Sorrell has been chief executive of the advertising behemoth since 1986.
At the annual general meeting (AGM) this morning (7 June), shareholders including asset management groups Standard Life Investments (SLI) and Royal London Asset Management (RLAM) called on WPP to address this “key governance risk”.
Deborah Gilshan, governance and stewardship director at SLI, which owns 19 million WPP shares on behalf of investors, said: “As a long-term shareowner in WPP, we acknowledge the success that Sir Martin Sorrell and all of the team at the company, past and present, have achieved and the ensuing benefits of that success to our clients.
“Critical to that success continuing is an orderly management succession, especially for the role of CEO. This remains the key governance risk to our long-term investment in WPP.”
She expressed concern that as another AGM passed, the pressure was increasing to address the issue of Sorrell’s successor.
Meanwhile RLAM has also been pressing Roberto Quarto, chairman at WPP, to up its efforts.
Ashley Hamilton Claxton, corporate governance manager at RLAM, said: “There is no doubt that WPP has become the media powerhouse it is today thanks to the hard work and dedication of Sir Martin Sorrell. The question for investors is how the business will look when he inevitably retires.”
She added the consortium of shareholders had pressed the chairman into making “real progress” with succession planning, calling it the “biggest risk facing the company”.
Hamilton Claxton praised the board for conducting more rigorous sourcing of potential internal candidates from companies within the broader WPP group.
She added: “Planning for succession is, however, still the biggest risk facing the company in our view, and there is still work to be done to assure shareholders of an orderly and stable transition when Sir Martin steps down.”
RLAM holds 6.18 million shares in WPP, 0.48% of the firm worth £106m.
In a trading update, also issued this morning, the £21.4bn market capitalisation company reported a first four-month revenue increase of 15.9%, at £4.85bn.
WPP operates in 112 countries, through more than 3,000 offices and has a market capitalisation of £21.4bn.
