Stock Exchange faces governance row after it details bonuses and options plan

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The Independent Online

The London Stock Exchange was heading for a conflict over corporate governance last night after it revealed plans to award fresh share options to Don Cruickshank, its non-executive chairman, and detailed £2m in special payments made last year to executives, despite the collapse of its merger plans with Deutsche Bourse.

Gavin Casey, since replaced as chief executive by Clara Furse, received a bonus of £138,000 for five-and-a-half months' work last year, along with £950,000 in compensation for loss of office. Ms Furse was paid a bonus of £50,000 just 10 weeks after joining at the end of January.

Mr Cruickshank received a bonus of £250,000, on top of £432,000 basic salary. Two other executives shared bonuses totalling £530,000. The payments were set out in the listing particulars for the LSE's forthcoming flotation.

Despite being a non-executive, Mr Cruickshank is now paid £350,000 a year, about £50,000 more than Ms Furse. He is also to enjoy a three-year term and be allowed to receive share options. Both benefits are contrary to corporate governance best practice.

The LSE said its remuneration committee "would not expect" to grant options to Mr Cruickshank. But in the event of a takeover he would receive a pay-off equal to one year's salary and share options of a value to be determined by the remuneration committee. Fees paid to each of the LSE's other main non-executive directors will double to £30,000.

The LSE confirmed that it expected the shares to commence trading on 20 July, although the listing documents contained little by way of additional information about strategy.

The LSE said its objectives were to: become the market of choice in the European time zone; extend its services and product range; build scale; and promote the capital markets.

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