Advertising tycoon Sir Martin Sorrell is in line for £19million of bonuses despite quitting the company he founded after a probe into alleged personal misconduct.
The multi-millionaire resigned as chief executive of WPP, the world’s largest ad firm, after being investigated over a claim he misused funds, and his departure has been seen as speeding up a potential break-up in the company.
But he is still set to receive the share-based bonuses over the next five years and remains one of WPP’s biggest shareholders, with a stake worth around £225million.
The multi-millionaire resigned as chief executive of WPP, the world’s largest ad firm, after being investigated over a claim he misused funds
The firm had appointed lawyers to investigate a whistleblower’s allegation against Sir Martin, who founded it 33 years ago and turned it into a £15billion global empire.
At the weekend it said the inquiry had concluded and ‘the allegation did not involve amounts that are material’. The outcome will now not be made public.
Sir Martin’s resignation and a slump in sales price over the last 12 months could cause the company’s board and investors to think about breaking up WPP.
Analyst Alex DeGroote told The Guardian: ‘The question to Quarta [WPP’s chairman] is how do we create shareholder value from this position. I think most analysts and investors when adding up the sum of the parts of WPP would answer that it is to break it up.’
WPP said the twice-married 73-year-old will be treated as having retired from the company, which means he will be eligible to receive bonus payouts related to 1.6million shares and receive his full pension.
Based on the current price, the shares are worth around £19million. It is not known how much Sir Martin’s pension pot has amassed, but he raked in £2.8million in contributions between 2011 and 2016.
The firm had appointed lawyers to investigate a whistleblower’s allegation against Sir Martin (pictured), who founded it 33 years ago and turned it into a £15billion global empire
On Saturday Sir Martin, thought to be worth around £500million, released an emotional statement to staff saying that over the last 33 years he had ‘spent every single day thinking about the future of WPP’.
The Cambridge and Harvard-educated father-of-four said: ‘As I look ahead, I see that the current disruption we are experiencing is simply putting too much unnecessary pressure on the business…
‘That is why I have decided that in your interest, in the interest of our clients, in the interest of all share owners, both big and small, and in the interest of all our other stakeholders, it’s best for me to step aside.’
Sir Martin, a leading opponent of Brexit, denied any wrongdoing after the allegations surfaced earlier this month. At the time a WPP source said they involved financial misconduct and Sir Martin’s behaviour, adding: ‘We are not talking a massive amount of money. The behaviour is the main aspect.’ Last night another source described the amount as ‘peanuts’.
Sir Martin’s pay – about ten times that of the average FTSE 100 boss – has attracted adverse publicity. He was paid more than £200million between 2010 and 2016 alone.