The Men Who Run London Stock Exchange Group Plc

What you need to know about the top executives of London Stock Exchange Group Plc (LON:LSE)

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Management can make all the difference to a company’s success and thus its share price.

The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.

In this series, I’m assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today I am looking at London Stock Exchange (LSE: LSE), which operates the Borsa Italiana and a number of equity, bond and derivative markets as well as the London Stock Exchange itself.

Here are the key directors:

Director Position
Chris Gibson-Smith (non-exec) Chairman
Xavier Rolet Chief Executive
David Warren Finance Director
Rafaele Jerusalmi CEO, Borsa Italiana

Takeover defence

Chris Gibson-Smith has been chairman since 2003, in which time he has fended off several takeover attempts alongside the previous CEO Clara Furse. His executive career was spent with BP, including being chief geologist and subsequently a managing director. Retiring from BP in 2001 he became chairman of National Air Traffic Services, and subsequently acquired a prestigious array of non-executive directorships, including being chairman of British Land from 2007 to 2012 and a non-exec of Lloyds Banking from 1999 to 2005.

Xavier Rolet was appointed in 2009. A former investment banker, he worked for Goldman Sachs, CSFB, Dresdner Kleinwort Benson and then Lehman Brothers from 2000 to 2008 (when it went bankrupt) as co-head of global equity trading.

Diversified

Rolet has diversified LSE’s business away from cash equities, with recent acquisitions of technology provider MillenniumIT, and a majority stake in LCH.Clearnet. The transformation has been notable, with LSE’s shares substantially outperforming the FTSE 100 during Mr Rolet’s tenure.

David Warren is a relatively new arrival, having been appointed finance director last year. He was previously CFO of LSE’s rival Nasdaq for nine years, followed by two years as advisor to its CEO. Apart from him bringing obvious relevant experience, some have suggested his appointment may be a preliminary part of a plan for LSE to make a bid for Nasdaq, a rival which unsuccessfully tried to acquire LSE.

Rafaele Jerusalmi joined the board in 2010. A former fixed income trader with CSFB, he joined Borsa Italiana in 1998 and became head of capital markets for LSE when it acquired the Italian exchange in 2007.

LSE’s eight non-execs bring substantial markets and business experience.

I analyse management teams from five different angles to help work out a verdict. Here’s my assessment:

1. Reputation. Management CVs and track record.

Sound.

 Score 3/5

2. Performance. Success at the company.

Very good.

Score 4/5

3. Board Composition. Skills, experience, balance

Sensible.

 Score 3/5

4. Remuneration. Fairness of pay, link to performance.

Uncontroversial.

 Score 3/5

5. Directors’ Holdings, compared to their pay.

CEO has £3m shares, chairman £1m.

 Score 4/5

Overall, LSE scores 17 out of 25, a decent result. Mr Rolet has made a notable mark since his arrival and during a difficult time for stock exchanges.

I’ve collated all my FTSE 100 boardroom verdicts on this summary page.

Buffett’s favourite FTSE share

Legendary investor Warren Buffett has always looked for impressive management teams when picking stocks. His recent acquisition, Heinz, has long had a reputation for strong management. Indeed Mr Buffett praised its “excellent management” alongside its high quality products and continuous innovation.

So I think it’s important to tell you about the FTSE 100 company in which the billionaire stock-picker has a substantial stake. A special free report from The Motley Fool — “The One UK Share Warren Buffett Loves” — explains Mr Buffett’s purchase and investing logic in full.

And Mr Buffett, don’t forget, rarely invests outside his native United States, which to my mind makes this British blue chip — and its management — all the more attractive. So why not download the report today? It’s totally free and comes with no further obligation.

> Tony does not own any shares mentioned in this article.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Investing Articles

Investing Articles

Up 75% in 5 years, I reckon this FTSE 250 still has lots to give!

Our writer explains why this FTSE 250 stock could still continue to provide growth and returns despite already being on…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

2 high-quality FTSE 250 stocks to consider buying

The FTSE 250 is home to some of the best investment opportunities out there. This Fool highlights two stocks for…

Read more »

Investing Articles

The Marks and Spencer share price dips! Is this my chance to buy?

Marks and Spencer was one of the hottest stocks on the market last year. With its share price falling in…

Read more »

Growth Shares

How low could the boohoo share price go?

Jon Smith explains why the enterprise value and the low risk of bankruptcy should help to prevent the boohoo share…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

Down 23% in a year! Can the Diageo share price regain £30 in 2024?

This Fool UK writer is checking the charts to see if the Diageo share price can recover from the recent…

Read more »

Asian man looking concerned while studying paperwork at his desk in an office
Investing Articles

I wouldn’t touch this FTSE 100 stalwart with a bargepole

Despite looking like a bargain on paper, this Fool is avoiding FTSE 100 constituent Vodafone at all costs. Here he…

Read more »

Investing Articles

I’m waiting for the Rolls-Royce share price to pull back before I buy

The Rolls-Royce share price has been the Footsie's best performer in the last year. But this Fool has no intention…

Read more »

Front view photo of a woman using digital tablet in London
Dividend Shares

2 dividend stocks to take me from £0 to £9.5k in second income

Jon Smith talks through some ideas with second income potential, including one stock that has a dividend yield above 10%…

Read more »