WPP faces ‘challenging year’, says CEO Mark Read

The CEO of the world’s largest advertising group, WPP, has admitted it still faces a tough year ahead after significant client losses and “legacy issues”.

Mark Read – who took over following the departure of Sir Martin Sorrell – assured investors the company was making good progress on its plan to return to sustainable growth.

“As anticipated, our first quarter trading update reflects the impact of certain significant client losses in 2018, in particular in the United States. Although we face a challenging year, especially in the first half, I am encouraged by how well our people, agencies and clients are responding to our new strategic direction. Our expectations for the full year are unchanged,” he said.

Read was optimistic about newly merged agencies, including VMLY&R(which formed out of VML and Y&R), and Wunderman Thompson (from the joining of Wunderman and JWT), saying they are showing initial signs of success.

But he noted, the road to recovery would not be easy.

“As we have said before, it will take time to address the company’s legacy issues, but we are committed to taking all the actions necessary to position WPP for future success,” he said.

The financial results for the first three months of the 2019 calendar year,\ did not include the performance of the local Asia-Pacific operation which was clubbed with Latin America, Africa and Middle East and Central and Eastern Europe.

The international group reported revenue of £3.588bn, which despite being a modest 0.9% climb, on a like-for-like basis is actually a decline of -1.3%.

Its reported revenue less pass-through costs was £2.926bn, a decline of -0.7%, (-2.8% on a like-for-like basis).

North America was WPP’s weakest region, its presentation to investors said. Revenue less pass-through costs was down -8.5% for the region.

In its 2018 annual report, it was revealed Read’s base salary was £325,000. With incentives and benefits factored in, his total package would be £965,000. The report noted Read was appointed in September 2018, so “his salary is prorated accordingly”.

Chief financial officer Paul Richardson had a base salary of £808,000, and a total package of £2.125m for the year.

Sorrell, who left in April last year pocketed a base salary of £391,000, and a total package of £3.085m for the time he was with the company in 2018.

The annual report also noted some discontent on WPP’s board “around the circumstances leading to Sir Martin Sorrell’s resignation in April 2018, [and] his contractual treatment as a retiree”.

In addition to getting WPP back on track towards sustainable growth, the annual report flagged gender diversity as an issue to focus on.

“Our workforce is gender-balanced overall and the proportion of women in executive leadership roles increased this year. At the Board level the appointment of Cindy Rose raises the proportion of women on the Board to 33%. Achieving gender balance at leadership levels remains a priority,” the report said.


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella Asia newsletter now.



Sign up to our free daily update to get the latest in media and marketing