The largest marketing service group of the world, WPP, has finally got its new chief executive officer, Mark Read.
51 years old Read has been jointly running WPP on an interim basis since Sir Martin Sorrell resigned in controversial and acrimonious circumstances in the month of April. The board of WPP was unanimous in the decision to appoint Read, who had been tipped as the favourite for the job.
Roberto Quarta, the chairman of WPP, praised Read’s “wise and effective stewardship” of the company over the summer months that “left us with no doubt that he is the right leader for this company”.
Quarta also added that “The board carried out a rigorous selection process, assessing internal and external candidates. [Read] has an intimate understanding of the business, he enjoys very strong internal support and he has earned the respect and endorsement of our clients with his constant focus on their needs.He has played a central role in many of WPP’s most successful investments and initiatives, and he has deep experience at board and operational level. In short, he is in every way a 21st-century chief executive.”
WPP said Read’s contract contains “restrictive covenants including an industry non-compete, a non-deal with clients and a non-poach and non-employ of key WPP individuals”.
The company was criticised for not having a non-compete clause with Sorrell. Within weeks of resigning from WPP, Sorrell had set up a new company, S4 Capital, and swooped on a £266m deal for MediaMonks, a company his former employer had also been looking at acquiring. As reported by the sources, he has also negotiated a remuneration package that will pay up to a maximum of £7m annually if he is able to successfully turn around WPP’s fortunes.
Read is to be paid an annual salary of £975,000 – Sorrell received £1.15m – with an annual bonus of up to 2.5 times his basic salary and a long-term incentive scheme award of up to 3.5 times his salary. He is also receiving an annual cash allowance of 20% of his salary in lieu of pension and a £35,000 benefits allowance.
Read said he will not consider a wholesale £22bn break-up of WPP, as critics have called for, but he will look at the sale of selective assets. WPP has stakes in companies including Vice and is also looking at strategic options including a £3.5bn sale, or partial sale, of its research arm Kantar.
“We are focused on creating value for shareholders and there are no sacred cows.To encapsulate [my] strategy I’ve used the words ‘radical evolution’. We need to move quickly, at pace – WPP needs to come closer together, not further apart. There are many good things about the business. It is a question of simplifying the offer, refocusing the portfolio and investing more in data and technology alongside creativity,” Read said.