Well, now we’re getting somewhere. Maybe. Although he strongly denies it, both The Wall Street Journal and the UK’s Daily Mailput out reports this weekend (the Journalfirst), that the personal misconduct investigation conducted by the WPP board of directors centered on allegations that former WPP Chief Martin Sorrell used company funds to buy the services of a prostitute about a year ago.
Despite the shocking allegations, WPP is still stonewalling on the matter.
The Mail reported that Sorrell left the company with a nondisclosure agreement prohibiting him from discussing any aspect of the circumstances surrounding his departure. Such agreements usually work both ways and likely prohibit WPP from saying anything as well.
The holding company in the past has said simply that it’s not required to disclose the particulars and therefore will not. This weekend it also cited new data laws as another reason for nondisclosure.
The stunning new revelations will make for a far more interesting WPP annual meeting, which is already set to be quite a brouhaha, with some advisors and shareholders demanding full transparency on the details about the board investigation that led to Sorrell’s departure.
Some have even called for the ouster of WPP chairman Roberto Quarta for keeping the whole episode shrouded in secrecy.
The meeting is scheduled for Wednesday, June 13.
Officially, Sorrell retired from the company with a separation package worth millions over the next several years. At least one advisory group has said full disclosure on the whole affair is necessary to determine whether Sorrell’s alleged misconduct might trigger a “for cause” clause that would enable the company to claw back a good portion of the future payouts to the former CEO.
Would cavorting with prostitutes on the company’s dime trigger such a clause? One can only hope.
Another question, of course, is what Sorrell's new partners at S4 Capital think of the latest developments. A couple of weeks ago, Sorrell joined the firm as chairman and plunked down around $50 million of his own money as part of a war chest to build it into some kind of marketing and communications force.
And then there’s that knighthood. I wonder if such behavior might put that at risk?