Martin Sorrell

Sir Martin Sorrell
Sorrell during the WEF 2010
Born Martin Stuart Sorrell
(1945-02-14) 14 February 1945
London, England
Nationality British
Education Haberdashers' Aske's Boys' School
Alma mater Christ's College, Cambridge
Harvard University
Occupation Businessman
Known for Saatchi & Saatchi
WPP Group
Salary GBP £70 million (total compensation, 2017)[1]
Net worth Increase £495 million (May 2017)[2]
Spouse(s)
Sandra Finestone (m. 1970–2005)

Cristiana Falcone-Sorrell (m. 2008)
Children 4, including Jonathan Sorrell

Sir Martin Stuart Sorrell (born 14 February 1945) is a British businessman and the founder of WPP plc, the world's largest advertising and PR group, both by revenue and the number of staff. Upon his retirement in April 2018, Sorrell was the longest-serving chief executive of a FTSE 100 company.[3] He is also known for being consistently one of the UK's highest-paid corporate executives.[4] Sorrell has served on boards and advisory bodies of a number of high-profile public, academic and business organisations, including several leading business schools, both in the UK and internationally.

Early life and education

Sir Martin Stuart Sorrell was born in London on 14 February 1945 to a Jewish family: his father was an electronics retailer,[5][6] whose ancestors came from Russia, Poland and Romania.[7] He was educated at the independent Haberdashers' Aske's Boys' School, then studied Economics at Christ's College, Cambridge[8], and gained an MBA from Harvard University in 1968.[5][9][10]

Career

Early career

Sorrell joined Glendinning Associates, then James Gulliver and then worked for the sports agent Mark McCormack.[11] He joined Saatchi & Saatchi in 1975, and was group finance director from 1977 until 1984. Often referred to as "the third brother",[12] he designed and carried out many of Saatchi's agency acquisitions. Sorrell undertook this by refining the practice of the ‘earn-out’.

WPP

In 1985, Sorrell privately invested in Wire and Plastic Products, a British wire shopping basket manufacturer, and joined it full-time as Chief Executive in 1986.[3] He began to acquire "below-the-line" advertising-related companies, purchasing 18 in three years, including in 1987 when he stunned the agency world with a $566 million hostile takeover of J. Walter Thompson. Sorrell followed this in 1989 with another dramatic hostile $825 million buy of Ogilvy and Mather. Since 2000, WPP has also acquired two more integrated, global agency networks, Young & Rubicam and Grey.[13]

In 2014, Sorrell received total compensation from WPP of GBP £40 million, his largest annual total since £53 million in 2004.[1]

In August 2017, Sorrel said that "digital disruption" was forcing companies to change their business models and reach customers in different ways when shares in WPP fell by more than 10% at the start of trading after the advertising giant reported slowing sales and warned about future growth.[14]

In September 2017, Sorrell criticised the marketing industry, arguing it is "too competitive" and that agencies value winning contracts, whether they are profitable or not, over content since making the headlines in a trade magazine is more important.[15]

In 2017, Sorrell became the longest-serving CEO of any company featured in the U.K.'s benchmark FTSE 100 Index - having stewarded WPP since 1985.

In April 2018, Sorrell retired from WPP after 33 years, following allegations of personal misconduct and misuse of company assets. Sorrell has denied the allegations. Roberto Quarta, chairman of WPP, become Executive Chairman until the appointment of a new Chief Executive Officer.[16]

Other interests

Martin Sorrell in 2008

In 1997, he was appointed an Ambassador for British Business by the Foreign and Commonwealth Office and subsequently appointed to the Office's Panel 2000 aimed at rebranding Britain abroad. In 1999 he was appointed by the Secretary of State for Education and Employment to serve on the Council for Excellence in Management and Leadership.

He is a Governor of London Business School, and a member of the Advisory Boards of both the Judge Business School in Cambridge, UK and IESE in Spain. He is also Chairman of the Global Advisory Board of the Centre for International Business and Management (CIBAM), at the University of Cambridge, UK.[17] In 1998, he was appointed to the Board of Directors of Associates of Harvard Business School and to the Board of the Indian School of Business.[13]

On behalf of New York Mayor Michael Bloomberg, he chaired Media.NYC.2020,[18] which reviewed the future of the global media industry, the implications for NYC, and suggested actionable next steps for the NYC government.

Sorrell was a "Remainer" in the run up to the Brexit referendum,[19] and has expressed support for a second referendum on EU membership once the Brexit terms have been finalized, stating that when "we finally see what the terms are of Brexit, then the electorate can be asked to reconfirm in whichever way possible, referendum or general election platform, that they still want to go ahead.”[20] He also justified new investments in France, Germany, Italy and Spain as a means to protect WPP against immigration caps following Brexit, emphasising the importance of freedom of movement of WPP's work force, 17 percent are from EU countries other than the UK.[21]

Criticism

In 2005 Sorrell sold £9m of shares in WPP at the end of a restricted stock holding period. He also agreed to change a contract with the company which had been much criticised by institutional shareholders in WPP as being unfairly written in Sorrell's favour. Under the previous agreement if Sorrell had been terminated, it would have led to a very large payout; the new agreement provided him instead with no termination payment.

In 2005 his pay was £2.42 million including cash and bonuses.[22] Further he exercised £52 million in share options, was entitled to a further £5.8million in stock, and deferred further options on another 2.65 million shares valued at £15 million until 2008.[23] In 2011 Sorrell's pay package increased by 70% to £4.5 million after WPP's pre-tax profits rose 28%.[24] In October 2011 Sorrell went on the BBC to defend large increases in his and other CEO pay packages[25] at a time when real average wages in the Western world were declining.[26][27]

Shareholders have criticised aspects of corporate governance at WPP. This came to the fore again in 2006 with the advent of two court cases revolving around alleged corruption in an Italian subsidiary and contract disputes with the US launch of the OK! magazine.

In June 2008 WPP drew strong criticism for the involvement of an agency, 'Imago', in which WPP's Y&R subsidiary held a minority interest, with the ZANU-PF presidential campaign in Zimbabwe. A report by the Financial Times[28] found out that Imago was employed by Robert Mugabe's campaign for reelection to the presidency of Zimbabwe. WPP subsequently divested Y&R's minority interests in Zimbabwe.[29]

Following criticism about his pay from investors, Sorrell agreed to a pay cut that would have reduced his salary from £46 million in 2016 to £13 million by 2021.[30]

Recognition

He was knighted in the 2000 New Year Honours.[31] On 27 September 2007, Sorrell was awarded the Harvard Business School’s highest honour, the Alumni Achievement Award, by Dean Jay O. Light. The award was also given to: Ayala Corp. chair Jaime Augusto Zobel de Ayala, A. Malachi Mixon of Invacare, Donna Dubinsky and Hansjörg Wyss of Synthes.[32] In 2015 he was a Trustee of the British Museum.[33]

Personal life

Sorrell is married to Cristiana Falcone, director of media and entertainment industries at the World Economic Forum.[34][35]

Sorrell was previously married to the American-born[34] Sandra Finestone, with whom he has three sons, but the marriage broke down in 2003, as a result of Sorrell's "obsession with work".[34] In October 2005, he cashed in £12 million of WPP shares to fund the divorce,[36] in which Ms. Finestone, represented by Nicholas Mostyn QC, was awarded a £30 million settlement including: a £3.25m four-storey Georgian townhouse; two Harrods underground car parking spaces worth around £90,000 each; £23.5m in cash; £2m in bank deposits; and other assets including stocks and shares.[34][36][37] Despite the divorce settlement, Sorrell still had 13 million shares, an estimated £80m stake in WPP, at the time of the divorce, which represented around 1% of the company, plus his 2005 pay settlement award.[36]

The divorce settlement was, at the time, the largest divorce settlement in British legal history,[34] and was unusual in being a 60/40 split in favour of Sorrell — a break from the previously established policy of a 50/50 split even in big-money divorces since an influential ruling by Appeal Court Justice Mathew Thorpe in the 2002 divorce between Harry and Shan Lambert established that the contribution to the household of non-working wives should be considered equal to their husbands'.[37] In the Lambert judgement, Lord Justice Thorpe stated that "special contribution remains a legitimate possibility but only in exceptional circumstances"; Sorrell was the first husband deemed to have met that criterion in a subsequent divorce settlement, with Mr Justice Bennett citing Sorrell's "special contribution" to the family's wealth in justification.[37]

Sorrell's three sons, Mark, Jonathan and Robert all went to Cambridge University and then Goldman Sachs, although two have since left.[38] Jonathan Sorrell is president of the hedge fund Man Group.[39]

References

  1. 1 2 Farrell, Sean (17 March 2015). "WPP's Martin Sorrell gets £36m payout for 2014 under contentious share plan". The Guardian. Retrieved 22 April 2015.
  2. ↑ "The Rich List". The Sunday Times (page 78). 7 May 2017.
  3. 1 2 "Who is Martin Sorrell, the UK's longest serving chief executive of a FTSE 100 company?". The Independent. 2018-04-15. Retrieved 2018-05-09.
  4. ↑ "WPP to cut Sir Martin Sorrell's pay in bid to calm investors". The Guardian. 28 April 2017. Retrieved 11 June 2018.
  5. 1 2 William D. Rubinstein; Michael Jolles; Hilary L. Rubinstein (22 February 2011). The Palgrave Dictionary of Anglo-Jewish History. Palgrave Macmillan. pp. 939–940. ISBN 978-1-4039-3910-4. Retrieved 20 April 2016.
  6. ↑ "Top Jewish earners". Somethingjewish.co.uk. Retrieved 19 April 2011.
  7. ↑ "The other side of Sir Martin Sorrell". Campaign India. 10 November 2009. Retrieved 26 April 2010.
  8. ↑ "Martin Sorrell". Christ's College Cambridge. Retrieved 14 April 2018.
  9. ↑ Benjamin, Todd (16 December 2005). "Martin Sorrell: Persistence and determination". CNN International. Retrieved 26 October 2010.
  10. ↑ "Sir Martin S. Sorrell, MBA 1968". Harvard Business School. Retrieved 14 April 2018.
  11. ↑ Reece, Damian (26 March 2005). "The Interview: Celebrating 60 and two decades of worldwide growth – Business Analysis & Features". The Independent. UK. Archived from the original on 21 January 2008. Retrieved 19 April 2011.
  12. ↑ "Ad Age Advertising Century: People: Martin Sorrell". Advertising Age. Retrieved 19 April 2011.
  13. 1 2 "Sir Martin Sorrell Biography from speakerideas.com". Retrieved 1 October 2012.
  14. ↑ "WPP cuts growth forecast as second quarter sales slow - BBC News". BBC. Retrieved 23 August 2017.
  15. ↑ "WPP's Sorrell: Agencies are obsessed with winning business just for the trade press headlines - Mumbrella". Mumbrella. 26 September 2017. Retrieved 24 October 2017.
  16. ↑ "WPP CEO Sorrell Quits After Three Decades at Top of Ad World". Bloomberg.com. 14 April 2018. Retrieved 14 April 2018.
  17. ↑ "Archived copy". Archived from the original on 28 June 2008. Retrieved 9 July 2008.
  18. ↑ Strauss, Steven; Kristy Sundjaja; Peter Robinson; Andrew Chen (2012). Media.NYC.2020 (PDF). NYCEDC.
  19. ↑ CNBC (17 January 2017). "CNBC Transcript: Interview with Sir Martin Sorrell". CNBC. Retrieved 24 October 2017.
  20. ↑ Turvill, William (24 August 2016). "WPP chief and Remain campaigner Martin Sorrell wants second EU vote". Retrieved 24 October 2017.
  21. ↑ "Sir Martin Sorrell: WPP is investing in Europe to protect against Brexit immigration curbs". Business Insider France (in French). Retrieved 24 October 2017.
  22. ↑ Paul Murphy (4 June 2005). "Martin Sorrell piles up £50m of WPP shares in nine months | Business". The Guardian. UK. Retrieved 19 April 2011.
  23. ↑ Snoddy, Raymond (2 January 2006). "Sir Martin Sorrell: Full of Eastern promise". The Independent. UK. Archived from the original on 6 September 2008. Retrieved 19 April 2011.
  24. ↑ Sweney, Mark (28 April 2011). "Sir Martin Sorrell's pay rises to £4.5m". The Guardian. London. Retrieved 28 October 2011.
  25. ↑ Martin Sorrell (28 October 2011). Sir Martin Sorrell defends top pay. British Broadcasting Corporation.
  26. ↑ "Week 42, 2011: UK Real Average Wage". Economic Research Council. 21 October 2011. Archived from the original on 25 April 2012. Retrieved 28 October 2011.
  27. ↑ Mandel, Michael (3 November 2008). "Real Wages Continue to Fall". Business Week. Retrieved 28 October 2011.
  28. ↑ "/ UK – Campaign link forces WPP sale". Financial Times. 20 June 2008. Retrieved 19 April 2011.
  29. ↑ "WPP to sell Mugabe-associated Zimbabwe agency". Retrieved 2 May 2017.
  30. ↑ Sweney, Mark (29 April 2017). "Martin Sorrell and the sunset of the superstar chief executives". The Observer. ISSN 0029-7712. Retrieved 24 October 2017.
  31. ↑ "13. Sir Martin Sorrell | Media". The Guardian. Retrieved 22 April 2016.
  32. ↑ Abs-Cbn Interactive, JAZA receives Harvard alumni award
  33. ↑ The British Museum Trustees, British Museum, accessed 31 March 2015
  34. 1 2 3 4 5 Duke, Simon (24 January 2009). "City tycoon Martin Sorrell 'used £45 million in shares to pay for divorce'". Daily Mail. Retrieved 21 December 2015.
  35. ↑ Gwyther, Matthew (3 December 2012). "Sir Martin Sorrell: 'Losing something still gets to me'". Management Today.
  36. 1 2 3 "Divorce forces Sorrell to cash in £12m of WPP shares". Brand Republic. 21 December 2005. Archived from the original on 9 July 2008.
  37. 1 2 3 Sherwood, Bob (25 October 2005). "Sorrell breaks trend in divorce settlement". Financial Times. Retrieved 21 December 2015.
  38. ↑ "WPP's Sir Martin Sorrell is Britain's Most Admired Leader 2012". Managementtoday.co.uk. 3 December 2012. Retrieved 22 April 2016.
  39. ↑ "Jonathan Sorrell - Man Group". www.man.com.
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