According to published reports, Xavier Rolet has stepped down as CEO of the London Stock Exchange with immediate effect after a protracted and contentious boardroom row over the leadership of the exchange.
Chairman Donald Brydon will also not stand for re-election in 2019 “as 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.”
Rolet, who was due to leave next year after an eight year reign as CEO, said in a statement, “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. I am proud of what we have achieved during the past eight and a half years. CFO David Warren will step in as interim CEO.”
The storm has been brewing over the past couple of weeks and there been reports that some of his staff disliked his management style. However, Rolet is widely seen as being integral to reviving the exchange’s fortunes and the exchange group has come under fire over his planned departure from activist investor, The Children’s Investment Fund, which holds a 5% per cent stake
Christopher Hohn, who heads TCI, has accused the LSE of forcing Rolet out against his will, seeking to extend his contract to 2021. He accused the board of gagging him with confidentiality clauses.
Bank of England governor Mark Carney also weighed in. Speaking at a press conference covering the BoE’s latest Financial Stability Report, Carney said, “Xavier Rolet has made an extraordinary contribution as head of the LSE over the last nine years. But everything comes to an end. We were appraised of the succession plan before it was announced — the agreed succession plan.”
He added: “In some respects, we are a bit mystified about the debate because we knew about the succession plan and stayed close to the situation. We can’t envisage a situation where a CEO stays beyond the agreed period. But it’s in the interest of all parties involved that clarity is provided as soon as possible.”
The departing Rolet will be paid his salary of £800,000 for 12 months of gardening leave, and a potential bonus worth £1.6m. He also has a number of long-term incentives under which he could theoretically earn £10.2m.