WPP’s Sorrell steps down

Sorrell (pictured) had been at the helm of the company since 1986, with his departure leaving the chief executive position vacant. WPP chairman Roberto Quarta will take on the role of executive chairman until a new chief executive officer has been appointed.

The company has also named Mark Read, chief executive officer of Wunderman and WPP Digital, and Andrew Scott, WPP corporate development director and chief operating officer for Europe, as joint chief operating officers.

The move follows an investigation by the company into an undisclosed allegation of personal misconduct against Sorrell, which he denied. The investigation has concluded, with the company saying the allegation "did not involve amounts that are material".

WPP said that Sorrell will be treated as having retired from the company, in accordance with his at-will employment agreement. His share awards will be pro-rated in accordance with group performance targets being met. He will be available to assist with the transition following his departure, the company said.

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

"Mark and Andrew and the management team at all levels have the knowledge and abilities to take WPP to even greater heights and capitalise on the geographic and functional opportunities."

He added: "I will particularly miss the daily interactions with everyone across the world and want to thank them and their families for all they have done, and will do, for WPP."

Quarta described Sorrell as "the driving force" behing WPP’s expansion to become the largest marketing services firm globally. He said: "During this time, the company has been successful because it has valued and nurtured outstanding talent at every level – within and well beyond our leadership teams.

"On behalf of the board I would like to recognise these achievements and thank Sir Martin for his commitment to the business over more than three decades."

WPP’s share price fell by almost four per cent this morning ( 16 April), following the news.

Alex deGroote, analyst at Cenkos Securities, predicted that the company will be broken up, adding that divisions such as market research firm Kantar could be sold and be worth as much as £3.5bn.

Lorna Tilbian, Impact columnist and former executive plc director and head of media at Numis Securities, said: "WPP being broken up into its constituent parts is not out of the question, as being smaller each would be more manageable and easier to grow double-digit. It would also be an elegant way of cutting the high dividend payout given the relatively high debt levels which the sale of Kantar could reduce.

"The future is smaller, nimbler and more client focused. In the new age, it’s not just the chief executive who has to be entrepreneurial."