Activist investor Sir Chris Hohn is continuing his campaign against the chairman of the London Stock Exchange (LSE) Group, Donald Brydon, in a bitter row which has already forced the early resignation of chief executive Xavier Rolet.
Investors will decide the fate of Brydon in a meeting on 19 December at a Southwark hotel, the LSE announced this evening in a circular sent to shareholders, after Hohn refused to back down.
The meeting was requisitioned by Hohn after he objected to the board's decision to remove Rolet, who presided over a sixfold increase in the firm's share price during his eight and a half years at the helm.
Brydon will be forced to leave if a simple majority of shareholders vote for him to go, leaving the venerable institution without a top leadership team at a crucial point in the City's history.
Hohn alleged the chairman had failed to provide "any substantive basis for the removal of the chief executive". However, the shareholder circular claims "aspects of Xavier Rolet’s operating style" were crucial to the decision to replace the chief executive, alluding to reports of a hard-driving manner leadership.
Rolet's decision not to publicly confirm he would leave once Hohn demanded he stay on also "negatively impacted" the relationship with the board, the circular said. Other factors in the decision included the length of his tenure and uncertainty following the failed merger with German rival Deutsche Boerse. The circular said: "After a long tenure of leadership, however distinguished, a change is often positive when developing future operations."
Hohn, who runs The Children's Investment (TCI) fund, this morning withdrew a call for a vote on extending Rolet's contract after the former chief executive made it clear he would not remain at the firm.
Brydon is already set to leave, after a compromise in which he said he will not seek re-election to the board in 2019. The circular describes Brydon as "the right person to lead the board", and says keeping him on is in the "best interests" of shareholders and the firm as the search for a new chief executive continues. Losing him would "damage the ongoing stability and success of LSEG", it added.
The LSE also claimed the backing of the City watchdog, the Financial Conduct Authority (FCA), in its battle with Hohn. The circular said: "The FCA agrees that this is important, and an appropriate way to achieve an orderly succession."
The FCA declined to comment. TCI declined to comment.
The circular reveals that Rolet and the board negotiated a script of answers to media questions, including that "the Company did not represent that Xavier Rolet had agreed to retire". The agreement is now void, the LSE said, although it added there is now a separate agreement between Rolet and the LSE not to make damaging statements about each other.