It was there in black and white.
In his farewell memo to 180,000 WPP staff in mid-April, Sir Martin Sorrell couldn’t have been more explicit: “As a founder, I can say that WPP is not just a mattter 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 took less than 50 days from writing that message to delve into his 1985 playbook (the same year that the Michael J Fox time-travelling blockbuster was released) for the launch of WPP 2.0.
Some WPP investors are now casting doubt on his former employer’s board’s judgement in allowing him to ‘retire’ and keep £19m in unvested share awards while neglecting to insist on a non-compete period.
Arguably, at 73, Sorrell has little time to waste. Unveiling his plan to reverse S4 Capital into listed cash shell Derriston Capital just two weeks before WPP’s AGM, though, feels like a contrived way to twist a knife between the shoulders of those he blames for ousting him.
A legal opinion from Slaughter & May warning WPP that it must not disclose further details of the investigation which preceded Sorrell’s departure has tied its board’s hands further.
Evidence that S4 is directly competing against WPP in an auction of advertising technology or related assets will stoke the ire of Sir Martin’s former investors with those he left behind. This dish of revenge is definitely not being served cold.
Other than auditors, you’d be hard-pressed to find a more scrutinised group in the City right now than the even more concentrated community of proxy advisers.
The likes of Glass, Lewis & Company and Institutional Shareholder Services (ISS) have come to wield enormous power in boardrooms on both sides of the Atlantic as directors seek to avoid job-threatening investor rebellions.
Is the shoe about to be on the other foot? A letter from the US Senate’s Banking, Housing and Urban Affairs Committee to Glass Lewis earlier this month is laden with criticisms – some implied, some explicit – of the company.
One area, relating to the accuracy of reports issued by proxy advisers is particularly potent.
The letter demands to know why Glass Lewis has no draft review process for companies “in order to improve the quality of your reports”.
On the subject of conflicts of interest, the committee members are seeking answers about cross-ownerships held by Glass Lewis’s shareholders: the Ontario Teachers’ Pension Plan and the Alberta Investment Management Corporation, both Canadian investors with an extensive presence on corporate share registers.
In response, Nichol Garzon, Glass Lewis’s general counsel, said it “looked forward to detailing how our existing practices and policies meet... the needs of both investors and issuers”.
I doubt enthusiasm is the word which best sums up its appetite for answering the senators’ questions.
Fintech in focus
A bewildering array of City committees has emerged since Britain voted for Brexit – and here’s another one to add to the list: the Innovate Finance fintech strategy group, featuring luminaries such as Monica Kalia, the co-founder of Neyber; Alison Rose, RBS’s commercial and private banking chief; and Mark Hoban, the former Treasury minister who chairs the International Regulatory Strategy Group.
The panel has a crucial agenda – fintech is one of the areas in which the UK can claim genuine international leadership. It mustn’t be squandered.
Read more: Fintech: Investors' new favourite