J ulia Hoggett has been a breath of fresh air as chief executive of the London Stock Exchange for the past two years. A sociologist by university background, she talks as if she genuinely cares about the role of the exchange in the UK economy – a concern that is often hard to detect within the parent company’s obsession with global data and analytics products.
She’s firmly within the new consensus that says core elements of the UK’s governance and shareholder-protection regime should be dismantled to attract more companies to London, as proposed by the Financial Conduct Authority this week (this column’s view: sadly, that pragmatic analysis may be correct). But she’s also produced genuinely innovative ideas, such as a plan to create a share-trading venue for privately owned firms as a stepping stone to a full UK market listing.
Hoggett’s latest free-thinking thoughts on how to boost the capital markets “ecosystem”, however, deserve no applause. Rough gist: UK-based executives need a pay rise to keep them loyal to London.
OK, the analysis is not quite so unsophisticated, but the spirit of her appeal for “a constructive discussion” about boardroom rewards isn’t hard to decipher. “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,” argues Hoggett.
“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.”
She’s obviously correct that proxy voting agencies are hypocrites who protest, say, a £10m boardroom package in the UK while nodding though a $30m one at an
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