Xavier Rolet steps down as LSE boss amid row
XAVIER Rolet has said he will step down immediately as chief executive of London Stock Exchange Group (LSE) after a weeks-long spat between the board and a hedge fund activist that demanded he stay in the role.
Rolet resigned following a request from the board, and will be replaced in the interim by chief financial officer David Warren, the exchange said yesterday. The LSE also asked activist shareholder TCI Fund Management, which owns 5 percent of the stock, to withdraw its demand for a general meeting. The shares fell 1.9 percent.
It is the second announcement regarding Rolet’s exit. On October 19, LSE said Rolet was due to step down at the end of 2018. Then Christopher Hohn, the head of activist shareholder TCI Fund Management, campaigned to keep him, while calling on LSE chairperson Donald Brydon to leave instead and demanding a shareholder meeting on the matter. Brydon won’t stand for re-election in 2019, LSE said yesterday.
“Since the announcement of my future departure on October 19, there has been a great deal of unwelcome publicity, which has not been helpful to the company,” Rolet said. “I will not be returning to the office of CEO or director under any circumstances. I am proud of what we have achieved during the past eight-and-a-half years.”
The 58-year-old became LSE chief executive in May 2009 after a career in trading that started in the 1980s at Goldman Sachs Group. Under Rolet, LSE’s stock has risen almost sixfold.
Behemoth
His profile grew when he agreed to sell the LSE to Deutsche Boerse, a plan that would have created a behemoth with combined market capitalisation of some $30 billion. The $14bn takeover was blocked on regulator concerns that it would have created a “de facto monopoly”.
In an unusual move, Bank of England governor Mark Carney waded into the argument, saying yesterday the company should clarify the issue soon, given the LSE’s important role in global derivatives markets. LSE’s dominant position in clearing has made that business a political football among politicians after the Brexit vote.
In yesterday’s statement, LSE said it had kept the Bank of England and the Financial Conduct Authority informed of its succession plans since late September.
The ball is now in TCI’s court. If TCI fails to withdraw its demand for the general meeting, LSE said it will publish a shareholder circular no later than today, confirming the date of the meeting.
It will also contain potentially negative details about Rolet’s management style that the board will use to protect itself against accusations it wrongly forced the chief executive to leave. The meeting must take place before Christmas.
TCI declined to comment yesterday.
Rolet leaves the LSE on the financial terms that were agreed at the time of the October announcement that he would quit in a little over a year. – Bloomberg