From straitened origins in coal mining and the rag trade, Martin Abbott is in line for a major windfall as the 135-year-old London Metal Exchange goes under the hammer. If the deal goes through, the LME's chief executive will collect his share of a shadow equity incentive scheme for a select group of managers which will possibly be worth as much as 21 million pounds ($33 million), depending on the selling price.
The LME, a last bastion of open outcry trading in a city dominated by computer dealing, opened its doors to a sale last year. The field has narrowed to three suitors and Abbott is helping to oversee the contest, although the shareholders - banks, traders and other firms which use the LME - must approve any deal. With the winning bid expected to exceed an independent valuation of 1 billion pounds, 52-year-old Abbott and the other beneficiaries are likely to pocket the kind of payouts that have provoked outrage among ordinary Britons when awarded to bankers.
For Abbott, it will be a long way from the days when he laboured at the coal face to support his studies for a law degree, or was so badly paid as a journalist on the fashion trade magazine Drapers Record that he had to walk to work because he could not afford the train fare. Abbott, whose CV also includes a spell as a security guard, participates in a shadow equity incentive scheme along with a small group of colleagues, whose value will be boosted if there is a change of the LME's ownership.
The LME declined to comment on figures, but said details of how the scheme would work out if the exchange is sold would be disclosed in documentation sent to shareholders and would crystallise only if shareholders voted in favour of a deal. The exchange, which accounts for 80 percent of traded volume in global metal futures transactions, achieved record trading volumes last year of 146.6 million lots, equivalent to $15.4 trillion annually and $61 billion on an average business day.
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