UK executives should be paid more if the country is to retain talent and dissuade companies from moving overseas, according to the head of the London Stock Exchange.
Julia Hoggett said there needed to be a “constructive discussion” about the approach to executive salary in Britain as part of wider efforts to increase the attractiveness of London’s capital markets.
“We should be encouraging and supporting UK businesses to compete for talent on a global basis, so we remain an attractive place for businesses to base, stay and grow,” the chief executive said in a statement on Wednesday. LSE extension website.
“The alternative is to continue to stand by as our biggest exports become skills, talent, tax revenues and the companies that generate them.”
His comments come as shareholders of some of Britain’s biggest companies mount rebellion against executive pay plans. Nearly 60 percent of Unilever Shareholders rejected the company’s remuneration report on Wednesday amid fears that the incoming chief executive’s pay, which includes a basic salary before bonuses of 1.85 million euros, was too high.
pearson He also suffered a sizable shareholder revolt last week after the education firm recommended raising the maximum annual bonus level from 200 to 300 percent of salary.
Hoggett’s push on pay coincides with a push by the UK’s financial regulator to overhaul stock market listing rules in a bid to stem a exodus of companies from the London Stock Exchange, where the number of listed companies has fallen by 40% since 2008.
“If the UK capital markets community chooses to stay on its current path, the consequences of that decision should be explicitly recognized and accepted,” he added.
Smith and nephew lost its chief executive Namal Nawana in late 2019 after just 18 months as the medical device maker was unable to meet his salary demands. Before his departure the company had discussions moving its listing to the United Statespartly to escape the UK’s tougher approach to executive pay.
Hoggett criticized the decision by some asset managers and chief executives to vote against the pay policies of UK company executives, which often fell “significantly below global benchmarks” and, he said, put the UK in a position of downside.
“Often the same delegating agencies and asset managers who object to UK compensation levels support much higher compensation packages in different jurisdictions, particularly in the US,” he added.
He said the LSE was seeking to bring together the chairmen of listed companies, founders of private companies, asset managers, the Financial Reporting Council, the Investment Association and lead agencies for talks.
Sébastien de Montessus, of Endeavor Mining, was the FTSE 100’s best-paid chief executive in 2021, earning £16.85 million, according to research last year by the High Pay Center and TUC search. In contrast, the highest-paid head of an S&P 500 company in 2021 was Expedia’s Peter Maxwell Kern, whose total adjusted pay was $296.2 million, according to S&P Global Market Intelligence.
City minister Andrew Griffith said Hoggett’s comments “will inform the work we are doing to increase the UK’s supply to companies wishing to list in the UK”.
“We want to attract the best and the brightest to these shores to help innovate and grow our economy,” he said.
Corporate chairmen have complained for years about what they see is a growing crisis facing UK boardrooms. They say they struggle to recruit the best executives and board directors and constantly fear investor pushback.
At the same time relations with shareholders they’ve gotten worse with presidents complaining about the role of proxy voting agencies, endless governance requirements, and investor “box-picking” exercises hampering the company’s growth.
However, the cost-of-living crisis has placed emphasis on widening the pay gap between the top and bottom echelons of companies. High Pay Center and TUC research estimates that the median pay of the FTSE 100 chief executive in 2021 was 109 times that of the average full-time worker, up from 79 times in 2020 and 107 times in 2019.
—————————————————-
Source link