Martin Sorrell
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Sir Martin Sorrell (born 14 February 1945 in London) is a British businessman, currently the chief executive officer of WPP Group and has served in that role since he started the company in 1986.
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[edit] Biography
Born in London, Sorrell was educated at Haberdashers' Aske's Boys' School then Christ's College, Cambridge, and has an MBA from Harvard University.
He joined James Gulliver and then worked for sports agent Mark McCormack[1]. He joined Saatchi & Saatchi in 1975, and was group finance director from 1977 until 1984. Often referred to as "the third brother"[2], he designed and carried out Saatchi's then legendary agency acquisitions. Sorrell undertook this by refining the practice of the ‘earn-out’.
[edit] WPP
In 1985, Sorrell privately invested in Wire Plastic Products, a British wire shopping cart manufacturer, and joined it full-time as Chief Executive in 1986. 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.
WPP is regarded as the driving force for the period of consolidation which has been going on within the communications industry for the last ten - fifteen years. His WPP group has amassed the largest media buying group in the world, Group M. Together with the giant creative agency networks, JWT and Ogilvy and Mather, WPP is one of the four major players in the global advertising market.
WPP’s stock price soared and although the company then went through difficult times, during which it was on the verge of collapse, Sorrell’s determination and business acumen brought it around[3].
WPP has become one of the world's leading communications services and advertising companies valued by the UK stockmarket at £7.5 billion. With billings of £15 billion and revenues of £3.5 billion, WPP's 70 operating companies provide national, multi-national and global clients with advertising, media investment management, information and consultancy, public relations and public affairs, branding and identity, healthcare and specialist communications services. WPP employs 65,000 people in 950 offices in 92 countries. He owns a substantial stake in the company through a series of pay awards and his own purchases of shares. Until recently he had never before sold shares in the company; his shares are worth around £95 million.
Sorrell himself is widely respected throughout the advertising industry, with his words being scrutinised and quoted by many within the marketing sector. Many industry observers credit him with the fact that the UK still has an independent, vibrant communications industry. His famed remark that the advertising recession in the early part of this decade was "bath shaped" was one of the most repeated quotes in the 2003 - 2004 period.
[edit] Other interests
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 and this year was appointed a member of the Committee for the Special Olympics, serving on the Board.
He is Deputy Chairman and Governor of London Business School and a member of the Advisory Boards of both the Judge Institute for Management Studies in Cambridge, UK and IESE in Spain. He is also a member of the Dean's Advisory Council for Boston University. 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[4].
He was Knighted in the Millennium New Year Honours list.
[edit] Criticism
In 2005 Sorrell sold £9m of shares in WPP to pay a tax bill, due to an Inland Revenue clampdown on executive tax avoidance arrangements. 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 provides him instead with one year's pay.
In 2005 his pay was paid £2.42 million including cash and bonuses[5]. Further he exercised £52 million in share options, is entitled to a further £5.8million in stock, and deferred further options on another 2.65million shares valued at £15 million until 2008[6].
Shareholders have criticised many 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.
[edit] Personal life
Sorrell married, to Sandra, in 1970, but the marriage broke down in 2003.
In October 2005, Sorrell cashed in £12 million of shares in WPP to satisfy paying his £30 million divorce settlement. WPP said in a statement: "The shares were acquired and retained by the WPP UK ESOP to be used to satisfy future share awards to employees of the WPP Group." The split after 33 years saw his ex-wife awarded a £3.25m Georgian townhouse, two Harrods underground car parking spaces worth £200,000, £2m in bank deposits, £23.4m in cash, plus thousands in stocks and shares[7].
Lady Sorrell stated as reasons behind the collapse in their marriage his infidelity and globetrotting, and the long hours spent building WPP, leading to Sorrell's workaholic lifestyle in which she said she felt "marginalised", that Sorrell had "dehumanised" and "discarded" her from his affections and took a mistress[8]. Lady Sorrell's barrister, Nicholas Mostyn QC, has represented women in several landmark divorce cases including that of Karen Parlour, who in 2004 won a 37 per cent share of four years of her footballer husband Ray's income, estimated at £1.2 million[9].
Despite the divorce settlement, Sorrell still had 13 million shares an estimated £80m valued stake in WPP at the time of the divorce, which represents around 1% of the company, plus his 2005 pay settlement award.
[edit] Harvard Alumni Achievement Award
On September 27, 2007, Martin Sorrel was conferred the Harvard Business School’s highest honor, the Alumni Achievement Award, by Dean Jay Light. The award was also given to: Ayala Corp. chair Jaime Augusto Zobel de Ayala, A. Malachi Mixon of Invacare, Donna Dubinsky and Hansjorg Wyss of Synthes. [10]
[edit] References
- ^ The Interview: Celebrating 60 and two decades of worldwide growth - Business Analysis & Features, Business - Independent.co.uk
- ^ Ad Age Advertising Century: People: Martin Sorrell
- ^ http://www.legalweek.net/ViewItem.asp?id=26613
- ^ IDM: Direct and interactive marketing skills and knowledge
- ^ Martin Sorrell piles up £50m of WPP shares in nine months | Business | The Guardian
- ^ Sir Martin Sorrell: Full of Eastern promise - Media, News - Independent.co.uk
- ^ £30m payout for ex-wife eases misery of divorce - Times Online
- ^ Divorce forces Sorrell to cash in £12m of WPP shares - Brand Republic Login - Brand Republic
- ^ Advertising magnate Sorrell to pay £30m in record divorce deal - Crime, UK - Independent.co.uk
- ^ Abs-Cbn Interactive, JAZA receives Harvard alumni award
