Investors to vote on plans to double London Stock Exchange boss’s pay to £13m

The owner of London’s stock market is facing an investor backlash over plans to more than double its boss’s pay.

London Stock Exchange Group (LSEG) wants to up chief executive David Schwimmer’s maximum pay from £6.25million to £13million.

Investors will vote today on whether to allow the near-£7million pay rise, at the annual general meeting amid soul searching in the City over the health of the stock market over which Schwimmer presides.

Analysts warn that a ‘relentless’ wave of takeover activity, amounting to a ‘feeding frenzy’ on undervalued British stocks, has left the exchange facing ‘death by a thousand cuts’.

But the London Stock Exchange (LSE) is only part of the wider group, with LSEG’s data and analytics division now accounting for around 70 per cent of its revenues.

And supporters of Schwimmer say the share price has doubled since he took over in August 2018.

It is the LSE, however, that remains the public-facing arm of the company.

And moves to double the chief executive’s pay have raised some eyebrows.

AJ Bell investment analyst Dan Coatsworth said: ‘The reputation of the UK stock market needs improving and London needs to be a more attractive place for a company to want to list their shares, a lot of which lies on Schwimmer finding solutions.

‘Much of the proposed deal is linked to future performance, so Schwimmer will have to work hard to earn it. That job is not going to be easy.’ Shareholder advisory firm Glass Lewis says the hike is ‘excessive’.

This year a host of companies has agreed takeovers that will see them leave the market. 

Proposed deals so far include a £5.8million bid for packaging group DS Smith, Nationwide’s £2.9billion takeover of Virgin Money, Barratt Development’s £2.5billion offer for smaller builder Redrow and the £762million purchase of haulier Wincanton by a US rival.

Several have jumped ship, including CRH and Ferguson which moved their shares to New York, and Tui, which switched to Frankfurt.

Shareholders in gambling giant Flutter, owner of Paddy Power, vote on moving its listing to New York next month.

And there is speculation that Nasdaq, America’s biggest stock exchange, is weighing up a bid for London’s junior Alternative Investment Market.

Schwimmer has earned £28million since taking over at LSEG. Last year he was paid £5.1million out of a maximum £6.25million, which LSEG says lags behind rivals in the US at the likes of Nasdaq as well as data firms such S&P Global.

It comes amid a wider discussion about whether British company bosses are underpaid. 

Others seeking huge rises include AstraZeneca boss Pascal Soriot, Tesco chief Ken Murphy and Deepak Nath, of industrial group Smith & Nephew.

Julia Hoggett, of the stock market division of LSEG, has said lower executive pay was making it harder for British firms to attract ‘global talent’.

LSEG said: ‘We’re focused on securing and retaining the calibre of talent required in a highly competitive global market while ensuring delivery of strong performance is rewarded.’