The sudden exit of Martin Sorrell from WPP is quit a news. He worked for the world’s largest advertising company. Now the challenge lies with the board to search for a solution after Martin Sorrell resigns from WPP
Martin Sorrell was responsible for making the company from a wire shopping basket manufacturer to a company that has more than 2 Lakh employees. No doubt the man is irreplaceable, and the new CEO will have to review the WPP’s strategy. The company was already facing struggle of declining ad spending, consultant’s competition in digital work, and the web giants risk of eliminating the middle men. The new CEO will also have to arrange the assets across the holding company which is one of the toughest jobs considering the current fragmented federation of businesses.
It was revealed that a probe had happened by the company, where the CEO was accused of being involved in the offences like personal misconduct and misuse of company assets. Just 2 weeks after the probe, Sorrel had resigned. The board was all set to declare the findings. Though he refutes all the blames, but as per WPP, the enquiry was complete. The company refused to share more details.
The new executive chairman till the new CEO comes is Chairman Roberto Quarta. The joint chief operating officers squad includes the highly accomplished names of Mark Read, the head of WPP agency Wunderman and Andrew Scott, WPP’s corporate development director. Their job will be to lead the business, develop strategy and optimize its portfolio.
The company had no issues with Sorrell’s fat paycheck till he performed. He is said to have earned more than 200 million pounds in the last five years of his service to the company. He was enjoying performance-related bonus package. But later the board observed that Sorrell was not performing the way he did. The shares lost a third of their value as compared to the past year, which was ahead if we observe the rival figures.
As per the business news, the data management unit of WPP Kantar has been going negative. Its revenue growth has underachieved the group average. It can be sold for as much as 3.5 billion pounds or $5 billion if they plan to decrease the debt. Also, in case the return cash is planned to be given to the shareholders, the same can be sold.
The WPP chief was quite a name in the ad industry who had also got knighthood from Queen Elizabeth II. Britain’s longest-serving CEOs in the recent times, who made regular public presence and talked about issues like Brexit and Donald Trump’s trade wars and the rise of Facebook Inc. and Google etc., got involved in the aggressive controversy enjoying a fat remuneration especially when the company wasn’t doing so well financially.
Martin shared that the current disruption was causing too much unwanted pressure on the business. He also said that in the interest of the company and clients, it was “best for me to step aside”. He also pointed out that WPP has faced difficult storms in the past.