WPP defended its handling of former CEO Martin Sorrell's "abrupt departure at a tense shareholder meeting where almost 30% of investors staged a pay revolt," according to Davies, Monaghan & Wearden of the London GUARDIAN. WPP Chair Roberto Quarta said that the advertising group received "very clear" legal advice that Sorrell "was entitled to retain" £20M ($26.7M) of future share awards "despite allegations of personal misconduct." But "disgruntled shareholders," frustrated by the company's "repeated failure to explain why Sorrell had suddenly left," used their annual vote to make clear their "dissatisfaction." Including abstentions, 29.5% "opposed WPP's pay report" and 16.6% voted against Quarta's re-election as chair. Quarta said that Sorrell would only have lost the share entitlement if "gross misconduct" could be established, "and the board was advised by lawyers that it could not" (GUARDIAN, 6/13). The BBC's Russell Hotten reported the shareholder votes were announced at the company's annual meeting, where Quarta "defended the advertising giant's role" in Sorrell's exit. Quarta, who faced criticism that he did not "adequately prepare" for Sorrell's departure, told the annual shareholders' meeting that the "board acted appropriately throughout." One shareholder asked Quarta why, in his speech, he did not thank Sorrell for his service to the company. Quarta "did not reply, but moved on to another question" (BBC, 6/13).
REVENUE DROP: THE DRUM's John McCarthy reported WPP announced its global revenue for the first four months of the year was down 3.4% year-on-year to £4.82B ($6.43B). Constant currency revenue was up 2.7% and "like-for-like revenue was up 1.4%." Net sales (now reported as revenue less pass-through costs) were down 5% to £3.97B ($5.3B) for the year. Growth was reported in western continental Europe, Latin America and Central and Eastern Europe as well as Asia Pacific. North America, meanwhile, was noted as a "difficult" market, especially in the "advertising and data investment management businesses" (THE DRUM, 6/13).
UNCERTAIN FUTURE: In London, Alex Ralph reported the "acrimonious departure" of Sorrell "raised uncertainty over the future of a substantial shareholding in the company held by his family’s charitable trust." The JMCMRJ Sorrell Foundation owns almost 5.5 million shares in WPP worth £68M ($90.7M), representing 0.4% of the FTSE 100 company’s share capital and "making it a top 30 shareholder, filings show." The charity, registered at the family’s Belgravia home, "uses dividend income to invest in charitable causes," focusing on "education, poverty alleviation, health standard improvement and support of inter-religious dialogue." It made grants of £1.4M ($1.9M) last year (LONDON TIMES, 6/13).
