WPP, the world’s largest advertising group, is investigating an allegation of “personal misconduct” against its CEO Sir Martin Sorrell.
In a statement issued on Tuesday, WPP said it had appointed independent counsel to conduct an “ongoing investigation”, adding that the allegations do not involve amounts which are material to WPP.
However, the Wall Street Journal, citing unnamed sources, said that WPP’s board was examining whether Sir Martin misused company assets.
Sorrell issued his own statement on Wednesday “unreservedly” rejecting any allegation of financial impropriety.
“Reports in the media have stated that WPP is investigating an allegation of financial impropriety by me, specifically as to the use of company funds,” he said.
“This allegation is being investigated by a law firm. I reject the allegation unreservedly but recognise that the company has to investigate it. I understand that this process will be completed shortly.
“As a significant share owner, my commitment to the company, which I founded over thirty years ago, remains absolute – to our people, our clients, our shareholders and all of our many stakeholders.”
Sorrell is one of the best paid executives in the UK, earning £70m in 2015-16. However, last month WPP announced its worst set of annual results since the 2009 recession, with revenues falling by 0.3% and net sales dropping 0.9%.
The news capped a rough year for the business, which cut its sales outlook three times after major consumer goods clients such as Unilever cut spending and as Google, Facebook and consultants Accenture encroached on its territory.
Despite investors expecting WPP to echo peers such as Omnicom and Publicis in sounding more upbeat about 2018, the UK company surprised the market by stating that it expected no sales growth at all in 2018.
Following Tuesday’s news, WPP’s share price was down 2.28% on Wednesday morning.
