WPP’s Next CEO Due Some Time This Year

With cloning technology not quite where it needs to be yet, 71-year-old WPP CEO Sir Martin Sorrell will have to settle for the next best thing in WPP’s search for a new CEO. Sorrell’s wife Cristiana Falcone Sorrell is expected to give birth to the couple’s first child some time this year, as reported in The Drum and elsewhere.

This development comes after the weekend announcement that Mick Jagger, who is only a year older that Sir Martin, will be having his eighth child with current girlfriend and ballerina Melanie Hamrick. (Not that the two are related.)

Joking aside, the news also follows WPP’s announcement in April that it had begun an internal and external search for Sorrell’s successor. With his first child with his current wife on the way (he has three sons from a previous marriage), speculation about Sorrell’s eventual retirement will likely increase, especially since there is, at the moment, no Arthur Sadoun waiting in the wings. It also seems possible that this news explains the timing of WPP’s April announcement, although WPP made clear in that announcement that Sorrell’s retirement would be happening anytime soon.

“At some point we all leave our jobs,” WPP chairman Roberto Quarta told shareholders at the time of the company’s 2015 Annual Report. Whether, in Sir Martin’s case, that happens tomorrow, in one, two, three, four or five years, or even over a longer period, we have already begun to identify internal and external candidates who should be considered.”

WPP Investors Want to Know Who the Hell Will Replace Sir Martin

At WPP’s Annual General Meeting last week, chairman Roberto Quarta faced increasing pressure from shareholders to provide more clarity and disclosure in the holding company’s succession plan for CEO Martin Sorrell, Campaign reports. That meeting, of course, also saw 33.5% of investors vote against Sorrell’s colossal pay package for 2015, approximately equivalent to the New York Mets’ payroll for its 25-man roster. 

As you may recall, back in April WPP announced that it had begun an internal and external search for Sorrell’s successor, with Quarta stating that WPP has “already begun to identify internal and external candidates who should be considered” for the position after Sorrell’s eventual departure, “Whether…that happens tomorrow, in one, two, three, four or five years, or even over a longer period.”

That nebulous statement was apparently not satisfactory to some WPP investors.

Hans-Christoph Hirt, executive director of Hermes EOS and a top shareholder, said he appreciated how “succession risk has risen up the company’s agenda” over the past year and a half but requested that Quarta “enhance” disclosure.

Standard Life head of stewardship Euan Stirling, meanwhile, suggested that clearer succession planning would “improve the risk profile” of the holding company and that if WPP wasn’t so reliant on Sorrell they could afford to pay its CEO less. 

Quarta responded by promising “further dialogue over the coming months” and assuring investors that WPP carries out “a continuous and constant assessment of individuals both internally and externally” for over 100 senior positions, including CEO.

Sorrell himself said “The fact that it’s not played out in the pages of Campaign doesn’t mean that something doesn’t happen.” Ouch.

As to when we can expect Sorrell to step down, Quarta said, “There is no set timeframe for CEO succession.”

“I’ve said I’ll carry on until they cart me out to the glue factory,” Sorrell added.

WPP Approves Sorrell’s Colossal Pay Package

WPP shareholders approved a £70.4 million ($102.4 million) pay package for CEO Sir Martin Sorrell for 2015 in spite of investor objections, The Wall Street Journal reports

More About Advertising, which contends the pay package may upset clients already angered by a recent report by The Association of National Advertisers (ANA) which found “numerous non-transparent” practices at U.S. media agencies, points out that the figure makes Sorrell by far the highest paid CEO in the U.K. and represents “196 times the average WPP employee’s pay.” His pay package, largely coming through bonuses, incentive stock awards and other benefits, also represents a 65% increase from the previous year. 

The pay package arrives despite considerable investor objection. In a recent meeting, 33.5% of investors voted against it. The Wall Street Journal points out that the number excludes abstentions, which, it says, “can be viewed as a milder form of protest.” Ahead of the meeting, the publication states, some shareholder advisor groups characterized the pay package as “excessive” and “unacceptable.” Proxy adviser Pensions & Investment Research Consultants Ltd. recommended that WPP shareholders oppose the pay package, while Institutional Shareholder Services Inc. advised them to back it. 

The head of WPP’s compensation committee, John Hood, said in the company’s annual report that “while the value of Sir Martin Sorrell’s award is very large, it was the result of an outstanding set of returns to share owners,” reflecting the fact that WPP’s shares rose some 16% in 2015. 

Wunderman Names Mark Read CEO

With Daniel Morel stepping down after leading the agency for 14 years, Wunderman has appointed Mark Read as its global CEO, effective next week. Read, who arrives from WPP, will retain his role as CEO of WPP Digital. Morel, meanwhile, will move into a non-executive chairman role with Wunderman.

Morel has served as chairman and global CEO since 2000, when the agency was known as Impiric. He was responsible for restoring the Wunderman name the following year.

Read has served as a chairman and CEO for WPP Digital for over eight years, following over ten years as director of strategy. Prior to that role, he was a founder and joint CEO of WebRewards, but his time at WPP dates back to a stint as corporate development manager that began in 1989.

WPP CEO Martin Sorrell said in a statement that Read “brings a wealth of knowledge in digital technology and its application to marketing services, as well as strong links to our new media partners.”

WPP’s Maxus Appoints New North American CEO

This morning in news that has nothing to do with the Omnicom/Publicis collapse, WPP/GroupM media agency Maxus poached a top executive from Omnicom’s PHD.

Steve Williams, who spent two years as president at PHD, will be Maxus’ new North American CEO starting June 1, replacing the retiring Louis Jones; Williams will report to global CEO Vikram Sakhuja as well as GroupM’s North American chief Kelly Clark.

In the new role, Williams will work with the New York, L.A., Chicago, Minneapolis and Toronto offices of what the press release and RECMA call “the fastest growing global media agency for the past four years.”

Before joining PHD, Williams served as CEO of the UK’s OMD Group.

No word on how much pleasure Martin Sorrell took in making this announcement.

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Chances of Omnicis/Publicom Merger Now Less Than 50/50

publicis-omicron

If you’re a gambling man, you might want to bet against the pending mega-merger and the double-headed hydra it would create.

Earlier this week, WPP‘s Martin Sorrell gleefully told Reuters–via a little birdie–that chances of the deal going through were less than even. Yesterday, The Wall Street Journal reported that analysts at Albert Fried had lowered the official odds to 40% (the previous number was 66%) while downgrading  the theoretical stock price from $70 to $56.

The fact that Publicis recently lost Microsoft, Samsung and Miller Lite didn’t help; the defections have compounded risks created by a clashing of egos over the contested CFO role.

All involved parties still say the deal will go through, primarily because “there’s a $500 million break-up fee at stake”, so we expect to see a few more upbeat press releases in the days ahead.

As principals at both companies sweat a bit more heavily this week than last, WPP may have already begun planning its victory lap.

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J. Walter Thompson Company Is Your New JWT

JWT_150_Owl_Logo_Black

The week’s biggest spoiler to date has nothing to do with “Game of Thrones” or “Mad Men.”

Martin Sorrell of WPP dropped an extremely premature bomb during an “executive breakfast” hosted by the Wall Street Journal: JWT will once again become the J. Walter Thompson Company as part of its 150th anniversary “rebranding.”

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What Does the Publicis/Omnicom Merger Mean for the Industry?

As one might imagine, the announcement (and Vine video) of the biggest merger in advertising history is causing quite a reaction from those in the industry. Above, Keith Hunt, managing partner of M&A consulting firm Results International, hypothesizes about the implications the newly formed Publicis Omnicom Group will have.

As Hunt notes, the merger means the company will be able to buy media very cheaply, leapfrogging WPP in the process. But, Hunt wonders, how far can you push down prices? At one point do vendors draw the line?

Also, Hunt says, there’s the issue of who’s in charge. Co-chief execs, John Wren (Omnicom) and Maurice Levy (Publicis)  are elder statesmen. Levy, the older of the two at 71, is now on the hot seat in terms of naming a successor, that is, if the balance of power between Publicis and Omnicom remains a priority. As WPP’s Martin Sorrell said in an interview today, “It’s a nil-premium merger — effectively a takeover of Publicis by Omnicom [without exchange of money].”

Finally, says Hunt, there’s the matter of positioning. It benefits the new company to frame the merger as one that hinges around new technologies and emerging markets, allowing Publicis Omnicom Group to compete against tech companies outside advertising agencies like Adobe. “Exciting times,” he adds before staring into the camera wistfully. It’s only the beginning.

Check out Wren and Levy bonding after the jump.

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It Appears We Were Right About a G2, Ogilvy Union

This looks like a pretty legit report from the London newswires and it confirms what we first speculated on last week, that G2 was separating from Grey and aligning under Ogilvy. Well, this just adds to what’s already been a busy week for Martin Sorrell and the gang at WPP. Here’s what appears to be the official announce, verbatim:

“LONDON—WPP (NASDAQ:WPPGY), the world’s leading communications services group, announces that its wholly owned subsidiaries, OgilvyAction and G2, will come together in a joint venture to form a company within the Group that becomes the largest and most geographically complete activation agency in the world.

The new entity marries the skill sets of two successful global businesses, which will operate in more than 100 offices in 56 countries. They bring complementary expertise in consumer activation, trade marketing, shopper marketing, one-to-one marketing and digital activation.

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WPP Takes Over john st.

You may have heard the word (shout out to the Toronto Egotist for the tip), but yes, Toronto-based john st. is the latest shop to be swooped up by Sir Martin Sorrell & Co. at WPP. As of now, though, neither john st,’s name/structure nor location will be affected by the WPP purchase, which comes just over two years after the holding company added fellow notable Canadian agency TAXI to its roster.

In a statement, Arthur Flesichmann, president/CEO of 12-year-old john st.,  known for quirkier efforts like the Granny-starring National Sweater day work and “Buyral, says the agency “…will continue to do the kind of work that has made our clients and us unignorable for the past 12 years. But now we will be able to offer services in areas that clients are asking for such as media, direct and public relations.”

Financial details of the WPP/john st. deal have not been disclosed. Current staff count at the newly acquired agency is approximately 100 and notable current clients include Mitsubishi, ING Direct, TJX (Winners, Marshalls), Kobo and AstraZeneca. Marketing fills in more of the blanks on this news here.

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