The 300-year-old London Stock Exchange Group (LSEG) will vote on Thursday on whether to potentially double CEO David Schwimmer’s salary. The bourse has advocated for higher executive compensation in order to bolster the UK capital markets.
The LSEG annual general meeting will vote on recommendations to authorize Schwimmer. This would allow him to receive up to 13.063 million pounds ($16.14 million) in total yearly compensation, marking an increase from the previous 6.25 million pounds.
In recent years, shareholder discontent has focused on executive compensation at Britain’s top companies. Critics, pointing out a growing disparity between typical worker incomes and CEO pay, have raised concerns.
Some fund managers in the UK are supporting proposals to allow boards more leeway when it comes to compensating them. This move aims to stop great personnel from leaving for nations where pay is less of a contentious issue.
Schwimmer’s compensation package would remain largely performance-based. Additionally, his base pay would increase from the current 1 million pounds to 1.375 million pounds starting in January 2024.
The 5.127 million pounds the former Goldman Sachs banker made in 2023, according to LSEG, is less than competitors like CME, Nasdaq, ICE, and major data firms like S&P Global and MSCI.
Since its pay policy was last reviewed in 2020, LSEG has evolved into a very effective, intricate, and worldwide organization. It produces strong performance and substantial shareholder value, as told to Reuters by the company.
LSEG, which also released a trade statement for the first quarter on Thursday, stated, “We have also reinforced a pay-for-performance philosophy and aligned executive compensation with the median of our global sector peer group.”
However, ISS, which counsels stockholders on voting matters, has suggested that Schwimmer’s compensation adjustments be rejected, citing incomplete Refinitiv integration.
“Despite the strategic and financial benefits expected from the transaction, the appropriateness and timing of the proposed salary increase do not appear sufficiently merited,” stated ISS.
Since Brexit, LSEG has faced increased competition for listings from EU-based financial hubs like Paris and Amsterdam. This has intensified competition from New York and increased pressure on authorities to support London’s worldwide competitiveness as a financial center.
Julia Hoggett, CEO of London Stock Exchange plc, chairs the Capital Markets Industry Taskforce. She asserts that executive remuneration policy is a crucial element of competitiveness and can help attract, reward, and retain top personnel.
Schwimmer’s anticipated pay increase coincides with the country’s cost of living crisis. This comes after Britain lifted a ceiling on banking bonuses inherited from the European Union.
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