WPP share price falls after Sir Martin Sorrell steps down as chief executive

 
Rebecca Smith
Sorrell stepped down from the firm over the weekend
Sorrell stepped down from the firm over the weekend (Source: Getty)

WPP's share price has fallen three per cent this morning after the news chief executive Sir Martin Sorrell was stepping down.

Sorrell said in a statement late on Saturday that he would be stepping down from the global marketing giant, following an investigation into alleged misconduct.

In a statement announcing his resignation, Sorrell said: "The current disruption we are experiencing is simply putting too much unnecessary pressure on the business."

Read more: Good fortune and Godspeed: Sir Martin Sorrell steps down from WPP

The statement concluded: "As a founder, I can say that WPP is not just a matter of life or death, it was, is and will be more important than that. Good fortune and Godspeed to all of you… now Back to the Future."

Sorrell has been at the helm for over 30 years and oversaw WPP's ascent into the world's biggest advertising company, and analysts have queried what's next for a firm that was so intertwined with its boss.

“It’s inconceivable that there’s anyone out there who can run WPP better” than Sorrell, said Alex DeGroote, an analyst at Cenkos Securities. "He is WPP."

Earlier this month, WPP confirmed it had hired a law firm to investigate “an allegation of personal misconduct against Sir Martin Sorrell".

The allegations against Sorrell, who founded the firm, do not include monetary amounts which are "material to WPP", the statement added.

Analysts have now turned their attention to where next for WPP as it gears up for life without Sorrell. Liberum said there is "a significant possibility" that WPP will offload its data investment, or market research, unit and possibly its PR arm too. The rest of the group looks more likely to be kept together.

Liberum analysts added that onlookers should not read too much into the fact Sorrell hadn't signed a non-compete clause, as "WPP is his creation and he would not want to do anything that would be seen as damaging the company".

He still owns around two per cent of the shares.

Read more: Ad giant WPP investigating boss Sir Martin Sorrell over alleged misconduct

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