WPP Faces Shareholder Backlash After Sorrell's Departure
June 13 2018 - 8:11AM
Dow Jones News
By Nick Kostov
WPP PLC is facing shareholder unrest over its handling of
founder Martin Sorrell's resignation, in a sign of how the
advertising giant is straining to turn the page on its former chief
executive and the business model he pioneered.
Shareholders attending their first annual meeting without Mr.
Sorrell at the helm showed unusually narrow support for Chairman
Roberto Quarta, who was re-elected with 84.5% of votes, compared
with nearly 98% last year.
More than 27% of shareholders voted against WPP's remuneration
report, which includes the board's decision to retire Mr. Sorrell
under "good leaver" status. That allows him to collect a long-term
share award of up to GBP20 million ($26.7 million) over the next
five years.
The votes were a measure of shareholders' frustration with the
company's response to the sudden exit of the 73 year-old founder.
For years the company insisted it had taken steps to identify
possible successors for Mr. Sorrell only to be broadsided by his
resignation in early April.
For decades, Mr. Sorrell was the center of WPP's empire,
extending WPP's reach across the globe through frenzied deal-making
that positioned him as an oracle to advertisers hungry for advice
on how to reach far-flung consumers. Digital disruption eroded that
business model as advertisers began turning to Facebook, Google and
other tech companies to better target consumers using oceans of
customer data.
On Wednesday, WPP said revenue fell 3.4% to GBP4.82 billion in
the first four months of the year. Net sales rose "marginally" on a
like-for-like basis.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
June 13, 2018 07:56 ET (11:56 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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