- Read took over from Sir Martin Sorrell in 2018
- Read will stay on until the end of 2025
- Shares down 33% year-to-date
Shares in WPP (WPP) were down over 2% in early morning trading after the advertising giant’s CEO Mark Read said he was stepping down in his role at the end of 2025.
The announcement comes as no surprise to investors due to the communications giant's weak start to the year.
WPP reported worse-than-feared 5% drop in first-quarter revenue in April and warned of ‘macroeconomic challenges’ which will impact the group’s second quarter performance.
The advertising industry has been hit by a raft of issues including the role of AI (artificial intelligence) in the sector and more recently the impact of Trump’s trade tariffs on client spending.
SUCCESSION PLANS
Philip Jansen, chair of WPP confirmed that Read would be staying on to lead WPP as CEO until 31 December.
Jansen added that Read would remain ‘focused on the execution of the company’s growth strategy’ and ‘support a smooth transition to his successor, once appointed.’
Read took over as CEO from WPP founder Sir Martin Sorrell in 2018 and has been with the company for the last 30 years.
Under his seven-year tenure as CEO WPP’s share price has halved taking its market capitalisation to around £6 billion.
More recently the group has struggled with the dominance of the advertising market by tech giants Alphabet (GOOG:NASDAQ) and Meta Platforms (META:NASDAQ).
FAILED TO REPOSITION WPP
Russ Mould investment director at AJ Bell said: ‘Fundamentally, Read has failed to reposition WPP in the face of structural changes to the advertising industry. The rise of artificial intelligence and social media networks have meant that big clients have less of a need to use agencies such as WPP.
‘WPP’s culture is rooted in traditional advertising and the world has gone digital, leaving the company scrabbling to play catch-up. Whoever replaces Read will have a big task in trying to modernise the advertising agency.
‘The fact the company hasn’t got a replacement CEO lined up would suggest chaos behind closed doors. It could take another three to six months to find someone else, and by that point, WPP’s more tech-savvy rivals could be even further ahead.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Martin Gamble) own shares in AJ Bell.
