London stock exchange chief calls for UK firms to pay bosses more

theguardian.com:

The chief executive of the London Stock Exchange has called for the bosses of UK companies to be paid more in order to match their counterparts in the US.

Julia Hoggett argued that British companies were finding it difficult to attract and retain executives because they offered smaller pay packages than rivals in the US.

The comments, in an article published on the LSE’s website on Wednesday, were criticised as “a bit deluded” by the High Pay Centre, a thinktank that tracks chief executives’ pay, while the head Trades Union Congress (TUC) said UK chief executive pay should go down, not up.

Hoggett’s remarks came hours after the UK financial regulator, the Financial Conduct Authority, announced a sweeping relaxation of rules on listing companies on British stock exchanges. Hoggett welcomed the changes, which could benefit the LSE if they attract more companies to London.

The FCA acknowledged that the shake-up would mean UK investors would face more risks because there would be fewer checks. However, Hoggett argued the changes left out the “critical element” of executive pay.

Companies are too often “hampered” by asset managers voting “against executive pay policies even when those pay levels are significantly below global benchmarks”, she wrote. “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.

“This lack of a level playing field for UK companies is often not discussed, or if it is, the downside risks to our companies, our economy and our competitiveness are not part of the conversation.”

Union leaders and some politicians have suggested that rising executive pay fuels the perception of inequality,