Defiance OF THE £450m tycoon 450m tycoon
A friend of the Royals, he was Britain’s best-paid boss – until accused of using company money to pay a prostitute. Now Sir Martin Sorrell gives his first major interview since his downfall. So is he humbled? Humiliated? Not one bit!
THAT’S not a question I’m going to answer one way or the other.’ Sir Martin Sorrell – a beacon of British business, the grandest of City grandees, a man who has been knighted by the Queen – has just been asked whether he’s ever visited a prostitute. And the tension in his boardroom in the heart of Mayfair is almost suffocating. How does it feel to be asked such a question? ‘We can move on.’ Is it humiliating? ‘Move on.’ Has he been treated unfairly? ‘Move on. Move on.’
Eight months ago, this formidable 73-year-old – the epitome of one of novelist Tom Wolfe’s Masters of the Universe – had it all. He was the boss of WPP, a world-famous advertising firm he had built up from scratch into one of Britain’s biggest and most admired businesses. He had offices in all corners of the globe, with a workforce of 130,000. And he was a hero of British entrepreneurship, his views on the economy and markets sought after by investors and commentators worldwide.
How times change. Today, Sir Martin has left WPP, a company he led for 33 years and came to see as his own ‘baby’, and is now the boss of a comparative minnow, S4 Capital, with only a few employees at his beck and call.
And because none of them is working on a wintry Friday evening, it has been left to him – a man who has amassed personal wealth of £450 million and was a guest at Harry and Meghan’s wedding – to answer S4 Capital’s doorbell, trudge down to the entrance of his townhouse office and escort his interviewer up to the firm’s onefloor headquarters in a tiny, juddering old lift.
So how has he ended up acting the bell-boy and facing questions about paying for prostitutes on company expenses?
Sir Martin traces his Shakespearean change in fortune back to Thursday, March 29, this year. He was looking forward to a family holiday on the continent for the long Easter weekend. But before jetting off he had been asked to attend an interview in WPP’s London headquarters. The interview was conducted by WPP’s lawyers, the US firm WilmerHale.
The tone of the interview had not been at all what he was expecting. He discovered he faced a major investigation into alleged misuse of company money and improper behaviour.
A few days later the allegations appeared in the US press. Sir Martin says it was then, late on a Tuesday evening while he was still abroad and before British newspapers picked up the story, that he decided to quit WPP. His resignation was formalised less than a fortnight later, late on a Saturday evening, following the conclusion of the mysterious probe.
With little information revealed by WPP – the allegations remained secret thanks to a non-disclosure agreement – the City rumour mill immediately went into overdrive.
Reports surfaced that Sir Martin had paid for a prostitute on company expenses. Sorrell has strenuously denied the claim but until now has maintained a stony silence on how the ordeal has affected him.
Today, in an exclusive interview with The Mail on Sunday, Sir Martin pays tribute to his wife, Cristiana, and his family for the support they have given him over the past eight months and speaks of his ‘sadness’ at leaving WPP. And he also vows to be remembered for his entrepreneurial achievements rather than the lurid allegations that have sullied his name.
Sorrell’s new workplace is in a narrow townhouse on an exclusive street in the shadow of Buckingham Palace and, more importantly for this consummate deal-maker, a stone’s-throw from a string of high-quality restaurants where he breakfasts, lunches and has dinner with contacts.
After Sir Martin answers the door, we ascend the building in its narrow lift, awkwardly standing face to sternum. I’m reminded of some of the nicknames this diminutive tycoon – who claims to share Napoleon’s height, 5ft 6½in – has earned in the business world: Titch – ‘that was at school’, he says.
The 21st of June (or the Shortest Knight, geddit?) – ‘yeah, that’s a variant of Titch’.
Mad Dwarf – ‘it’s a variant of Titch as well’.
Odious Little Jerk – ‘it wasn’t Odious Little Jerk – it was Odious Little S***’.
As we take our seats in S4 Capital’s boardroom, Sorrell must know that a barrage of unwanted questions are coming his way. But he makes clear he’s not going to make my job easy. ‘There won’t be any tough questions – I won’t answer any tough questions,’ he says, fixing me with a steely glare.
Sir Martin, smartly dressed as ever in a suit and tie, initially sticks to his word, batting it all off with the words ‘move on, move on’.
He maintains a rigid posture behind his vast boardroom table, his hands clasped, reinforcing the message that nothing will break his resolve.
But eventually he starts to soften. ‘It’s not been easy,’ he finally admits. ‘But I’ve had a lot of support and counsel from all my family and friends – and people inside WPP.’
His family include second wife Cristiana, who is 30 years his junior, and their two-yearold daughter, Bianca.
From his first marriage he has three adult sons, all of whom work in the City, and grandchildren. How did his family deal with the allegations, I ask. ‘We talked about it,’ he says. ‘But that’s a private matter.’ Sorrell rubbishes any suggestion of marital problems. ‘That’s not a question I’m going to dignify with an answer,’ he says, adding: ‘Anybody who really knows me, knows the allegation and surrounding innuendo were fabricated.’ But he does admit that some people will believe what’s been written about him. ‘Some people look at it and believe it, and some people don’t,’ he says. ‘I think you have to be philosophical about it.’ Sorrell insists he has experienced ‘tougher moments’ in his life. This
may be hard to believe. But he has had a more colourful life than most of his peers in the business world.
Brought up as an only child (a brother died in childbirth) in a Jewish household in North London, Sorrell attended Cambridge and Harvard universities before entering the world of commerce.
He flew beneath the radar in his early years, but rose to prominence after being made finance boss of advertising firm Saatchi & Saatchi. As he helped build it into a global giant, Sorrell became known as the ‘third Saatchi’ brother, after founders Maurice and Charles.
At 40, Sorrell broke off on his own. He bought an obscure basket maker called Wire And Plastic Products, renamed it WPP Group and – against all odds – built it up into the largest advertising company in the world, overtaking Saatchi & Saatchi. To get there, Sorrell bought up some of the bestknown companies in the advertising world, making plenty of enemies along the way. His Odious Little S*** nickname came about when WPP bought Ogilvy Group. Its founder David Ogilvy, known as the Father of Advertising, bestowed the title upon Sorrell.
Sir Martin points out that this comment was made before the two had met, and that Ogilvy – whom he later made chairman of WPP – later apologised.
Sir Martin was knighted in 2000 – when he earned his 21st June nickname from jealous industry peers – for his incredible rise in the business world. But all was not well in his personal life.
In 2005, his marriage of 33 years to Sandra, mother to his three sons, broke down and ended in a public divorce court. He was ordered to pay her a record £29million, which included their £3.25million Georgian townhouse in Central London.
Sorrell was back in court two years later. This time, he was suing two former colleagues who allegedly posted anonymous messages online about a short-lived relationship he had with WPP’s chief operating officer in Italy at that time.
One message was said to have described Sir Martin and the woman as ‘the mad dwarf and the nympho schizo’.
The case was settled out of court for a reported £120,000 but, controversially, WPP shareholders were left to pick up legal fees he had accrued up to that point totalling £800,000.
Sir Martin married his second wife Cristiana, an Italian economist, in 2008. He provoked rage among WPP investors a couple of years later when it emerged that the company was paying for her travel expenses.
The controversy led to one of many run-ins between WPP’s chief executive and his shareholders.
‘My wife has made and continues to make a significant contribution to what I do,’ Sorrell argues. ‘What she does is extremely significant.’ He later agreed to start paying her expenses personally.
Sir Martin has regularly been the FTSE 100’s best-paid chief executive, taking home more than £200 million between 2012 and 2016 alone. Sorrell says he has no regrets. He points out that a large amount of his pay was actually in bonus form, meaning it was dependent on his performance. He also says contrasts between himself, a man who invested in his own company and built it up from scratch, and those brought in to manage big businesses, are not fair.
‘I was totally committed to the enterprise,’ he says. ‘I fundamentally believe that people in companies like WPP should make an investment, which I did.’
Despite animosity between himself and the board, after resigning from WPP on April 14 this year, Sorrell carried on working for the firm for a month and even secured some significant business.
‘Things had to be handled,’ he says. ‘You can’t just cut it off just like that. There were contractual negotiations going on with clients. I was involved in negotiating a major [advertising] contract.
‘The client said that the only person he was prepared to deal with in relation to the renewal was myself… that was one of the last things I did for WPP.’
Sorrell, notably relaxed now the conversation has moved on from prostitution, also grasps this opportunity to explain why he is both a good founder and a good manager. ‘There are people who are good at starting businesses, and there are people who are good at running businesses,’ he says.
‘Rarely do you find both sets of talent in one person.’
Yet around the time of the prostitution allegation, Sir Martin also faced accusations that he had been a ‘brutal and inhuman’ boss. How does he reconcile that with his claim he’s good at running busi- nesses? ‘I’ve said before, I always like to have things done well,’ he shoots back. ‘If at any point they weren’t done well, I was concerned about that. But if things were executed well, everything was fine.’
It was also reported that staff had been upset when he sacked his chauffeur of 15 years after he refused to pick up Cristiana from a restaurant at 2am because he had another job five hours later.
Despite still owning a neartwo per cent stake in WPP, Sir Martin has turned into the firm’s most vocal critic since leaving: he recently described it as being a ‘car crash in slow motion’.
Sir Martin turns 74 in February, he has a young daughter and grandchildren nearby, and money is no concern for him and his family. But after leaving WPP, he chose to launch himself straight into a new job without taking a break.
‘Having gone through what I went through, I decided in May to embark on a new enterprise,’ he says. ‘A clean sheet of paper. It’s obviously not easy – because the good news is you have a clean sheet of paper, the bad news is that I obviously miss the scale of WPP.
‘But we’re starting to build a good operation… and I think it can actually be really exciting. I can’t say how far we’ll go or what we’ll do [but] I’m finding it very interesting and absorbing and challenging. There are lots of opportunities, so we’ll see how it goes.’
Sorrell says it would be ‘foolish’ to speculate on how large S4 Capital can become. But in suggesting it could one day catch up with WPP, a firm worth £11 billion, he provides a clue to his own ambitions.
He refers to S4 as a ‘speck’ in the rear view mirror of the ‘car crash’ WPP. ‘If you’re in a car crash, and you stop, the speck catches up quite quickly,’ he chortles.
Whether it’s feasible or unthinkable, there is no doubt Sir Martin would love to witness the demise of his company and then sweep in to its rescue. He feels great ‘sadness’ at having left the firm and reveals he has very personal feelings towards it. ‘WPP is a great company and it was, and still is, my baby,’ he says. ‘That’s founder’s mentality. It’s as near as a man can come to having a baby. Not physically, but emotionally.’
No matter what happens, Sir Martin is confident he will be remembered for the right reasons, rather than for a couple of months in 2018.
‘I’ve had three lives,’ he says. ‘Nine years at Saatchi, 33 years at WPP and, hopefully, five to ten years at S4 Capital. The records have, and will, speak for themselves.’
Some people are good at starting businesses, some are good at running them… rarely do you find both sets of talent in one person I’m reminded of his nicknames… Mad Dwarf and Odious Little S***
THE chaos continues. There is the Brexit vote in the Commons on Tuesday and more about that in a moment. But there have also been the vicious movements in share prices around the world, which in the case of the UK have wiped out all the gains of the past two years. And not just in Britain. The Facebook share price is back to its level in the spring of 2017 and the price of even the mighty Apple is where it was in January.
The trigger for these collywobbles was the detention of a woman in Canada.
That might seem bizarre, but Meng Wanzhou is Chinese commercial royalty. She is the daughter and potential successor of Huawei founder Ren Zhengfei. She is also chief financial officer of Huawei, the second largest manufacturer of communications equipment in the world.
So her detention and request for extradition to the United States, reportedly on Huawei’s exports to Iran, was a red rag. Suddenly, the idea of a lull in the trade war between the two countries evaporated.
So we have three elements to the chaos. There is political disruption, certainly in the UK but also elsewhere (look at France where the government has been shaken by protests around the country by campaigners in yellow jackets). There is financial market disruption. And there is the growing evidence of a trade war between the world’s largest and second largest economies.
Lord King, Mervyn King, the former governor of the Bank of England, has likened the UK political situation to that of the late-1930s and the 1970s, two earlier periods when the political establishment lost control. When one of the great economists of our generation says something like that, you sit up. But I think the analogies are unhelpful.
Very few people alive now remember the 1930s, but I do recall my parents talking about their sense of despair about the policy of appeasement, and how they felt Chamberlain’s Munich accord with Hitler would make war inevitable.
But whatever view you take of Europe’s negotiating tactics over Brexit (and I think they have behaved both unpleasantly and stupidly), this is not Munich.
Nor is this the 1970s, when I started work. That decade saw the break-up of the fixed exchange rate system; the oil price shocks; the secondary banking crisis; interest rates hitting 15 per cent; inflation touching 25 per cent in 1975; the Government bowing to the International Monetary Fund’s programme in 1976; and the decade ending in the ‘winter of discontent’ strikes – a level of chaos that led to the election of Margaret Thatcher’s Government in 1979. If you think things are bumpy now, it is nothing like the mess we faced when we hit the job market in the 1970s.
Nor is the geopolitical situation so fragile. The Meng Wanzhou detention reminds us that we are entering into a period of trade tension as the two giants, the US and China, square up for a series of economic fights. In about ten years’ time, China will pass the US to become the world’s largest economy, but the US will remain the dominant power. This is not a recipe for harmony.
But a trade war is only a trade war. The Cold War was much more dangerous. The memory of the Cuban Missile Crisis of 1962 lingered on into the 1970s. The US and the Soviet Union were so alarmed by what might have happened, that they agreed the first arms reduction treaty, SALT 1, in 1972. But a more comprehensive treaty was not reached until 1991. Now see Brexit in this context.
You may think that the more extreme scenarios in the event of a no-deal Brexit painted by Lord King’s successor, Mark Carney, are absurdly negative. You may agree with Lord King that it would indeed be madness to ‘align the country indefinitely with laws over which it has no influence’.
But when, as we report on Page 12, you get a substantial majority of UK businesses supporting the compromise that has been negotiated, then we should take that seriously. This is only the exit deal. Future trade relations will evolve, and almost certainly away from Europe because the rest of the world will grow faster.
But this weekend, politicians should care to listen to the people who are still driving the economy forward – and respect their views.
Take it seriously when a majority of UK firms support a compromise
FIGHTING ON: Sir Martin during the interview. Left: With wife Cristiana