Square Mile veteran Jan du Plessis has added his voice to the conversation surrounding the City of London’s declining competitiveness on the world stage.
Against the US, “it’s clear that over the last five, 10 and 15 years, we have been declining as a financial capital in almost any metric”, du Plessis said in a Bloomberg interview, though his reasonings were particularly contentious.
Citing various cultural issues around remuneration, shareholder relations and the “quite narrow British way of life”, du Plessis had plenty of bugbears to point the blame at.
“The reality is that across the pond, 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.”
He called the required publication of ratios between bosses’ pay and the lowest-paid worker “yet another political tool to try to embarrass companies and the boards and their chief executives.”
Pay transparency measures came into force in the UK in 2019 for UK-listed companies with over 250 employees. The US has had similar rules in place since 2015.
BT Group, where du Plessis served as non-executive chairman between 2017 and 2021, has an average pay ratio of 35:1 between the chief executive Philip Jansen and the lower quartile of employees, with that number stretching as higher as 97:1 when taking into account bonuses.
In comparison, BT’s US counterparts T-Mobile, AT&T and Verizon have pay ratios in the hundreds, with T-Mobile being the worst offender at over 300:1.
du Plessis, whose resume included chair appointments at Rio Tinto, Lloyds TSB and British American Tobacco, also expressed his disregard for the “unwanted influence” of proxy agencies.
He also weighed in on the issue of dual-class share structures, which have become a topic of debate as the UK government seeks to address the exodus of high-profile firms from the capital markets.
Popular among US companies but limited by regulations in the UK, dual-class share structures allow for preferential voting rights for certain shareholders.
The Financial Conduct Authority has suggested a more permissive approach to dual-class share structures in its consultation on London listing rules, leading to concerns over diluted investors’ voting rights.
du Plessis cited Danish pharma group Novo Nordisk (NYSE:NVO) as a leading example of the benefits of dual-class share structures.
Companies controlled by “responsible serious families or small groups of shareholders that care about the long run are very successful,” according to du Plessis.
What about Brexit du Plessis?
One word missing from du Plessis’ spiel was Brexit, but where he was too afraid to go, JPMorgan Chase & Co (NYSE:JPM)’s EMEA chief Vis Raghavan seemed all too willing.
Also speaking to Bloomberg today, Raghavan said Britain’s exit from the European Union has “cannibalised” London’s listing pool.
He did, however, tout London’s rule of law and regulatory environment, while warning policymakers not to “gold plate” UK regulation, or transpose EU laws, in order to preserve London’s attractiveness for global businesses.