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.
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.
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.
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.
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.
“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.”
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.”
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
This is the biggest news in years in the advertising market: Martin Sorrell steps down as head of WPP https://t.co/KKdmrDUl3V
— Paul N Robinson (@PaulRobinsonPR) April 15, 2018
Very very smart, brave, tough, ruthless & skilled. The Alex Ferguson of the marketing biz and an equally tough act to follow. Martin Sorrell’s legacy will be judged by WPP’s durability https://t.co/FOq5t1JOqS via @financialtimes
— Anthony Burgess-Webb (@tbw1) April 15, 2018
I’ve had no contact with Martin Sorrell for at least seven years but when I sent him a good luck email this morning he responded within forty minutes. A remarkable man. https://t.co/GRMKeOKcln
— Simon Albury (@simonbg12) April 15, 2018
My retirement advice for Martin Sorrell – and he’s got a few more quid than most of us.
1 it’s great
2 spend more time with those you love
3 learn something new
4 do something creative
5 be more physically active
6 stop trying to leg people over, you’ll be happier
7 sleep better pic.twitter.com/nBpbbgdr66
— Colin Byrne (@capbyrne) April 15, 2018
Sir Martin Sorrell has resigned from WPP.
Love him or hate him he built an amazing company in WPP. It will be interesting to see what happens in the vacuum left. #wpp #martinsorrell https://t.co/hZ5GwF7j2t https://t.co/sr8Tedz7Ef
— Russell Marsh (@RussellMarsh) April 15, 2018
Good riddance to a grossly over paid master of universe. Martin Sorrell steps down as head of WPP advertising agency https://t.co/7SdM6426Ie
— Paul sweeney (@paulsweeneyman) April 15, 2018
The man David Ogilvy once called an "odius little shit" steps down from WPP. #martinsorrell
— Esther Clerehan (@clerehan) April 14, 2018
— Lionel Barber (@lionelbarber) April 15, 2018
Thought I would try and paint a picture of what SMS is like as a person from as little as I’ve gotten to know him over the years. It would take me weeks to write up all my stories, so here’s a very brief overview – If interested I hope you enjoy it. https://t.co/pva4grnUuQ
— Stephen Lepitak He/Him (@StephenLepitak) April 15, 2018
Regardless of the reasons for his departure, Sir Martin Sorrell built up an incredible marketing/advertising/PR empire in WPP over 32 years employing 200k people in over 120 countries. WPP was a phenomenal barometer of global economic activity – He was an amazing entrepreneur!
— David Buik (@truemagic68) April 15, 2018
He backed Remain and Hillary Clinton, he was undone by misconduct allegations. The real reason Martin Sorrell had to go was the share price. pic.twitter.com/0bOcRhsF59
— Media Guido (@MediaGuido) April 15, 2018
— Nick Jackman (@NickJackman_) April 15, 2018
Sir Martin Sorrell resigns as WPP chief https://t.co/1raxOGgJ7g <WPP board must face some realities about the need to 'refine' the creaking marketing conglomerate. Oh, and they will need to say more about their internal inquiry>
— Colin Morrison (@ColinMorrisonUK) April 15, 2018
Sir Martin Sorrell stands down as WPP chief after 32 years. Financial misconduct allegations over recent weeks (flatly rejected by Sorrell) leave a sad mark at the end of an extraordinary career.
— Christian May (@ChristianJMay) April 14, 2018
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