Sir Martin Sorrell investigated by WPP over personal misconduct allegation

WPP is investigating Sorrell for alleged “personal misconduct”

WPP (LON:WPP) has appointed an independent counsel to look into allegations of "personal misconduct" by its chief executive Sir Martin Sorrell, the advertising giant has said.

According to the Wall Street Journal, WPP's board is looking into whether Sir Martin misused company funds. "The investigation is ongoing", WPP said, adding: "The allegations do not involve amounts which are material to WPP".

The 73-year-old Sorrell has led WPP since he used shopping carts maker Wire & Plastics as the corporate foundation for building the world's No. 1 communications company.

Sorrell has headed WPP since 1986, and has no clear successor.

Law firm Wilmer Hale, which WPP hired to investigate the issue, first interviewed Sorrell on March 29, according to a person familiar with the matter, who asked not to be identified as the details are private.

Ian Whittaker, analyst at Liberum, said the allegations could "intensify" speculation about the chief executive's future at WPP.




"I understand that this process will be completed shortly", he said. "As a significant share owner, my commitment to the company, which I founded over 30 years ago, remains absolute - to our people, our clients, our shareholders and all of our many stakeholders".

The trouble at the top has once again put a spotlight on the issue of succession at WPP amid accusations of a "Sorrellcentricity" - the view that Sorrell runs the giant business autocratically as a personal fiefdom, dominating decision-making. Sorrell has never given any indication that he may be ready to step back.

Sorrell, who has topped Britain's annual executive-pay lists on several years including 2014 and 2015, has in recent years become the focus of investor criticism over CEO compensation.

Nevertheless, WPP shares have slumped to their lowest level in more than four years as growth has stalled and some fund managers have called for more radical action from the board.

"It's never good when your CEO or any part of the leadership team is being investigated", Edentree's Patel said.

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