Ousted ad boss Sorrell may be stripped of his £20m bonus
Ousted advertising tycoon sir Martin sorrell could be stripped of £ 20million in bonuses by his ex-employer.
Ad giant WPP has warned its former chief executive that he is ‘likely to be in breach of his confidentiality obligations’ if he pursues a planned takeover bid – and could forfeit lucrative potential share awards, according to a legal letter.
It comes after it emerged sir Martin’s new business s4 Capital was set to bid against WPP for Dutch digital production firm Media Monks.
sir Martin, who earned £70million in 2015, is understood to have already been warned by WPP that if he used knowledge or contacts gleaned from his time there he would be in breach of his leaving terms.
the 73-year- old built WPP from a tiny manufacturer of shopping baskets into one of the world’s most powerful advertising agencies, worth more than £14billion.
But he stepped down as chief executive earlier in April amid allegations of personal misconduct, in one of the most spectacular corporate upsets in recent years.
Claims later emerged that WPP had been investigating whether sir Martin had spent £300 of company money on a prostitute.
two colleagues allegedly witnessed their boss going into a flat in a Mayfair red light district on June 6 last year. sir Martin strenuously denies the allegations.
Details of the investigation were never disclosed by the company. After leaving WPP, sir Martin kept his entitlement to shares based on WPP’s performance – worth up to £20million – which have Firm bid: Sir Martin Sorrell yet to be released to him and could now be taken away, according to the legal letter seen by sky News. Unusually, his contract also allowed him to set up another venture immediately. sir Martin revealed just six weeks after leaving WPP that he was setting up s4 Capital, triggering concern at his old firm.
he said he planned to build a ‘multi-national communication services business focused on growth,’ having said he had no plans to retire. on tuesday, it emerged that s4 Capital and WPP were both interested in buying Media Monks, with the price estimated to go as high as £264million.
Yesterday, in a further sign of its growing threat to WPP, s4 Capital revealed it was planning to raise up to £1billion to fund a takeover spree.
s4 has previously detailed plans for sir Martin to pump in £40million, with support pledged from investors for up to £150million more.
It comes after sir Martin earlier dismissed competition speculation – describing his new firm as ‘a peanut that wouldn’t want to compete against a £20billion global company like WPP’.
sir Martin has frequently come under fire for his pay at WPP, which was about ten
‘Breach of confidentiality’
times that of the average FtsE 100 boss.
Until recently he received £274,000 to pay for his wife Cristiana Falcone – a World Economic Forum adviser almost 30 years his junior – to accompany him on business trips. the twice- married father was paid more than £200million between 2010 and 2016, mostly due to a longterm incentive scheme established years earlier.
he is ranked number 285 in the sunday times rich List 2018, with his net worth estimated at £456million.
shareholders vented their anger at WPP’s annual general meeting last month over its handling of his departure, including failure to enforce any non-compete clause.
sir Martin and WPP both declined to comment. According to sky News, an email seen by s4 shareholders is understood to say that it had sought legal advice in response and believed the allegations made by WPP’s lawyers were without foundation.