Shareholders have voted in favour of doubling the pay packet of London Stock Exchange Group’s chief executive to £13m on the same day that fears were reignited about an exodus of UK-listed firms.
Investors backed the group’s plans to increase David Schwimmer’s maximum pay levels from £6.25m to more than £13m. The resolution passed, with nearly 89% voting in favour of the new pay policy.
The LSEG annual shareholder meeting was held as it emerged that two large UK-listed companies, Unilever and Anglo American, may leave the London market for lucrative deals and listings abroad.
The Australian mining company BHP has a £31bn offer for rival Anglo American, a move that could result in the cancellation of FTSE 100-listed firm’s UK shares. Two years ago, BHP dropped its dual Australia-UK listing in favour of a single home on the Sydney stock exchange.
Meanwhile, the chief executive of Unilever, Hein Schumacher, said the consumer goods company was “considering all options” for a potential listing of its ice-cream business, which makes brands including Magnum and Ben & Jerry’s, and could be valued at up to €17bn (£14.6bn).
Schumacher said he was “talking to many different stakeholders in the process” and had discussed a potential Amsterdam listing with the Dutch economic affairs minister. However, he did not confirm whether he met the equivalent UK minister, raising fears that London could miss out on another bumper stock market float. Schumacher added that he had “regular conversations with governments including the UK government”.
There has been much handwringing in the City and Whitehall over an exodus of listed firms from the London stock market. Those leaving include the travel group Tui, which will shift its listing to Germany, and the Dublin-based betting firm Flutter, which is asking shareholders to consider moving its shares to the US market.
Schwimmer tried to appear upbeat, telling shareholders on Thursday the pipeline of floats was “encouraging” and that a pending shake-up of listings rules, which include simplifying some requirements for companies, would be helpful. “We are very pleased with the direction of travel for the London market,” he said.
The influential shareholder advisory firm Glass Lewis had advised shareholders to reject Schwimmer’s pay policy, saying in a report this month that the company had not “sufficiently rationalised an increase of this magnitude in a lump sum approach, particularly given the CEO’s pay relative to UK peers”.
However, Schwimmer had argued that the group had to compete with peers in the US, where executives can expect much higher renumeration. “If London has an ambition to be a globally leading financial centre and to attract world-class companies, that means it has to attract world-class talent,” he said in February.
LSEG said this month that it was “focused on securing and retaining the calibre of talent required in a highly competitive global market” while “ensuring delivery of strong performance” was rewarded.
