Coverage: WPP CEO Sorrell steps down

Martin Sorrell has stepped down as chief executive of WPP PLC following the conclusion of an investigation into an allegation of personal misconduct, ending his more than three decades of leadership atop the world’s largest advertising company.

Nick Kostov of The Wall Street Journal had the news:

Roberto Quarta, chairman of WPP’s board, will take on the role of executive chairman until a new CEO is appointed, the company said. Mark Read, chief executive of WPP agency Wunderman, and Andrew Scott, WPP’s corporate development director and chief operating officer for Europe, have been appointed as joint-chief operating officers of WPP.

Mr. Sorrell’s departure is being treated as a retirement, the company said. The board is conducting a search for internal and external candidates for a new CEO with “no set time frame,” the company said.

“Obviously I am sad to leave WPP after 33 years. It has been a passion, focus and source of energy for so long,” Mr. Sorrell said. “However, I believe it is in the best interests of the business if I step down now.”

Mr. Sorrell’s exit is a shocking turn of events and a sudden end to the career of a man who had become one of the oracles of the advertising business. The 73-year-old Mr. Sorrell had been at the helm since he founded the company in 1986, helping to transform a little-known U.K. wire-shopping-basket manufacturer called Wire & Plastic Products into the largest advertising holding company in the world. It boasts a host of blue-chip creative agencies like J. Walter Thompson and Young & Rubicam as well as powerhouse media-buyer GroupM.

Camila Domonoske of NPR reported that Sorrell acknowledged the misconduct only obliquely:

He acknowledged the allegations of misconduct only obliquely.

“I see that the current disruption we are experiencing is simply putting too much unnecessary pressure on the business,” he wrote. “That is why I have decided that in your interest, in the interest of our clients, in the interest of all shareowners, both big and small, and in the interest of all our other stakeholders, it is best for me to step aside.”

“As a Founder, I can say that WPP is not just a matter of life or death, it was, is and will be more important than that,” he wrote.

Sorrell, whose name has been inextricably bound with WPP’s identity since he reinvented the company in the ’80s, has never discussed stepping down from the firm before. But he says there is a succession plan in place.

Mark Sweney of The Guadian reported that Sorrell stands to receive a lot of money by leaving:

Sir Martin Sorrell is in line for almost £20m in payouts from WPP over the next five years, as part of the deal struck to leave the advertising group he founded more than three decades ago.

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 breakup of WPP.

The world’s largest advertising group said its founder and chief executive would be treated as having retired from the company. This means Sorrell will be eligible to receive payouts related to 1.6m shares in a number of award plans that will vest over the next five years. The exact value depends on the company’s performance. At WPP’s current share price of £12 the awards are worth about £19m.