Sir Martin Sorrell, head of the world's largest advertising agency network, WPP, resigned from his position after an investigation was carried out.

Martin Sorrell announced that he is stepping down as CEO of the marketing group WPP. Sorrell was the founder of the company, leading it for three decades. There are suspicions that he improperly used the company's assets, at the same time exposing it to losses.

"I see that the current turmoil we are experiencing simply puts too much unnecessary pressure on our business, our more than 200,000 people and their approximately 500,000 associates, and the clients we serve in 112 countries. Therefore, I have decided that in your interest, our clients' and shareholders' interest, both large and small, as well as in the interest of all our other stakeholders, it is best if I resign." - Sorrell said in a statement addressed to WPP employees.

"Of course I am sad to leave WPP after 33 years. It has been my passion, my main occupation and a source of energy for so long. I am leaving the company in very good hands." - he added.

At the beginning of April, the "Wall Street Journal" revealed that the board of WPP hired an external law firm to conduct an investigation into "individual misconduct" in the running of the company by Martin Sorrell. Of course, the manager denied the allegations and even added that he would not play any role in the lawyers' proceedings.

Who will replace Martin Sorrell?

Roberto Quarta, chairman of WPP, will temporarily take on the role of executive chairman until a permanent successor to Martin Sorrell is appointed. Meanwhile, the duties of CEO of the WPP group will be performed by the head of Wunderman and WPP Digital - Mark Read - and the managing director for corporate development at the company - Andrew Scott.

Right to remuneration

Sorrell will also retain the right to previously agreed management bonuses tied to the company's performance. Their value in 2012-2016 is estimated at GBP 210 million. Sorrell will also take part in handing over duties to new people in the management.

Sorrell's achievements

Martin Sorrell emphasized in his statement that during his tenure the company acquired many agencies, such as Walter Thompson, Ogilvy, Young & Rubicam, Grey, 24/7 Real Media, Taylor Nelson Sofres, and launched its own structures and brands, including GropuM.

WPP's debt

WPP's debt

According to preliminary results, in 2017 the WPP group recorded:

  • A decline in total revenue of 0.6% to GBP 55.56 billion.
  • An increase in revenue of 6.1% to GBP 15.26 billion.
  • An increase in profit before tax of 11.6% to GBP 2.11 billion.
  • An increase in profit after tax of 27.4% to GBP 1.91 billion.

At the end of the year, the group's net debt amounted to GBP 4.48 billion, that is GBP 352 million more than a year earlier.

Summary

Sir Martin Sorrell resigned as CEO of WPP after 33 years at the company he founded himself. The reason was an internal investigation into "individual misconduct." Temporary leadership will be taken over by Roberto Quarta, Mark Read and Andrew Scott.

In 2017, WPP recorded a 6.1% increase in revenue to GBP 15.26 billion, but net debt rose by GBP 352 million. Sorrell may retain the right to bonuses reaching GBP 210 million for 2012-2016, which raises controversy in the advertising industry.