Martin Sorrell fights back as WPP probes ‘personal misconduct’ allegation

Sir Martin Sorrell came out fighting on Wednesday against allegations of personal misconduct and misuse of company funds at WPP, the advertising giant he founded.

Amid some investor disquiet about succession planning for the 73-year old ad guru and concern about his pay packet, WPP has hired three law firms to probe the unspecified allegation. WPP said the amounts of money involved are not material to the company.

Sir Martin “unreservedly” denied the allegations.

“Reports in the media have stated that WPP is investigating an allegation of financial impropriety by me, specifically as to the use of company funds,” Sir Martin said in a statement. “This allegation is being investigated by a law firm. I reject the allegation unreservedly but recognise that the company has to investigate it.

“I understand that this process will be completed shortly,” he said.

Sir Martin added: “As a significant share owner, my commitment to the company, which I founded over 30 years ago, remains absolute — to our people, our clients, our shareholders and all of our many stakeholders.”

Some City sources think there could be tension between Sir Martin and his chairman Roberto Quarta and wonder if Quarta is using this inquiry to put pressure on his chief executive.

Investors who have seen the shares fall from around 1800p a year ago — they fell another 2% to 1093p today — are known to be unhappy at Sir Martin’s £48 million pay deal. That was down from £70 million a year earlier.

The investigation is understood to have begun a week ago — news of it leaked into the US press last night. WPP has hired Allen & Overy, Linklaters and Slaughter & May to handle the issue.

One City source said: “There is an agenda here. There is no need to go through this.”

WPP has had a rough year as major clients such as Unilever and Procter & Gamble cut back spending. The huge shift to digital advertising and the dominance of Facebook and Google has also been problematic.

Sir Martin, dubbed the Sage of Soho, has been in charge at WPP for more than three decades, building it almost from scratch into a huge business. It has more than 134,000 staff in 100 countries.

The Wall Street Journal reported that an internal memo to top executives said: “The message for our people and clients is one of business as usual within our operating companies and client teams. Our work for clients is unaffected and continues uninterrupted.”