Average Life of a CEO Is About Five Years: Sorrell

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Aug. 5 (Bloomberg) -- WPP CEO Sir Martin Sorrell and Sri Kumar Global Strategies President Komal Sri Kumar discuss geopolitics, the economy and the markets on “Bloomberg Surveillance.” (Source: Bloomberg)

Sorrell from wpp.

Good morning.

Away from the geopolitics, we talked about risk aversion.

You are on the frontlines about whether companies feel ok about the economy.

What is the state of the economy from your perspective?

Douglas flint's, the but risk aversion applies to clients -- comments about risk aversion applies to clients, too.

Many companies are just around making revenue forecaster expectations.

They are making it by cutting costs.

Currency makes it much more difficult to make those targets.

Foreign multinationals, multinationals based in the u.k. are struggling to make their numbers even at the top and bottom line.

In that environment, or fast growth markets are slowing down, not so much western continental europe, but the u.s. has improved, not as much as we would like to say, that environment makes companies risk-averse.

Average life of a ceo is for-five years.

-- 4-5 years.

Boards do not want any trouble.

The deal activity it's a little bit puzzling if you believe that people are risk-averse.

That is the way through to getting more growth.

In a world which has become very risk-averse.

There is too much focus on cost and too little focus on the top line.

You have had an exceptionally cautious view on american economic experiments.

Then we get 4% gdp.

I had e-mails to ask you if you are wrong.

I'm not wrong if you look at the bottom line rather than just looking at the headline.

1.5% of that growth came from inventory accumulation.

I would maintain it is unintended inventory accumulation, something that is going to be worn out and run down.

If you remove that, if you had inventory accumulation of zero, the gdp growth in the second quarter would have been 2.5%. i need you to brave sir martin sorrell right now.

Is the animal spirit out there?

Excuse me.

It is a surveillance correction.

I hope you noticed that.

Sir martin sorrell put me in the timeout chair.

When does this turn?

When do we find the animal spirit?

I would say from a macro point of view, we are seeing the risk aversion that you made reference to, from a macro viewpoint, i see that, in terms of the 10 year treasury yield.

It did not stay up as it went up.

You see high yield spreads which bottomed out.

They are rising.

This is similar to what happened in 2007. as far as animal spirits are concerned and the turnaround to optimism, my view is that it is going to come, but only after it is displaced.

The animal spirit is not around the corner.

It is something we have to wait

This text has been automatically generated. It may not be 100% accurate.


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