London Stock Exchange Group CEO: Leadership, CEO pay, and busting silos
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Welcome to in good company. I'm an a clean the CEO of the norwegian and welfare. Now today i'm joined by David tramer, the CEO of l sec, which contains the lon company.

Now this company has been at the forefront of social centuries, is now a global powerhouse. David is a new yorker with a really interesting background and will explore some of that. Um but David, so happy that I managed to convey you to come on when .

we lost our dinner in london. It's pleasure to be here. Thanks for.

And contains long stock exchange, but IT also doors a lot of lot of things. So what what does the company actually do that's kick off with the basics?

So we are one of the worlds, or i'll say, the world's leading financial markets, infrastructure and data provider. We have a number of different businesses that serve customers, buyside suicide financial institutions and corporate governments across the trade life cycle, across the value change.

So just in terms of the specific businesses that we are in, we have data analytics where the number one provided on the world of, for example, real time financial data, we have an index business for the rustle, which is when the world's leading index businesses. We have a risk intelligence business, which provides the leading content set for what you use for background checks in K, Y C A, A, M, L. You put all those businesses together that are our data analytics after that's roughly seven percent of our revenue.

Then we have capital markets execution venues across multiple asset classes. So you touched on the linden stock exchange leading execution menu. And equities, we have F, X execution venues, both dealer to customer and dealer to dealer and for exchange. And then we also are the controlling shareholder of trade web, which is when the world's leading electronic execution venues for fixed income.

So a lot to keep track on. So one of the big macro o trends that drive .

your business. So the inflation situation that we've had a last several years moves in interest rates. All those kinds of a dynamics have an impact on our business generally to the positive side. And now the voluntier ity tends to be fairly good for our business.

But if you take a step back from that and gets your question on the different trends, data and demand for data, obviously a lot of discuss about A I these days and how does that play into what we're doing? The quality of, for example, large language models is only uh is entirely dependent on the quality of the data that goes into them. And so there's more and more focus on data quality. And given what we do, given our focus on data integrity, data manage, data audit ability, that's proving to be a big driver for us as well. I think some of the geopolitical dynamics also, they tend to lead to more volatility, and they tend to also lead more demand for data as people are trying to navigate the global situation.

We are seeing a bit of a trend when IT comes to U. K. Companies moving to the us. Why why do you think that is?

Well, there is a there is a stronger narrative around that. Then the facts would actually suggest and I think it's important to recognize that. But having said that, we have seen a few um moving to do A A couple of things driving that.

I think it's a little bit different in each case. In one or two cases, it's been because of a sense of a most of the market being in the U. S. For certain companies. In some cases, IT has been and people don't like to talk about this too much, but in some cases it's been because of uh, compensation standards in the U.

S. 所以 easy to pay you to pay high。

So yes, the salaries for executives in the U S. Tend to be uh in some cases in multiple of what they are in the U. K.

So if you're a fin tech or biotech company that come out of one of the great universities in the U. K. And you can listen in london, well, you can listen in new york. And um you listen in new york might get paid three or four times more than you get paid in london.

And in london you might be criticized far because of some of the cultural elements here, which we should not to talk about, that can create A A dynamic where people are more attracted to the U. S. environment.

There are number of factors, and I think that this, the pendulum will swing. There are a number of factors that make the U. K, Frankly, a much more attractive listing venue.

But there is a i'll got a cultural discussion going on right now in the U. K. About this particular ism.

From your standpoint， how have you seen the the backlash against H E. S. G .

considerations? So I think a lot of the underlying trends or changes that are included in this unwieldy acronym of esg are still moving forward. I think esg as a concept is just becoming more sophisticated.

I don't see there there. There's the politics in the U. S.

Around climate and the sort of anti walke dynamic in certain aspects of U. S. politics. I think if you break IT down in terms of the elements of what goes into esg, climate continues to be an issue.

And although people are talking about IT less, I think companies are still focused on IT and recognize it's a multi decade chAllenge. And we have to figure out how to work through a transition. I think on the social and governance, most companies are focused on creating an inclusive environment in the interest of attracting employees.

It's an employee value proposition. And so I think the political noise or backlash will continue sort of in its own sphere. But if you are a company looking to attract talent, you wants to make sure you have an attractive environment.

David, moving on to C O pay, which is something we've feel feel pretty strong about. What what kind of reflections do you have when he comes to C O pay?

So from our perspective, vent, and this is in importantly with the notion of london as a global financial center, we think that IT needs to be globally competitive. And that then quickly gets into a uh, a discussion around what's going on in the U S. Is the S, C, O, P. In the U S. excessive?

Is is that excessive?

I would say there there are some examples where you look at the numbers and say, does why does someone need to be paid that amount for for what they're doing? Fundamentally, it's it's about creating value for shareholders. That's how I think about IT personally and that's how we think about IT conceptual.

But we Operate in the global market. And so whether it's C, E, O pay or whether it's pay for senior executives, we have been a bringing in a lot of talent as we've been transforming, say, and a lot of a talent that we have been looking at is working in the U. S.

And we need to make sure that we can compete in terms of attracting that global talent. Um I think that applies to us that that applies to companies across the U. K.

And I think there needs to be a there is A A cultural aversion in the U。 K. And this, you see this in the media.

You see this in some of the proxy agencies. Any very different standard to pay in the U. K.

Versus pay in other jerdan tions, particularly in the U. S. And so are we have been involved in a growing dialogue, uh, on this topic in U.

K. Because I think it's a very important element to making sure that the U. K. Continues in london, continues to remain globally competitive and attracting world class talent.

Do you think american ceos are Better than european sales?

I would not make that journalizing speaking as an american, but I don't I can make that a no.

But certainly when you look at the pay difference, you would thought they're a have a little Better, right?

If the paid difference was the indication, uh, you would think I do think there are some some cultural differences between american corporate culture and U. K. corp. culture.

But do what do you think if you were to um what do you think is the essence of the difference?

I think in the us, success is more celebrated and failure is more tolerated. And I think there is greater risk aversion in the U. K.

And a sense that it's Better to avoid failure and take less risk in the U. K. And there's less celebration of extraordinary success in the U. K.

And well, you should come to no way and visit.

I imagine it's different in many different cultures. But in terms of that kind of comparison between the U. S.

And the U. K. And i've certainly noticed the difference in my time here.

You do you think shahlan actually have a an impact hair? And what they say on C O P, I mean, we've been voted for a long time. It's it's it's not really moving.

Well, I think we pay attention to IT. I can can speak for others. We certainly pay attention to IT. I think as I mentioned earlier, I think it's about outlining the pay of executives with the shareholder experience. And I would say it's important that, that is aligned over the medium till long term.

And I think within the construct of what I was saying about um global competitiveness, I think it's important to be able to compete on a global stage and attract talent globally. But within that construct, I think uh the U K. Market people pay a lot of attention to that. Um and I would say perhaps so much attention to that when these differently standards that were applied across geography IT makes IT hard to attract talent from the us.

Moving on to data analytics. You know a huge part of your business is in this field. How will A I change your business?

So we are embedding A I in a number of different parts of our business. It's a capability that we have been working with in a few different areas for a while. And whether it's improving our Operations, improving our customer service, improving some of the customer for us, let me give you a couple examples.

We get over a million customer query ies a year given the breath of our product offering. We get questions about all kinds of things. So someone may call us up or emails and how do I get pricing and then a to a chart for indonesian versus malayan government.

That's something that what we're doing now, we're using basically large language model capability to answer that question for our customer service wraps. And as that model get Better and Better, we are going to expose that directly to the customers. And so that's one example.

We have a due diligence business that does do diligence reports for uh, our customers. The complaints we got, uh, about the product was that the reports were not written well enough. The english writing was not good enough.

We now have those being written using LLM capabilities, makes the the actual writing much Better. And then we have the people going through the reports. My english might not be their first language, but their fact checking them and making sure that the quality of the data in them is accurate and Better. So uh those for couple examples were of course, embedding A I functionality in the different products that we're building with microsoft, which is going to bring a whole new capability to what has historically been， i'll say, a fairly clunk y space in terms of user interface um whether that desktop products or others in the financial sector.

So what kind of fiction you have now?

Give you specific example. We are rolling out a product called meeting prep doing this with microsoft. What will that be on your screen? You have a little button. You click on the meeting prep button that opens up a back to you input the name of the person you're meeting with and maybe the company she's from. And then you ask for the meeting prep memo.

Within fifteen seconds or so, IT will pull up and craft in memo, however long you wanted to be based on public data, financial data, research data, corporate data from us, and then using some of the A I functionality, pulling all the data that, uh, you make accessible to IT from your email, your files, your C R M. system. And I think we all know in in these various industries, when you have a meeting with someone you off, you may have someone on your team preparing that kind of memo over the course of a few hours, and this will be ready in fifteen seconds. So and if if he does not have everything you want, or if you wanted to refocus on a certain new area, you can just ask you to be pretty.

pretty handy for my book out of preparation.

What the youth cases are kind of amazing. When you think about David.

we touched on corporal culture. What have you done with a copa culture at the else's culture .

has been a big part of the change that we have been going through. So when I arrived at l seg, IT was in in any way. IT was a collection of great asset. Uh, IT was not really Operating as an integrated company. And so really from day one or actually I safe three months because I spent my first three months talking to people and and learning my way around and understanding a lot of the issues, I was very focused after that. Those first few months, I was very focused on creating a common culture for the organization.

How do you do that?

Well, you have to to find IT in terms of what your aspiration is, where your intent. So at l seg, I mentioned he was a collection asset. We were we have some great businesses, but they were Operating in a uh sy loaded way or a segmented way.

So we had to make IT. Clearly, we wanted people to Operate in a more connected way and a more integrated way. We had a an environment where in certain parts of the business, people were very comfortable Operating the way they had always been offering, and I had been fine.

So we were very focused on creating an environment where people were willing to change that and we're willing to disrupt myself. Uh and then we also had parts of the business that we're Operating spectacularly well and then we had other parts of the business that we're really more comfortable with, to be blunt, about IT. And so we talked about the fact we wanted to raise the bar across the organization. Ah this was all before we went through a significant acquisition of a business called refinance, and that added a significant level of a chAllenge in terms of creating .

a common culture. I say I going to work harder and really lift the bar, and we are going to make a lot more money. I mean, how do you what specific did you do?

You have to model IT at the senior or leadership level. You have to talk about IT all the time. You have to embedded in all the different processes that you have, and that means you have to evaluate people on whether they are living up to your cultural aspirations.

So one of the a process is that we went through this past year, uh, was an exercise of really engaging the whole organization in talking about what are our values. And we had massive survey and we are had focus groups of and our people came up with the values of the organization. And that's an important underpinning the the foundation of our culture, making sure that our people are living in line with those values. If you think about what what is culture IT is the um is the rules of behavior for an an organization, often unwritten rules.

You spend a little time in gold mosaic. Is the culture at l seg different from golden max or you aspiring to bring the gold max culture into l seg?

Very different cultures. Uh, there are parts of the gold sax culture that I think I have been trying to bring a little bit more .

into at else I.

well, so in my I think IT was I had only been IT out like a couple months. And I was visiting the office of elsag and someone raised a question, what what did you learn? A golden tax that is helpful for us here at L.

C. H. S. A. And I said, I really interesting in my twenty years ago. And tax. No one ever asked me about their specific legal entity or Operating unit. And I think that has been an important part about creating a more connected l seg um in terms of making people, whether they're in paris or tokyo or cape town and we Operate all .

over the world. So how do you salo .

S A couple of things. And when I wrapped out, we didn't have a common review process. The reviews were done within each business unit and the head of the business unit would make decisions about his or her people.

And that was that we have now created a common review process across the organza we calibrate across the organization. We've created a group of senior leaders, basically our top hundred people. We get them together once a month so they all know what's going on.

Across the organization, we have done a number of different structural things like that to make sure that people are thinking across the organization we have thought about, do you embedded in your compensation structure? We haven't actually had to do that because, uh, it's actually working in terms of people in one part of the business actually helping introduce someone in the other part of the business to a strong customer relationship. But you have to model IT and you have to really focus on in bedding and IT doesn't it's not quick. It's a multi, multi your process.

So what kind of people do you promote? To achieve this.

you have to promote people who are living that culture and living those values. And it's also it's been another interesting change for the organization. We historically have been in an organization of very impressive subject matter experts given the kind of business that we are in and the important of expertise in our business and the amount of subject matter expertise within our sega is extraordinary across a broad range of aspects of financial markets.

And one of the things that we've been very focused on over last few years is, in some cases, taking those subject matter experts and making them, helping them, training them and turning them into leaders of people and leaders of businesses. And in some cases, we've also been bringing that talent in. From outside, though, are a big focus on the development .

of our talent. How easy is to make a sub expert into a general leader?

Not easy, not easy, but it's a really interesting debate.

I mean, we of course have IT here in the front as well. We got some incredible experts um and many people like to be LED by experts to have the credibility and so when they love to be LED by experts, there is a really is a really two sides the .

discussion this and Frankly, there are some people where they are and and are some rules uh that are right for people who are subject matter experts but may not be great people here. Is that okay? But you have to have the right mix. And importantly, in the rules that require leadership and require real management of teams and require the development of 天文， you have to make sure that the people in those rules do have those skills.

Now, to make this all tick, what is your leadership .

philosopher? To bring in great people, to have great people on my team, to get them a line around the strategic direction, and then to give them a lot of running room. And then I i'd like to periodical drill down into the details of certainly not as a micro manager, but more just because I I like knowing what's going on and I like getting into the specific of things. But as I said, i'll do that not in a micromanaging way, but I understand what's going on and then pop back out.

You sure you not make him?

I think I I think so. Yeah, I haven't that that has not been an issue that has come up in in my reviews.

Now the c of golden um said that we had him on the podcast that a leadership is to take people where they don't want to go. Where are you taking people at the elsag where I don't want to go?

I think a part of leadership can be taking people in a new direction. I'm not sure it's necessarily where they don't want to go IT may be where they didn't know they didn't want to go. And so give you an example with when we acquired the refined business.

So this was an an acquisition that we closed on at the at. Basically end of january twenty, twenty one. And at that point, definitive had about twenty five thousand people else.

I had about five thousand people. So was a massive acquisition for us. The refined business was growing at one or two percent a year on the back of a two percent annual Price. Price and l sag had parted that had had a strong track record of high growth. So there was an enormous question in the marketplace.

And Frankly, with an l seg, how do we take this massive business and get IT to change and and grow? And so there there's a lot that we went through to do that. We don't have that business growing at the attractive rates.

And as of the last quarter, about seven percent growth. So massive change over the last few years. That's something that we had to change, a lot of how people Operated and a lot of how that organization worked.

And there was some resistance institutional biocon tic. But we now have people incredibly excited about the direction that we're going in. So I think its leadership is more about communicating where you're trying to get people and then showing them how you're going to get there, then taking people they don't want to go when .

you make a big decision. How important is gut fellow pattern recognition relative to analysis and numbers?

I think god feel is important in the context of having a really good understanding of the situation. And so you're never going to have perfect information. And I think in most of these situations where we're dealing with complex decisions or complex systems, you often have to make a judgment call.

I'm very comfortable making a judgment call or using got feel, if you will, in a situation where i've I feel like I understand the broader situation and understand the underlying drivers. Uh, I think the notion making got feel in a situation that you otherwise don't know much about or don't know enough about can verge on into the realm of a reckless. But I think you absolutely have to makes some judgments with imperfect information.

And that's effectively what what everyone to call a judgment can feel. You have to exercise that and you have to be willing to do that. And you have to be willing, Frankly, to make mistakes. And I think if you if you go into a decision process knowing that you're going to make some mistakes, you want to make more good decisions than bad decisions, but you got to keep movement forward.

That's OK. How do you .

try to acknowledge them openly and address what the issues were or a lessons learn? We have a we have A A great process internally with an elsag where you know there's a problem, there's an out, there's an issue. You know, we do incident reviews.

We try to do lessons learned. We try to track all we we track the serious incidents, but we also track the less serious incident because they are the ones where you can learn a lot from and make sure that you address issues before they become serious incident. So and we have this another aspect that we are really building into an embedding in our culture because l seg prove refinance of a strong risk management culture. Finau came out of thomson reuters, which was a media company, uh and this itself as a effectively uh, a media company, there was a very little concept of risk management in the way that the financial sector thinks about risk management.

I I think .

IT was fine for what they were doing before. And then IT was something that we had to address in terms of a integrating into our seg.

David, a love to end with some personal questions. How do you deal with setbacks? Personally.

I think you just have to recognize this is all part of the game, if you will. Not that life is game, but setback ks happen.

And what's been your main settings in life?

I would say A. Things go wrong all the time from a career perspective. You know I um you asked the only about golden sex. I think I must have applied the golden sex three times before I got a job there over the course of several years. And so that's just an example of yeah set back.

Okay, you didn't get IT just to you did actually you did actually get into harvard.

I I did for the school. Yes, I think but it's it's just the point of like setbacks are part of life and you have to sort of assume there will be set backs and you keep going. And uh, can you get discouraged in certain things? Or if if there's something that you're going for this just not realistic and you you sort of change direction, that's okay.

Um but I think um it's it's something that you have you have to expect. And then it's sort of a question, what's what's your personal resilience? And do you want to just keep trying, you want to keep going, uh or do you change course?

How important is your personal network?

I think um interesting know when I got to the U K, I I wasn't not a part of the network here at all.

Are you now?

I have been i've gotten to know more people and more got ten more embedded in the community and whether that's from a government perspective, the corporate world, the the media world and have built more and more than network. I think networks are important and helpful um and I think IT is IT can be an important part of how someone can develop IT or rise up through organizations. And I think a lot in this world, for good or for bad, is based on personal relationships. Uh and so IT is important to build those relationships.

And what's what's the key to .

doing that to building .

relationships?

Yeah I think everyone's going to have their own style. Um my style is to be straight forward. Um try to be clear.

I think I am I believe in decency. If I can point out that way, I think it's important to treat people well. Uh, humility is really important uh, to me. I don't have a lot of patients or interest in in dealing with big egos. Um so those are some of the areas that with in terms of how I approach relationships, I do think is more important to be respected than light.

How do you avoid becoming a big eagle?

I think you just keep your feet on the .

ground and partners.

yes, they don't care you know how important your job is or how people treat you at work, uh and they are uh, they've got their own issues in their own needs. So I think it's is just a value set in terms of um is a really interesting question. I think modesty and humility is is just an important way of dealing with people. I don't think there's a justification this kind of how I answer. There's no rationale justification for someone to have a big eagle um that seems almost like i'd say its compensation for insecurity is kind of how I think .

about IT how do you relax?

Like playing time with my family. I like getting exercise and I love .

reading what .

you eating all kinds of things. I love reading histories. I like books about how people think. Those not so a lot of not fiction almost finish with A A relatives new book about the um the japan work crimes tribunal of judgment in tokyo um really interesting um but I I love reading I also like to reading current events, reading articles in in different publications .

so favorite publication .

oh i'm not sure I would name a favourite uh and I read a few different newspapers, few different magazines. I know if you do endorsements here .

and now in your podcast and David last last question, what is what is your advice, Young people?

Don't set your own limits. I think in so many situations, people don't even go for something because they're scared they will get IT. And that is such an unnecessary limitation on what people might go for. So I think that's really important.

The environment will make sure there are enough limitations.

Exactly, the environment takes care of that. So you shouldn't add add to IT yourself.

Very good, David. This seems to be very few limitations for else seg. We all the best and it's been really fantastic. You on big. thanks.

Thank you. Nap pleasure to be here.