Michael Lawrence was sacked as chief executive of the Stock Exchange yesterday after the City's powerful share-dealing firms staged a dramatic coup.
The toppling of a man described as a deeply unpopular outsider in the Square Mile sent shock waves through financial markets, coming just two years after his predecessor was also forced to quit.
His departure is certain to provoke outrage at the rewards top executives receive for failure. Having accepted a pounds 100,000 bonus less than a year ago for the "achievements" in his first year in office, Mr Lawrence is likely to walk away with a severance payment of more than pounds 300,000. Including the bonus, he was paid pounds 422,000 in the year to last March and enjoyed a one-year rolling contract.
He came to the Stock Exchange two years ago from the Prudential, Britain's biggest institutional investor, where he developed a reputation for enjoying his high earnings. A pilot and yachtsman, he celebrated his move to the Stock Exchange by buying a red Aston Martin car from the actor Rowan Atkinson.
The sacking could also undermine London's status as Europe's financial centre. Mr Lawrence has been trying to push through far-reaching changes to the way shares are traded in the City, changes that many of the biggest dealing firms fear could threaten their profitable existence.
The Stock Exchange's plans to introduce a computerised order-matching system rather than the current regime in which market makers promise to buy or sell shares at a given price has been seen as an affront to one of the City's most powerful self-interest groups.
Market makers are the direct descendants of the jobbers who ruled the Exchange floor only a decade ago before Big Bang and who naturally do not want to see themselves replaced by a blinking cursor on a computer screen.There was ill-concealed glee at the departure of a man many in the City viewed as arrogant and condescending.
Labour's City spokesman, Alistair Darling, demanded a full explanation "to prevent lasting damage to the reputation of the City".
He said: "The fact that Michael Lawrence has gone signals deeper problems at the Stock Exchange than they are admitting. It is fairly well-known that he wanted to pursue radical changes within the Stock Exchange and that he was being resisted."
John Kemp-Welch, a senior partner of the blue-blooded stockbroker Cazenove and now chairman of the Stock Exchange, tried to play down the impact of Mr Lawrence's departure. He said: "While Mr Lawrence's departure reflects the loss of confidence in him by the board, it does not imply any change in the Stock Exchange's policy. Our objective is to be the market of choice."
Mr Lawrence said last night: "I am disappointed to leave but happy with the programme of major initiatives and the excellent executive team. But the reforms must be allowed to continue.''
Power struggle, page 16