At WPP's annual meeting in June 2017, WPP Chairman Roberto Quarta was called upon to defend CEO Martin Sorrell's then $62.2 million pay package. "Sir Martin Sorrell has built this business from nothing," Quarta said. "He is totally committed to this business. I don't think pay is what keeps Martin here at WPP. He's been here for 30 years and hopefully we will keep him here for many more years."
Less than a year later, Sorrell has stepped down from the world's largest agency company amid an investigation into misconduct and the company's worst performance in a decade. But he leaves an indelible legacy in the ad business.
Below, a selective look at the history of the empire he built from shopping carts.
Sorrell invests in U.K. firm Wire & Plastic Products with the intention of building a below-the-line ad business. He becomes CEO a year later.
WPP (1986 revenue: $38 million) turns the formerly genteel industry on its head with the first-ever hostile takeover, scooping up J. Walter Thompson (1986 revenue: $641 million). JWT rebuffs Sorrell's initial offer of $435 million and sues to stop the takeover. Sorrell sweetens the offer to $566 million and wins over JWT despite three big JWT clients balking -- Ford Motor Co., Goodyear Tire & Rubber and Eastman Kodak. Goodyear leaves; Ford pulled some $90 million in billings at the time but today remains a key WPP client.
Ogilvy & Mather is swooped up by WPP in yet another unsolicited takeover for $864 million, earning Sorrell the nickname "the ogre of Madison Avenue." A harsher take came from O&M founder David Ogilvy, who famously termed Sorrell "an odious little shit." The two later came to a detente, wrote former Ad Age Editor Fred Danzig: "Mr. Sorrell, undeterred, asked Mr. Ogilvy to dinner. Ever the gentleman, and realizing that he had spoken harshly about someone he had never met, Mr. Ogilvy sat down with Mr. Sorrell and came away with a new friend."
The hefty price tag for O&M leads WPP to borrow heavily just as the economy and agency business sink into recession. In 1990, a profit warning causes shares to plummet 66 percent in just four days. The company's stock plunges 96 percent from a 1989 peak to its 1992 low ($2.50). The outside auditor in 1991 casts doubt about WPP's ability to remain a going concern. WPP in 1992 restructures its $1 billion in debt.
December 31, 1999
Martin Sorrell is knighted. In a rather odd interview with valleygirl.tv in 2012, he says that after the Queen put the sword on his shoulders, "She said to me, 'Are you still involved in the business?' " Somewhat taken aback, Mr. Sorrell answered, "Well, ma'am, I am -- unless you know something that I don't."
In a $4.7 billion deal, WPP buys Young & Rubicam. Even before Sorrell struck the deal, WPP's stock tumbles over speculation he will overpay. Y&R at the time was hardly the industry's hottest agency, but the deal includes other valued properties such as Wunderman, now one of the biggest digital plays in the agency business. The press release announcing the buy says that "with Y&R, WPP Group will become the industry leader." Even so, Omnicom Group at the time remained billions ahead in market cap.
WPP acquires Cordiant Communications Group. The deal includes Bates, Fitch, HealthWorld and 141 Worldwide. The holding company creates GroupM to oversee its media agencies.
Madison Avenue's last big independent, Grey Global Group, falls to WPP for $1.8 billion in cash and stock. Grey Chairman-CEO Ed Meyer sells his WPP stock the day after the deal was completed. Thanks to Grey's Procter & Gamble business, P&G becomes a top 10 WPP client. The combination creates a $9.4 billion holding company in WPP, but it still lags still behind Omnicom's $9.7 billion in revenue.
WPP spends $649 million to buy 24/7 Real Media, a digital outfit with a storied past. Merrill Lynch took 24/7 public in 1998 at $70 a share; shares soared to $348. Merrill analyst Henry Blodget recommended the stock in 2000 even as he privately referred to it in internal email as a "piece of shit." After the net bubble burst, shares plunged in 2001 to 45 cents. 24/7 lost money in 12 of 13 years through 2006, but WPP sees opportunities in adding 24/7 to its digital arsenal. WPP's broker on this deal? Merrill Lynch.
WPP surpasses Omnicom as the largest agency company. WPP leapfrogs Omnicom with help from the revenue contribution of Taylor Nelson Sofres, a U.K.-based market-research firm that WPP buys in October 2008. Taylor Nelson Sofres becomes part of WPP's Kantar market research business.
WPP purchases AKQA Holdings, a U.S.-based digital network, in a deal with an enterprise value of $540 million. At WPP's annual meeting, 60 percent of shareholders protest Sorrell's salary.
In July, Publicis Groupe and Omnicom propose a merger that would topple WPP from its hard-earned perch. "It's messy and it gives us a lot of opportunity," says Sorrell about the proposed marriage, saying it had no benefits to employees or his rivals clients. The merger plan dissolves in May 2014.
Shareholder opposition to Sorrell's salary has become a constant at WPP's annual meetings, and a complaint is lodged in June over his $62.2 million pay, which had already been trimmed from $91.1 million the prior year. WPP's 2017 revenue: $19.7 billion.
On March 1, WPP suffers the worst stock slump since 1999 after Sorrell predicts a year of no growth, blaming packaged goods clients. In a statement April 3, the board says it 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 investigation is ongoing. The allegations do not involve amounts which are material to WPP." Sorrell says in his own statement that he rejects the allegations "unreservedly." Eleven days later, Sorrell steps down as CEO, ending a 33-year career at the world's largest agency company.