ICAP Plc cut Chief Executive Officer Michael Spencer’s bonus 75 percent after profit missed targets and the interdealer broker paid a fine to settle a probe by British and U.S. regulators into Libor-rigging.
Spencer’s 2014 bonus will be reduced to 700,000 pounds ($1.2 million) in cash and shares from 2.8 million pounds in the year-earlier period, the London-based company said in its annual report today. His total compensation will fall to 2.2 million pounds from 4.3 million pounds, ICAP said.
Interdealer brokers such as ICAP act as a go-between for banks and profit when prices fluctuate because more traders use the products they trade. ICAP said last month operating profit declined 4 percent in the year through March as interest rates at record lows curbed volatility and banks scaled back their fixed-income, currency and commodity trading activities.
“Market conditions remain very challenging,” the company said in the report. “Regulatory change continues to create uncertainty within the marketplace. In the first two weeks of May 2014, a number of our major bank customers have again reported significantly reduced activity levels across their FICC franchises and do not foresee any material near-term recovery.”
The firm paid 55 million pounds to the U.S. Commodity Futures Trading Commission and the U.K. Financial Conduct Authority in September to settle a probe over the involvement of its brokers in helping bank traders’ efforts to manipulate the London interbank offered rate for the Japanese currency.
ICAP was separately accused by the European Commission today of colluding to help rig the yen-London interbank lending rate. The company refused to settle an investigation by the European Union’s antitrust arm last year. Six other banks including UBS AG and Deutsche Bank AG took part in the December accord with the European regulator.
ICAP “does not believe that it has breached any applicable EU competition law,” according to the annual report.