Lars Mucklejohn
Sun, 7 April 2024 a
David Schwimmer, chief executive officer of London Stock Exchange Group Plc, at the Ukraine Recovery Conference in London, UK
Photographer: Chris J. Ratcliffe/Bloomberg via Getty Images
The owner of the London Stock Exchange is facing shareholder dissent after a key proxy advisor opposed plans to double its chief’s pay amid a debate over how the Square Mile can compete with US-style remuneration deals.
The London Stock Exchange Group plans to boost its chief executive David Schwimmer’s pay to a reported £13.2m from £6.3m, citing its diversification into a global financial markets infrastructure and data services firm under his leadership.
The firm said in its latest annual report that changes to its remuneration policy would “enable LSEG to secure the calibre of talent and new skill sets required for LSEG’s continued transformation in a highly competitive global market”.
However, proxy advisor Glass Lewis has urged shareholders to vote against LSEG’s plans for Schwimmer’s pay at its annual general meeting on 25 April, The Sunday Times reported.
While not opposing the increase in his salary to £1.4m from £1m, Glass Lewis raised concerns over sharper rises elsewhere in his pay package.
It calculated that Schwimmer’s short-term bonus opportunity would rise to £4.1m from £2.25m under LSEG’s proposals, while his long-term bonus potential would jump to £7.5m from £3m. Glass Lewis said Schwimmer’s pay rise should be phased in over a number of years.
Schwimmer, an American, joined LSEG in 2018 after two decades at US investment banking giant Goldman Sachs.
He has overseen a period of bumper growth for the firm, transforming it into a data and analytics behemoth with some 25,000 staff and operations in more than 60 countries. LSEG’s share price has more than doubled since Schwimmer joined.
However, fears have grown over its flagship exchange, which saw just 23 new firms list last year – a 49 per cent slide from the 45 registered in an already quiet 2022.
City grandees have recently argued that London risks losing listings and top talent to the US if bosses cannot receive the larger pay deals that are available across the pond.
Julia Hoggett, the CEO of the London Stock Exchange, said last May that the UK needed a “constructive discussion” on pay to stop top bosses fleeing to New York.
Glass Lewis said that although LSEG now has more exposure to the US market, its chief “is currently UK-based, and in a UK context, his remuneration is already significant”.
ISS, another influential proxy advisor, has backed Schwimmer’s pay rise but warned it would be “significant and unusual in the UK market”.
William Vereker, who chairs LSEG’s remuneration committee, told Glass Lewis that the company consulted almost 100 shareholders representing nearly 80 per cent of the voting rights and found they were supportive of the changes to Schwimmer’s pay.
He added that the idea of “excessive” pay was an “outdated ideological position that does not reflect the realities companies face in attracting world-class talent in a global marketplace”.
An LSEG spokesperson told City A.M.: “LSEG has transformed into a highly successful, complex, global organisation since our remuneration policy was last materially reviewed in 2020, delivering strong performance and significant shareholder value.”
They said the company was “focused on securing and retaining the calibre of talent required in a highly competitive global market whilst ensuring delivery of strong performance is rewarded” and that it had “aligned executive compensation with the median of our global sector peer group and reinforced a pay-for-performance philosophy”.
The owner of the London Stock Exchange is facing shareholder dissent after a key proxy advisor opposed plans to double its chief’s pay amid a debate over how the Square Mile can compete with US-style remuneration deals.
The London Stock Exchange Group plans to boost its chief executive David Schwimmer’s pay to a reported £13.2m from £6.3m, citing its diversification into a global financial markets infrastructure and data services firm under his leadership.
The firm said in its latest annual report that changes to its remuneration policy would “enable LSEG to secure the calibre of talent and new skill sets required for LSEG’s continued transformation in a highly competitive global market”.
However, proxy advisor Glass Lewis has urged shareholders to vote against LSEG’s plans for Schwimmer’s pay at its annual general meeting on 25 April, The Sunday Times reported.
While not opposing the increase in his salary to £1.4m from £1m, Glass Lewis raised concerns over sharper rises elsewhere in his pay package.
It calculated that Schwimmer’s short-term bonus opportunity would rise to £4.1m from £2.25m under LSEG’s proposals, while his long-term bonus potential would jump to £7.5m from £3m. Glass Lewis said Schwimmer’s pay rise should be phased in over a number of years.
Schwimmer, an American, joined LSEG in 2018 after two decades at US investment banking giant Goldman Sachs.
He has overseen a period of bumper growth for the firm, transforming it into a data and analytics behemoth with some 25,000 staff and operations in more than 60 countries. LSEG’s share price has more than doubled since Schwimmer joined.
However, fears have grown over its flagship exchange, which saw just 23 new firms list last year – a 49 per cent slide from the 45 registered in an already quiet 2022.
City grandees have recently argued that London risks losing listings and top talent to the US if bosses cannot receive the larger pay deals that are available across the pond.
Julia Hoggett, the CEO of the London Stock Exchange, said last May that the UK needed a “constructive discussion” on pay to stop top bosses fleeing to New York.
Glass Lewis said that although LSEG now has more exposure to the US market, its chief “is currently UK-based, and in a UK context, his remuneration is already significant”.
ISS, another influential proxy advisor, has backed Schwimmer’s pay rise but warned it would be “significant and unusual in the UK market”.
William Vereker, who chairs LSEG’s remuneration committee, told Glass Lewis that the company consulted almost 100 shareholders representing nearly 80 per cent of the voting rights and found they were supportive of the changes to Schwimmer’s pay.
He added that the idea of “excessive” pay was an “outdated ideological position that does not reflect the realities companies face in attracting world-class talent in a global marketplace”.
An LSEG spokesperson told City A.M.: “LSEG has transformed into a highly successful, complex, global organisation since our remuneration policy was last materially reviewed in 2020, delivering strong performance and significant shareholder value.”
They said the company was “focused on securing and retaining the calibre of talent required in a highly competitive global market whilst ensuring delivery of strong performance is rewarded” and that it had “aligned executive compensation with the median of our global sector peer group and reinforced a pay-for-performance philosophy”.
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