‘Narrow’ mindset holds back City, warns ex-bt chairman
A “NARROW British way of life” is holding back the City of London, the former chairman of telecoms giant BT has warned.
Jan du Plessis, who is chairman of Britain’s accounting watchdog, said a cultural objection to embracing change and boosting executive pay was causing the Square Mile to fall behind rival financial hubs such as New York and Paris.
He told Bloomberg that the City still has a “peculiarly, quite narrow British way of life” that made it resistant to reforms such as introducing dual-class share structures.
The City grandee said: “It’s clear that over the last five, 10 and 15 years, we have been declining as a financial capital in almost any metric. Certainly relative to the US.
“The reality is that you go to the US and they are paid multiples of what people are paid here, stratospherically different levels, and they are being very successful. And no one seems to care.”
The comments came after the boss of the London Stock Exchange warned last week that Britain is being held back by a campaign against high pay.
Julia Hoggett said a pay disparity between UK chief executives versus their US counterparts had “not received enough attention” and called for a level playing field to stem an exodus of companies from the Square Mile.
Mr Du Plessis, who previously was chairman at FTSE 100 miner Rio Tinto, also hit out against the influence of proxy advisers, saying they increasingly object to pay reports and are “a law unto themselves”.
There are growing concerns in the City that shareholder advice groups are pushing a narrow agenda that could harm the Square Mile.
The advisers make recommendations to big investors about how they should vote at companies’ annual meetings on issues such as board membership and pay. Proxy advisers are increasingly taking a hard line on issues such as pay, climate change and gender diversity.
Mr Du Plessis said the publication of ratios between chief executive pay and the lowest-paid worker is “yet another political tool to try to embarrass companies, boards and their chief executives”.