Sorrell's Absent Successor Sets WPP Investors A-Twitch

24 January 2006

The question of who will succeed Sir Martin Sorrell (61 this year) as ceo of WPP Group has again raised its head, according to a report in the Sunday Times.

Concern was first voiced last summer by activist shareholder group RREV (Research, Recommendations and Electronic Voting) which, in partnership with US counterpart ISS, demanded action from the WPP board on the issue of succession [22-Jun-05].

But as most accounts receivable departments know, demand is one thing and settlement another. Likewise, seven months after demanding 'payment', RREV and ISS still await Sir Martin's succession remittance.

Now the succession hydra has grown two more heads, each of which sits on the WPP board and and wants an answer to the lineage question. They are equally unhappy at Sorrell's alleged parsimony with key information.

The pair, non-executive directors Paul Spencer and Christopher Mackenzie, are reportedly unenthused by WPP's recent abortive deal to take over Aegis Group in partnership with US private equity firm Hellman & Friedman. Allegedly irked at "not quite being in the loop" on the backstage manoeuvrings, they are asking for more detailed financial information.

Both are financial heavyweights. Spencer is non-executive chairman of the State Street Managed Pension Funds and of Goshawk Insurance Group; also a non-executive director of UK government-owned savings body NS&I. Mackenzie is ceo of the financial advisory partnership Equilibrium and executive chairman of Brunswick Capital, Russia's leading investment bank.

WPP chairman Philip Lader, attempted to pour oil on the increasingly choppy waters. "I don't deny that there may be some who want more or less of something, but that is healthy for a board," he soothed. "There may have been one director or two that may have preferred more detailed information at various points."

He assured the Sunday Times that WPP reviews the succession issue annually, but does not publicly disclose which individuals are in line for anointing.

Data sourced from Sunday Times (UK); additional content by WARC staff