WPP's shares fall following shock resignation of Sir Martin Sorrell
Shares in advertising giant WPP dipped on Monday following the shock resignation of chief executive Sir Martin Sorrell.
Sir Martin, who has been at the head of the firm for 33 years, stepped down over the weekend in the wake of allegations of personal misconduct.
WPP's share price fell by 5% when the marked opened before regaining ground, and was later down by 3%.
The advertising firm carried out an inquiry into allegations that Sir Martin misused company funds, but said the amounts involved were not material.
Sir Martin, who has denied any wrongdoing, resigned on Saturday evening, saying the allegations were "putting too much unnecessary pressure on the business".
In a note to staff, he said: "That is why I have decided that, in your interest, in the interest of our clients, in the interest of all share-owners, both big and small, and in the interest of all our other stakeholders, it is best for me to step aside."
WPP chairman Roberto Quarta has now been made executive chairman while a search for a successor takes place. Sir Martin will be treated as having retired.
Mark Read, chief executive of WPP's Wunderman business, and Andrew Scott, European chief operating officer, have been made joint operating chiefs.
Liberum analyst Ian Whittaker said they were key contenders to replace Sir Martin.
He said Sir Martin was the "glue that bound much of WPP together", meaning the company may now look to sell its market research and PR divisions.
"There will also be speculation as to whether WPP would sell some of its Associates stakes in the businesses, as it recently did with the 25% stake it owned in Japanese ad firm Asastu-DK," he said.
"Our view is that, while WPP will run the rule over some of the assets, many stakes are likely to be held for strategic reasons and so we think these will not be the focus of disposals."
Roddy Davidson, analyst at Shore Capital, said: "This is a disappointing end to Sir Martin's illustrious career at WPP which saw him build the world's largest marketing services group and deliver substantial value to shareholders over three decades.
"It also highlights the apparent lack of detailed succession planning that has troubled us and many other observers for some time."