The head of the world’s largest advertising agency, WPP, has stepped down after an internal investigation into his personal conduct.
Chief executive Sir Martin Sorrell ran WPP for 33 years, becoming the highest paid boss of a FTSE 100 company.
He said WPP had been a passion but it was in “the best interests of the business” for him to resign.
WPP said the investigation, over use of company money, was finished. Sir Martin has rejected claims of wrong-doing.
The chairman of WPP, Roberto Quarta, will oversee the agency until a new CEO is appointed.
Sir Martin once said he would “carry on until they carry me out of the glue factory”. The 73-year-old was the longest serving chief executive of a FTSE 100 firm by far.
He will be treated as having retired, WPP said in a statement, so will receive any payments, bonuses and shares in line with his contract.
He was one of the best-paid chief executives, and in 2015 faced a shareholder revolt over a £70.4m remuneration package.
Earlier this month it was disclosed that he was under a misconduct investigation by WPP, but Sir Martin strongly rejected any claim of financial impropriety.
Analysis: Simon Jack, BBC business editor:
Although Sir Martin is deemed to have “retired” this was not the outcome he wanted.
His legacy as one of the titans of the advertising industry is secure – he built a £20bn global business from scratch and amassed a personal fortune.
In the end, it was the trends in world business that wrong-footed the sprawling empire he created. The old advertising firms have been rendered less important by the sheer reach and analytics available by platforms like Google and Facebook.
By his own admission, WPP got “walloped” last year and the company has lost a third of its value. If it hadn’t, it’s possible he could have survived the recent investigation into his conduct involving amounts of company money.
But shareholders were getting restless, he had lost the unanimous backing of the board and at 73, he is no spring chicken.
He has enormous energy and you wouldn’t put it past him to create a new media empire. But his life’s work, WPP – a company he was often accused of treating as his own – will now be run by someone else.
In a statement, WPP, whose businesses include J Walter Thompson and Ogilvy & Mather, said: “The previously announced investigation into an allegation of misconduct against Sir Martin has concluded. The allegation did not involve amounts that are material.” It did not give further details of the claims.
Mr Quarta described Sir Martin as being the “driving force” behind WPP’s growth and thanked him for his commitment to the business.
In a statement, Sir Martin said: “Obviously I am sad to leave WPP after 33 years.
“It has been a passion, focus and source of energy for so long. However, I believe it is in the best interests of the business if I step down now.
“I leave the company in very good hands, as the board knows.”
Who is Sir Martin Sorrell?
- Formed WPP in 1985 after taking control of a shell company, Wire & Plastic Products, and established it as a marketing services group in 1986
- Oversaw growth of company which now has 3,000 offices in 112 countries
- Born in London, he read economics at Christ’s College, Cambridge University
- One of UK’s top-paid executives. His pay package in 2015-16 was £70m – then the biggest in UK corporate history – which more than a third of investors refused to back
- A lack of succession planning for after the 73-year-old’s retirement has caused some anxiety among investors
WPP, originally called Wire and Plastic Products, was a UK manufacturer of wire baskets for the first 14 years of its life until 1985 when Sir Martin took a loan out against shares he owned in Saatchi & Saatchi and purchased a stake in the company.
His aim was to turn it into a marketing company. Within a couple of years, the renamed WPP Group embarked on a series of acquisitions – research business Taylor Nelson Sofres, the Ogilvy Group, and the Young & Rubicam Group – as the firm expanded its presence across the world.
Sir Martin was born in London and educated at the Haberdashers’ Aske’s Boys’ School before going on to read Economics at Christ’s College, Cambridge.
An MBA from Harvard followed, and Sir Martin entered the world of work at Glendinning Associates before starting at Saatchi & Saatchi in 1975, becoming group finance director in 1977.