The chief of the London Stock Exchange has called for bosses’ pay to be boosted if the City is to continue to attract top firms and talent.
Speaking at the Innovate Finance Global Summit today, Julia Hoggett said that the UK needed to have a “grown up conversation” about the remuneration of executives if it is going to tempt in firms to do business here.
“The reality is that if we want the best companies to start here, scale here and grow there and stay here, then we need to be able to make sure that we can reward the best people,” she said.
“And that that becomes part of celebrating and understanding the value of the company and having proper grown up conversations about what remuneration is, but also the alignment of incentives.”
Hoggett said the UK was lagging behind the US where non-executive directors can benefit from compensation in shares as well as cash.
“That may seem radical, but it’s not radical in most other parts of the world,” she added.
Hoggett’s calls for a rethink of executive pay follow vocal demands from the City to lift an EU-era cap on bankers’ bonuses, which some warn is similarly blocking a stream of top talent coming to work at UK banks.
Her comments come just one day after City A.M. revealed Ron Kalifa, author of the landmark review of fintech, wrote to the Treasury calling for a list of reforms to the UK’s capital markets ecosystem, including calls for executives’ pay to be boosted.
City A.M. understands that Kalifa warned ministers that executive remuneration risked lagging behind the level of risk and liability that they are expected to shoulder, leading to an exodus of top talent away from public firms.
Both Hoggett and Kalifa similarly called for a reform of the landscape for analyst research to ensure that UK firms could get the level of coverage required for growth firms to attract investment.
European brokers have been forced to slash the size of their analyst teams after EU-era MiFID II rules forced them to ‘unbundle’ analyst and trading fees.