Sir Martin had been the subject of an internal investigation into an allegation of financial misconduct, but his resignation still came as a surprise. In a statement, WPP said the investigation had concluded and that “the allegation did not involve amounts that are material”.
It added that Sir Martin would be available to assist with the transition. Roberto Quarta, Chairman of WPP, becomes executive chairman until the appointment of a new chief executive officer, while Mark Read, chief executive officer of Wunderman and WPP Digital, and Andrew Scott, WPP corporate development director and chief operating officer, Europe, have been appointed as joint chief operating officers of WPP.
In a communication to staff Sir Martin explained “The current disruption is simply putting too much unnecessary pressure on the business, our over 200,000 people and their 500,000 or so dependents, and the clients we serve in 112 countries.
“That is why I have decided that in your interest, in the interest of our clients, in the interest of all share owners, both big and small, and in the interest of all our other stakeholders, it is best for me to step aside."
WPP is Sorrell’s creation, built up over 33 years, but with his departure and a radically changed advertising landscape, there is an expectation that just as the constituent parts had been assembled so they will now likely be dismantled.
“It is inevitable that this company is going to be broken up,” Alex DeGroote, an analyst at Cenkos Securities, told the Financial Times.
He suggested that market research assets such as Kantar could be sold quickly for between £3bn and £3.5bn although he added that this would unbalance the wider group.
Sir Martin’s future will also be watched with interest – his parting message to staff was “back to the future” and the FT reported that he had never signed a non-compete agreement, leaving him free to begin a new advertising venture.
Sourced from BBC, Financial Times; additional content by WARC staff