Fredric J. Tomczyk
About Fredric J. Tomczyk
Fredric J. Tomczyk is Chief Executive Officer (since September 2023) and a director of Cboe Global Markets; he previously served as an independent director from July 2019 to September 2023. He is 69, holds a B.S. in Applied Economics & Business Management from Cornell University, and is a Fellow of the Institute of Chartered Accountants of Ontario . Company performance under the incentive framework included 2024 net revenues of $2,072 million (102.6% of target) and adjusted EBITDA of $1,363 million (104.2% of target), and the 2022–2024 PSU cycle paid 200% on relative TSR (83rd percentile) and 161.5% on cumulative adjusted diluted EPS ($23.34) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| TD Ameritrade Holding Corp. | President & CEO | 2008–2016 | Public company CEO experience across brokerage/markets; governance and regulatory leadership |
| TD (The Toronto-Dominion organization) | Senior leadership roles | 1999–2008 | Increasing responsibility within large financial services organization |
| London Life | President & CEO | Pre-1999 | Insurance leadership; diversified financials experience |
External Roles
| Organization | Role | Years |
|---|---|---|
| Willis Towers Watson PLC (public) | Director | Current |
| Sagen MI Canada Inc. and Sagen Mortgage Insurance Company Canada | Lead Independent Director | Prior |
| Knight Capital Group, Inc. (former public) | Director | Prior |
| Liberty Property Trust (former public) | Trustee | Prior |
| Securities Industry and Financial Markets Association | Director | Prior |
| Cornell University | Athletic Alumni Advisory Council Member | Current |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of Salary) | Actual Annual Incentive ($) |
|---|---|---|---|
| 2024 | 1,000,000 | 165% | 2,087,250 |
| 2023 (partial year) | 287,500 | 165% (offer letter) | 584,990 |
Notes: 2024 CEO pay ratio 18:1 vs median employee ($182,120 vs $3,325,419); would be 49:1 including a pro rata portion of his 2023 appointment RSU grant .
Performance Compensation
Annual Incentive (Plan design and 2024 outcomes)
- Plan mix: Corporate 70% (Net Revenue 30%, Adjusted EBITDA 40%); Individual 20%; DEI 10% .
- 2024 corporate results vs goals: | Metric | Weight | Threshold ($mm) | Target ($mm) | Max ($mm) | Actual ($mm) | Payout (% of target) | |---|---:|---:|---:|---:|---:|---:| | Net Revenue | 30% | 1,818 | 2,020 | 2,222 | 2,071 | 126.0% | | Adjusted EBITDA | 40% | 1,112 | 1,308 | 1,505 | 1,363 | 128.0% |
- CEO total payout factor for 2024 annual incentive: 127% of target .
Long-Term Incentives
- Program: 50% time-based RSUs (3-year graded vest) and 50% PSUs (50% relative TSR vs S&P 500; 50% cumulative adjusted diluted EPS) with 0–200% payout range over 3 years .
- 2022–2024 PSU performance: TSR 83rd percentile → 200% payout; 3-year cumulative adjusted diluted EPS $23.34 → 161.5% payout .
- CEO appointment grant (no 2024 LTI grant): 44,452 RSUs granted Oct 12, 2023 ($7.15m grant-date value); vest in three equal annual installments on Oct 12, 2024/2025/2026, subject to continued service; special CIC and pro rata provisions if he remains a director or resigns after Oct 12, 2024 (see vesting notes below) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (common) | 22,024 shares; less than 1% of outstanding |
| Unvested RSUs (12/31/24) | 29,635 units; market value $5,790,679 |
| 2023 CEO RSU vesting schedule | 44,452 RSUs granted 10/12/23; vests 1/3 on 10/12/24 (vested), 1/3 on 10/12/25, 1/3 on 10/12/26; continued service required; CIC full vesting if still a director; pro rata vesting upon voluntary board resignation post-10/12/24 if no cause |
| Options | Company has not featured stock options in the long-term program; no CEO option grants |
| Ownership guidelines (Executive) | CEO: 6x base salary; all NEOs met holding requirement as of 12/31/24 |
| Hedging/Pledging | Executives prohibited from hedging and pledging; no executive hedges/pledges in 2024 |
Vesting/flow-overhang considerations: Remaining tranches of the 2023 RSU grant are scheduled for October 12, 2025 and October 12, 2026; customary sell-to-cover tax transactions could occur around vest dates (no Form 4 selling data assessed here) .
Employment Terms
| Component | Term |
|---|---|
| Offer letter (9/18/2023) | $1,000,000 base salary and 165% target bonus; $7.15m RSU appointment grant in 2023 in lieu of 2023–2024 annual LTI grants; eligible for standard benefits and relocation support; severance governed by Executive Severance Plan (no bespoke CEO severance) |
| Annual incentive design | Corporate (Net Revenue 30%, Adjusted EBITDA 40%), Individual (20%), DEI (10%); 0–200% payout structure |
| Executive Severance Plan (non-CIC) | Accrued pay; prorated target bonus for year of termination; severance cash equal to base salary + target bonus; COBRA premiums (18 months for EVP level, which includes CEO as a participant) |
| Executive Severance Plan (change-in-control) | Double trigger; window: 6 months pre- to 2 years post-CIC; cash equal to 2x (EVP level) base salary + target bonus; prorated target bonus; COBRA (24 months for EVP); successor must assume plan |
| Potential payouts (as of 12/31/24) | Non-CIC involuntary termination: Salary $1,000,000; Cash incentive $3,300,000; Other $27,435; Total $4,327,435 . CIC termination: Salary $2,000,000; Cash incentive $4,950,000; Unvested equity $5,790,679; Other $36,580; Total $12,777,259 . Death/Disability: Unvested equity $5,790,679 . |
| Clawbacks | Mandatory (Dodd-Frank compliant; 3-year lookback for restatements) and supplemental discretionary clawback (effective 12/18/2024) permitting recovery up to 100% of cash/equity for post-effective-date covenant breaches or cause-like conduct; supplemental also covers non-PEO EVP restatements (3-year lookback) |
| Perquisites/gross-ups | 2024 “All Other Compensation” included relocation assistance ($120,904) and related tax gross-up ($69,329), and car service ($24,918) and related tax gross-up ($19,818) for CEO; policy states no tax gross-ups upon a change in control |
Board Governance
- Role and independence: CEO and director; not independent under listing standards .
- Committee roles: Member, Executive Committee; invited guest to other standing committees (except ATS Oversight) .
- Board structure: Non-Executive Chairman (split Chair/CEO); 11 of 12 nominees independent; independent Audit, Compensation, and Nominating & Governance committees .
- Meetings and oversight: 9 Board meetings in 2024; each director attended ≥75%; independent directors met in executive session 6 times in 2024 .
- Strategy oversight: Tomczyk led a comprehensive long-term strategy review in late 2023–2024 with sharpened focus on organic growth leveraging global securities platforms .
Performance & Track Record
| Metric/Highlight | Detail |
|---|---|
| 2024 financials (select) | Net revenues $2,072m (+8% YoY); diluted EPS $7.21 (+1% YoY) |
| 2024 capital returns | $454m returned via dividends and buybacks; dividend +15% to $0.63/qtr; 1.15m shares repurchased for $204m |
| TSR through 12/31/24 | 1-year ~11%; 3-year ~56% (16% CAGR); 5-year ~75% (12% CAGR); 10-year ~208% (13% CAGR) |
| Strategic actions | Wound down Cboe Digital spot trading; expanded derivatives, data, indices; AI center of excellence |
| Say-on-pay | ~84% support at 2024 AGM; company has received >84% support annually since 2010 IPO |
Compensation Structure Analysis
- Strong pay-for-performance link: CEO’s cash bonus driven by formulaic revenue/EBITDA outcomes plus individual and DEI goals; 127% payout for 2024 reflects above-target corporate performance .
- Equity mix and risk: CEO’s 2023 appointment RSUs (multi-year vest) concentrate exposure to stock performance and retention; no stock options used, reducing volatility/leverage risks .
- Governance safeguards: Double-trigger CIC, robust stock ownership and holding requirements, strict anti-hedging/pledging, and dual clawback framework .
- Perquisite gross-ups: Limited tax gross-ups appeared for relocation and car service in 2024 (not CIC-related), a modest governance negative offset by no CIC gross-ups policy .
Equity Ownership & Alignment (detail table)
| Item | Amount/Term |
|---|---|
| Shares owned | 22,024 (<1% of outstanding) |
| Unvested RSUs (12/31/24) | 29,635 ($5,790,679) |
| 2023 CEO grant vesting dates | 10/12/2024 (vested), 10/12/2025, 10/12/2026 |
| Stock ownership guideline | 6x salary; holding requirement met as of 12/31/24 |
| Hedging/Pledging | Prohibited; none in 2024 |
Employment Terms (severance/CIC detail)
| Scenario (as of 12/31/24) | Cash Salary | Cash Incentive | Unvested Equity | Other | Total |
|---|---|---|---|---|---|
| Involuntary (non-CIC) | 1,000,000 | 3,300,000 | — | 27,435 | 4,327,435 |
| CIC + qualifying termination | 2,000,000 | 4,950,000 | 5,790,679 | 36,580 | 12,777,259 |
| Death/Disability | — | — | 5,790,679 | — | 5,790,679 |
Plan terms (summary): Non-CIC severance includes accrued pay, prorated target bonus, and cash equal to base + target bonus; CIC severance (double trigger within -6 months to +2 years) includes accrued pay, prorated target bonus, and 2x (EVP level) base + target bonus; COBRA 18 months (non-CIC) and 24 months (CIC) for EVP-level participants (CEO is a plan participant) .
Board Service History and Dual-Role Implications
- Board history: Independent director (2019–2023); CEO and director since Sept 2023; serves on the Executive Committee; is an invited guest to other committees (except ATS Oversight) .
- Governance mitigants: Split Chair/CEO (Non-Executive Chairman), majority independent Board (11/12), independent key committees, regular independent executive sessions (6 in 2024) .
- Independence: Not independent due to executive role; committee membership limited accordingly .
Investment Implications
- Alignment: Significant unvested RSU stake with multi-year vesting and stringent ownership/holding requirements supports alignment and retention; anti-hedging/pledging and robust clawbacks reduce agency risk .
- Incentive quality: Balanced annual incentive (revenue/EBITDA/individual/DEI) and 50/50 PSU mix (TSR/EPS) tie pay to both absolute fundamentals and relative shareholder returns; 2024 payout moderation (127%) aligns with above-target corporate results .
- Overhang/selling pressure: RSU vest dates (Oct 12, 2025/2026) could create routine sell-to-cover flows; no evidence of pledging/hedging; no options overhang .
- Downside protections/costs: Double-trigger CIC and disclosed payout matrix cap change-of-control leakage; limited 2024 perquisite gross-ups are a small negative but not CIC-related and are outweighed by overall governance design .
- Execution: Strategy sharpened in 2023–2024 under Tomczyk with focus on organic growth and product innovation; 2024 results and multi-year TSR support credibility of execution while preserving capital return .