LONDON, April 24 (Reuters) - London Stock Exchange Group shareholders will vote on Thursday on whether to potentially double the pay of CEO David Schwimmer, after the 300-year old bourse campaigned to raise executive rewards to strengthen UK capital markets.

LSEG's annual general meeting will vote on proposals to allow Schwimmer's total yearly remuneration to rise to up to 13.063 million pounds ($16.14 million) from 6.25 million pounds.

Executive compensation at Britain's top companies has drawn shareholder anger in recent years, with most critical of a widening gap between average worker earnings and CEO pay.

But some UK fund managers are backing calls to give boards more flexibility on paying top talent to staunch a brain-drain to countries where pay is less of a hot topic.

Much of Schwimmer's package would remain performance based, given that his annual basic pay would rise from 1 million pounds at present, to 1.375 million pounds from January 2024.

The former Goldman Sachs banker earned 5.127 million pounds in 2023, which LSEG says lags rivals such as CME, Nasdaq , ICE and big data companies such as S&P Global and MSCI.

LSEG told Reuters it has transformed itself into a highly successful, complex and global organisation to deliver a strong performance and significant shareholder value since its pay policy was last reviewed in 2020.

"We have also aligned executive compensation with the median of our global sector peer group and reinforced a pay-for-performance philosophy," said LSEG, which also publishes a first quarter trading update on Thursday.

Shareholder adviser Glass Lewis has urged LSEG shareholders to vote against proposed changes to LSEG's remuneration policy, saying the "lump sum" approach is "excessive".

"While we recognise the company's global footprint and associated pay concerns, we do not believe that the company has sufficiently rationalised an un-phased increase of this magnitude," Glass Lewis said in a note this month ahead of the LSEG meeting.

LSEG has faced listings competition from EU-based financial centres like Paris and Amsterdam since Brexit, adding to already stiff rivalry from New York and piling pressure on regulators to bolster London's global competitiveness as a financial centre.

Julia Hoggett, CEO of London Stock Exchange plc, chairs the Capital Markets Industry Taskforce, which says executive remuneration policy can help to attract, retain and reward top talent, and is a key component of competitiveness.

Schwimmer's planned pay hike comes after Britain removed a cap on banker bonuses inherited from the European Union and as the country faces a cost of living crisis.

The $27 billion takeover of data and analytics company Refinitiv in January 2021 transformed LSEG into a company where data accounts for about 70% of its business, and it is better able to compete with financial market data leader Bloomberg.

Thomson Reuters, which owns Reuters News, has a minority shareholding in LSEG after the Refinitiv deal. LSEG also pays Reuters for news. ($1 = 0.8095 pounds) (Reporting by Huw Jones; Editing by Sinead Cruise and Alexander Smith)