WPP empire faces break-up after ‘fed up’ ad giant Sorrell resigns

The undignified departure of one of Britain’s greatest tycoons is a warning shot to other corporate titans

ADVERTISING king Sir Martin Sorrell quit after growing “fed up and p----d off” at an investigation into his alleged misconduct, it has emerged.

Sources close to Sir Martin told The Daily Telegraph: “It wasn’t a boardroom battle but the way they behaved in his eyes, the manner in which they handled the investigation, in the end he thought: ‘I’m 73 years old I don’t need this s--t.’”

His resignation, late on Saturday night, brings down the curtain on a glittering 30-year career that made him the longest serving executive in the FTSE-100.

A renowned workaholic, Sir Martin once swore that he wouldn’t leave the adver- tising giant “until they carry me out of the glue factory”.

His departure leaves one of the UK’S biggest companies facing serious questions about its future.

Industry sources said WPP’S sprawling empire faced the prospect of being broken up without Sir Martin at the helm. Business: Pages 1 and 5

Driven, ambitious and with a forensic attention to detail. A master networker with a contacts book that is among the best in the world. A 30-year record of building a massive corporate empire from almost nothing, creating vast wealth and a huge number of jobs in the process. If any corporate baron in Britain, or indeed the world, was entitled to feel secure in his lavishly rewarded work, it was surely Sir Martin Sorrell, the boss of the advertising and marketing conglomerate WPP.

And yet, in an instant he is gone. One of the most stellar careers in British business has been ended in a matter of days over what, on the surface, appear to be some very trivial allegations. In part, that is a personal tragedy. A man who could have stepped down a year, or even a few months, ago and been feted as one of the great tycoons of recent time now departs ignominiously. But it is also a symbol of how corporate power is shifting. If WPP’S business model hadn’t been in trouble then neither would Sir Martin. In truth, this is a story of how technological change is sweeping away even the most impregnable empires – and if Sorrell wasn’t safe, neither is anyone else.

Sorrell’s rise was meteoric. Originally finance director of the Saatchi Brothers advertising empire, he stepped out on his own in the mid-eighties. Taking control of a tiny listed manufacturer – WPP stands for Wire and Plastic Products – Sorrell’s financial brilliance allowed him to engineer a series of breathtaking corporate raids. Madison Avenue legends such as Ogilvy & Mather were bought under his control, and the original “Mad Men” fitted into a corporate empire that for years ran as smoothly as clockwork.

WPP ended up with more than 400 different agencies, across 112 countries, and with more than 200,000 staff. It was the mightiest advertising, public relations and marketing colossus in the world. And it netted Sorrell a personal fortune estimated at close on £500million.

There have been signs of trouble for more than a year. WPP’S share price has been under pressure, dropping from £17 to £11 in the last 12 months (and that was during a bull market), and Sorrell’s lavish pay has been criticised by shareholders. But few people expected it all to unravel as quickly as this. Earlier this month, allegations surfaced against Sir Martin personally over the use of company funds. He hired three law firms to deal with them, but even that clearly wasn’t enough. With the board scheduled to meet this week to consider his position, time was fast running out. In a terse statement last night, WPP announced his departure.

Most of the analysis will focus on Sorrell’s personal downfall. And while his own mistakes may have contributed to his demise, that was far from the whole story. If WPP had been doing fine, then no one would have worried too much about Sorrell’s expenses, or what he was paid. In the City, a bit of personal excess is just fine, so long as the shareholders come out ahead as well. A successful CEO can hammer the company credit card as much as he or she wants. The trouble was, WPP was under threat from all sides.

The fact is, WPP was built for a different world, one dominated by Big Media and Big Brands. It was fundamentally about delivering old-school advertising and PR for massive global companies. But that way of persuading people to buy stuff is fast disappearing. On Netflix, no one watches the ads because there aren’t any. On Youtube and Facebook, it is easier for brands to create their own cheap content, or work with vloggers. The rise of niche, artisan products means big brands have far less appeal anyway. WPP was designed to deliver a single message to a global audience – a way of business that no longer exists.

Sorrell tried to keep up with the pace of change, but at 73 it was clearly beyond him. Despite his numbercrunching image, he was in fact the last of the old-style Charlotte Street and Madison Avenue admen, at home in a world of long lunches and big budget, attention-grabbing commercials. Now the algorithms have taken over, and there was no place for him any more.

In truth, it was technology that blew Sorrell away – and if he isn’t safe, then neither is any other corporate titan.