It looks like WPP’s upcoming annual meeting may turn out to be a battle for the future direction of the company.
And the firm’s biggest investor, Chicago-based Harris Associates, has weighed in, supporting the current regime, led by Chairman Roberto Quarta.
Last week, an influential investor advisory group, Glass Lewis, urged WPP shareholders to give Quarta the boot at the upcoming meeting on June 13, saying he has failed to put into effect an adequate succession plan for WPP, which forced out its longtime CEO Martin Sorrell last month. (Technically, Sorrell retired.)
Glass Lewis was also highly critical of the non-transparent way in which Sorrell’s departure was publicly managed. Sorrell left under the cloud of an internal investigation into alleged “personal misconduct” on his part.
But the company has opted not to disclose any details surrounding the specific allegations, or what the investigation turned up.
At several public appearances since his departure, Sorrell has refused to reveal any of the particulars.
However, the UK’s Guardian got in touch with Harris Associates partner David Herro, who told the publication that the activist investor supports Quarta and how he has managed L’Affaire Sorrell.
“We do not agree with Glass Lewis,” The Guardian quoted Herro as saying. “In our view, the release of the conduct report is not a critical issue.” Rather, Herro said, “We are more concerned with an orderly succession process and the selection of an excellent and capable chief executive.”
I guess that makes sense from an investor point of view. I don’t agree, but I can understand why Herro would say that. His company has more than $1 billion invested in WPP -- and he is singularly focused on growing that investment.
But that singular focus ignores Sorrell’s legacy, now mysteriously tainted by a shadowy investigation into undisclosed allegations. Sorrell very visibly built the biggest public advertising company in the world and led it for 30-plus years. People have a right to know why his reign ended so abruptly.
And as Glass Lewis pointed out, if Sorrell's alleged transgressions were egregious, he may not be entitled to the full separation package he was granted.
So stay tuned. This corporate battle is far from over.