London Stock Exchange to press ahead with huge pay rise for chief executive despite backlash from shareholders
The London Stock Exchange will press ahead with a huge pay rise for its chief executive despite a backlash from shareholders.
In April, 24 per cent of investors who voted opposed the pay report, which raised David Schwimmer’s basic salary by £200,000 to £1m.
The pay rise also increased the maximum the 52-year-old could earn in bonuses and pensions from £4.3m to £5.4m per year, which shareholder advisory group ISS said was ‘not sufficiently merited’.
Writing on the wall: The board has remained defiant saying the pay rise is justified because the scope and responsibilities of the job had just increased
But the board remained defiant yesterday saying the pay rise is justified because the scope and responsibilities of the job had just increased.
The LSE bought Refinitiv, a financial data group, earlier this year for £20billion from Thomson Reuters and Blackstone in an all-share transaction.
Refinitiv made sales of £4.5billion last year – more than double the revenues of the LSE Group (LSEG) – and has roughly four times its workforce. A spokesman for LSEG, which now has a market capitalisation of £38.4billion, said: ‘The large majority of shareholders continue to support the decision and recommendations of the remuneration committee as the group becomes a significantly larger and global business.’
The company previously said it recognised that many shareholders would have preferred a ‘phased’ pay rise for the chief executive, to reflect that the deal with Refinitiv was yet to pay off for shareholders.
In the money: David Schwimmer
Schwimmer, a former Goldman Sachs executive, has been paid £11.5m since he joined in 2018. His predecessor Xavier Rolet raked in £45.5m between 2009 and 2018 before he was sacked. Schwimmer has faced a battle to convince investors the transition from exchange operator to financial markets and data giant will pay off. Shares have fallen from 9800p following the deal’s completion in January to 7448p last night. Refinitiv’s flagship product Eikon, a data terminal used by fund managers and analysts, suffered a series of outages earlier this year.
Refinitiv also lost its boss David Craig this year, and is in a dispute with Reuters over a three-year contract which is costing it £235m per year.
Schwimmer has focused on integrating IT systems between the two companies this year, while pointing investors to a five-year plan to bring the two businesses together. But there are concerns the expensive integration plan could put targets to aggressively reduce Refinitiv’s debt in jeopardy.
To ease competition concerns, LSEG sold its Borsa Italiana exchange and its Italian fixed income trading business, MTS, for £3.6billion.