Patrick Sexton
General Counsel and Corporate Secretary at CBOE
Executive
About Patrick Sexton
Patrick Sexton, age 60, is Executive Vice President, General Counsel and Corporate Secretary of Cboe Global Markets; he has served as EVP GC since March 2018 and has been with Cboe since 1997, with prior roles providing legal, regulatory, and compliance counsel. He holds a B.A. from the University of Notre Dame and a J.D. with honors from Notre Dame Law School . During 2024, Cboe delivered net revenues of $2,072 million (+8% YoY), diluted EPS of $7.21 (+1% YoY), and adjusted EBITDA of ~$1,363 million, supporting pay-for-performance outcomes; longer-term TSR at 12/31/24 was 11% (1-yr), 56% (3-yr), 75% (5-yr), and 208% (10-yr) .
| Performance Snapshot | 2015–2024 (10-yr) | 2020–2024 (5-yr) | 2022–2024 (3-yr) | 2024 (1-yr) |
|---|---|---|---|---|
| Total Shareholder Return (incl. dividends) | 208% | 75% | 56% | 11% |
| Financials | 2023 | 2024 |
|---|---|---|
| Net Revenues ($mm) | $1,918 | $2,072 |
| Diluted EPS ($) | $7.13 | $7.21 |
| Adjusted EBITDA ($mm) | $1,241–$1,245 (ex/including minority investments) | $1,363 (program metric)/$1,362.8 (ex minority) |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cboe Global Markets | EVP, General Counsel & Corporate Secretary | 2018–present | Executive leadership over global legal, regulatory and compliance; supported strategic initiatives and leadership transitions |
| Cboe Exchange, Inc. | Deputy General Counsel | 2013–2018 | Senior legal oversight during expansion and product innovation |
| Cboe (various legal roles) | Legal/Regulatory/Compliance Counsel (increasing responsibility) | 1997–2013 | Built institutional legal/regulatory capability through major growth periods |
Fixed Compensation
| Component | 2023 | 2024 | Notes |
|---|---|---|---|
| Base Salary | $430,000 (pro rata after Mar 1) | $450,000 (effective Mar 1) | +5% for added responsibilities and market alignment |
| All Other Compensation | $66,256 | $62,455 | Includes 401(k) $27,600; SERP company contrib. $31,433; taxable insurance $2,772; airline club $650 |
Performance Compensation
Annual Incentive (Cash)
- Structure and weightings: Corporate financial (70%: Net Revenue 30% / Adjusted EBITDA 40%), Individual (20%), DEI (10%) .
- Sexton target bonus: 120% of base salary .
- 2024 corporate performance and payouts: Net Revenue $2,071mm (126% of target); Adjusted EBITDA $1,363mm (128% of target) .
- Sexton’s actual 2024 annual incentive payout: $662,041 (124% of target opportunity) .
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout vs Target |
|---|---|---|---|---|---|---|
| Net Revenue ($mm) | 30% | $1,818 | $2,020 | $2,222 | $2,071 | 126% |
| Adjusted EBITDA ($mm) | 40% | $1,112 | $1,308 | $1,505 | $1,363 | 128% |
| Individual | 20% | — | — | — | See highlights | 109–128% range across NEOs |
| DEI | 10% | — | — | — | See highlights | 105–138% range across NEOs |
Individual highlights for Sexton: advanced global product enablement through regulatory frameworks, maintained regulatory relationships, supported cybersecurity preparedness, developed succession/cross-training, globalized legal function, and community engagement .
Long-Term Incentive (Equity)
- Program mix (for NEOs other than CEO): 50% time-based RSUs (3-year ratable) and 50% PSUs split evenly between 3-year Relative TSR (vs S&P 500) and 3-year Cumulative Adjusted Diluted EPS, each with 0–200% payout and cliff vest at end of cycle .
- 2024 PSU goals: TSR thresholds at 25th/50th/75th percentiles; EPS thresholds at $25.82/$28.40/$31.15 (50%/100%/200% payout) .
- Special one-time retention grants in Feb 2024 (50% cliff RSU vest 2/19/2027; 50% PSUs on 2024–2026 metrics); special awards are not retirement-eligible .
| 2024 Grants to Patrick Sexton | Shares | Target Grant Value | Vesting |
|---|---|---|---|
| Time-based RSUs (annual) | 2,706 | $505,000 | 1/3 on 2/19/2025, 2/19/2026, 2/19/2027 |
| PSUs – TSR (annual) | 1,353 target (677 thr / 2,706 max) | $252,500 | Cliff after 2024–2026 performance period (settle ~2/19/2027) |
| PSUs – EPS (annual) | 1,353 target (677 thr / 2,706 max) | $252,500 | Cliff after 2024–2026 period |
| Special RSUs (retention) | 670 | $125,000 | Cliff on 2/19/2027 (not retirement-eligible) |
| Special PSUs – TSR | 335 target (168 thr / 670 max) | $62,500 | Cliff after 2024–2026 period (not retirement-eligible) |
| Special PSUs – EPS | 335 target (168 thr / 670 max) | $62,500 | Cliff after 2024–2026 period (not retirement-eligible) |
2022 PSU outcomes (company-wide): 3-year relative TSR at 83rd percentile → 200% of target; 3-year cumulative adjusted diluted EPS $23.34 → 161.5% of target (vested Feb 10, 2025) .
Equity Ownership & Alignment
- Beneficial ownership: 23,026 shares as of March 18, 2025 (less than 1%) . Includes 976 shares issuable within 60 days from accelerated vesting of certain pre-2024 RSUs tied to qualified retirement .
- Ownership guidelines: 3x base salary requirement; all NEOs met holding requirements as of 12/31/24 .
- Hedging/pledging: Executives prohibited from hedging and pledging; none of the executives had hedges or pledges in 2024 .
- Outstanding awards (selected items, 12/31/24): unvested RSUs of 1,012 (2022), 1,951 (2023), 2,706 (2024 annual), and 670 (2024 special); unearned PSUs include 2023 grants shown at max 2,926 (TSR) and 2,926 (EPS), 2024 annual at target 1,353 (TSR) and 1,353 (EPS), and 2024 special at target 335 (TSR) and 335 (EPS) .
| Unvested/Unearned Awards (12/31/24) | Shares (#) | Notes |
|---|---|---|
| RSUs (2022 grant) | 1,012 | Vested 2/19/2025 |
| RSUs (2023 grant) | 1,951 | 50% vested 2/19/2025; 50% vests 2/19/2026 |
| RSUs (2024 annual) | 2,706 | Ratable on 2/19/2025/2026/2027 |
| RSUs (2024 special) | 670 | Cliff vests 2/19/2027 (not retirement-eligible) |
| PSUs 2023 (TSR) – shown at max | 2,926 | 2023–2025 cycle; settle ~2/19/2026 |
| PSUs 2023 (EPS) – shown at max | 2,926 | 2023–2025 cycle; settle ~2/19/2026 |
| PSUs 2024 (TSR) – target | 1,353 | 2024–2026 cycle; settle ~2/19/2027 |
| PSUs 2024 (EPS) – target | 1,353 | 2024–2026 cycle; settle ~2/19/2027 |
| PSUs 2024 Special (TSR) – target | 335 | Not retirement-eligible |
| PSUs 2024 Special (EPS) – target | 335 | Not retirement-eligible |
Retirement and vesting: Starting with 2024 awards, qualified retirement (age 55+ and 10+ years’ service) with 6-month advance notice and an approved transition plan allows continued vesting on normal schedule for RSUs and pro-rata PSUs (performance certified at period end); Sexton satisfied age/service criteria as of 12/31/24; special 2024 retention awards are excluded from retirement eligibility .
Employment Terms
- Employment agreement: None; covered by Executive Severance Plan .
- Severance (without cause/for good reason): Accrued items + pro-rata target bonus + cash severance equal to 1x (EVP) base salary + target bonus, plus COBRA premiums for 18 months .
- Change in Control (double trigger): Accrued items + pro-rata target bonus + 2x (EVP) base salary + target bonus, plus COBRA premiums for 24 months; equity uses double trigger vesting (assumed awards accelerate upon qualifying termination; if not assumed, accelerate at change in control) .
- Clawbacks: Mandatory Dodd-Frank-compliant clawback adopted Oct 11, 2023; supplemental discretionary clawback (Dec 18, 2024) allows recovery up to 100% of cash and equity compensation for post-effective-date covenant breaches or conduct constituting cause; equity agreements integrate clawback provisions .
- Covenants: RSU/PSU awards include non-compete, non-solicit, and confidentiality covenants .
| Potential Payouts at 12/31/2024 | Salary | Cash Incentive | Unvested Equity | Other | Total |
|---|---|---|---|---|---|
| Involuntary termination (no CIC) | $450,000 | $1,076,066 | $3,166,718 | $51,702 | $4,744,486 |
| Termination in connection with CIC | $900,000 | $1,616,066 | $4,846,897 | $68,936 | $7,431,899 |
| Death/Disability | — | — | $3,932,816 | — | $3,932,816 |
| Qualified Retirement | — | — | $3,166,718 | — | $3,166,718 |
Note: Amounts are based on 12/31/2024 stock price and assume applicable plan/award terms as described in footnotes (retirement eligibility, CIC double trigger, etc.) .
Multi‑Year Compensation
| Element ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $415,000 | $427,500 | $446,667 |
| Bonus | — | — | — |
| Stock Awards | $806,155 | $1,085,605 | $1,422,809 |
| Non‑Equity Incentive Plan Comp | $861,540 | $595,942 | $662,041 |
| All Other Compensation | $55,256 | $66,256 | $62,455 |
| Total | $2,137,951 | $2,175,303 | $2,593,972 |
Deferred compensation: 2024 SERP executive contribution $39,292; company contribution $31,433; aggregate earnings $255,280; year-end balance $1,297,206 .
Compensation Structure Analysis
- Mix and metrics: High at-risk pay via annual incentive (corporate Net Revenue and Adjusted EBITDA at 70% weighting) and PSUs linked to 3-year TSR and adjusted EPS; no stock options in 2024 .
- Year-over-year changes: Sexton’s base salary increased 5% to $450k effective March 1, 2024; target bonus remained 120% of salary; special one-time retention awards added in 2024 (half cliff RSU, half PSUs) to support leadership stability post-2023 transitions; retirement eligibility tightened for new awards (advance notice/transition plan) to reinforce retention .
- Governance enhancements: Adoption of mandatory clawback (2023) and supplemental discretionary clawback (2024) .
- Shareholder alignment: Say-on-pay support ~84% in 2024; board engagement informed 2024–2025 refinements .
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited for executive officers; none in 2024 .
- Repricing/underwater option modifications: Not applicable; no options featured in 2024 LTI .
- Tax gross-ups: None disclosed for Sexton; gross-ups disclosed for CEO relocation/car service (contextual, not applicable to Sexton) .
- Related party transactions: None disclosed involving Sexton .
- Ownership concentration: Less than 1% beneficial ownership; ownership guidelines met .
Compensation Peer Group (Benchmarking)
CME Group, Intercontinental Exchange, Nasdaq, MarketAxess, MSCI, LSE Group and others across exchanges/fintech; 2024 peer group comprised 20 companies after removal of Synopsys . The committee uses peer and survey data for reference rather than a strict percentile target .
Say‑on‑Pay & Shareholder Feedback
Say‑on‑pay support was ~84% in 2024, with ongoing engagement leading to refinements such as retirement vesting requirements and the supplemental clawback policy .
Expertise & Qualifications
- Education: B.A., University of Notre Dame; J.D. with honors, Notre Dame Law School .
- Experience: Nearly three decades at Cboe with deep legal/regulatory expertise spanning U.S. and international markets; EVP GC since 2018 .
- 2024 contribution highlights: Regulatory enablement for new products/features; cybersecurity preparedness; leadership development/succession; globalization of legal function .
Employment Terms (additional details)
- Non-compete/non-solicit/confidentiality covenants embedded in equity awards .
- Double-trigger equity vesting under CIC; retirement continuation rules (for 2024+ awards) require 6‑month notice and approved transition plan .
Investment Implications
- Alignment: Strong linkage to corporate profitability (Adjusted EBITDA, Net Revenue) and multi‑year shareholder returns (TSR, EPS) plus robust clawbacks and anti‑hedging/pledging policies signal alignment with long‑term value creation .
- Retention risk: Moderate—Sexton is retirement‑eligible and covered by double‑trigger CIC protections (2x cash for EVPs), with 2024 awards designed to enhance orderly transitions (advance notice/transition plan, continued vesting) and special 2024 retention awards (cliff/PSUs) non‑retirement‑eligible to incentivize tenure through 2027 .
- Supply/vesting dynamics: Meaningful scheduled equity vesting through 2027 (annual RSUs and special RSUs; PSUs settle post‑performance) could lead to routine Form 4 activity around vest/withholding; policy constraints reduce discretionary hedging/pledging risk .
- Ownership: Beneficial ownership is small (<1%), but the company mandates ownership multiples and reports compliance, mitigating misalignment concerns .