The metaphorical tug-of-war between the United States and Britain has heated up in recent years as British companies have gone public across the Atlantic.A related obstacle is attracting management talent from London Salary standard Much lower compared to some parts of the world like New York.
The chief executive of the London Stock Exchange has been outspoken about the need to boost pay packages for Britain’s top executives if it hopes to compete with global players.In an interview with Bloomberg in the city podcastJulia Hoggart of the London School of Economics highlights the challenges posed by lower executive pay scales.
“We have hindered ourselves from creating a level playing field to compete with the rest of the world,” she said in a podcast released Wednesday.
“We want the UK to create companies with global impact,” Hoggart said, adding that markets in Asia, the Americas and parts of Europe offer higher salaries for potentially “game-changing” experts, forcing the UK to Offer them a salary. Even more than the CEO paid to entice them to join.
“We have to be intentional about the potential impact it (executive compensation) has on the ability to create companies with global impact.”
According to a survey, the median salary of CEOs of S&P 500 companies in New York increased by 34% between 2015 and 2021, while the median salary of CEOs of London’s FTSE 100 index companies fell by 13%. wall street journal Report Starting in April. The significant differences in senior executive pay support Hoggart’s argument and hint at a widening pay gap between the UK and other regions.
“Over the last 20-30 years, the UK has gradually stopped investing in itself,” Hoggart said on the podcast, stressing that the country sometimes fell short in channeling capital into growth.
Hoggart had previously made similar comments in a blog post calling for an expansion of pay packages for senior executives in the UK.
Hoggart wrote: “We should encourage and support British companies to compete globally for talent so that we remain an attractive place for companies to base, stay and grow.” in a blog post in May. “The alternative is that we continue to stand by as our biggest exports become skills, people, tax revenues and the companies that generate those revenues.”
The blow to Arm’s overseas listing
The London Stock Exchange chief’s latest comments come just weeks after the initial public offering of British chipmaker Arm, which debuted with much fanfare on the U.S. tech-heavy Nasdaq index. The listing, worth $55 billion, is a huge blow to London as Arm was initially listed on the London Stock Exchange and Nasdaq until 2016 when SoftBank acquired the business for $32 billion.
In the podcast interview, Hoggart discussed what Arm’s choice to list in the United States means for the UK (where the company is still headquartered), calling it a “huge” blow.
“We should fight for every company that we think can provide substantial financing, especially those great home-grown British companies that are world leaders in their areas of business,” Hoggart said. “There are many reasons for Arm to move into the United States, I firmly believe there is a possibility they could move into the UK as well.”
Other companies, including British plumbing equipment company Ferguson, have also taken the route of listing in the United States. For companies taking this action, the reasons range from taking advantage of the larger U.S. market to gaining more liquidity.
London remains a land of hope
Hoggart points out that despite London’s flaws, the city and its markets still offer unique opportunities.
“London is the only European venue in the top ten global exchanges,” she said. “We are Europe’s largest market by any measure.”
She highlighted how companies around the world were pouring more money into UK private companies but the UK market was not “paying attention to what is actually happening right under our noses”. Another factor Hoggart points to is the need for the country to convert more of its pension assets into equity and venture capital to create significant value.
“We need to have a mindset of investing in the UK from the private to the public sector to support those great companies that we are actually creating very quickly, but then we are raising capital from overseas capital,” Hoggart said.
For its part, UK regulators are considering An overhaul Comply with stock listing rules and relax restrictions to attract more companies to the financial center. Recently, UK pension providers have started to increase their investment in growth companies.
Representatives of London Stock Exchange Group declined wealthPlease comment further.
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