Yahoo Finance Pay British bosses more ‘or put London’s global status at risk’
The UK must consider copying US-style pay packages or risk losing its status as a global financial centre, the head of the London Stock Exchange Group (LSEG) has said.
David Schwimmer said British investors had to allow chief executives to earn more to stop an exodus of companies from the London market and help attract top talent.
Mr Schwimmer said: “When you look at standards for compensation around the world, the US is in a different place. That is an issue that companies that are competing on a global basis from a base in London need to take into account.”
A dearth of new listings in London has prompted fears about whether the capital can compete with US and European rivals.
Under £1bn was raised on the London market last year through 23 initial public offerings (IPO), a low point for the exchange.
Companies once listed on the London Stock Exchange (LSE) are also leaving, with Tui moving its primary listing to Germany and CRH moving to New York. Paddy Power-owner Flutter has also said it is planning to shift to the US.
Lower levels of executive pay in the UK have been blamed for the London stock market’s decline, with many investment advisors and fund managers reluctant to sign off on generous remuneration deals.
Mr Schwimmer suggested pay was a key factor holding back London’s stock market. He said: “When we are looking to attract talent, when we’re looking to retain our people, we need to make sure that we are providing a competitive offering in light of that globally competitive environment.”
Mr Schwimmer himself is reportedly in line to benefit from US-style pay after the board of LSEG sounded out investors about doubling what he can earn.
The US-born chief executive received £6.25m last year but an overhaul of his pay could see him pocket up to £11m.
He declined to comment on his own remuneration but admitted that the LSEG had to pay higher wages to attract the best of the best.
His comments come after Julia Hoggett, who runs the stock market day to day and reports to Mr Schwimmer, last year also warned that lower pay levels were holding back London
Ms Hoggett said there was a “lack of a level playing field” when it came to pay.
Mr Schwimmer said 2024 would be a better year for new listings but said there was no “complacency” about the issue. He said: “I would expect the number of IPOs this year to be higher than what we have seen last year. Last year was a weak year around the world for IPOs.”
LSEG is best known as the owner of the 220-year old London Stock Exchange but it makes most of its income from data.
The group boasts 45,000 customers and sells software to 99 out of the world’s 100 largest banks and 75 of the world’s top fund managers.
The FTSE 100 group reported revenues 8.3pc higher at £8bn for 2023 and a 7.9pc rise in adjusted operating profits to £2.8bn.
