WPP, in­vestors ad­just to life with­out Sor­rell

Business Standard - - WORLD -

WPP en­tered un­charted ter­ri­tory on Mon­day af­ter the exit of founder Mar­tin Sor­rell left the world's big­gest ad­ver­tis­ing com­pany rud­der­less at a time of in­tense in­dus­try change.

Shares in WPP fell 6 per cent af­ter Sor­rell, the driv­ing force be­hind 33 years of deal­mak­ing and re­lent­less ex­pan­sion, stepped down on Satur­day af­ter the board in­ves­ti­gated an al­le­ga­tion of mis­con­duct.

David Herro of Har­ris As­so­ciates, WPP’s big­gest share­holder ac­cord­ing to Thom­son Reuters data, said Sor­rell would be missed. “Sir Mar­tin is a vi­sion­ary, a leg­end in ad­ver­tis­ing and a skil­ful busi­ness­man,” he said. “The cir­cum­stances sur­round­ing this are re­gret­table as is a lead­er­ship tran­si­tion with­out Sir Mar­tin’s in­volve­ment.”

The sud­den de­par­ture of Sor­rell has sparked ques­tions as to whether the hold­ing group can re­main in its cur­rent form of em­ploy­ing 200,000 peo­ple in more than 400 agen­cies across 112 coun­tries. It has also prompted fears that with­out Sor­rell’s con­tacts it could lose clients and tal­ent.

“We think the lack of op­er­a­tional di­rec­tion for the group and po­ten­tial for client losses are clear down­side risks over the short to medium term,” Deutsche Bank said.

WPP said chair­man Roberto Quarta will be­come ex­ec­u­tive chair­man while its dig­i­tal boss Mark Read and An­drew Scott, the chief op­er­at­ing of­fi­cer of WPP Europe, be­come joint chief op­er­at­ing of­fi­cers.

WPP’s stock fell 6 per cent af­ter Mar­tin Sor­rell re­signed

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