Shares (Berlin: DI6.BE - news) in WPP, which said the allegation did not involve sums which were material to the company, fell to more than four-year lows and were down 2.1 percent at 1,094 pence at 1058 GMT. From here, he built the advertising empire that now boasts 3,000 offices in 112 countries. However, independent counsel has been brought in by the company, alongside existing legal advisers Allen & Overy and Slaughter & May, to investigate allegations from a whistleblower. Guy Jubb, who led the charge while he was head of corporate governance at Standard Life and is now an academic, spoke before Tuesday's developments. In a statement, he says he understands the company must investigate and that he believes the process will be completed shortly. As the industry struggles with reduced spending from clients like Unilever and Procter & Gamble Co. and rising competition from the likes of Google and Facebook Inc., some observers ponder whether it's time for new management at WPP.
Reacting to the statements, Sorrell said in a statement, "I reject the allegation unreservedly but recognise that the company has to investigate it". "In my view, today's announcement is the tipping point", Jubb said in an email.
According to the Wall Street Journal, WPP's board is looking into whether Sir Martin misused company funds. The executive has denied any suggestion of wrongdoing.
At least one major investor is backing Sorrell for now. Specifically, the lack of clear succession planning has been cited as leaving the company's future unresolved.
An icon in the industry, Sorrell built London-based WPP from an investment in a shopping-basket manufacturer into the owner of blue-chip agencies Ogilvy & Mather, J. Walter Thompson, Y&R and Grey, but has struggled to appease investors anxious about market headwinds.
The investigation will put pressure on Sorrell, who is one of Britain's best-known - and most highly-paid - business leaders.
"It's never good when your CEO or any part of the leadership team is being investigated", Edentree's Patel said.
Since then, he's taken a pay cut.