London Stock Exchange chief quits immediately amid bloody boardroom battle
"I will not be returning to the office of CEO or director under any circumstances," says Xavier Rolet
A power struggle at the top of the London Stock Exchange has resulted in the departure of both leading protagonists hours after a dramatic intervention by the governor of the Bank of England.
The chief executive of the London Stock Exchange (LSE) has stepped down effective immediately after a long running war between the board and a hedge-fund activist that demanded he stay in the role.
Xavier Rolet has said he will “not be returning to the office of CEO or director under any circumstances”.
The board demanded Mr Rolet’s resignation and will replace him in the interim by the chief financial officer David Warren, the exchange said on Wednesday.
The LSE also asked activist shareholder TCI Fund Management, which owns 5 per cent of the stock, to withdraw its demand for a general meeting. The shares fell 2 per cent.
Mr Rolet was due to step down at the end of 2018, according to a previous announcement from the LSE.
He announced his resignation the day after Bank of England governor Mark Carney waded into the argument in what was an unusual move.
Mr Carney said he was "mystified" by the dispute and said it was "in the interest of all parties that clarity is provided as soon as possible".
He asked that the company 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 Wednesday’s statement, LSE said that it had kept the Bank of England and the Financial Conduct Authority informed of its succession plans since late September.
TCI chief Christopher Hohn has been campaigning to keep Mr Rolet on and called on the LSE chairman Donald Brydon to leave instead. Although Mr Brydon is remaining in his post currently, it has been announced that he will not be standing for re-election in 2019.
Mr Hohn also demanded a shareholder meeting on the matter.
“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,” Mr 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. Under Mr Rolet, LSE’s stock has risen almost sixfold.
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 US$30 billion. The $14bn takeover was blocked on regulator concerns it would have created a "de facto monopoly”.
Whether this boardroom battle continues is now largely up to TCI.
If TCI fails to withdraw its demand for the general meeting, LSE said it will publish a shareholder circular no later than Thursday confirming the date of the meeting. It will also contain potentially negative details about Mr Rolet’s management style that the board will use to protect itself against accusations it wrongly forced the chief executive to leave.
The meeting would have to take place before Christmas.
TCI declined to comment on Wednesday.
Mr 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. Mr Rolet, a Frenchman who grew up in Algeria, may still get a bonus for 2017, the company said.
It has been reported that he will leave with a maximum package of nearly £13m as he goes on a 12-month period of "gardening leave".
Updated: November 29, 2017 08:13 PM