sorrell is an Englishman who was born in London, in February 1945, to a family who originated in Russia, Poland and Romania. After going to private secondary school at Haberdashers’ in Hertfordshire – a very expensive private school – he graduated from Christ’s College Cambridge. Later, he earned his MBA at Harvard University.
After a couple of jobs he joined advertising company Saatchi & Saatchi in 1975 and while there was Group Finance Director for seven years until 1984. In that job he was responsible for the financial engineering of S&S’s own serial acquisition activities during those years. In 1985 he went out on his own, acquiring a small listed company WPP which he used as the spring board for making marketing or advertising company acquisitions of his own including, to the astonishment of the entire advertising world, the US$566 million hostile takeover of J. Walter Thompson in 1987. Since then other major advertising company dominos fell into his lap including the purchase of Ogilvie and Mather, of Young & Rubicam and of Grey helping him build what has become, until now the world’s largest agency with a market cap of over US$22 billion.
He was knighted by the Queen in the year 2000, in the New Year’s Honours List.
Sir Martin has made some changes in his personal life. Today he is married to Cristiana Falcone, who is the Media & Entertainment Industries Director for the World Economic Forum. Previously he was married to Sandra, with whom he has three sons, but the marriage broke down in 2003 leading subsequently to an expensive divorce. In October 2005, Sorrell cashed in US$18 million of shares in WPP to help pay for his US$45 million divorce settlement.
Even so, after the settlement, Sorrell still had 13 million shares left in WPP still with an estimated value close to US$100 million at the time. So he seems to have done ok, especially as the share price has gone up substantially in the years since.
In a superb touch of irony, for a man uniquely specialized in communications, the current web page listing his Board of Directors at WPP, on the company’s web site, has voluminous entries about all of his fellow directors. But for his own entry this is the sum total of what it says:
“Sir Martin Sorrell joined WPP in 1986 as a director, becoming Group chief executive in the same year. He is a non-executive director of Formula One and Alcoa Inc.”
I wonder if all his business conversations are equally brief and to the point!