WPP bosses were given a bloody nose by shareholders today over their decision to hand Sir Martin Sorrell a £19million pay-off after he quit over a prostitute scandal.
The 73-year-old multi-millionaire founder of Britain’s biggest advertising empire left in April amid claims he put a £300 visit to a Mayfair brothel on expenses.
He was also accused of bullying staff and ‘blurring’ the line between corporate and personal expenditure for himself and his wife.
But despite the string of salacious allegations and his sudden departure, WPP have agreed to pay Sir Martin, who is worth £456million, £19million in shares over the next few years.
Chairman Roberto Quarta told investors today that an internal investigation, which has been kept secret, did not find Sir Martin had been guilty of gross misconduct so he was entitled to the gigantic pay-off.
In an extraordinary revolt at its AGM almost 30 per cent of WPP shareholders failed to back its executive pay proposal as they expressed their fury over the handling of Sorrell’s departure.
WPP bosses were given a bloody nose by shareholders today over the handling of Sir Martin Sorrell’s departure after a prostitute scandal involving a Mayfair brothel (right)
Almost a third of shareholders showed their anger by voting against Sir Martin’s pay-off
Almost 20 per cent voted against the re-election of Mr Quarta as chairman at the WPP AGM today
And almost 20 per cent voted against the re-election of Mr Quarta as chairman amid claims he had handed the scandal badly and anger he is in charge at WPP and also at medical equipment giant Smith & Nephew.
One private shareholder has asked WPP’s board about their decision to continue paying out Sir Martin’s long-term incentive plan (LTIP) on the basis that he did not leave due to ‘gross misconduct’.
Multi-millionaire advertising mogul Sir Martin (pictured with his wife Cristiana), 73, the former head of advertising giant WPP, allegedly spent £300 in the flat
However, the shareholder cited reports suggesting Sir Martin has ‘plans to set up in competition’ with WPP which he claims ‘surely must constitute as gross misconduct’.
‘On that point, shouldn’t we pull the LTIP?’
But chairman Roberto Quarta cited recent comments from Sir Martin, which characterise his new company as ‘a peanut that wouldn’t want to compete against a £20 billion global company like WPP’.
He added that management at WPP have confidentiality agreements that clearly Sir Martin would not want to ‘jeopardise’.
Multi-millionaire advertising mogul Sir Martin, 73, the former head of advertising giant WPP, allegedly spent £300 in a Mayfair brothel and then claimed it on expenses – an allegation he strenuously denies.
Two of his employees having a drink in Shepherd Market, a piazza full of upmarket bars and restaurants, are said to have spotted him going into 50A on June 6 last year.
It led to an investigation by WPP, which Sir Martin founded, into alleged ‘personal misconduct’ and possible misuse of company funds, and ultimately resulted in his resignation as chief executive in April. He has consistently denied all the allegations.
Staff at WPP have now been told they ‘deserve to be treated with respect’ following Sir Martin’s departure.
In a veiled attack on Sir Martin, who was ousted over allegations he used £300 company cash at a brothel in Mayfair, the current boss of WPP Mark Read said the giant firm needed to be a place where staff feel ‘safe and supported’.
Sir Martin, was alleged to have a fiery temper who would sometimes unleash a tirade of verbal abuse on employees.
It is claimed by former staff he was ‘brutal and inhuman in how he dealt with assistants’, and had a reputation for being difficult.
Yesterday, Mr Read, who was appointed chief operating office of WPP following Sir Martin’s exit from the firm, sent a memo to staff.
In it he said: ‘When I come to work I expect to be treated with respect by my colleagues, and every one of you reading this has the right to expect the same.
50A Shepherd Market (pictured) houses a brothel and two WPP employees told the company they believed their boss went inside
The flat – which welcomes visitors with a lurid pink sign inside the front door announcing ‘beautiful model’ – is one of the smaller Mayfair properties owned by the family trust of Earl Howe
‘Although we can’t comment on specific allegations, I feel we should remind ourselves of and reinforce the kind of values we want and need to have within every part of our business: values of fairness, tolerance, kindness and – again – respect.
‘It should hardly need saying that all WPP working environments must be places where people feel safe and supported.’
The firm also announced a review of conduct rules relating to staff in a bid to make improvements.
Rumours about the private life of Sir Martin have been rife in the City since he quit as chief executive of WPP in April 33 years after he founded it
It followed a probe in to misconduct in which it was revealed an internal investigation had discovered a small sum of company cash had been mis-used.
The 73-year-old was handed a £20m exit deal and was not made to sign a non-compete agreement, something that has angered shareholders who say they have not been given enough information to decide if he is a ‘good leaver’.
Roberto Quarta told the AGM today that they had ‘very clear’ advice by lawyers not to fight Sir Martin’s giant pay-off
Some shareholders at today’s meeting questioned how WPP had carried out the probe into Sir Martin’s alleged behaviour and question why it was kept quiet
Roberto Quarta is chairman of WPP and medical equipment giant Smith & Nephew, raising questions about his workload
This week, an investigation by the Financial Times claimed Sir Martin’s dismissal had followed a whistleblower allegation that he had visited a brothel in Mayfair.
This morning WPP will come under pressure to publish the exact details of the investigation in to Sir Martin, which had been led by top law firm WilmerHale.
It is expected that as many as one in five shareholders could call for it to be published, and that chairman Roberto Quarta, who led the probe in to the chief executive could also face claims to be axed.
Investment firm Hermes plans to vote against Mr Quarta. It said: ‘Given the lack of confirmed information about the reasons for the former chief executive’s departure, we do not believe we can assess whether his termination package is appropriate.’
WPP insists it cannot reveal more because of privacy laws. Sorrell has declined to comment after signing a gagging agreement. It has bene hoping to rally support from big names ahead of the vote.
WPP’s biggest shareholder, Harris Associates, has backed him however and so has Institutional Shareholder Services, the world’s biggest advisor.
Before the allegations of Sir Martin’s indiscretions arose, he had announced the launch of a new business, S4 Capital.
This is understood to have have infuriated the WPP board.
City sources last night said the firm was prepared to launch a legal attack on Sir Martin if he tried to poach staff or use information gained from WPP to launch takeovers of rivals. It could potentially cost the tycoon as much of £20m if he was deemed to have breached his leacing contract.
WPP would not comment. A spokesman for Sir Martin said he ‘strenusously denies’ the allegations.
A loyal chauffeur brutally sacked, a chance sighting by two off-duty staff… and the downfall of the £500M ad man Martin Sorrell
It was a chance sighting a year ago by two off-duty employees of Sir Martin Sorrell’s multi-billion-pound advertising empire WPP that was to culminate in his explosive exit from the company he founded 33 years ago.
Tuesday June 6, 2017, was a grey afternoon and a light drizzle was falling on Mayfair. But storm clouds were gathering on the horizon for Sir Martin personally.
The father-of-four’s alleged visit to a Mayfair brothel came the day before a tumultuous annual general meeting of WPP at which a fifth of the advertising firm’s investors voted down their chief’s astonishing £48million pay package.
Sir Martin quit multi-billion-pound advertising empire WPP in April this year, after alleged misuse of company funds and ‘personal misconduct’ – which he strenuously denies
Ever since Sir Martin quit the firm in April this year, after alleged misuse of company funds and ‘personal misconduct’ – which he strenuously denies – speculation has been rife in the City about what he was accused of doing.
Yesterday it was claimed WPP had been investigating whether Sir Martin had spent £300 of company money on a prostitute.
The Financial Times reported that on June 6 last year, two employees of WPP, based in Farm Street, Mayfair, met for a drink in nearby Shepherd Market.
The area is one of London’s oldest red-light districts and was where Lord (Jeffrey) Archer infamously met prostitute Monica Coghlan.
Workaholic who took home £70m in ONE year
Three decades at the top of the world’s largest advertising agency saw Sir Martin Sorrell amass a vast fortune.
But his years as one of Britain’s highest paid executives also gave the 73-year-old little time – or inclination – to spend his estimated £495million wealth.
A self-confessed workaholic, Sir Martin famously declared: ‘I don’t relax. I can’t even spell the word “hobby”.’ The son of an electronics retailer, he studied at Cambridge and Harvard before going to work for Saatchi & Saatchi in the 1970s.
In 1985, aged 40, he took control of Wire & Plastic Products, which made wire shopping baskets, and turned it into a marketing company. As chief executive he created an advertising empire with 200,000 employees in 112 countries and a turnover of £15.3billion. Its success was reflected in his pay and bonuses, which totalled £70.4million in 2015 – then believed to be the highest pay package in British corporate history.
Since 2010, he has pocketed more than £230million in pay and bonuses, and a long-term incentive scheme means he will receive another £20million from WPP over the next five years – despite his resignation and the misconduct inquiry.
The two colleagues were sitting outside a bar when they allegedly witnessed their boss going into Flat 50a. Afterwards, one of them took a photograph of the location, the FT reported.
It is unclear whether the two WPP employees mentioned anything about their alleged sighting to the company at the time.
But later it became central to the firm’s investigation into its chief executive’s alleged misconduct. In the early months of 2018, one of the employees broke their silence and confided to a senior colleague about what they had allegedly seen that evening in June 2017, said the FT.
Exhausted chauffeur fired for wanting to rest
One catalyst for the investigation was apparently the firing of Sir Martin’s long-serving chauffeur. The popular driver had worked for the millionaire chief executive for some 15 years until he was abruptly sacked last October.
The unnamed chauffeur used to ferry Sir Martin around London in a Range Rover and was also often on call for his wife Cristiana too.
One night last October, he had allegedly been working for 12 hours without a break when he was asked to pick up Lady Sorrell from the exclusive restaurant Mayfair Isabel and run her back to the couple’s £5million Belgravia home.
According to sources who spoke to the FT, it was already 2am and the driver was told he would have to be back in place for another job at 7am.
It was said that he refused to pick up Lady Sorrell, saying he would be too tired and unsafe on the road if he only got two or three hours’ sleep.
The Sorrells fired him the next day, the FT claimed.
The driver was a popular figure at WPP’s Farm Street offices, said to be well liked by the personal assistants who helped Sir Martin maintain his exhausting round-the-clock schedule.
His dismissal was ‘met with shock and sadness across the executive suite’, the newspaper said – as well as a resolve to act. The alleged shabby treatment of the chauffeur was apparently a key factor motivating a future whistleblower.
A fiery temper and four-letter outbursts
Another factor was said to be Sir Martin’s alleged fiery temper. The ad boss built his multi-billion-pound empire virtually from scratch and is said to work day and night, quick-firing off emails and micro-managing his sprawling business, which has 200,000 employees across the globe.
But he is known to expect his employees to match his pace and the role of Sir Martin’s executive assistants (EAs) has allegedly proved particularly ‘punishing’.
The chief executive’s six EAs earn around £80,000 apiece but one described her salary as ‘battle pay’, in light of the verbal abuse she has to put up with.
‘He was brutal and inhuman in how he dealt with his assistants,’ one former executive told the FT. ‘He would say “you’re f***ing idiots, what’s f***ing wrong with you”… He had a real dark side.’
A former WPP board member said being an executive assistant was ‘a pretty thankless task’, a role that another employee likened to ‘being in an abusive relationship’, with Sir Martin presenting a charming image to the outside world that was at odds with the one that was witnessed by staff. The chief executive apparently called one elderly colleague a ‘pudding’ and described others as ‘bozos’.
Executive assistants working closely with Sir Martin did not typically last longer than 18 months because the job was too tough, according to the newspaper. One ex-employee told the FT: ‘After a year, my doctor told me that if I continued I would be dead.’
Sir Martin is said to accept that he can be difficult at times but strongly denies mistreating, abusing or bullying staff and his supporters said many people have worked for years at WPP, and that Sir Martin has received dozens of messages of support.
Bewildering expenses claims
Another factor explaining the unease in the WPP boardroom was the alleged ‘blending’ of Sir Martin’s expenditure on his corporate and private life – not to mention that of his wife.
The City veteran is described as a perpetual motion machine, working all hours – including during holiday – and constantly responding to emails.
His business took him all over the world as he mixed with the global elite. He was among the guests at Prince Harry and Meghan Markle’s wedding in Windsor last month.
Lady Sorrell was often expected to be at Sir Martin’s side at events with clients and their spouses, but some claimed it was occasionally difficult to discern when he and his wife were travelling for business or pleasure.
The blurred lines between the spending for corporate and personal purposes was said to have led to ‘fierce arguments’ at head office about which items required personal reimbursement by Sir Martin.
In 2015, Sir Martin drew attention for chalking up £274,000 in travel expenses for his wife, who is a senior City executive in her own right, with high-flying roles at the World Economic Forum, telecoms giant Viacom and the cosmetics firm Revlon.
After 2015, WPP stopped providing travel expenses for Lady Sorrell, 43 – Sir Martin’s second wife – who gave birth to the couple’s daughter in November 2016.
Despite a generous benefits and pay package that made him the country’s best-paid chief executive in 2015 – earning £70million that year – the FT said it had been ‘common for Sir Martin to request cash for day-to-day expenses’.
The newspaper claimed this had ‘long puzzled head office staff’, who were aware his restaurant, drinks, transport, laundry and gifts expenses were typically put on the company account or credit card.
It was ‘all the more puzzling’, said the FT, because Sir Martin was not always required to provide receipts for the cash he received. In covering the globe for his company, Sir Martin was bound to rack up significant expenses as part of his duties. Auditors always signed off WPP’s accounts and insiders insisted that ‘great care and attention’ was always taken by the company and the chief executive over his expenses and that he ‘denies there was any misuse of funds’.
How whistleblower sparked investigation
All of the above served as the backdrop to the investigation by WPP into its own chief executive’s alleged use of a prostitute.
Sir Martin had long dominated the company he founded, but 2017 witnessed the downfall of a succession of powerful men in the media and Hollywood.
In January this year, it was revealed that WPP had sponsored the Presidents Club charity dinner at which high-powered businessmen were accused of sexually harassing ‘hostesses’ hired to be groped at the event.
Amid widespread criticism of men’s behaviour at this event, one WPP employee decided to turn whistleblower to reveal what they had witnessed last June in Shepherd Market – their boss allegedly visiting a brothel. The allegation was passed up the chain to WPP’s chairman Roberto Quarta, who set up a subcommittee that eventually called in a Washington law firm, WilmerHale, to investigate.
The whistleblower provided the photo of 50a Shepherd Market. Sir Martin was interviewed for two hours by WilmerHale partners on March 29. Believing it was a routine matter, he did not have a lawyer present, according to the FT.
On April 13, WilmerHale’s findings – considered so sensitive that a written report was not provided – were revealed verbally to the board.
Friends of Sir Martin said he was not given the full picture. The investigation concluded that there was no proof of misuse of company funds, that the amounts of money in question were ‘wholly immaterial’ and that no other WPP employee was affected.
The board apparently concluded the matter was largely a personal issue for Sir Martin.
Yet the fact that the investigation had been carried out was leaked to The Wall Street Journal and Sir Martin is said to have concluded that his position as CEO was untenable, resigning the following day.
WPP has said it would be breaching the Data Protection Act to reveal the details of Sir Martin’s departure, and his spokesman has said he signed a non-disclosure agreement ‘which he has adhered to and will continue to adhere to’. The spokesman added that Sir Martin ‘strenuously denies’ the allegations.
Inside the £160 an hour brothel above a bookies at centre of Martin Sorrell scandal
This is the doorway of the seedy brothel at the centre of the BPP scandal
Behind the plain white front door is a lurid pink sign announcing ‘beautiful model’ and wooden stairs leading up to a one-bedroom flat.
Visitors are ushered into a generous room with a king-size bed adorned with neon red fairy lights. A leather jacket, bondage gear and racy underwear hang on a rack behind the bedroom door.
This was the scene at 50a Shepherd Market, a nondescript flat above a bookies. But being in the heart of Mayfair, this flat, which once belonged to a peer, is worth £1.3million. Now it is rented by the day, by a variety of young women who sell their bodies for sex – often to men who turn up unannounced.
‘The young lady will be with you shortly,’ a middle-aged dark-haired woman, the flat’s maid, said in a strong northern accent when the Daily Mail visited yesterday. Seconds later, the young lady, clad in black lingerie and wearing black high heels, could be seen sitting cross-legged in a tiny waiting area.
She looked in her mid 20s, was about 5ft 5in tall and of slim build. She had straight black hair, longer than shoulder length, and wore dark mascara. She spoke with an eastern European accent. Seemingly shy but cautiously friendly, she did not wish to give her name and said she operated on a ‘no questions asked’ basis.
Inside the bedroom there is cream acrylic carpet, burgundy wallpaper and dimmed lighting. Thick dark curtains are pulled tight across windows that look out on Shepherd Market, a favourite playground of expensive bars and restaurants for the capital’s wealthier residents.
Speaking softly, the woman nervously ran through the price list. For £60, clients get a 20-minute session. It costs £160 for an hour of ‘whatever you want’.
The flat, above a ground-floor branch of bookmakers William Hill, has an en-suite bathroom and a rudimentary kitchen. The walls are bare, apart from an A4-size silhouette image of a woman.
‘I rent this apartment for my business for one day a week, every Monday,’ she said. ‘We don’t really know the other girls who work here. I don’t see anybody else. We just leave some money in the microwave to pay the rent. Some people come back lots of times, some people only visit once. We don’t ask them personal questions because they don’t want to answer them. They just come in, do their business, and then they leave.’
According to a website which reviews brothels, women named Bianca, Elly, Priya and Suzzanna are said to work at 50a Shepherd Market.
Suzzanna, who works on Tuesdays – the day that Sir Martin Sorrell is alleged to have visited the flat on June 6 last year – is described as ‘brown-haired and curvy’.
According to the Land Registry, the flat seems to have once belonged to the 6th Earl Howe, the Right Honourable Edward Richard Assheton Penn Curzon, styled Viscount Curzon. He died in 1984 aged 75, and the flat was left in his will. It is unclear who now rents it out but the will’s executor, Michael Williamson, is named as the proprietor in the Land Registry records. He was unavailable for comment yesterday.
Shepherd Market’s seedy reputation dates back to the 1980s when former Tory Party deputy chairman Jeffrey – now Lord – Archer, paid a prostitute for sex, the late Monica Coghlan, after meeting her in Mayfair.