WPP Readies Plan If CEO Goes -- WSJ
14 Aprile 2018 - 9:02AM
Dow Jones News
By Nick Kostov and Suzanne Vranica
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (April 14, 2018).
The board of WPP PLC is weighing contingency plans in the event
Chief Executive Martin Sorrell leaves the company, people familiar
with the matter said, as the advertising giant's longtime leader
deals with an allegation of misconduct.
If Mr. Sorrell departs, the board is considering tapping WPP
veterans Mark Read and Andrew Scott to be co-CEOs, the people said.
The appointments would likely be on an interim basis while a search
is conducted, one of the people said.
The board is set to convene early next week for a meeting that
had already been planned months ago, according to people familiar
with the matter.
Last week, WPP said an independent counsel has been appointed to
look into "an allegation of personal misconduct" after The Wall
Street Journal reported on the probe. The Journal reported that the
board was also looking into whether Mr. Sorrell misused company
assets. WPP said any possible misconduct did not involve sums that
were material to the company.
Mr. Sorrell last week denied any financial impropriety. Mr.
Sorrell didn't immediately respond to a request for comment
Friday.
The investigation is expected to be completed as soon as next
week, two of the people said. Mr. Sorrell's fate at the company has
yet to be decided, and the situation is fluid, they said.
The publication Campaign U.K. earlier reported on the potential
leadership contingency plan.
The idea of WPP without Mr. Sorrell atop the organization was
once almost unfathomable. The British executive has been at the
helm of WPP for more than three decades, building the company into
the world's largest advertising company by acquiring an alphabet
soup of Madison Avenue agencies.
That empire gave Mr. Sorrell unique status as business leaders
around the world sought his advice not only on the ad industry but
on broader trends in the global economy. Mr. Sorrell has also
garnered a reputation among employees for relentless
micromanagement, keeping close tabs on WPP's far-flung
operations.
"There has probably never been an executive as on top of so much
complexity as Martin Sorrell," said David Bell, an ad veteran who
formerly led Interpublic Group of Cos., a rival ad holding company.
"His capacity to know details about everything is unbelievable.
That skill is the great asset of WPP and its greatest weakness
because if he is not there, what happens?"
Shareholders have long criticized WPP for not publicly
disclosing a succession plan in the event of an exit by Mr.
Sorrell, who is 73 years old. The probe into Mr. Sorrell's conduct
has now brought those concerns to a head.
Mr. Read, the global CEO of WPP unit Wunderman since 2015, is
known for his strategy and investment prowess. At Wunderman, he was
tasked with modernizing a staid customer-relations marketing
agency, bringing in new creative and technology chops. He also
recently launched a new offering, called Wunderman Inside, to help
marketers build in-house creative and marketing operations using
Wunderman resources and talent.
Before Wunderman, Mr. Read spent more than a decade at the
holding company level at WPP. There he served as executive director
as well as head of strategy and CEO of WPP Digital, where he played
a role in WPP's acquisition of 24/7 Real Media.
Mr. Scott has had a lower profile at WPP, but behind the scenes
he has played a leading role in the company's aggressive
acquisition strategy for more than a decade. The one-time
management consultant has been behind some of Mr. Sorrell's biggest
deals, including the $1.95 billion purchase of market research firm
Taylor Nelson Sofres in 2008 and its deal to buy Grey Global Group
in 2004.
WPP executives describe Mr. Scott as a no-nonsense executive, a
sharp strategic thinker and a "pit bull" negotiator. Still, Mr.
Scott has limited experience handling clients, a critical component
for ad chiefs. But colleagues say Mr. Read can fill that gap.
Mr. Scott declined to comment, and Mr. Read didn't immediately
respond to a request for comment.
WPP employs more than 200,000 people, including associates and
companies in which WPP has an investment, in over 112 countries.
More than 400 companies are part of WPP.
WPP's stock has dropped about 32% over the past 12 months
following a string of disappointing financial results. Since the
Journal reported on the probe last week, the share price is up
slightly, giving the company a market value of about GBP15 billion
($21 billion).
--Alexandra Bruell contributed to this article.
Write to Nick Kostov at Nick.Kostov@wsj.com and Suzanne Vranica
at suzanne.vranica@wsj.com
(END) Dow Jones Newswires
April 14, 2018 02:47 ET (06:47 GMT)
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