by MarkLives (@marklives) Updated 2018/04/16 WPP has announced the resignation of its CEO, Sir Martin Sorrell, with immediate effect. This follows the conclusion of an investigation into an allegation of misconduct against Sorrell. According to a statement issued by the group,”[t]he allegation did not involve amounts that are material.”

Roberto Quarta, WPP chairperson, becomes executive chair until the appointment of a new chief executive officer. Mark Read, CEO of Wunderman and WPP Digital, and Andrew Scott, WPP corporate development director and chief operating officer, Europe, have been appointed as joint COOs of WPP.

“In accordance with his at-will employment agreement, Sir Martin will be treated as having retired on leaving WPP, as detailed in the Directors’ Compensation Policy. 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,” the group stated.

Further reading

Campaign: Notes on a scandal: Things will never be the same after Sorrell exit

To anyone rubbing their hands at the downfall of our industry’s biggest titan, I say “be careful what you wish for”. The sorry Sorrell saga certainly wont do anything for the standing of our industry among clients already questioning the value we add. But a weaker WPP wouldn’t do much for the status of British advertising in what is now a global agency marketplace. And unless clients and analysts turn against the holding-company model altogether, a strong WPP led by a strong chief is surely desirable.

Ad Age: Martin Sorrell was an amazing visionary (and now WPP must change)

Although Sorrell blamed clients for “shortsighted” cuts in marketing spend, he missed an important fact: WPP agencies, like all holding company agencies, had been cost-reduced into weakness. They were no longer seen by their clients as valuable strategic partners. Senior agency personnel had been let go; juniors had taken their place. Client brands, which ceased to grow very much after 2008, were in trouble, and agencies were not capable of making a difference.

The Guardian: Martin Sorrell stands to pick up £20m as WPP faces possible breakup

Analysts believe Sorrell’s departure combined with a share price slump of almost a third over the past year means investors and the WPP board will have to consider that there is potentially more value in breaking up WPP.

Financial Times: Martin Sorrell resigns after 33 years as WPP chief

WPP, which will consider internal and external candidates to succeed Sir Martin, faces complex set of challenges. Some of its biggest clients say it has an unwieldy structure and point out that professional services firms such as Deloitte and Accenture are encroaching on traditional advertising turf. They add that Google and Facebook are offering brands the ability to connect direct with vast numbers of people.

Financial Times: Martin Sorrell’s legacy will be judged by WPP’s durability

In the end, the road to the “glue factory” that Martin Sorrell often joked was his ultimate destination was shorter and more slippery than he could have imagined. Less than two weeks after the surfacing of an investigation into allegations of personal misconduct (denied by Sir Martin), the advertising industry’s most tenacious, most outspoken and — not to be forgotten — most successful conglomerateur is out.

The Guardian: Martin Sorrell steps down as head of WPP advertising agency

Whoever takes on WPP will find keeping the sprawling empire – autocratically run with an iron hand with what has been dubbed “Sorrellcentricity” – intact perhaps an impossible task. Observers believe that Sorrell’s departure will have rapid and catastrophic ramifications for WPP and the wider global advertising eco-system.

Ad Age: Martin Sorrell’s farewell note to staff: WPP more important than ‘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, 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.”

Campaign: Sorrell departs WPP: how an outsider shaped the global ad industry

Because Sorrell was never defined by the industry he has always viewed it with an outsider’s dispassion. Quick-thinking and clever, he was astute enough to recognise the huge potential of the creative industries if they could be well enough managed to meet what clients were demanding of them. This meant introducing the kind margin-boosting cost controls that were commonplace in Sorrell’s world but largely alien to adland.

The New York Times: Martin Sorrell Resigns as Chief of WPP Advertising Agency

A first-generation Jewish immigrant in Britain whose parents came from Kiev, Ukraine, Mr. 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.”

The Drum: Who could be in the frame to succeed Sir Martin Sorrell at WPP?

Irrespective of current events – Sorrell denies any wrongdoing – the question of who should succeed such an indomitable figure, and the company’s readiness for that eventuality, had already been among the thorniest subjects facing WPP in recent years. In its 2016 annual report, WPP said succession planning was underway and a pool of internal and external candidates had been identified. “The founder CEO has over 30 years’ service with the company and is identified with the success of the group’s strategy and a failure to plan for his succession could impact investor confidence in the company,” it acknowledged.

The Drum: Beneath the gushing tributes to Sorrell lies an industry fortified by the prospect of change

Despite his eye-watering salary, an ugly past business year and personal misconduct allegations still left unresolved, the industry’s response to Sir Martin Sorrell’s WPP resignation smacks more of effusive obituary than critical analysis. But alongside the tributes is a feeling of invigoration: a hopeful sense that things will never be the same again without the godfather of modern advertising.

Social media reaction

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