WPP board begins investigation of its CEO Sir Martin Sorrel, says WSJ

MUMBAI: Once the toast of the advertising industry, investors, and shareholders, Sir Martin Sorrell now faces the ignominy of being probed by a law firm, which has been appointed by the WPP board for a potential misuse of assets and personal misconduct, if a report in the Wall Street Journal is to be believed.

The agency group has been under pressure from clients and hungry for business rivals for a while. Its share price has fallen some 35 per cent as companies such as Alphabet (Google) and Facebook have been doing direct deals with brands, cutting agencies such as WPP out of the picture. Additionally, big spenders such as Unilever, Procter & Gamble have also been cutting back on marketing spends in a rapidly disintermediating digital content marketplace.

This has led to WPP reportedly putting up a lackluster performance which in turn has affected its share price. Sorrell was also forced to take a cut in his pay, the amount he was forced to back down from 2017’s 48 million pounds sterling, will become clearer in the next few days as it announces its financial performance.

A Saatchi & Saatchi finance executive in the seventies and eighties, Sorrell went about building what would become a global tour de force under the umbrella of a company called Wire & Plastic Products. He acquired 18 different below the line agencies over three years, before making an audacious $566 million dollar bid for J Walter Thompson and then $825 million for Ogilvy & Mather. He acquired both of them. He snared two other agencies Young & Rubicam and then Grey Worldwide on the follow through. Among the other agencies and communication services providers under WPP today include: Wunderman, Kantar Group, Hill & Knowlton, Burson-Marsteller, GroupM, Cohn & Wolfe, Brand Union, Buchanan UK among others.

WPP as a group employs close to 200,000 employees worldwide and reported a revenue of 15.265 billion pounds sterling, with an operating income of 1.908 billion pounds sterling with net income standing at 1.912 billion pounds sterling in 2017.

Investors have been baying for Sorrell’s blood for some time now with the agency not coming with a solid plan to revive growth. Speaking to in Amsterdam a couple of years ago Sorrell had said: “I only own two per cent of the company; but I am identified with the company. I will carry on as long they will let me. WPP is not a matter of life or death for me, it is more than that. They will carry me out to the glue factory.”

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