ASX looks for new chief after Elstone quits

Photo / Kenny Rodger

The operator of the Australian Securities Exchange, ASX, is searching for a new chief executive after incumbent Robert Elstone said he would not renew his contract.

Elstone's contract expires on July 11 next year, but the ASX board has agreed to pay him A$750,000 ($967,980) for the right to terminate his contract up to three months before or after this date, if they find a replacement who can start earlier.

Elstone's departure was announced by ASX chairman David Gonski in his address to shareholders at the company's annual general meeting in Sydney yesterday.

"We have agreed to pay Robert a lump sum of A$750,000 in return for this flexibility and in recognition of the fact that he has not received any new grant of performance rights under the group's long-term incentive plan since December 2007," Gonski said.

"This will give the board the flexibility to ensure that we have the time to find and install a new CEO.

"It also ensures the ability for that new CEO to take up his or her position should they wish to do so prior to 11 July next year."

Gonski told the meeting that the board's hunt for a new chief would include appointing an executive search firm.

"This search will include candidates from both within ASX and from outside."

Elstone said ASX was entering a new era with increased competition and reduced supervisory roles, which should be accompanied by new leadership.

The federal government in March gave Chi-X Australia approval to create a rival electronic market exchange that will break ASX's two-decade monopoly.

Also this year, certain market supervisory functions were transfered from ASX to the Australian Securities and Investments Commission.

Elstone said he was confident that ASX would be ready and well placed to compete when competition for share-trade execution services started in Australia "as long as the playing field is level".

"But we don't know when that will be or what the new market rules will definitively look like," he said.

Elstone said ASX's share price over much of the past year had reflected regulatory uncertainty and proposed public policy settings.

It had been less reflective of the current underlying performance fundamentals of the company, its growth prospects or the diversified nature of its revenue streams, he said.

ASX shares hit a low on July 7 when they finished at A$28.34.

Elstone has been chief executive of the combined ASX and Sydney Futures Exchange (SFE) for five years.

- AAP