WPP looks at life after Sorrell

05 May 2009

LONDON: Advertising giant WPP has admitted in its annual report that the board is looking at succession plans in the event of chief executive and company founder Sir Martin Sorrell leaving. Sorrell, 64, founded the company in 1985 before embarking on an acquisition spree including JWT in 1987 and Ogilvy & Mather in 1989.

Since then the company has added agencies Young & Rubicam and Grey, and formed the media buying giant MindShare. Last year it bought research firm TNS for £1.1bn ($1.65bn; €1.23bn).

The WPP board says that this process is “normal succession planning” and there are no current plans for Sorrell to leave.

At the same time, WPP is reportedly planning to cut 7,200 jobs from its staff of 110,000 in 2009.

Sorrell recently reduced the company's revenue forecast for 2009, saying like-for-like revenues would fall by around 5% compared to a forecast dip of 2% two months ago.

However, its first quarter revenue surged 11% when recent acquisitions like TNS are included.

Some analysts worry about WPP's debt pile of £3.75bn, with Morgan Stanley commenting in a recent note: “WPP has by far the largest leverage and has delivered weaker growth than competitors in recent quarters. It has also performed poorly in the last two recessions.”

The company recently strengthened its balance sheet via a £450m convertible bond issue to pay down the TNS purchase.

Data sourced from The Guardian; additional content by WARC staff