Sorrell almost stepped aside over misconduct investigation

ADVERTISING guru Sir Martin Sorrell was on the brink of stepping aside over shock misconduct claims against him, friends of the executive revealed last night.

The 73-year-old boss of WPP, the world’s biggest ad agency, considered taking a break during an investigation into allegations he misused company funds.

The claims have sparked an inquiry by top lawyers and left Sorrell’s future at the company hanging in the balance.

They have also triggered fresh speculation over who could succeed him at the helm of the sprawling empire he has built over 33 years. But rather than standing aside, Sorrell resolved to fight the allegations, which he rejects ‘unreservedly’.

He cut short a holiday with his second wife Christina, who is almost 30 years his junior, to be back at WPP’s headquarters in London. Friends of the multi-millionaire said he felt a duty to the firm he built – particularly to its 200,000- strong workforce and shareholders.

And they denied he had misused any company money, insisting he had always been scrupulous with expenses claims.

Sorrell was paid £70m in 2015 and £48m in 2016, including tens of thousands of pounds for a car, private healthcare and for accommodation while travelling.

WPP’s board has revealed no details about the ‘personal misconduct’ claims against Sorrell, which insiders say involve only small amounts of cash.

But legal big guns have been brought in to manage the situation, including ‘magic circle’ firms Allen & Overy and Slaughter and May. Washington-based WilmerHale has been put in charge of the investigation into the claims against Sorrell, a WPP spokesman confirmed. Former lawyers at WilmerHale have gone on to work for US presidents, including Richard Nixon and Bill Clinton as they battled various crises.

One senior figure at WPP said: ‘It’s serious – for it to have come this far and the board not to have resolved it.’

There are growing doubts Sorrell, one of the world’s best-paid executives, can survive the controversy in his current position.

And although WPP insiders rejected suggestions there was a boardroom split over his future, the affair is seen to have weakened Sorrell’s iron grip on power.

City analysts have ramped up speculation about his succession, something WPP is said to have extensively prepared for.

‘ The announcement draws attention, once again, to the issues that can arise when an individual has too much power,’ said Guy Jubb, Standard Life Investments’ former global head of governance and stewardship.

Ketan Patel, a fund manager at WPP shareholder EdenTree Investment Management, said: ‘We would like to see a clear step of succession planning.

‘In Sorrell’s case, he hasn’t even identified or brought in the people or a layer of management where you feel, if he did leave, they’d be ready to take over.’

But the chief executive has received backing for now from the firm’s biggest shareholder, Harris Associates. ‘Unless we hear Sir Martin has committed material offences, we believe he is the correct person to lead WPP,’ Harris partner David Herro said.

Yesterday sources said the probe into allegations against Sorrell was expected to report back within weeks, although there is no fixed timetable. The stakes are high for the chief executive, who is on a ‘zero hours’ contract which means he can be sacked without notice.

Shares in WPP fell 2pc on Wednesday after news broke of the claims. However yesterday the stock recovered and was up nearly 4pc, or 43.5p, to 1138.5p.