Category: Advertising

Farewell package for WPP’s Sorrell faces investor backlash

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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WPP’s decision to allow founder Martin Sorrell to quit with share awards worth millions of pounds faced fresh opposition on Tuesday as Hermes EOS advised shareholders to vote against the advertising giant’s remuneration report.

Anger over the handling of Sorrell‘s departure is set to dominate WPP’s annual meeting in London on Wednesday where investors will target the one issue that caused uproar during Sorrell‘s tenure – the amount he was paid.

WPP’s incentive plans have led to opposition in the past, with Sorrell earning around 200 million pounds in the last five years alone. A third of WPP’s investors refused to back his 70 million pound ($94 million) pay package in 2016.

Sorrell‘s last award scheme could potentially pay out 20 million pounds but it is expected to come in well below that due to the recent underperformance of the group.

Other shareholders are set to target the re-election of the WPP’s chairman, Roberto Quarta, after Sorrell quit the world’s biggest advertising firm following an inquiry into allegations of personal misconduct. Some investors have expressed concern about the handling of Sorrell‘s exit.

Neither Sorrell or the company have given any details of the complaint and the 73-year-old has since set up a rival ad firm.

“Given the lack of confirmed information about the reasons for the former CEO’s departure, we do not believe we can assess whether his termination package is appropriate,” Hermes EOS’ Pauline Lecoursonnois said in a statement.

But in a boost to Quarta, two major shareholders, including WPP’s biggest, told Reuters they still backed him.

The Hermes decision to oppose the pay report, which governs executive pay in the year just gone, sees it break ranks with the world’s biggest adviser, Institutional Shareholder Services, which last month said it would support it.

The firm is readying for a sizeable rebellion against the remuneration package, with concerns within the company that more than a quarter of investors could vote against it.

Investors are targeting the pay awards after WPP agreed Sorrell could leave with his long-term incentive plan intact, meaning his share awards will vest over the next five years as company targets are met.

Clarity Call

Hermes, which advises pension schemes and other institutional investors on how to vote at corporate meetings, said it backed all other agenda items.

It also supported the re-election of Quarta, who, it said, had overseen an improvement in the board’s effectiveness since taking over in 2015.

Hermes said given the structural challenges facing the industry, the board needed to make the right CEO appointment and ensure all strategic options for the company were considered.

“We will be asking the chair for clarity on the key criteria the new CEO needs to meet, whether a formal review of the strategic options and of the portfolio has already commenced, how much can be done before the appointment of a new CEO and how the board is involved,” Lecoursonnois said.

David Herro, Chief Investment Officer of international equity at WPP’s top fund investor Harris Associates told Reuters he also backed the re-election of the board.

“(We support WPP on) board re-election. I want to make sure on the rest,” Herro said in an email.

Harris has a 7.5 percent WPP stake, according to Thomson Reuters data.

A second top-20 investor, who wished to remain anonymous, said he also backed Quarta.

“We are supportive of the chairman who has handled a very difficult situation well in circumstances neither of his making or choosing.”

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Exclusive: Martin Sorrell’s first ever interview after moving on from WPP

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Watch Martin Sorrell live in conversation with Anant Rangaswami. This is his first ever interview since his exit from WPP in April this year.

In an exclusive conversation with CNBC-TV18, Sorrell outlines his next steps in the world of advertising.

Also Read: Martin Sorrell leaves behind shoes too big to fill

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Income Tax confirms royalty taxation for Google’s Adwords programme

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a setback for Google India, the Bengaluru bench of Income Tax Appellate Tribunal (ITAT) on Friday confirmed royalty taxation for Google’s Adwords programme, reported Taxsutra.

“The bench of tribunal in case Google India Private Ltd had upheld royalty taxation for the Adwords programme, in the TDS default proceedings for AYs 2007-08 to AY 2012-13,” said Taxsutra.

The ruling was delivered by ITAT bench of Sunil Kumar Yadav and Inturi Rama Rao.

Earlier, ITAT refused to entertain Google India’s request that Google Ireland’s appeal (relating to taxability of the same payment for Adwords programme by Google India) should be decided first because implications (u/s 40(a)(i) and 201) in the hands of Google India would only follow suit once taxability of Google Ireland was decided.

Google AdWords is an online advertising service developed by Google, where advertisers pay to display advertising copy, product listings, and video content.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Martin Sorrell leaves behind shoes too big to fill

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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I’ve had more opportunities to interview Sir Martin Sorrell than most journalists have.  In addition to interviewing him each time he visited India, for a year I interviewed him every month, wherever he was in the world, for a show on CNBC-TV18 that we created called “30 minutes with Martin Sorrell.”

In addition to my interviews, my colleagues interviewed him regularly at Cannes and at Davos.

Each time I heard that he was coming to India, I would scramble and ensure that I got ‘quality’ time with him – at least half an hour.

There is no other network agency head or advertising agency head that I would do this for.

Sorrell is different – he is a dream subject for an interview. Even post his WPP life, he will be.

Because he can talk, with authority, on an incredibly wide range of subjects. He can talk about advertising, about media, about creativity, about blockchain, about Modi, about the Congress party, about Brexit, about Theresa May, about Trump, about the impact of the monsoons on India and the latest Opec decisions on the European Union, about the change in policies in China and how these would affect the tech companies.

He has called Facebook and Google names: he dubbed them ‘frenemies’.

He can talk about cricket.

He can talk about food.

And he remembers the names and faces of everyone of importance that he has met.

That’s why Martin Sorrell is a dream subject for an interviewer.

As my former colleague at CNBC TV18 and current friend Pavni Mittal tweeted, “As someone who has interviewed him multiple times, I can’t think of a CEO as sharp, articulate – and fun. If you walked away with a bad Martin Sorrell interview, it was your fault!”

I break up Sorrell into three elements: the global industrialist, the network agency head and the Sorrell who has a special spot for India. And it is because he is all of these three elements that WPP will find it hard to deal with his departure, as will the advertising business as a whole.

Let’s deal with these different Sorrell and the impact of his leaving WPP.

The impact on the advertising industry as a whole: Sorrell, through his ability to understand, interpret and magically articulate the state of the economy or political developments was a far sought after talking head on news TV whenever anything major happened in the western world or in China. Anything. He willy-nilly ‘represented’ the advertising and marketing businesses in such situations, lending gravitas to a business that struggled to be seen as having gravitas in any country, including India. Sorrell was a regular at Davos, rubbing shoulders with leaders of countries, leaders of industries and policymakers from across the world. In short, Sorrell made the world take advertising seriously. After all, if advertising wasn’t a serious and important business, why was Sorrell on prime time news along with prime ministers, presidents and CEOs?

In Sorrell’s absence, who will be the flag-bearer of advertising? I can’t think of ONE.

Sorrell has an amazing ability to remember names and faces that matter to his business and has raised relationship-building and relationship maintenance to a fine art. In the past week, I have mailed him twice. In both instances, I have received a response in a few minutes. This, while he was going through the most difficult time of his WPP journey.

Sorrell knows every important client of his across the world. Because clients are important to him. He knows Kumar Mangalam Birla, he knows Sanjiv Mehta, he knows Sunil Sood, and so on. He makes it clear to them that he knows them and that they are important to WPP. If that’s not a dream and near-perfect client servicing result, I don’t know what is.

He knows key WPP employees across the world – and has close relationships with them. He appointed them, trusted them, delegated, gambled on them and gained thanks to them. There is no other way he could run a company that operated in over 100 countries and with 200,000 employees.

He has been derided for being a Math Man as opposed to being a Mad Man, but that derision is hugely misplaced. Under his watch, WPP and their constituents have been regularly at the top of the leaderboard at Cannes and at almost every significant award you can name. While he is definitely an accountant, his ability to hire the best (or buy the best, as he did with JWT and Ogilvy in his early days) and retain the best speaks volumes of the focus on the business. He clearly understands what makes creativity tick – creative people. His relationship with creative stars at WPP globally can be seen at Cannes, where all of them are under one ‘roof’.

He saw the importance of Asia in particular and the BRICS nations in general far ahead of is peers and competition, resulting in greater investments in offices and people in these markets, resulting further in greater market share in these markets.

As far as India is concerned, Sorrell has been an annual magnet, his visits becoming the provocation to discuss all things good and bad about the business in India. Each visit also sparked discussions on possible acquisitions and acquisition targets, though, in the last so many years, Sorrell has stayed away from investments in all but the digital domain. He would have loved to have done a deal with Madison or cleaned up the uncertainty at Rediffusion Y&R, but, sadly, that’s for a future CEO to deal with.

Finally, he is a math man. He understands numbers well, and his understanding of numbers has seen his WPP empire grow to almost GBP 20 billion at one point (it is estimated to be worth, even today, at GBP 22 billion if broken up into different businesses).

So what’s next for WPP? Whatever the new management does, Sorrell’s shoes are not easy to fill – and the replacement will NOT be able to fill them.

And advertising will be the poorer for this inability.

As will all the journalists who regularly interviewed Sir Martin Sorrell.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Money Follows Eyeballs – Mobile Ad Boom Continues

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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One of the golden rules of advertising is that money follows eyeballs. And since people are looking at their smartphones pretty much all the time these days, it’s no surprise that advertising budgets are shifting to mobile devices as well.

According to Zenith’s latest global advertising forecast, advertisers will spend an additional $72.6 billion a year on mobile ads in 2020 compared to last year. Having overtaken desktop ads last year, mobile devices are now the second largest advertising medium worldwide, trailing only television. Mobile ad spending is expected to reach $180 billion in 2020, nearly double the estimated total for desktop advertising expenditure ($94 billion).

This story was first published on Statista.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow