Embattled Sorrell exits CEO post at WPP

Embattled Sorrell exits CEO post at WPP

Sir Martin Sorrell, chief executive of the world's largest advertising agency network, WPP has resigned from his post following an investigation being held by the company.

The news is likely to impact the share price of WPP as well as have wider implications for the advertising industry, including WPP AUNZ.

"It is hard to see a future for WPP", the chief executive said.

WPP's corporate development director and chief operating officer for Europe Andrew Scott and, Wunderman CEO Mark Read would don the mantle of co-chief operating officers.

WPP said Sorrell would be treated as having retired, with chairman Roberto Quarta becoming executive chairman until a new chief executive is appointed.

Sorrell, 73, will step aside immediately, according to a statement late on Saturday by WPP.

Earlier this month, the board of WPP appointed an independent counsel to investigate Sorrell for personal misconduct. His departure followed allegations of personal misconduct and misuse of company assets and comes days before the board was set to publish the findings of their investigation. "However, I believe it is in the best interests of the business if I step down now", said Sorrell.

Having denied the unspecified allegation made against him by a whistleblower, Sir Martin's decision to resign will inevitably spark speculation about the nature of the claims made against him.

Mr Sorrell is among the most influential advertising professionals globally and also the longest-serving FTSE-100 chief executive, who has run WPP since setting up the business in 1985. Sir Martin would of course assist with the transition. WPP's shares have lost a third of their value of the past year-far more than rivals facing the same market challenges-as its financial guidance has repeatedly proved too optimistic.

Some multinational advertisers, including P&G, which owns ‎Ariel and Gillette, have signalled their intention to take more of their marketing services activity in-house, reducing the lucrative work for which they are charged by external agencies.

He added in a letter sent to WPP staff: "As I look ahead, I see that the current disruption is simply putting too much unnecessary pressure on the business, our 200,000 people and their 500,000 or so dependents, and clients we serve in 112 countries".

WPP has seen its ‎shares fall by almost a third during the last 12 months, although it still has a market capitalisation of more than £15bn.

"Once WPP breaks up, the pressure on the other guys will be irresistible", he added.

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