News that WPP has taken steps to prepare for life after chief executive Sir Martin Sorrell and that investors are pushing for asset sales combined to lift shares
in the advertising giant on Monday morning.
The FTSE 100 conglomerate last week launched an investigation into allegations of personal misconduct by Sorrell, who has denied the allegations. If not before, there is likely to be an update when WPP announces its first quarter trading statement on Monday, 30 April.
On the short list so far are three internal candidates, The Times reported: Mark Read, chief executive of WPP's wholly owned digital agency subsidiary Wunderman; Lindsay Pattison, chief transformation officer of WPP's Group M media investment management company; and Johnny Hornby, founder of WPP-backed The & Partnership. WPP also has a list of several external candidates that is being "constantly refined", it was reported.
Investors are also take the opportunity to push for a break-up of the firm's vast global portfolio of subsidiaries, it was also being reported, partly as the sheer size and complexity of the business is felt to make the task even more difficult for any Sorrell successor.
Sorrell has run WPP since 1986 when he took control of Wire & Plastic Products, a maker of wire baskets, and used it as a vehicle to begin a never-ending quest to acquire advertising and marketing companies all over the globe. Sorrell has also regularly been the top-paid FTSE 100 boss, leading to complaints that the board allows him to dominate the company.
Investors are calling for a sale of Kantar, WPP's £3.5bn market research arm, the Mail reported, with the cash proceeds to be used to pare debt, pay buybacks and focus on the core businesses.
One of the group's largest shareholders was quoted as saying WPP "feels as if it's lost its way a bit, and that it's not fit for the modern era".
After many years of outperforming the market, life has got tougher for WPP, with a string of sales warnings issued last year, in what was its worst year since the global recession.
Last week, analysts from Berenberg said that, while they could not comment on the new allegations, "the more pressure Mr Sorrell feels he is under (for operational reasons relating to weak new business momentum, industry shifts, or other factors), the more likely he may be to take more radical steps to support the company and its share price - possibly via asset disposals (of associates or market research business) or a strategy to quickly improve the growth profile or release funds to facilitate the strategic pivot towards business transformation and fund greater cost cutting".
WPP shares, having fallen 18% so far in 2018 after losing more than a quarter of their value in 2017, were up more than 1% to 1,175.5p after almost three hours of trading on Monday.