WPP's New Journey Without Sorrell At The Helm: The Challenges For New Successor
For decades Martin Sorrell steered the ship at the world's biggest advertising company. Now many wonder what direction WPP will go without its captain at the helm.
Mike Ingram, Chief Market Strategist, WH Ireland, says, "Sir Martin Sorrell was so intimately associated with the brand of WPP if a solution isn't found quickly then that could only accelerate the outflow of clients that the company has seen over the past couple of years."
The 73-year-old's shock departure over an allegation of misconduct has come at a tough time for the British firm. In March it published its weakest results since the financial crisis - after consumer goods groups like Unilever and P&G cut spending. It could mean Sorrell's successor - may have to cut costs at WPP - with its 200,000 employees in 400 companies across 112 countries.
Mike says, "There are those out there that have been quite vocal saying that the company under Sir Martin Sorrell's leadership had become too large, too unwieldy, impossible to manage, not much joined up thinking, and potentially it needs to be broken up."
Whoever takes over also faces another challenge. The industry itself is undergoing rapid change - with players like Google and Facebook - monopolising the online ad market.
The successor will have to reassure investors too. Shares in WPP fell 4 percent in early trade - they're already down 30 percent this year. But Sorrell himself won't have to worry too much - he could be in line for a share bonus of almost 20 million pounds.
(With inputs from Reuters)