Sorrell hit for £37m after WPP dives 11pc
MEDIA tycoon Sir Martin Sorrell suffered a £37m loss after shares in his company WPP had their biggest oneday fall since 1998.
The advertising guru warned economic and political turmoil was harming global growth, raised doubts over fraud and fake news and said there was ever-greater pressure on clients to cut costs.
It came as WPP slashed sales growth forecasts for this year from 2pc to between 1pc and 0pc. The announcement wiped £2.2bn off its value as shares crashed 10.9pc, or 174p, to 1420p.
Sorrell himself owns 21.3m shares, meaning his personal fortune dropped £37.1m.
However, the boss has benefited from years of vast pay packets which have made him a lightning rod for accusations about corporate greed in the City – Sorrell has survived years of investor anger at his fat cat pay and took home £48.1m last year alone.
The boss’s painful losses yesterday are also likely to have been eased by a new expenses scheme which entitles him to £200,000 a year in cash to support his ‘wellbeing and security’.
Major City shareholders such as Royal London Asset Management have described his bonus package as ‘exceptionally high’.
Stefan Stern of the High Pay Centre said: ‘Given the size of Sir Martin’s overall pay packet already, I wouldn’t have thought any further funding for his wellbeing was required.’
The new allowance is less than the £228,000 of benefits Sorrell took last year – but he had to explain how this was spent, including on car costs, healthcare and an accommodation allowance. No such scrutiny is needed under the new regime.
WPP turned over £7.4bn in the first half of this year, up 1.9pc on the same period in 2016. Profits jumped 52.4pc to £779m, although this performance was boosted because the firm took a £122m one-off accounting hit in the previous period.
Bosses said there were growing concerns about revenues, with a pronounced slowdown in the second quarter.
Things got even worse in July, when revenues shrank 4.1pc.
Sorrell warned of a darkening global outlook and concerns the internet is becoming a hotbed of criminality and misinformation.
Sorrell said: ‘In the last year or so, growth has become even more difficult to find, perhaps due to increasing social, political and economic volatility.
‘Even the growth of the digital marketplace has been dogged by issues such as measurability, viewability, fraud, and fake news, let alone the duopoly of Google and Facebook and the growing dominance of Amazon.’
With growing pressure on companies’ marketing budgets, Sorrell added that fierce competition within the media industry was spurring WPP’s rivals to offer deep discounts or longer payments terms.