WPP Chief Executive Martin Sorrell Resigns After Probe

WPP Chief Executive Martin Sorrell Resigns After Probe

A statement released this evening confirmed that Sorrell, the founder of the world's biggest ad agency group, has left the role of chief executive with immediate effect.

The departure of Sorrell, who resigned on Saturday before learning the findings of an internal investigation into alleged personal misconduct, is also being viewed as a potential catalyst for a break-up of WPP.

WPP act for some of the biggest consumer electronics and appliance Companies in the world, Sorrell was also one of the highest paid earning an annual salary of over $150M per year, the Company has said that a new CEO will be appointed shortly.

Analysts believe Sorrell's departure combined with a share price slump of nearly 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.

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, the press statement read.

"The allegation did not involve amounts that are material", it said.

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Sorrell, a former top advertising executive for Saatchi & Saatchi, developed the group after buying a small British plastics company, Wire & Plastic Products. Sorrell rejected the allegations and said his commitment to the company which he founded 30 years ago, remains absolute.

He said that he leaves the company in "very good hands", with Read, Scott and the management team at all levels having the knowledge and abilities to take WPP to "even greater heights, as well as capitalise on the geographic and functional opportunities".

In a parting memo to WPP's 200,000 employees obtained by AdAge, Sorrell explained that the firm's "current disruption" has come from "putting too much unnecessary pressure on the business".

"We have weathered hard storms in the past. Nobody, either direct competitors or newly-minted ones can beat the WPP team, as long as you work closely together, whether by client and/or country or digitally", he further added. His share awards will be pro-rated in line with the plan rules and will vest over the next five years, to the extent that performance targets are met. Sorrell is one of the largest shareholders of WPP, with a 1.46% stake, according to data compiled by Bloomberg.

The probe served to intensify scrutiny on Sorrell and WPP's succession planning, long criticized by investors as being insufficient, prompting speculation that a CEO long seen as unstoppable might be forced to step aside. I shall miss all of you greatly. "Good fortune and Godspeed to all of you".

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