'Sorrell? He's the reason WPP's in the mess it is today'

eople at WPP are excited by the future, they’re not burdened by the past," Mark Read told shareholders at his first annual general meeting as chief executive today, as he talked about turning around the "amazing" company – without mentioning his predecessor and former mentor, Sir Martin Sorrell. 

However, Read, who was keeping an eye on emails and social media when he wasn’t talking, will have known that Sorrell was still trying to be a burden, more than a year after his acrimonious exit. 

Sorrell has started up a rival, S4 Capital, and he timed an announcement about several new hires, including Scott Spirit, a former senior WPP executive, for noon – exactly the moment that the WPP AGM began. 

But few, if any, of the 150 small and largely elderly shareholders at the Purcell Room on London’s South Bank would have known or cared about Sorrell’s latest attempt to goad his old company.

'Strong WPP'

Read gave an upbeat presentation that focused heavily on creative work, investing in talent and simplifying WPP for clients. There was little focus on individual agencies, although he showed one slide with 20 key shops.

"I’m a great believer in these agency brands," he stressed. "We need to have strong agency brands, but we also need to have a strong WPP. We need to have both. It’s not a question of either/or."

Read has an understated manner but showed hints of passion. In a striking moment, before inviting chief creative officer John O’Keeffe on stage to showcase some recent campaigns, Read said "it makes me proud to be chief executive to see the work that we produce" for brands such as Ford and Google.

The new WPP boss set out his strategy for "radical evolution" last year and has already carried out several major, internal agency mergers and widened the company’s focus to include commerce, experiences and technology as well as communications as revenues keep declining – for the third year in a row.

Read keeps pushing the need for change and to make WPP what he calls a "modern" and "contemporary" company that acts collaboratively, rather than a group of different businesses.

"When we look back in three years’ time on WPP, we’ll see a very different company than that we saw six or 12 months ago," he promised the AGM.

No mention of Sorrell

There were no Sorrell-style pronouncements from Read or chairman Roberto Quarta about global GDP or Brexit.

Indeed, no-one from WPP mentioned Sorrell until a shareholder asked a question about whether the former CEO will still get long-term bonuses (answer: he is entitled to awards in 2020, 2021 and 2022, but they depend on the company’s performance, which has been lacklustre).

However, the need to deal with the Sorrell legacy hung in the air. Paul Richardson, the long-serving group finance director, who might be more loose-lipped since he is leaving, talked about how the company’s previous profit margin of around 17% was "unsustainable" and "not sensible".

Several shareholders also mentioned WPP’s need to cut debt, which stood at £4.6bn at the end of the first quarter despite asset sales, and Richardson agreed.

"At the moment, we have not been acquiring businesses," he pointed out, and that is unlikely to change "until we bring the debt under control".

And, with that, the AGM was over in about 63 minutes – less than half a Sorrell marathon.

Read was elected by 99.9% of shareholders and just 6% failed to back the compensation report and Quarta's re-election.

Drama-free

It had been a drama-free event compared with the Sorrell days, when there was almost always a bust-up over his pay, or last year when he had just been ousted.

Only two journalists from Bloomberg and Campaign attended, compared with about 20 last year.  

Shareholders seemed broadly content, even though the share price has halved from £19 in 2017, when revenues first went into reverse under Sorrell.

WPP’s stock has shown signs of recovery in recent months, climbing from a low of £8 in February to pass £10 this week – the highest level since October 2018. 

Denis Doble, a former diplomat and small shareholder from south London, said he was "reasonably happy" as WPP has held the dividend, rather than cutting it. 

He missed Sorrell a bit because he was "a showman" and "amusing", but felt it was time for a new leader. 

Liz Davies, a retired civil servant who grew up in Wales, was more scathing about the former CEO, despite being an early investor in WPP and tripling her money after selling most of her shares.

Asked if she would invest in Sorrell’s "new era" marketing services venture S4 Capital, she laughed at the suggestion and pointed out that the 74-year-old was to blame for the recent problems at WPP.

"He was a man of his time," Davies told Campaign. "What does he know about the future? That’s why the company’s in the mess it is today."