the times | Thursday April 28 2022 41
Business
Legal & General said, “We believe
that a substantial amount of executive
pay should remain aligned with com-
pany performance and shareholder
value creation. We do not consider the
payment of free shares appropriate.”
TP insisted yesterday that there were
performance expectations attached to
the plan and that the remuneration
committee had the discretion to cut the
payout if it wasn’t satisfied that man-
agement had done enough.
“It could potentially reduce down to
zero,” a TP spokesman said. “We believe
we’ve had a very high level of engage-
ment with our shareholders.”
Other large shareholders in TP in-
clude Schroders with 11.5 per cent, Lion-
trust with 10.2 per cent and Jupiter with
more than 8 per cent. The company
recently came under fire from a US
activist investor, Phase 2 Partners,
which wants it to put itself up for sale.WPP has followed its rivals in the ad-
vertising industry by shrugging off
worries about the economy to lift its
sales forecast for the year.
The world’s biggest advertising com-
pany said like-for-like net revenues had
climbed by 9.5 per cent during the first
quarter to £2.57 billion, far exceeding
City forecasts for a rise of 7.1 per cent.
While the rest of the year is expected
to be tougher as headwinds in the glob-
al economy mount, WPP nevertheless
lifted its guidance for net sales growth
for the year to a range of 5.5 per cent to
6.5 per cent. It had previously told in-
vestors to expect about 5 per cent.
Publicis, the French group, and the
New York-based Omnicom both raised
their full-year forecasts after strong
first quarters. Since last year the adver-
tising industry has been enjoying a
bounce back from the depths of the
coronavirus crisis in 2020, when com-
panies cut marketing spending during
lockdown. WPP’s like-for-like net sales
surged by 12.1 per cent to £10.4 billion in
TP Icap, the FTSE 250 specialist brok-
ing group, has been rebuked by one of
the most influential investment groups
in the City after persisting with a con-
troversial executive bonus scheme.
Legal & General Investment Man-
agement said it was now planning to
vote against the scheme and remove the
remuneration committee chairwoman,
Tracy Clarke, from the TP board.
LGIM said it was “dismayed” when
TP resurrected a pay package proposal
which the fund manager had already
expressed serious concerns about. The
earlier proposal was withdrawn after
TP sounded out investors last year.
While the new proposed pay scheme
had been adjusted, it was still not suffi-
ciently performance-related to satisfy
Legal & General, which wanted to see
much more watertight conditions toPatrick HoskingThe chief executive of M&G is to leave
the group, announcing his departure
only six weeks after the arrival of
a new chairman at the fund manager
and one week before a new finance
director joins.
John Foley, 65, said he was retiring
because M&G had reached an inflec-
tion point and it was a good time to start
the search for his successor.
Foley has been chief executive since
2015 and managed the business
through its demerger from Prudential
plc in 2019. While the share price is
slightly down over that period, M&G
said he had delivered total returns of
30 per cent thanks to strong dividends.
Amid a flurry of board changes over
the past two years, the new chairman,
Ed Braham, the former senior partner
at Freshfields Bruckhaus Deringer,
came in as permanent chairman last
month, succeeding Mike Evans, who
left in January last year because of
stress. Fiona Clutterbuck had been
stand-in chairman for 14 months.
One internal candidate for the top
job is seen as Clare Bousfield, whoM&G chief steps down amid
flurry of boardroom changes
until a successor was found. M&G is a
member of the FTSE 100 and manages
£370 billion of assets on behalf of five
million retail customers and more than
800 institutional clients. Last year
Schroders, a rival investment house,
took a look at bidding for M&G but
later withdrew.
Braham paid tribute to Foley,
saying: “John has led M&G through
significant change and overseen a
successful demerger, while steering the
group through the unprecedented
events of the pandemic. The business
has performed strongly, returning
£1.8 billion to shareholders since listing
in October 2019.”
Foley said: “We have delivered our
demerger commitments despite ex-
traordinary macro challenges, and are
well-placed to leverage M&G’s scale
and expertise to build an international
leader in savings and investments.”
Shareholders do not like chairmen,
chief executives and finance directors
to leave at the same time, preferring to
see long handover periods to ensure
continuity and familiarity with the
business. M&G shares rose 1p, or 0.5 per
cent, to close at 212p.stepped off the board in September last
year to head the company’s legacy
savings business in the UK, which still
uses the Prudential brand, and to head
up its fast-expanding wealth manage-
ment operation. The finance role was
temporarily taken up by Paul Cooper
but a permanent successor, Kathryn
McLeland, joins next week from Bar-
clays, where she was group treasurer.
Braham, who is also chairman of theboard nomination committee, is ex-
pected to hire headhunters to consider
outside candidates for the job.
Foley, who was paid £4.48 million last
year, has overseen a bumpy period for
the group, which has been plagued by
outflows and was one of the most
prominent fund managers to have to
freeze its property fund at the start of
the pandemic. He said he would stayPatrick Hosking Financial EditorBroker bonus plan angers Legal & General
ensure management were fully aligned
with shareholders. The scheme could
lead to Nicolas Breteau, the chief exec-
utive, receiving a total annual package
of £3.57 million, according to the com-
pany’s own figures.
The pay proposal is highly sensitive
for the TP board, which has presided
over a two-thirds collapse in its share
price since early 2020. Forty-three per
cent of shareholders vetoed the remu-
neration policy last year.
Legal & General, which manages £1.4
trillion of savings, owns 2.3 per cent of
TP. Unusually, it is disclosing its inten-
tions before TP’s annual meeting on
May 11, which it does only in what it re-
gards as the most egregious cases.
At the heart of the dispute is TP’s de-
cision to move from a Long Term In-
centive Plan, where share awards are
conditional on meeting targets, to a Re-
stricted Share Plan, with no targets.John Foley has
led M&G for the
past seven yearsWPP lifts guidance as revenue rises
Ben Martin Read. In March WPP became the first
big advertiser to announce that it would
withdraw from Russia after the assault
on Ukraine. Russia accounts for about
0.6 per cent of WPP’s net sales and the
company has almost 1,400 staff there.
Read said yesterday that the com-
pany had agreed to divest its businesses
in Russia by selling them to their local
management teams. “This is the best
and most practical, pragmatic solution
for WPP and for the people that work
for us,” he said, adding that the dispos-
als would likely result in a non-cash, ex-
ceptional charge of about $45 million.
Read said it was “too early to say”
how Elon Musk’s ownership of Twitter
might affect the social media platform’s
attractiveness to advertisers.
Netflix, the streaming company, said
last week that it was considering adver-
tisements on its service for the first time
after experiencing a fall in subscribers.
Read said: “It’s got some of the world’s
best content and our clients would love
to see their brands within that.”
WPP shares closed down by 13½p, or
1.4 per cent, at 976½p.
- However, soaring inflation,
Russia’s invasion of Ukraine and wor-
ries about new lockdowns in China are
now weighing on the broader economy.
Even so, buoyant demand for WPP’s
services in digital media, e-commerce,
data and marketing technology is lift-
ing the group.
“We had a very strong year in 2021
and that’s continued into the first quar-
ter,” Mark Read, its chief executive,
said. “We do expect some slowdown in
growth over the course of the year.”
FTSE 100-listed WPP employs about
109,000 people and is behind the Ogil-
vy, GroupM and Hill+Knowlton Strate-
gies businesses. The group was built by
Sir Martin Sorrell, who left the com-
pany in acrimonious circumstances
four years ago and was succeeded byArchegos founder charged
with fraud and racketeering
Callum Jones
US Business CorrespondentBill Hwang, founder of Archegos Capi-
tal Management, and the family office’s
former chief financial officer have been
indicted on charges of securities fraud,
wire fraud and racketeering.
Federal prosecutors in the United
States allege that Hwang, a former
hedge fund manager, and Patrick Halli-
gan used Archegos as an “instrument of
market manipulation and fraud”.
They are accused of having manipu-
lated the price of stocks held by Arche-
gos and lying to banks and brokerages,
which lost billions on trades. Hwang,
58, was arrested yesterday morning.
The collapse of Archegos last March
rattled markets. It defaulted on margin
calls, sparking a fire sale of shares in-
cluding ViacomCBS and Discovery. It
left banks, including Credit Suisse,
Nomura, Morgan Stanley and Deut-
sche, with losses of more than $10 bil-lion. Attorneys for Hwang and Halligan
say their clients are innocent.
Between the spring of 2020 and 2021,
prosecutors allege the value of the Ar-
chegos portfolio surged from $1.5 bil-
lion to over $35 billion as a result of
criminal conduct by Hwang and others.
Damian Williams, US attorney for
the Southern district of New York,
alleged that they had conducted a
“massive fraud” which “nearly jeopar-
dised” the financial system. “The lies
fed the inflation and the inflation fed
more lies,” he said at a news conference.
“Last year, the music stopped.”
Separately the Securities and Ex-
change Commission announced civil
fraud charges. Gurbir Grewal, director
of enforcement, said Hwang and Ar-
chegos “propped up a $36 billion house
of cards by engaging in a constant cycle
of manipulative trading, lying to banks
to obtain additional capacity” before
“using that capacity to engage in still
more manipulative trading”.9.5%
Rise in like-for-like net revenues at WPP
Source: WPPby 6.3 per cent to £1.75 billion and
would have grown by 6.8 per cent if
the group had not boycotted Russia.
“The revenue impact of Ukraine/
Russia is anticipated to be [about]
£60 million in 2022,” it said. “Most
of the impact reflects the
suspension of data and analytics
services to customers in Russia.”
The group is one of the biggest
companies listed in London with a
market value of £45 billion. It owns
the London Stock Exchange and the
Russell FTSE indices businesses,
provides data and analytics tools to
the securities industry and offers
clearing services.
The acquisition of Refinitiv in
January last year hit initial
problems when the group conceded
that the deal would cost more to
bed down than thought, but more
recently has gone smoothly.
Only 2 per cent of shareholders
voted against the remuneration
report at the annual shareholders
meeting yesterday. The group faced
a 23.5 per cent revolt last year after
lifting the base pay of David
Schwimmer, its chief executive, by
25 per cent to £1 million. His total
package came in at £6.44 million in
2021, just below the £6.48 million
he was paid in 2020.
Shares in LSEG fell by 124p, or
1.53 per cent, to £79.60.MATT CROSSICK/ALAMYThe boss at the centre of the nickel
trading debacle last month has
changed his mind about leaving
the London Metal Exchange,
pictured left, for a new career in
cryptocurrencies and will stay on.
Matthew Chamberlain, chief
executive of the metal exchange
since 2017, announced in January
that he was leaving for a crypto
start-up, but was then engulfed in a
row over the suspension of trading
in nickel for almost week in March
after a huge price rise in the metal.
That led to accusations that the
exchange had improperly cancelled
bona fide trades to protect
member firms at serious cost to
other investors. The Financial
Conduct Authority and Prudential
Regulation Authority are both
investigating the affair.
Hong Kong Exchanges and
Clearing, which owns the 145-year-
old LME, said it was “very pleased”
that Chamberlain would be staying.
Chamberlain said: “I want to
continue to work with the team on
supporting the long-term health
and efficiency of the market and
drive forward the sustainable
development of our industry.”
The Hong Kong exchange group
has reported its biggest quarterly
fall in profit for six years, blaming
the 31 per cent fall on Covid
restrictions in China causing its
flotations business to dry up.Nickel market boss to stay