- REUTERS/Neil Hall
- LSE CEO Xavier Rolet leaving “with immediate effect” after shareholder battle.
- LSE chairman Donald Brydon also leaving the business.
- Rolet’s exit speeded up after shareholder The Children’s Investment Fund claimed the board were forcing him out against his will.
LONDON – London Stock Exchange (LSE) CEO Xavier Rolet’s exit from the business has been sped up by a year after a battle between shareholders and the board over his tenure.
LSE announced in October that Rolet would leave the business by December 2018 but the company said in a statement on Wednesday that he would now leave “with immediate effect.” Chief Financial Officer David Warren will take over as interim CEO until a successor can be found.
LSE chairman Donald Brydon is also departing the business. The exchange operator said Brydon would not be seeking re-election to the board “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.”
Shares in London Stock Exchange Group opened over 1.5% lower on the news.
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The departures follow a row between LSE’s board and shareholder The Children’s Investment (TCI) Fund, which owns 5% of shares, over Rolet’s departure.
TCI Fund founder Sir Christopher Hohn is suspicious of Rolet’s abrupt departure, believing he was being forced out against his wishes.
Hohn said in a letter to the board earlier this month he believes Rolet is “being improperly threatened by the board with severe reputational damage unless he immediately steps down as CEO… or publicly confirms that he does not want to remain.”
The exact substance of what this “severe reputational damage” might be is unclear. Hohn called for “the Bank of England and the FCA [Financial Conduct Authority]… to immediately intervene to instruct the board to appoint a new chairman.”
Rolet said in a statement on Wednesday:
“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.”
Brydon said in a statement:
“The Board is confident LSEG will continue to prosper with David Warren as Interim CEO and the existing strong management team. They have deep knowledge of LSEG’s business and helped shape, lead and execute its strategies. They are already working towards LSEG’s current three-year financial targets. I look forward to working with David and his team. We acknowledge, as I said last month, Xavier’s immense – indeed transformative – contribution to the business.”
TCI Fund has called for a general meeting of shareholders to challenge the board on Rolet’s exit. LSE said on Wednesday that it wants TCI Fund to withdraw its request in light of new of Rolet’s accelerated departure. If the hedge fund doesn’t withdraw its request, LSE said it will send a notice of the general meeting date to shareholders by November 30.