WPP investors revolt over Sorrell scandal

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WPP investors want more clarity about the departure of Sir Martin Sorrell

WPP shareholders have challenged the firm’s board of directors amid anger over the way it handled the departure of founder, Sir Martin Sorrell.

Almost a third of shareholders did not back the company’s pay and bonus scheme and almost 17% did not support the re-election of chairman Roberto Quarta.

Shareholders have demanded more clarity over the departure of Sir Martin.

He resigned in April amid allegations of misconduct.

Over 30 years Sir Martin transformed WPP from a small maker of wire baskets into the world’s largest advertising company.

His departure came amid allegations of payment to a sex worker and poor treatment of staff – which he denies.

Sir Martin is due to receive up to £19m over the next five years.

The shareholder votes were announced at the company’s annual shareholder meeting, where Mr Quarta defended the advertising giant’s role in the exit of Sir Martin.

Mr Quarta told the annual shareholders’ meeting that the “board acted appropriately throughout”.

One shareholder asked Mr Quarta why, in his speech, he had not thanked Sir Martin for his service to the company. Mr Quarta did not reply, but moved on to another question.

Another asked about the future direction, given that Sir Martin was “so key” and “so crucial” to the company.

Mr Quarta said everyone had contributed to building “an amazing business” and that WPP would “would succeed without him”.

Inquiry

An internal inquiry looked into allegations against Sir Martin made by a whistleblower, but the report has not been published because WPP said doing so would breach data protection rules.

Mr Quarta told the AGM in London: “The process that the Board followed in response to the allegation against Sir Martin was robust both from a governance and legal perspective.

“Although we have confirmed that the matter was financially wholly immaterial to WPP, we understand why some would like the company to disclose or confirm further details of the allegation.

“However, right from the outset, the board has acted in accordance with unequivocal legal advice that data protection law prohibits us from doing so.”

A report in the Financial Times earlier this week raised issues about Sir Martin’s treatment of employees.

Mr Quarta said: “While we are not able to comment on individual cases or specific allegations, I want to make it clear that at WPP – as in any other workplace – everyone is entitled to be treated with respect.

“As we said in response to the FT’s report, everyone at WPP should feel able to raise concerns and to have them listened to and acted upon as appropriate.”

Unusual times

After the meeting, Mr Quarta told the BBC that there was no “bad blood” between him and Sir Martin. “Absolutely not”, he said.

He hadn’t referred to Sir Martin’s contribution in building WPP during his speech “because there will be time to do that in the future”.

He also rejected suggestions that the lack of shareholder support was a personal rebuke.

“I normally get 90%-plus in favour of re-election, so something in the 80s is a disappointment. But that’s OK, these have been unusual times.”

WPP investors revolt over Sorrell scandal

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