WPP has moved to reassure shareholders that succession planning is in place for an eventual successor to Sir Martin Sorrell, the group’s outspoken CEO and chairman. In recent years questions have arisen over who will be next to lead the organisation.
Sir Martin (71), who has lead the company since its inception in 1985, is one of the most prominent figures in advertising and media and has built what is the world’s largest communications conglomerate.
Roberto Quarta, chairman of WPP’s board, said in the annual report for 2015 published over the weekend that while Sir Martin has not made any plans to step down “Sir Martin, like all of us, is not immune from being hit by the proverbial bus.”
“At some point we all leave our jobs. The question is when. Whether, in Sir Martin’s case, that happens tomorrow, in one, two, three, four or five years, or even over a longer period, we have already begun to identify internal and external candidates who should be considered.”
It is eyeing potential future CEOs from within the group who have “familiarity” with its strategy as well as external figures.
“Share owners should have no doubt that we already have a strong pool of internal and external candidates to draw from,” he said.
The latest company reports also revealed Sir Martin, who is also the highest paid CEO in the UK, took home a package of close to £70 million in 2015. He has had to consistently defend his remuneration in recent years, and some reports in the UK are speculating that WPP will face a shareholder revolt at its 8 June AGM over the terms. Although, this was something else Quarta moved to quell in his director’s statement.
“The first thing to remember about compensation schemes is that they don’t happen overnight. The headlines we will inevitably read concern obligations and agreements put in place several years ago for our executives … The plan was laid out; the results are laid out. The performance is there; the metrics are there. This is a matter of record, contract and history. It is not the future,” he said.
WPP’s merger with the Australian communications group STW was agreed and finalised last month seeing the creation of WPP AUNZ. Read more about how the merger will impact the Australian market here.
In the first quarter of 2016, WPP reported an 8.3% rise in billings to just shy of £12 billion. Revenue increased 10.5% to just over £3.08 billion. Both of which were described as “well above budget”.
WPP also claims new business wins were behind some of the financial performance, noting “success” amid the “media tsunami” in the US which has seen an incredible amount of business in review in the market over the past 18 months. New business amounted to US$1.779 billion in Q1, compared to $1.0bn in the same period the previous year.
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