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Xavier Rolet has stepped down as chief executive of the London Stock Exchange, bowing to board pressure to resolve a governance crisis at the top of the institution.

Mr Rolet’s decision to call an end to his eight-and-a-half year tenure was intended to head off a damaging shareholder meeting set to take place next month, in which investors would have had to vote on his future.

The LSE said on Wednesday that chairman Donald Brydon, who has been locked in a power struggle with Mr Rolet, was also leaving and would not seek re-election in 2019. 

The shareholder vote was called by The Children’s Investment Fund, an activist investor trying to unseat Mr Brydon and extend Mr Rolet’s contract until 2021.

TCI, led by Sir Christopher Hohn, has led a public battle against the board after the exchange announced in October that Mr Rolet would step down next year. Mr Rolet has led a revival of the exchange’s fortunes since 2009, in which the group’s market value has soared from £800m to more than £14bn.

TCI, a long-term backer of Mr Rolet, accused Mr Brydon of forcing Mr Rolet out against his will and gagging him with confidentiality clauses.

Xavier Rolet, left, and Donald Brydon

Explaining his sudden departure on Wednesday morning, Mr Rolet said there had been “a great deal of unwelcome publicity, which has not been helpful to the company”.

Mr Rolet added: “I will not be returning to the office of chief executive or director under any circumstances. I am proud of what we have achieved during the past eight-and-a-half years.”

David Warren, chief financial officer, will take over until a successor is appointed. Mr Warren is a former chief financial officer at Nasdaq and has been at the LSE for five years, and been a part of many of the LSE’s biggest deals of recent years.

The LSE said that Mr Brydon would oversee the appointment of a new chief executive but then step down as chairman.

“He and the board believe that at that point it would be in shareholders’ interests to have a new team at the helm to steer the future progress of the company.”

The LSE has asked TCI to withdraw its requisition of the extraordinary meeting. If TCI did not do so by the end of Thursday, the LSE warned it would have to publish a circular setting out the reasons for Mr Rolet’s departure.

Mr Rolet’s departure comes a day after an intervention by Mark Carney, governor of the Bank of England, who said that Mr Rolet had “made an extraordinary contribution . . . but everything comes to an end”.

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