Sir Martin Sorrell has called on his successor at WPP to step down “before he is pushed” in another broadside against the advertising group he left acrimoniously in 2018.
His attack on Mark Read, WPP’s chief executive, prompted a stern response from the advertising group’s biggest shareholder, which accused Sir Martin of mounting a “disgusting” campaign to destabilise the business.
The extraordinary exchange, through separate interviews with the Financial Times, are the culmination of two years of criticism from Sir Martin, who has said he launched his digital advertising venture, S4 Capital, to “prove a point” to the “bozos” at WPP.
Sir Martin stepped down from WPP, a company he built into the world’s biggest advertising empire, after a dispute over issues including his expenses and conduct, in which he denied any impropriety. Since then he has regularly criticised the group and was accused of slapping an old WPP protégé in the face during a confrontation, an allegation Sir Martin has denied.
Asked on Tuesday about Mr Read’s performance, Sir Martin said he “won’t last” because he had throttled key businesses, lost experienced staff and sold assets that have since soared in value.
“The best thing he can do is resign before he is pushed. Really. He won’t last,” Sir Martin told the FT, noting WPP’s chief financial officer John Rogers “has big eyes” on the top job.
WPP declined to comment.
The remarks prompted David Herro, the chief investment officer of Harris Associates, which owns about 7 per cent of WPP stock, to hit back at Sir Martin for “attacking the people cleaning up his mess”.
“Martin has been undermining Mark from day one. This is more of the same . . . it should not be taken very seriously,” he told the FT. “He is still very upset with how [his departure] unfolded and he is striking back.”
“Martin cannot let it go,” Mr Herro added. “This is the way old school admen work. To me it is disgusting. If he is so disappointed in WPP why does he not make a bid for it or sell his shares?”
Sir Martin still retains a 2 per cent stake in WPP and borrowed money against the shares to launch his new venture. He said he does not “use them as collateral against S4 any more”.
Sir Martin argued Mr Read’s reorganisations were “driving people nuts” and “killing the businesses”. Selling WPP’s stake in Globant, a South American tech group, was a “shocking, terrible decision” that wasted £1bn of shareholder value, he said.
S4 comfortably beat analysts' expectations on Monday, reporting like-for-like revenues up 13 per cent to £86.4m in the three months to the end of September. Sir Martin said S4 found the “digital sweet spot” of a stagnant ad market.
Although S4’s turnover is a tiny fraction of WPP’s, investors have bet on Sir Martin’s dealmaking record. Shares in S4 have risen 140 per cent since January, giving it a £2.4bn market value that is about a quarter of WPP’s.
Thomas Singlehurst, an analyst at Citi, noted the ructions within WPP were doubtful but were being amplified because rivals such as Sir Martin see “opportunity in instability”.
“To paraphrase Gore Vidal, in [the advertising] business it is not enough to succeed but for others to fail,” he said. “In that context there is pressure on Mark to show he is making a success but in fairness there is some evidence he is doing that.”
Asked whether he would eventually make a tilt against WPP, Sir Martin said: “In your dreams”. “The best tool that we can take against WPP is to continue to build our business and to confound the sceptics.”
Shares in WPP jumped more than 11 per cent after markets rallied to news of a Covid-19 vaccine breakthrough. S4 stock rose 3.6 per cent.
This story has been amended since original publication to note that the Citi analyst cited was Thomas Singlehurst
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