WPP CEO Martin Sorrell left his job at the top of the world’s largest ad holding company Saturday, just about two weeks after the company launched an investigation into personal misconduct by the 33-year ad industry veteran.
Roberto Quarta, chairman of WPP, will take on the role of executive chairman while the search for a new CEO is on. Wunderman execs Mark Read and Andrew Scott will run day-to-day operations at WPP as joint chief operating officers.
In a statement, Sorrell, referring to the investigation into misconduct, said that “the current disruption we are experiencing is simply putting too much unnecessary pressure on the business. That is why I have decided that in your interest, in the interest of our clients, in the interest of all share owners, both big and small, and in the interest of all our other stakeholders, it is best for me to step aside.”
Earlier this month, WPP had announced that it was starting an investigation into Sorrell, responding to allegations of personal misconduct. Sources familiar with the matter said that the allegations involved financial dealings.
In a statement, WPP said: “The previously announced investigation into an allegation of misconduct against Sir Martin has concluded. The allegation did not involve amounts that are material. In accordance with his at-will employment agreement, Sir Martin will be treated as having retired on leaving WPP, as detailed in the Directors’ Compensation Policy.”
The ramifications of Sorrell’s departure will be felt far and wide. WPP, long considered the bellwether of the ad industry, already had its worst year for revenue growth since 2009 earlier this year. Agencies are becoming less relevant, with costs ballooning as the impact of technological disruption continues to wreck havoc on the bottom line. From in-housing to smaller players to the threat from consultancies, WPP is facing a bleak future.
Sorrell himself is a symbol for the ad industry itself. The exec, who took a stake in WPP back in 1985 with the goal of building a holding company for marketing services, has been one of the most well-known and outspoken figures in advertising. He’s also been behind growing media buying giants like WPP’s GroupM, which now wields outsize influence in the industry, from setting standards on viewability to its most recent requirement asking publishers to sign on to an addendum ahead of the GDPR enforcement in May.
In recent years, he’s faced his share of criticism, for his close to $100 million yearly payout to the way his company dealt with allegations of sexual harassment crisis against Gustavo Martinez, the former CEO at J Walter Thompson. That suit, brought by former chief communications officer Erin Johnson, was only settled earlier this month, with many criticizing WPP for its handling of the issue.
“It’s the end of an era,” said one WPP employee who spoke under condition of anonymity. “It’s a little shocking, but it feels like comeuppance.”