AJ Bell argues that WPP (LON:WPP) faces a succession issue regardless of the outcome of an investigation into chief executive Martin Sorrell over alleged personal misconduct, Citywire reports. The news comes after the advertising giant launched an independent probe into alleged ‘personal misconduct’ by its chief executive.
WPP’s share price fell in the previous session following news of the probe, shedding 2.01 percent to close at 1,095.00p. The shares underperformed the broader UK market, with the benchmark FTSE 100 index closing marginally in positive territory.
WPP faces succession issue
AJ Bell investment director Russ Mould commented yesterday that it was hard to know what WPP would look like under different leadership.
“Sorrell has been at the helm of the business since it was a wire shopping basket manufacturer […] He used the business as an acquisition vehicle and made his first really big splash with a $566 million hostile takeover of New York-based agency J Walter Thompson in 1987,” Mould pointed out, as quoted by Citywire, adding that even if the current probe did not amount to anything, the advertising giant still needed “to confront the succession issue sooner rather than later given Sorrell turns 73 in February”.
‘Personal misconduct’ investigation
WPP’s probe followed a report in The Wall Street Journal, which suggested that Sorrell had misused company assets and had been accused of improper personal behaviour.
The Telegraph reports that the ad giant’s chairman Roberto Quarta had called in outside law firm Wilmer Hale to probe allegations made by a whistleblower. The newspaper notes that it is understood that Sorrell’s fate could be decided by the time WPP is due to publish its annual report at the end of this month.