WPP has confirmed that its board is investigating its CEO, Martin Sorrell, in response to undisclosed alleged "personal misconduct."
"The Board of WPP has appointed independent counsel to conduct an investigation in response to an allegation of personal misconduct against Sir Martin Sorrell, Chief Executive Officer of WPP," the world's largest agency holding company said in a statement. "The investigation is ongoing. The allegations do not involve amounts which are material to WPP."
Sorrell responded to the allegations in an emailed statement through a communications consultancy Projects Associates, which said it acts for the executive "in his personal capacity."
"Reports in the media have stated that WPP is investigating an allegation of financial impropriety by me, specifically as to the use of company funds," the statement reads. "This allegation is being investigated by a law firm. I reject the allegation unreservedly but recognize that the company has to investigate it. I understand that this process will be completed shortly."
The statement continues: "Obviously, I shall play no part in the management of the investigation under way. As a significant share owner, my commitment to the company, which I founded over thirty years ago, remains absolute - to our people, our clients, our shareholders and all of our many stakeholders. I do not intend to make any further statement at this time."
Sorrell's statement came after a report from the Wall Street Journal Tuesday afternoon said WPP's board was looking into whether Sorrell had misused company assets, without elaborating beyond that.
WPP experienced its worst stock slump since 1999 in March, after the company predicted long-term earnings growth as little as 5 percent and twice that at best, compared with a previous prediction of as much as 15 percent.
Later in March, WPP said in a filing Sorrell would face a substantial pay cut, receiving a long-term bonus of 10 million pounds, compared with 41.6 million pounds a year earlier.