FTSE bosses should be paid like top footballers, says ICAP founder
Bosses of London-listed firms should be paid like the best footballers without facing a backlash, Michael Spencer has argued.
The founder of brokerage ICAP and former Conservative party Treasurer said that to attract top talent to run major companies, the UK needed to tackle the “political hot potato” of FTSE bosses’ pay.
“We don’t mind paying our footballers, top-rate footballers, extraordinary amounts of money,” the billionaire said.
“Somehow that’s considered perfectly acceptable. But if the CEO of BP or HSBC earns £20m a year, materially less than their peer group in America, everyone jumps up and down saying this is an outrage.”
His comments come amid fears over the appeal of London’s markets and companies’ ability to compete with US rivals for talent.
The group of senior City figures led by London Stock Exchange boss Julia Hoggett, CMIT, has been pushing lawmakers and proxy advisers for UK executive pay to be brought closer to parity with US rivals.
Hoggett said last year that Britain needed a frank conversation on pay in order for firms to stay and grow in the UK rather than chase bigger pay packets in the US.
Spencer told the Financial Times: “The US celebrates the fact that great chief executives earn large amounts of money. They want their chief executives to be paid like football stars.”
FTSE 100 chief executives were paid a median of £4.1m last year, compared to $16m for S&P 500 bosses.
Elsewhere, Spencer warned that the cost of trading in the UK was also dragging on the competitiveness of its capital markets.
He said: “A simple starting point is that the UK stock market is the only major market in the world that still charges stamp duty on transactions. What you have therefore created with stamp duty is a market place that is less liquid and therefore ratings of shares will be lower in that market.”
“Why would any proper company therefore list in London?” Spencer added.