WPP fall sparks tales of brothels and bullying
Rumours swirl that CEO used company cash to pay for sex
● Martin Sorrell’s driver had worked for the WPP CEO for 15 years, ferrying the advertising king around London in a Range Rover. Last autumn, his job came to an abrupt end.
An extra-long chauffeuring shift — after he had worked 12 days on the trot — had finished with a request to pick up Sorrell’s wife, Cristiana, from a Mayfair restaurant and drop her at the couple’s Belgravia home. It was 2am, and the driver was told he needed to be back five hours later for another job.
He refused, claiming he had a previous appointment and, in any case, would not be safe on the road with just two or three hours’ sleep. Sorrell fired him the next day.
Neither man would have known at the time that this moment of executive intemperance would help to trigger a chain of events that would lead to Sorrell stepping down from a business he had spent 33 years building — transforming a maker of wire supermarket baskets into the world’s largest marketing and communications group.
Since Sorrell resigned on April 14 after a board-level investigation into his personal conduct and use of company money, a picture has emerged of routine verbal abuse of underlings and a blending of his corporate and private life that jarred with some colleagues — particularly over his company expenditure.
In the weeks following the 73-year-old’s departure, there has been criticism of the company’s handling of the matter, in particular the lack of disclosure over the reasons for his exit. Sorrell was able to walk away from WPP with his multimillion-pound incentive arrangements intact.
Initial disquiet has turned to anger among some shareholders and employees after he announced last month that he was launching his own advertising group, a potential competitor to WPP.
The absence of any information beyond WPP saying an investigation into alleged personal misconduct had “concluded” has led to wild speculation about his departure. But interviews with WPP employees have allowed a picture of events to emerge which centres on an alleged visit to a Mayfair brothel a year ago — said to have been witnessed by two employees, one of whom later reported it to the company.
This alleged incident raised questions about the possible use of company funds and appeared to fit a pattern where personal and company expenses were hard to separate.
Sorrell’s chauffeur was a popular figure at WPP’s London offices, enjoying a friendly relationship with the bank of assistants who saw to the WPP chief’s needs on a 24-hour basis — and those of his wife. For many women over the years, being a “Sir Martin EA” has proved a punishing role. Annual salaries were typically above £80 000 (about R1.4million), but by the account of several assistants, this did not go far enough.
Sorrell’s treatment of his assistants and other junior colleagues was well known among senior staff, but they did not know how to respond when they witnessed it, according to current and past WPP executives.
Sorrell, who declined to comment personally for this article, has accepted he can be difficult at times, but he denies he mistreated, abused or bullied staff.
Sorrell reshaped the industry through audacious dealmaking and the acquisition of illustrious agencies such as J Walter Thompson and Ogilvy & Mather. Today, WPP owns about 400 companies in media buying, analytics, research and PR and employs 130 000 people. It represents clients such as Google, Ford and Unilever — relationships often struck and maintained by Sorrell.
But Sorrell was much more than a CEO. A regular fixture at the World Economic Forum in Davos, he was also a star turn at conferences worldwide. The frenetic pace of his travel required close co-ordination with his assistants, who also dealt with the needs of Cristiana, often required to be at his side. The blurred lines between the spending for corporate and personal purposes became a source of resentment within head office.
In 2015 — the year Roberto Quarta was appointed chairman, succeeding Philip Lader — WPP revealed that the CEO’s total benefits for the preceding year came to £453 000.
Last year, Sorrell was paid a fixed allowance of £200 000 to procure his own benefits. After 2015, WPP stopped providing spousal travel benefits for his wife.
Despite his generous benefits and pay package, it was common for Sorrell to request cash for day-to-day expenses. This had long puzzled head office staff, who were aware that all his needs were typically put on the company account or credit card.
It was all the more puzzling because Sorrell was not always required to provide receipts for the cash he received. It was an allegation about his use of such cash that formed part of the investigation into his conduct.
Last year, the company hit a rough patch. The packaged consumer goods conglomerates that were its biggest clients were cutting their spending with WPP’s network of creative agencies and media-buying companies. Activist investors played a role in driving down spending that was hitting WPP’s growth. But so, too, did the rise of Facebook and Google as the dominant platforms for online marketing and the emergence of new competition for WPP in the form of consultancies that have moved into advertising.
Within WPP, there were nagging fears that Sorrell was not moving quickly enough to address the new digital marketplace. A former executive said: “You won’t learn what 16-year-old girls are thinking about when you hang out at Davos.”
During 2017 and into 2018, WPP shares lost a third of their value. Several big clients announced they were putting their business with WPP up for review. Sorrell was under increasing pressure.
In October, he fired his longtime chauffeur — spurring the driver’s supporters in the executive suite to action. Challenging a dominant boss such as Sorrell was a risky business, but the climate had changed over the course of 2017 with the downfall of all-powerful men in the media and Hollywood.
Speaking out about inappropriate male behaviour suddenly felt possible, and one WPP employee eventually took the leap.
The whistleblower and a colleague allegedly witnessed Sorrell entering a building in one of London’s red light districts in June — and took a photograph.
WPP investigated. Its lawyers eventually interviewed Sorrell for two hours. As well as the alleged sighting, he was questioned about his management style. He denied wrongdoing. A distressed Sorrell considered resigning but eventually proposed continuing as CEO for an interim period, putting forward a new management structure.
Sorrell discussed his succession plan with Quarta on April 3 — four days after his grilling by the lawyers. Shortly after the conversation concluded, to the astonishment of Sorrell, the Wall Street Journal revealed the existence of an investigation focused on his personal behaviour and whether company funds had been misused.
What happened next is a matter of controversy, made more difficult because of confidentiality clauses.
The investigation concluded after finding there was no proof of misuse of company funds as alleged, the amounts of money in question were “wholly immaterial” and no other WPP employee was affected. The board therefore decided the matter was largely a personal issue for Sorrell himself. He resigned the next day.
In fact, Sorrell had concluded his position as CEO was untenable within minutes of the leak. He was anxious to ensure that his privacy was protected and that he could fulfil the terms of his contract, allowing him to walk away.
The contract, agreed in 2008, was “somewhat one-sided”, according to a person close to WPP. It did not contain a noncompete clause and allowed him to depart with all of his incentives intact, unless the board found any “wilful gross misconduct”.
Sorrell’s representatives have strenuously denied the allegation that he visited a brothel. They said the claim was made only after his chauffeur was sacked, almost a year after the alleged event.
The former CEO remains entitled to performance-related share awards for five cycles of the WPP share plan, running until 2022. People close to the company insist that, since WPP stock underperformed in the 18 months before his resignation, the final payout to him will fall short of the maximum 1.65 million shares — currently worth around £20-million — that might be due to him.
Within weeks of resigning, Sorrell had returned to the public arena with plans for a new advertising venture.
He is determined to have a second act, continuing a career well into his 80s, but his aura of invincibility has been shattered. The company he built from nothing is reeling. The inquest has just begun.
You won’t learn what 16-year-old girls are thinking about when you hang out at Davos A former WPP executive
Sorrell reshaped the industry through audacious dealmaking and the acquisition of illustrious agencies