WPP plc

WPP plc

Type	Public limited company
Traded as	LSE: WPP NASDAQ: WPPGY
Industry	Advertising Public relations
Founded	1971 (Wire and Plastic Products plc) 1985 (Sorrell acquisition and entry into advertising)
Founder	Martin Sorrell (as an advertising company)
Headquarters	London, England (Head office) Saint Helier, Jersey (Registered office) Dublin, Republic of Ireland (Executive office)
Area served	Worldwide
Key people	Philip Lader (Chairman) Martin Sorrell (CEO)
Services	Branding & identity Consumer insights Design Digital Marketing Market research Media planning and buying Public relations Relationship marketing
Revenue	£12,235.2 million (2015) [1] £11.528 billion (2014)
Operating income	£1,632.0 million (2015) [1] £1.513 billion (2014)
Net income	£1,245.1 million (2015) £1.152 billion (2014) [1]
Total assets	$42.37 billion (2016)[2]
Number of employees	121,397 (2015)[3]
Subsidiaries	Grey Global Group Ogilvy & Mather Young & Rubicam JWT Hill & Knowlton Burson-Marsteller GroupM Cohn & Wolfe Brand Union
Website	WPP.com

WPP plc, (Wire and Plastic Products) is a British multinational advertising and public relations company with its main management office in London, England, and its executive office in Dublin, Ireland.^[4] It is the world's largest advertising company by revenues, and employs around 190,000 people in 3,000 offices across 112 countries.^[3][5] It owns a number of advertising, public relations and market research networks, including IMRB, Millward Brown, Grey, Burson-Marsteller, Hill & Knowlton, JWT, Ogilvy & Mather, TNS, Young & Rubicam and Cohn & Wolfe.^[3]

WPP has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It has a secondary listing on NASDAQ.

History

Wire and Plastic Products plc was founded in 1971 as a manufacturer of wire shopping baskets. In 1985 Martin Sorrell, searching for a listed company through which to build a worldwide marketing services company, bought a controlling stake of just under 30% at a cost of $676,000.^[6][7] Sorrell had been the financial director for the advertising agency Saatchi & Saatchi from 1977 to 1985, managing its takeovers of companies in the US and the UK. The holding company was renamed WPP Group and in 1987 Sorrell became its chief executive.^[6]

During 1986 WPP became the parent company of Picquotware, a manufacturer of teapots and jugs, based in Northampton. In November 1987 a fire destroyed the Northampton factory and production was restarted at Burntwood in Staffordshire. On 25 November 2004 WPP closed the Burntwood factory and stopped manufacturing Picquotware: all assets were sold on 14 December 2004.^[8]

In 1987 the company acquired J. Walter Thompson (including JWT, Hill & Knowlton and MRB Group) for $566m.^[6] The company listed on NASDAQ in 1988.^[6] In 1989 it acquired Ogilvy Group for $864m^[6] and in 1998 formed an alliance with Asatsu-DK Inc. of Japan.^[6]

In May 2000, WPP agreed to acquire the United States-based advertising company Young & Rubicam for $5.7 billion, in what was at the time the largest ever takeover in the advertising sector.^[9] The takeover made WPP the largest advertising company in the world measured by billings and revenue, overtaking Omnicom Group and Interpublic.^[9] In 2006, WPP took over majority share of China's largest field marketing and brand activation agency, Always Marketing. Always has since been placed under the J. Walter Thompson group to provide breakthrough into the Chinese market and full on field marketing and brand activation support to JWT offices around Asia. In 2007, WPP Digital was created to develop the Group's digital capabilities. In October 2008, WPP acquired market research firm Taylor Nelson Sofres for £1.6 billion.^[10][11]

During 2009 WPP reduced its workforce by around 14,000 employees, or 12.3% of its then total staff numbers, in response to the onset of the 2008–2012 global recession.^[12][13]

In June 2012, WPP agreed to acquire the digital advertising agency AKQA for US$540 million.^[14][15]

In March 2014 WPP agreed to acquire a minority stake in Swedish broadcaster FlowNetwork. ^[16]

In July 2015 WPP agreed to acquire a majority stake in the digital healthcare agency ABS Creative.^[17]

In November 2015 WPP agreed to acquire a majority stake in Essence, a global digital agency. ^[18]

Operations

WPP's advertising agency company holdings include the Grey Group, Ogilvy & Mather, Young & Rubicam Brands, and JWT (formerly known as J. Walter Thompson Co.).

WPP's government lobbying and public relations company holdings including Hill+Knowlton Strategies, Ogilvy Public Relations Worldwide, Burson-Marsteller, and Cohn & Wolfe (the last two being part of Young & Rubicam Brands).

WPP's media investment management company holdings are operated by GroupM and include Mindshare, MEC (formerly Mediaedge:cia), Maxus, MediaCom (originally part of Grey Group) and Essence.

WPP's research insight and consulting companies, forming a separate umbrella group known as Kantar, comprise BMRB, Added Value, Kantar Video, Indian Market Research Bureau, Millward Brown, Management Ventures Inc., Research International (which no longer exist as an entity after the merger with TNS) and TNS.

Delfinware Domestic Wireware, which was established in 1969 and manufactures kitchen and bathroom wire racks, is also a subsidiary of WPP Group.^[19]

Governance

WPP is governed by a board of directors, whose current members include Colin Day, Esther Dyson, Orit Gadiesh, Ruigan Li, Philip Lader, Stanley Morten, Kōichirō Naganuma, Lubna Olayan, John Quelch, Mark Read, Paul Richardson, Jeffrey Rosen, Timothy Shriver, Martin Sorrell, Paul Spencer and Solomon Trujillo.

Controversies

2012 shareholder revolt on executive remuneration

With a number of shareholder revolts over executive pay having already happened at other public companies' AGMs earlier in the year, the media coverage of Martin Sorrell's intended £12.93m pay packet drew increasing public attention.^[20][21] The result was an overwhelming 59.52% shareholder vote to reject the resolution.^[21][22]

Taxation

It has been reported that WPP goes to great lengths to lower its own corporate tax bill. The Guardian reported that between 2003 and 2009 the company paid £27m in UK corporation tax, compared to what the newspaper "might expect" based on reports of the firm making 15% of its profit in the UK, of around £126m.^[23]

Television Audience Measurement

In 2012 the Indian broadcasting NDTV filed a lawsuit against Television Audience Measurement (TAM), a joint venture of the former competitors Nielsen and Kantar Media Research which for years has provided the only TV audience measurement system in India. WPP Plc was listed among the defendants as the holding group of Kantar and IMRB. NDTV's lawsuit, filed in the New York State Supreme Court under the Foreign Corrupt Practices Act and seeking $1.4 billion for negligence and hundreds of millions for interference and breach of fiduciary duty, cited a public conversation between Vikram Chandra, CEO of NDTV, and Martin Sorrell, CEO of WPP, in which Chandra had described ways in which the system was prone to tampering and bribery; his request for a halt to the publication of the allegedly compromised data was unsuccessful.^{[24][25][26][27][28]}

WPP responded that the lawsuit had not been served on WPP or any of its operating companies, the New York court had no jurisdiction in the case and that it would file for dismissal, seeking legal costs, and that it was considering a lawsuit against NDTV for defamation, a threat which NDTV in turn called "baseless".^[29] The motion to dismiss was filed a week later, with the statement in its memorandum of law that "This case is nothing more than a desperate attempt by the plaintiff, a television station in New Delhi, India, to drum up media coverage in India to divert attention from the real reasons its programmes have had low audience ratings and its financial performance has been abysmal for five years ... New Delhi TV has crossed the globe and come to New York State Supreme Court to complain about an Indian company, TAM, and how it measures the ratings of television programmes in India."^[30] The motion to dismiss is to be decided by the court on 14 December 2012.^[31] Nielsen later filed its own petition for dismissal, writing that "NDTV attempts to transform a potential contract claim against TAM into tort and oral contract claims against the Nielsen defendants. Nothing in the law supports such a magic trick. Simply put, NDTV fails to allege a legal duty independent of a contract and fails to allege all of the elements needed to support each cause of action."^[32]

References

External links

• WPP official website

FTSE 100 companies of the United Kingdom   → FTSE 250
3i Admiral Group Anglo American Antofagasta Ashtead Group Associated British Foods AstraZeneca Aviva BAE Systems BHP Billiton BP Babcock International Barclays Barratt Developments British American Tobacco British Land BT Group Bunzl Burberry Capita Carnival Centrica Coca-Cola HBC Compass Group CRH Croda International DCC Diageo Direct Line Group Dixons Carphone easyJet Experian Fresnillo GKN GlaxoSmithKline Glencore Hammerson Hargreaves Lansdown Hikma Pharmaceuticals HSBC Imperial Brands Informa InterContinental Hotels Group International Airlines Group Intertek Intu Properties ITV Johnson Matthey Kingfisher Land Securities Group Legal & General Lloyds Banking Group London Stock Exchange Group Marks & Spencer Mediclinic International Merlin Entertainments Micro Focus International Mondi Morrisons National Grid Next Old Mutual Paddy Power Betfair Pearson Persimmon Polymetal International Provident Prudential Randgold Resources Royal Bank of Scotland Reckitt Benckiser RELX Group Rio Tinto Group Rolls-Royce Royal Dutch Shell Royal Mail RSA Insurance Group Sage Group J Sainsbury Schroders Severn Trent Shire Sky Smith & Nephew Smiths Group SSE Standard Chartered Standard Life St. James's Place Taylor Wimpey Tesco Travis Perkins TUI Unilever United Utilities Vodafone Whitbread Wolseley Worldpay WPP