Martin Sorrell

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Sir Martin Sorrell
Martin Sorrell - World Economic Forum Annual Meeting Davos 2010 crop.jpg
Born Martin Stuart Sorrell
(1945-02-14) 14 February 1945 (age 71)
London, England
Nationality British
Education Haberdashers' Aske's Boys' School
Christ's College, Cambridge
Harvard University
Occupation Businessman
Known for Saatchi & Saatchi
WPP Group
Salary GBP £40 million (total compensation, 2014)[1]
Net worth Increase £257 million (May 2014)[2]
Religion Judaism
Spouse(s) Sandra Finestone (m. 1970–2005)
Cristiana Falcone-Sorrell (m. 2008)
Children Jonathan Sorrell

Sir Martin Stuart Sorrell (born 14 February 1945) is a British businessman and the chief executive officer of WPP plc.

Early life and education[edit]

Martin Stuart Sorrell was born in London on 14 February 1945 to a Jewish family with an electronics retailer father,[3][4] whose ancestors came from Russia, Poland and Romania,[5] Sorrell was educated at the independent Haberdashers' Aske's Boys' School then Christ's College, Cambridge, and has an MBA from Harvard University.[3][6]

Career[edit]

Early career[edit]

Sorrell joined Glendinning Associates, then James Gulliver and then worked for the sports agent Mark McCormack.[7] He joined Saatchi & Saatchi in 1975, and was group finance director from 1977 until 1984. Often referred to as "the third brother",[8] he designed and carried out many of Saatchi's agency acquisitions. Sorrell undertook this by refining the practice of the ‘earn-out’.

WPP[edit]

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. 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 Brands and Grey.[9]

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 to fifteen years. His WPP group has amassed the largest media buying group in the world, GroupM. Together with the creative agency networks, JWT, Ogilvy and Mather, Young & Rubicam and Grey, WPP is one of the "Big Four" major players in the global advertising industry.

WPP has become one of the world's leading communications services and advertising companies valued by the UK stockmarket at £5 billion. With billings of £37 billion and revenues of £7.5 billion, WPP's 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 communications, direct, digital, promotion and relationship marketing, and specialist communications services. WPP employs 140,000 people in 2,400 offices in 107 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 £70 million.[citation needed]

Sorrell himself is widely respected throughout the advertising industry, with his words being scrutinised and quoted by many within the marketing sector. He had articulated in 1996 how interactive media—including the Internet—could transform the way we build brands and communicate to consumers in a November 1996 Harvard Business Review article, "The Future of Interactive Marketing".[10] 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.

On 18 November 2008, WPP technically re-incorporated itself as an offshore entity in Jersey (Jersey is considered as a fiscal paradise by the OECD) in order to reduce an annual tax bill of more than £200million.[11]

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

Other interests[edit]

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.[12] 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.[9]

On behalf of NYC Mayor Michael R. Bloomberg, he chaired Media.NYC.2020,[13] which reviewed the future of the global media industry, the implications for NYC, and suggested actionable next steps for the NYC government.

Criticism[edit]

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 provides him instead with no termination payment.

In 2005 his pay was £2.42 million including cash and bonuses.[14] Further he exercised £52 million in share options, is entitled to a further £5.8million in stock, and deferred further options on another 2.65 million shares valued at £15 million until 2008.[15] In 2011 Sorrell's pay package increased by 70% to £4.5 million after WPP's pre-tax profits rose 28%.[16] In October 2011 Sorrell went on the BBC to defend large increases in his and other CEO pay packages[17] at a time when real average wages in the Western world are declining.[18][19]

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[20] 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.

Recognition[edit]

He was knighted in the 2000 New Year Honours.[21] 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 Hansjorg Wyss of Synthes.[22] In 2015 he was a Trustee of the British Museum.[23]

Personal life[edit]

Sorrell is married to Cristiana Falcone, director of media and entertainment industries at the World Economic Forum.[24][25]

Sorrell was previously married to the American-born[24] Sandra Finestone, with whom he has three sons, but the marriage broke down in 2003, as a result of Sir Martin's "obsession with work".[24] In October 2005, he cashed in £12 million of WPP shares to fund the divorce,[26] where represented by Nicholas Mostyn QC she 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.[24][26][27] 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.[26]

The divorce settlement was, at the time, the largest divorce settlement in British legal history,[24] and was unusual in being a 60/40 split in favour of Sir Martin — 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'.[27] In the Lambert judgement, Lord Justice Thorpe stated that "special contribution remains a legitimate possibility but only in exceptional circumstances"; Sir Martin was the first husband deemed to have met that criterion in a subsequent divorce settlement, with Mr Justice Bennett citing Sir Martin's "special contribution" to the family's wealth in justification.[27]

Sorrell's three sons, Mark, Jonathan and Robert all went to Cambridge University and then Goldman Sachs, although two have since left.[28] Jonathan is chief financial officer of the commodities hedge fund Man Group.[29]

References[edit]

  1. ^ a b 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 49). 18 May 2014. 
  3. ^ a b 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. 
  4. ^ "Top Jewish earners". Somethingjewish.co.uk. Retrieved 19 April 2011. 
  5. ^ "The other side of Sir Martin Sorrell". Campaign India. 10 November 2009. Retrieved 26 April 2010. 
  6. ^ Benjamin, Todd (16 December 2005). "Martin Sorrell: Persistence and determination". CNN International. Retrieved 26 October 2010. 
  7. ^ Reece, Damian (26 March 2005). "The Interview: Celebrating 60 and two decades of worldwide growth – Business Analysis & Features, Business – Independent.co.uk". The Independent (UK). Retrieved 19 April 2011. 
  8. ^ "Ad Age Advertising Century: People: Martin Sorrell". Advertising Age. Retrieved 19 April 2011. 
  9. ^ a b "Sir Martin Sorrell Biography from speakerideas.com". Retrieved 1 October 2012. 
  10. ^ (November, 1996)."The Future of Interactive Marketing". Harvard Business Review
  11. ^ Simon Duke (24 January 2009). "City tycoon Martin Sorrell ‘used £45million in shares to pay for divorce'". Daily Mail (UK). Retrieved 19 April 2011. 
  12. ^ "Archived copy". Archived from the original on 28 June 2008. Retrieved 9 July 2008. 
  13. ^ Strauss, Steven; Kristy Sundjaja; Peter Robinson; Andrew Chen (2012). Media.NYC.2020 (PDF). NYCEDC. 
  14. ^ Paul Murphy (4 June 2005). "Martin Sorrell piles up £50m of WPP shares in nine months | Business". The Guardian (UK). Retrieved 19 April 2011. 
  15. ^ Snoddy, Raymond (2 January 2006). "Sir Martin Sorrell: Full of Eastern promise". The Independent (UK). Retrieved 19 April 2011. 
  16. ^ Sweney, Mark (28 April 2011). "Sir Martin Sorrell's pay rises to £4.5m". The Guardian (London). Retrieved 28 October 2011. 
  17. ^ Martin Sorrell (28 October 2011). Sir Martin Sorrell defends top pay. British Broadcasting Corporation. 
  18. ^ "Week 42, 2011: UK Real Average Wage". Economic Research Council. 21 October 2011. Retrieved 28 October 2011. 
  19. ^ Mandel, Michael (3 November 2008). "Real Wages Continue to Fall". Business Week. Retrieved 28 October 2011. 
  20. ^ "/ UK – Campaign link forces WPP sale". Financial Times. 20 June 2008. Retrieved 19 April 2011. 
  21. ^ "13. Sir Martin Sorrell | Media". The Guardian. Retrieved 2016-04-22. 
  22. ^ Abs-Cbn Interactive, JAZA receives Harvard alumni award[dead link]
  23. ^ The British Museum Trustees, British Museum, accessed 31 March, 2015
  24. ^ a b c d e Duke, Simon (24 January 2009). "City tycoon Martin Sorrell 'used £45 million in shares to pay for divorce'". Daily Mail. Retrieved 21 December 2015. 
  25. ^ Gwyther, Matthew (3 December 2012). "Sir Martin Sorrell: 'Losing something still gets to me'". Management Today. 
  26. ^ a b c "Divorce forces Sorrell to cash in £12m of WPP shares". Brand Republic. 21 December 2005. 
  27. ^ a b c Sherwood, Bob (25 October 2005). "Sorrell breaks trend in divorce settlement". Financial Times. Retrieved 21 December 2015. 
  28. ^ "WPP's Sir Martin Sorrell is Britain's Most Admired Leader 2012". Managementtoday.co.uk. 2012-12-03. Retrieved 2016-04-22. 
  29. ^ Jill Treanor. "Hedge fund group Man appoints Jonathan Sorrell as finance director | Business". The Guardian. Retrieved 2016-04-22. 

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