LSE boss Xavier Rolet stands down after ‘unwelcome publicity’
Mr Rolet has been replaced by chief financial officer David Warren, while chairman Donald Brydon said he planned not to stand for re-election in 2019.
London Stock Exchange Group boss Xavier Rolet has stepped down with immediate effect, blaming “unwelcome publicity” amid a mounting row over succession plans for the top job.
Mr Rolet had announced last month that he would step down by the end of 2018, but the move sparked a spat between the group and activist investor The Children’s Investment Fund Management (TCI), which accused the group’s chairman of pushing out Mr Rolet.
Mr Rolet has been replaced by chief financial officer David Warren at the helm, while chairman Donald Brydon said he planned not to stand for re-election in 2019.
Mr Rolet said: “Since the announcement of my future departure on 19 October, there has been a great deal of unwelcome publicity, which has not been helpful to the company.
“At the request of the board, I have agreed to step down as CEO with immediate effect. I will not be returning to the office of CEO or director under any circumstances.”
TCI, which owns more than 5% of the LSE, had ordered a shareholder vote for the removal of Mr Brydon and to retain Mr Rolet until 2021.
The LSE Group said it “believed, and continues to believe” that the previous plan to hunt for a successor to Mr Rolet for his departure by the end of 2018 was “in the best interests of the company”.
It has now asked TCI to withdraw its demands for a shareholder vote in light of Mr Rolet’s decision.
The LSE’s leadership row had caught the attention of the Governor of the Bank of England, Mark Carney, who said on Tuesday that he was “mystified” by the tussle.
Mr Carney called for urgent clarity and said he “can’t envisage a circumstance where the CEO stays on beyond the agreed period”.
Shares in the LSE Group fell 2% after Mr Rolet’s shock announcement.
Mr Rolet will now be placed on gardening leave for 12 months, during which time he can be consulted by the board, but can bring forward his notice to four weeks and instead receive a payment in lieu.
He is still eligible for an annual bonus worth up to 225% of his salary for 2017, as well as share awards under the long-term incentive scheme.
Mr Warren will be paid a salary of £700,000 in the role of interim chief executive, up from £488,000 in his previous role.
Mr Brydon said: “The board is confident LSE Group will continue to prosper with David Warren as interim CEO and the existing strong management team.”
On Mr Brydon’s decision not to stand for re-election at the group’s next annual general meeting, the LSE said: “He and the board believe that at that point it would be in shareholders’ interests to have a new team at the helm to steer the future progress of the company.”
Mr Rolet’s departure comes after eight years in the top job, during which time the LSE has seen its stock market value soar from £800 million to nearly £14 billion.
Following last month’s announcement of his departure plans, TCI investment manager Christopher Hohn wrote to Mr Brydon, accusing him of offering poor explanations for Mr Rolet’s departure and claiming that confidentiality agreements were barring full disclosure of his plans.
The fund had been urging Mr Brydon to resign on his own terms, for Mr Rolet’s contract to be extended and for the group to suspend the search for his successor.