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Monday 16 April 2018

Thoughts on Sir Martin Sorrell's departure from WPP

SorrellI never thought I would pen an article in which I felt ‘sorry’ for Sir Martin Sorrell. But anyone who ends a 33 year career as the longest service FTSE100 CEO being drummed out for reasons unknown, deserves some sympathy. Sorrell built an unknown company called Wire & Plastic Products into a global juggernaut with 3000 offices in 112 countries - providing superb returns for shareholders over the medium to longer term. Despite recent falls, WPP's shareprice is up 3x in the last ten years alone.

Sure, Sorrell faced many criticisms for his gigantic pay-packet. But if he had earned that by owning ‘founder’ shares in WPP, nobody would have batted an eyelid. Without Sorrell, the WPP story would never have happened. Sorrell displayed all the characteristics of a founder - workaholic, ruthless, attention to detail, demanding extreme loyalty etc.

I’ve heard Sorrell speak on many occasions - both in the media and in person. He is remarkable for his recall of facts and figures. He always has an ‘opinion’ and I usually find myself in agreement. I was particularly pleased that Sorrell accepted in the invitation to address the Prince’s Trust Leadership Dinner in 2013. I have quoted his “Doing Good is Good for Business” on many occasions since.

It is well reported that the advertising business is going through much disruption as it moves from the old ‘analogue’ media like TV and print to ‘digital’ platforms like Facebook and Google. In the process, companies are moving their buying in house - by-passing agencies like WPP.

Maybe, at the age of 73, Sorrell should be retiring anyway. But the manner of his departure seems hardly fitting for a person who has achieved so much. Of course, it may transpire that a dreadful deed has been perpetrated. But, at the moment, the nature of that dirty deed is being kept secret. Telling, perhaps, that Sorrell is being treated as a ‘Good Leaver’ and, financially, the effects are said to be ‘immaterial’ to WPP.

Within our own tech industry, long-serving Founder/CEOs at Microsoft/ SalesForce/ Amazon/ Apple/ Dell etc,  or in the UK at Capita/ Computacenter/ Sage/ Aviva(CadCentre) etc, have all provided superb returns for shareholders - which tend to evaporate once that ‘old’ CEO departs/dies.

Sorrell will be a hard act to follow. I doubt we will see his like again. Indeed I suspect WPP will now be broken-up.

Posted by Richard Holway at '07:26'

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