WPP Readies Plan If CEO Goes -- WSJ
By Nick Kostov and Suzanne Vranica
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 14, 2018).
The board of WPP PLC is weighing contingency plans in the event Chief Executive Martin Sorrell leaves the company, people familiar with the matter said, as the advertising giant's longtime leader deals with an allegation of misconduct.
If Mr. Sorrell departs, the board is considering tapping WPP veterans Mark Read and Andrew Scott to be co-CEOs, the people said. The appointments would likely be on an interim basis while a search is conducted, one of the people said.
The board is set to convene early next week for a meeting that had already been planned months ago, according to people familiar with the matter.
Last week, WPP said an independent counsel has been appointed to look into "an allegation of personal misconduct" after The Wall Street Journal reported on the probe. The Journal reported that the board was also looking into whether Mr. Sorrell misused company assets. WPP said any possible misconduct did not involve sums that were material to the company.
Mr. Sorrell last week denied any financial impropriety. Mr. Sorrell didn't immediately respond to a request for comment Friday.
The investigation is expected to be completed as soon as next week, two of the people said. Mr. Sorrell's fate at the company has yet to be decided, and the situation is fluid, they said.
The publication Campaign U.K. earlier reported on the potential leadership contingency plan.
The idea of WPP without Mr. Sorrell atop the organization was once almost unfathomable. The British executive has been at the helm of WPP for more than three decades, building the company into the world's largest advertising company by acquiring an alphabet soup of Madison Avenue agencies.
That empire gave Mr. Sorrell unique status as business leaders around the world sought his advice not only on the ad industry but on broader trends in the global economy. Mr. Sorrell has also garnered a reputation among employees for relentless micromanagement, keeping close tabs on WPP's far-flung operations.
"There has probably never been an executive as on top of so much complexity as Martin Sorrell," said David Bell, an ad veteran who formerly led Interpublic Group of Cos., a rival ad holding company. "His capacity to know details about everything is unbelievable. That skill is the great asset of WPP and its greatest weakness because if he is not there, what happens?"
Shareholders have long criticized WPP for not publicly disclosing a succession plan in the event of an exit by Mr. Sorrell, who is 73 years old. The probe into Mr. Sorrell's conduct has now brought those concerns to a head.
Mr. Read, the global CEO of WPP unit Wunderman since 2015, is known for his strategy and investment prowess. At Wunderman, he was tasked with modernizing a staid customer-relations marketing agency, bringing in new creative and technology chops. He also recently launched a new offering, called Wunderman Inside, to help marketers build in-house creative and marketing operations using Wunderman resources and talent.
Before Wunderman, Mr. Read spent more than a decade at the holding company level at WPP. There he served as executive director as well as head of strategy and CEO of WPP Digital, where he played a role in WPP's acquisition of 24/7 Real Media.
Mr. Scott has had a lower profile at WPP, but behind the scenes he has played a leading role in the company's aggressive acquisition strategy for more than a decade. The one-time management consultant has been behind some of Mr. Sorrell's biggest deals, including the $1.95 billion purchase of market research firm Taylor Nelson Sofres in 2008 and its deal to buy Grey Global Group in 2004.
WPP executives describe Mr. Scott as a no-nonsense executive, a sharp strategic thinker and a "pit bull" negotiator. Still, Mr. Scott has limited experience handling clients, a critical component for ad chiefs. But colleagues say Mr. Read can fill that gap.
Mr. Scott declined to comment, and Mr. Read didn't immediately respond to a request for comment.
WPP employs more than 200,000 people, including associates and companies in which WPP has an investment, in over 112 countries. More than 400 companies are part of WPP.
WPP's stock has dropped about 32% over the past 12 months following a string of disappointing financial results. Since the Journal reported on the probe last week, the share price is up slightly, giving the company a market value of about GBP15 billion ($21 billion).
--Alexandra Bruell contributed to this article.