Sir Martin Sorrell's announcement was stage-managed but seems genuine, and clears the way for other companies
Welcome home, Sir Martin Sorrell. OK, the WPP boss is merely considering moving the domicile of his advertising group from Ireland to Britain. And, yes, the announcement was excruciatingly stage-managed to suit the government's publicity machine. But Sorrell's intention does seem genuine.
None of his three conditions presents a substantial obstacle to return. The government clearly intends to change the controlled foreign companies rules. Sorrell's boardroom colleagues almost certainly won't object to leaving Dublin. And his shareholders rarely make a fuss, not even when the great man's complicated incentive arrangements are under the microscope.
So who's next? United Business Media was actually faster out of the traps than WPP ? well done. And Informa, the exhibitions and magazines group, made warm-ish noises today. So it should. It boasts about how it can trace its roots to 1734, when Edward Lloyd pinned his shipping list on the wall of his coffee shop in Lombard Street, thus creating the famous Lloyd's List. The company needs a very good reason to continue to structure itself as a "mid-Atlantic floating entity", as Andrew Witty of Glaxo (incidentally, a big WPP client) put it at the weekend. In Informa's case, the mid-Atlantic actually means Zug in Switzerland, but the point remains.
Next in line should be Wolseley, which spells "Plumb Center" the American way but was a British company for 120 years until it, too, took flight to Switzerland. It said at the time it thought it could save �23m that way.
That's not small change, but there are two points to make. First, Wolseley could have done its shareholders a bigger favour if it hadn't chased top-of-the-market acquisitions in the US, thus necessitating a later �1bn repair to its balance sheet. More pertinently, about a quarter of Wolseley's UK revenues are underpinned by public-sector contracts.
George Osborne should remember that fact the next time he needs a big corporate name to sprinkle stardust on his policy announcements ? he has sticks as well as carrots at his disposal. Wolseley should rethink.
Source: http://www.guardian.co.uk/business/2011/mar/24/wpp-martin-sorrell-budget-corporation-tax
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