UK executives should be paid more if the country wants to retain talent and keep companies from shunning the City of London in favour of listings elsewhere, the head of the London Stock Exchange has said.
A “constructive discussion” on the UK’s approach to executive pay was necessary in the context of broader talks on the effectiveness of London’s capital markets, Julia Hoggett said in a statement on the LSE website on Wednesday.
“We should be encouraging and supporting UK companies to compete for talent on a global basis, so we remain an attractive place for companies to base themselves, stay and grow,” the chief executive added.
“The alternative is we continue standing idly by as our biggest exports become skills, talent, tax revenue and the companies that generate it.”
Her comments come as companies flee London’s stock exchange, where the number of listed companies has fallen 40 per cent since 2008, and as the UK’s financial regulator pushes for an overhaul of stock market listing rules.
The LSE and the Capital Markets Industry Taskforce seek to bring together the chairs of listed companies, founders of not yet listed businesses, asset managers, the Financial Reporting Council, the Investment Association and proxy agencies for talks.
Hoggett criticised asset managers and proxy advisers and their votes against executive pay policies of UK companies, which can often be “significantly below global benchmarks”, meaning in her view the UK is not on a “level playing field”.
“Often the same proxy agencies and asset managers that oppose compensation levels in the UK support much higher compensation packages in different jurisdictions, notably in the US,” she added.
