Stephen Merkel
About Stephen Merkel
Stephen M. Merkel (age 67) is BGC’s Executive Vice President and General Counsel (since 2001) and, since February 18, 2025, Chairman of the Board and a director. He also serves as Executive Vice Chairman, Executive Managing Director, and General Counsel for the Cantor Fitzgerald group (BGC’s controlling stockholder), and is Chief Legal Officer and EVP at Newmark; since February 2025 he has also been a director and Chairman of Newmark’s board. He holds a BA from the University of Pennsylvania and a JD from the University of Michigan Law School . Company performance context: in 2024 BGC reported $2,262.8 million total revenues and $123.2 million net income; cumulative TSR for $100 invested reached $163.72 as of 2024 year-end (peer group TSR $121.70) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| BGC Group, Inc. | EVP & General Counsel | 2001–present | Led legal/regulatory across brokerage platform; advisor on strategy and transactions . |
| Cantor Fitzgerald group (incl. Cantor, CFGM, CF&Co) | Executive Vice Chairman, Executive Managing Director & General Counsel | 1993–present | Senior legal/business leadership at controlling stockholder; cross-affiliate coordination . |
| Newmark Group, Inc. | Chief Legal Officer & EVP; Director and Chairman of Board | 2019–present (CLO/EVP); Director/Chair since Feb-2025 | Governance leadership; legal oversight at BGC affiliate . |
| Goldman Sachs (J. Aron Division) | Vice President & Assistant General Counsel | Pre-1993 | Structured products/commodities legal (J. Aron) . |
| Paul, Weiss, Rifkind, Wharton & Garrison | Associate | Pre-1993 | Complex corporate/securities matters . |
| U.S. Court of Appeals (2d Cir.) | Law Clerk to Hon. Irving R. Kaufman | Pre-1993 | Federal appellate clerkship . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Newmark Group, Inc. | Director; Chairman of Board | Since Feb-2025 | Also CLO & EVP since 2019 . |
| Cantor Fitzgerald, L.P. and affiliates (incl. CFGM, CF&Co) | Executive Vice Chairman, EMD & General Counsel | 1993–present | Parent/affiliate of BGC; control relationships . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,000,000 | 1,000,000 | 1,000,000 |
| Approved 2025 Base Salary ($) | 1,000,000 |
Notes: 2025 base salary reaffirmed at $1.0M .
Performance Compensation
- Design: Annual Incentive Plan with multi-factor goals (Adjusted earnings/profits, revenue/volume growth vs peers, market penetration/expansion, strategic M&A/JVs, strategic hires/retention, other significant performance). Committee uses negative discretion; no fixed weightings disclosed .
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Non-Equity Incentive Plan Compensation – Total ($) | 1,000,000 | 1,300,000 | 1,750,000 |
| of which: Cash ($) | 500,000 | 650,000 | 1,062,500 |
| of which: Equity portion and type | $500,000 in partnership awards (NPSU‑CV/NPPSU‑CV) at $4.59/unit | $650,000 in 77,106 RSUs (5-year ratable) | $687,500 in 72,751 RSUs (5-year ratable) |
2024 award details (granted using $9.45/share pricing, effective April 1, 2025): 72,751 RSUs vest 20% annually over 5 years, subject to continued substantial service and BGC/affiliates generating ≥$5 million revenue in the vesting quarter .
Performance metrics reference table (company-level context)
| Measure | 2022 | 2023 | 2024 |
|---|---|---|---|
| Total Revenues ($000s) | 1,795,302 | 2,025,401 | 2,262,818 |
| Net Income ($000s) | 58,867 | 38,775 | 123,228 |
| Cumulative TSR (Value of $100) | 67.10 | 129.49 | 163.72 |
Other program features:
- Clawback policy (effective Dec 1, 2023; retro to Oct 2, 2023) applies to incentive-based compensation upon required restatements .
- Hedging prohibited absent Audit Committee approval; insider pre-clearance required; Rule 10b5‑1 plans pre‑approval required .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 68,856 Class A shares: 16,511 directly; 46,087 in 401(k); 6,258 in family trusts (spouse sole trustee) . |
| Percent of outstanding | Less than 1% . |
| Unvested equity awards (executive) | 77,106 RSUs from 2023 year‑end grant (5‑year ratable) ; 72,751 RSUs from 2024 year‑end grant (effective 4/1/2025; 5‑year ratable; quarterly $5m revenue condition) . |
| Insider transactions | Sold 136,891 BGC Class A shares to the Company on Jan 2, 2024 at $6.98 per share under buyback authorization; approved by Audit and Compensation Committees . |
| Hedging/pledging | Hedging prohibited without approval; no pledges disclosed for Merkel in the proxy . |
| Ownership guidelines | Not disclosed in the proxy. |
Implications: RSU vesting cadence over five years with quarterly performance condition supports retention and staggers supply; the 1/2/2024 sale provided liquidity but was via company repurchase, not open‑market selling .
Employment Terms
| Term | Key provisions |
|---|---|
| Change-in-Control Agreement | If a “change in control” (Cantor or affiliate ceases to control BGC) occurs and Merkel terminates employment, lump sum equals 2x (annual base salary + most recent annual bonus), plus 2 years medical benefits; all equity vests upon change in control . |
| If CIC occurs and he does not terminate | Lump sum equals 1x (annual base salary + most recent annual bonus) and medical benefits; if terminated by Company within 3 years post‑CIC, lump sum equals 1x (annual base salary + most recent annual bonus) . |
| Tax gross‑up | Agreement provides for potential excise tax gross‑up; none would have been due based on Dec 31, 2024 calculations . |
| Estimated CIC totals (12/31/2024 basis) | Termination in connection with CIC total $5,617,881 (base + bonus + benefits); “extension of employment” scenario $1,867,881; Company termination within 3 years of CIC total $2,750,000 . |
| Non‑compete / non‑solicit | Not disclosed for Merkel in the proxy. |
| Time allocation (affiliates) | Committee notes some executives are compensated by affiliates; Merkel spent ~35% of 2024 on BGC matters; expects ~35% in 2025 (varies with developments) . |
Board Governance and Service
- Board service: Director and Chairman since February 18, 2025; Board elected him Chair following Howard W. Lutnick’s resignation to serve as U.S. Secretary of Commerce . BGC is majority‑independent (4/6 independent directors) but the Chair is not independent; the Board believes an independent chair is not necessary/effective given ownership structure; no lead independent director .
- Committee roles: All standing committees (Audit, Compensation, Corporate Responsibility) are fully independent; Merkel does not chair or sit on these committees per committee membership listings .
- Director compensation: Employee/affiliate directors receive no additional director compensation .
- Executive sessions: Independent directors meet in executive session at least twice per year .
Dual-role implications: Merkel is both Chairman and an executive officer (General Counsel), and is a senior executive at BGC’s controlling stockholder (Cantor/CFGM). While the Board cites robust independent committees and processes, the combination of Chair + GC and control affiliations may raise independence/perceived conflict considerations for some investors .
Compensation Committee and Governance Process
- Committee independence and advisor: Compensation Committee (independent) engaged Korn Ferry; Committee found no conflicts with the advisor .
- Pay design: Mix of cash and equity (RSUs), long-dated vesting viewed as highly retentive; negative discretion applied; equity subject to forfeiture and quarterly revenue condition on vesting .
- Peer/context used (not benchmarked to a percentile): CME, ICE, Nasdaq, Tradeweb, MarketAxess, TP ICAP, Compagnie Financière Tradition, and others .
- Say-on-pay: Advisory vote provided annually; Board considers investor feedback (no historical percentages disclosed in the proxy) .
Related Party Transactions (select Merkel-relevant items)
- Executive transaction: Company repurchased 136,891 BGC Class A shares from Merkel at $6.98 on Jan 2, 2024 under the authorized buyback; approved by Audit and Compensation Committees .
- Affiliates/controls: Extensive related-party arrangements (Cantor/CFGM control ~66.1% of voting power as of 9/16/2025). Audit Committee pre-approves related-party transactions; detailed administrative services, clearing, and financing arrangements disclosed .
Risk Indicators & Red Flags
- Chair is not independent; no lead independent director (Board policy based on ownership structure) .
- Dual role (Chairman + GC) and extensive roles at controlling affiliates could concentrate influence and present perceived independence issues .
- Potential excise tax gross-up under legacy CIC agreement (though none indicated at 12/31/2024) .
- Discretionary bonus framework without fixed metric weightings; however Clawback Policy applies to incentive-based compensation and hedging is restricted .
Investment Implications
- Pay-for-performance and retention: Merkel’s 2024 bonus increased to $1.75M (+$450k YoY), with 39% paid in long-vesting RSUs subject to quarterly revenue conditions, aligning near-term incentives with operating momentum and creating multi-year retention hooks . This structure reduces immediate selling pressure but creates scheduled supply around annual vest dates.
- Alignment and ownership: Merkel’s direct economic stake is modest (<1% of shares outstanding; 68,856 shares), but he holds meaningful unvested RSUs (77,106 from 2023; 72,751 from 2024 grant), supporting retention. No pledging disclosed; hedging restricted .
- Governance discount risk: The combined Chairman/GC role, control structure (Cantor/CFGM), and related-party ecosystem may support a governance discount for some investors despite majority-independent committees and formal related-party oversight .
- Change-in-control economics: Single-trigger equity vesting on CIC and 2x cash severance if Merkel resigns post‑CIC could be viewed as shareholder-unfriendly by some; however, current calculations show no excise tax gross-up due and quantified payouts are moderate versus peers .
- Trading signals: The January 2024 insider sale to the Company (committee-approved buyback) provided liquidity but does not indicate open-market selling pressure; monitor Form 4s and vesting calendars for incremental supply around annual RSU tranches .