Ex-WPP head moving on after vice scandal

Sorrell has launched a new venture weeks after exiting firm amid misconduct allegations

Sir Martin Sorrell, the former head of British advertising giant WPP, is clearly in a hurry to move on after stepping down from the firm he founded, amid a storm over allegations that he misused company funds and made a payment to a prostitute.

Six weeks after his departure from WPP in April, amid a probe into the allegations of personal misconduct and misuse of company assets, the world's most famous advertising executive launched a new venture.

The 73-year-old said that a shell of a company he bought last month will be the vehicle he uses to reinvent himself.

"The sooner the better," he said on the sidelines of the Conference of Montreal.

Mr Sorrell has invested £40 million (S$70 million) into S4 Capital Ltd and plans to build it into a provider of marketing services and advertising technology, in a similar fashion to how he built up WPP - itself a shell company - over the course of three decades into the world's largest provider of advertising and marketing services.

Mr Sorrell has denied the allegations of paying for sex with company money, but has refused to provide the reason for leaving, due to a non-disclosure clause.

Responding to a story by the Wall Street Journal last weekend, a spokesman for Mr Sorrell said he had "signed a non-disclosure agreement when he stepped down, which precludes him from discussing any of the circumstances surrounding his departure".

The spokesman added: "He has rigidly adhered to this obligation and will continue to do so. As for the allegations which have appeared in the Wall Street Journal, Sir Martin strenuously denies them."

The grand plans of the elder statesman of the advertising industry had investors in WPP baying for chairman Roberto Quarta's resignation at the company's annual shareholders' meeting last Wednesday after it emerged that Mr Sorrell was leaving without a non-compete clause and with share awards which could be worth up to £20 million.

The departure sparked a veritable rebellion at the meeting, rekindling arguments that the firm paid Mr Sorrell too much and did not prepare for his succession.

In the last five years alone, Mr Sorrell earned around £200 million. His astronomical pay prompted a third of WPP investors to refuse to back his £70 million pay package in 2016.

Investors at the annual meeting asked why he had left, why the company had not prepared for his departure and why he had been allowed to keep his share awards .

"What will the strategy be, because Martin was so key to this and he's no longer here?" one private investor asked.

WPP was also unable to provide the reasons for Mr Sorrell's departure, only saying it had "been advised that it cannot disclose details of the allegations against Sir Martin Sorrell because it is prohibited by data protection law from giving such details".

The company is under pressure to appoint a new chief executive and outline its strategy amid a changing advertising landscape. Over the past year, the firm lost a quarter of its value as major clients slashed their marketing spending and online titans like Facebook and Google increased their influence.

Mr Quarta says the search for Mr Sorrell's replacement is well advanced.

While Mr Sorrell's new venture won't have the global reach of WPP, what it does provide is a clear perspective, which he described as "ground zero".

He said a legacy business like WPP was restrictive and the opportunities were straightforward in terms of marketing services, given changes that are taking place.

Mr Sorrell said this meant his new firm could be faster, cheaper, less bureaucratic, more responsive, more global, less regional, and focused on the creative.

He dismissed speculation that his firm would compete with WPP, pointing out that he had a stake in his former employer.

"I still have 2 per cent, so I want to see WPP succeed," he said.

He also nixed rumours linking him with a potential acquisition of WPP's market research unit Kantar. "I don't know where analysts get it from, other than them wishing to cause trouble," he said.

Mr Sorrell indicated that he had been looking at "one or two things" in the area of blockchain that would "bring benefits to clients and media owners".

He said he expects to be involved in S4 Capital for at least five years, health permitting, and is on the lookout for a CEO.

"At the age of 73, it would be inadvisable for me to believe I can carry on for a long period of time," he said. "I'll probably have a five-to seven-year bite at the cherry."

A version of this article appeared in the print edition of The Sunday Times on June 17, 2018, with the headline 'Ex-WPP head moving on after vice scandal'. Print Edition | Subscribe