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London Stock Exchange Group’s shareholders have backed a proposal to double the pay of its chief executive to a maximum possible £13.1mn, making David Schwimmer one of the top-paid FTSE 100 bosses.
Nearly 89 per cent of shareholders voted for the plan, under which chief executive Schwimmer can earn incentive payments of up to 550 per cent of his £1.375mn salary and a 300 per cent bonus for this year. His pay package was £6.25mn last year.
Schwimmer, who has led LSEG since 2018 after a 20-year career at Goldman Sachs, earlier this year said that UK companies needed to pay their executives more in order to compete with US businesses.
Approval of Schwimmer’s new pay deal marks the latest win for UK companies seeking to compete with higher-paying US-based businesses for talent, and makes Schwimmer one of the best-paid FTSE 100 chief executives.
AstraZeneca shareholders this month approved a bumper pay rise for chief executive Pascal Soriot to £18.7mn, justifying the move by saying the company’s main rivals are US-based.
LSEG has used a similar rationale. In its annual report, the company argued it should be measured against large financial-data providers such as US-based S&P Global, and that higher pay is necessary to hire and retain executives.
Prior to Schwimmer’s pay rise, one of his subordinates — the New York-based chief executive of LSEG’s electronic bond trading platform Tradeweb — was paid nearly twice as much as him, a reflection of the stark salary differences across the Atlantic.
“We have also observed pay disparities when recruiting US-based talent with many candidates having existing pay levels that are higher than our CEO’s,” LSEG said in its annual report.
Shareholder adviser Glass Lewis had recommended that investors vote against Schwimmer’s new pay package, saying the large lump-sum increase was unjustified. “While the company is significantly exposed to the US market, the CEO is currently UK-based and, in a UK context, his available remuneration is already significant,” it said.
In recent years, LSEG has transformed from being a stock exchange operator to focusing on providing financial data to traders, asset managers and other industry professionals.
In the first three months of the year, LSEG’s revenues rose 7.3 per cent to £2.1bn, which was in line with analysts’ expectations. Revenues from LSEG’s data business rose 4.3 per cent while that from equity market activity rose just 1.6 per cent amid a slow start to the year for listings.
Gross profits hit £1.9bn, a 7.6 per cent rise compared to the same period last year.
Microsoft has a 4 per cent stake in the group and they have been building new products together. LSEG said on Thursday that these would start to be rolled out later this year, including a new directory of financial services professionals.
Revenues at its data business were “impacted by cancellations related to Credit Suisse as expected”, LSEG said, as the collapsed bank dropped its data subscriptions.
