UK Edition
Pay us more to boost the City of London, say FTSE chiefs
Square Mile bosses call for more government action to boost pension funds’ investing
Low executive pay is the biggest obstacle to boosting the City of London, FTSE bosses have said.
A new survey of 150 directors at London-listed companies found that lower pay for City chiefs compared to rival financial centres was holding back the London Stock Exchange (LSE) as a listing venue.
The research, carried out by investment bank Numis, adds to growing complaints in the Square Mile that Britain is being held back by a campaign against high pay.
Julia Hoggett, chief executive of the LSE, has said a pay disparity between UK chief executives versus their US counterparts has “not received enough attention” and called for a level playing field to stem an exodus of companies.
Chief executives of S&P 500 companies in the US make on average $10m more than FTSE 100 counterparts, according to data from Equilar and Deloitte published earlier this year.
38pc of executives surveyed by Numis said the need for a more competitive executive remuneration environment was the most important reform needed to improve the LSE.
Meanwhile, 32pc said regulators should ease corporate governance rules and 20pc said making it easier to fundraise on the stock market was the most pressing reform needed.
The City’s stock market has faced a bruising few months after a number of companies left for New York, while new deals have stalled.
Ross Mitchinson, co-chief executive of Numis, said: “There is room for additional bold steps to enhance London’s attractiveness – whether that be for homegrown UK businesses or as an international financial centre – though the UK needs to balance that with maintaining the high standards of regulation and governance it has come to be known for.”
More than 90pc of the directors polled also said that the Government should go further on pension reforms and force retirement schemes to invest in UK-listed companies.
Mr Mitchinson said that directors would have liked to see Jeremy Hunt, the Chancellor, mandate retirement schemes to “support UK Plc and not just private companies”, adding: “It does seem crazy that many UK pension funds have almost no equity exposure.”
Earlier this month, Mr Hunt announced a voluntary “compact” deal among the country’s biggest pension companies to invest 5pc of their assets in start-ups and private equity, but fell short of mandating funds to back UK assets.