William M. Farrow, III
Chairman at CBOE
Board
About William M. Farrow, III
William M. Farrow, III, age 70, is Cboe’s independent Non‑Executive Chairman since September 2023, having served as Lead Independent Director from May to September 2023 and as a director since 2016 . He is the retired President & CEO of Urban Partnership Bank (2010–2017), and previously CIO of The Chicago Board of Trade (2001–2007), with senior roles at Bank One; he holds a B.A. from Augustana College and a Masters of Management from Northwestern University’s Kellogg School of Management . The Board affirms his independence under BZX standards; 11 of the 12 nominees are independent and the bylaws require at least two‑thirds independent directors .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Urban Partnership Bank | President & CEO | 2010–2017 | Led community development bank; governance oversight experience |
| FC Partners Group, LLC | Managing Partner & CEO | 2007–2009 | Technology advisory and development leadership |
| The Chicago Board of Trade | EVP & Chief Information Officer | 2001–2007 | Cybersecurity/information systems expertise |
| Bank One Corporation | Various senior positions | Not specified | Financial services leadership |
| Federal Reserve Bank of Chicago | Director (prior) | Not specified | Regulatory/governance exposure |
| Echo Global Logistics, Inc. | Director (former public) | Not specified | Corporate governance experience |
| Winston and Wolfe LLC | Owner (private) | Not specified | Technology development and advisory |
External Roles
| Organization | Role | Public/Private | Notes |
|---|---|---|---|
| WEC Energy Group, Inc. | Director | Public company | Current public board |
| CoBank, Inc. | Director | Cooperative | Current board |
| Endeavor Health | Director | Health system | Current board |
Board Governance
- Current Cboe committee assignments: Executive Committee (Chair) and Finance & Strategy Committee (member); invited guest to all other standing committees .
- Special Committee Chair (ad hoc) related to investigation into personal relationships; committee met twice in 2024 (demonstrates engagement during a sensitive governance matter) .
- Non‑Executive Chairman responsibilities include presiding over Board/stockholder meetings, approving agendas and schedules, liaising with the CEO and independent directors, and shaping information flow to the Board .
- Attendance and engagement: 9 Board meetings in 2024; each director attended ≥75% of Board and committee meetings; independent directors held 6 executive sessions in 2024; all then‑serving directors attended the 2024 Annual Meeting .
- Independence: Board leadership is split; independent committees (Audit, Compensation, Nominating & Governance) and ≥2/3 independent directors mandated by bylaws .
Fixed Compensation
| Component | 2024 Program | 2025 Program | Notes |
|---|---|---|---|
| Annual cash retainer | $90,000 | $90,000 | Director retainer |
| Annual stock retainer (value at grant) | $170,000 | $170,000 | RSUs; value based on closing price at grant |
| Non‑Executive Chairman cash retainer | $150,000 | $150,000 | Additional retainer for Chair role |
| Committee chair cash retainers | $15,000–$25,000 | $15,000–$25,000 | By committee (Audit $25k; Risk $20k; ATS $20k; others $15k) |
| Committee member cash retainers | $7,500–$16,500 | $7,500–$16,500 | Risk member increased to $12,000 in 2024 |
| Meeting fees (excess meetings) | $1,500 per meeting | $1,500 per meeting | Only above baseline+2 meetings per committee |
| Director | 2024 Fees Earned/Paid in Cash | 2024 Stock Awards | 2024 All Other Compensation | 2024 Total |
|---|---|---|---|---|
| William M. Farrow, III | $248,591 | $170,159 | $5,000 | $423,750 |
| Notes | Includes Non‑Executive Chairman retainer and Finance & Strategy member retainer | RSUs granted May 16, 2024; grant-date fair value (ASC 718) | Matching gifts via company program | Totals per proxy table |
| Citations |
Additional details:
- Special Committee meeting fees: Farrow received $1,500 per meeting for Special Committee attendance .
- Deferrals: Farrow elected to defer 100% of his 2024 equity grant into the Director Equity Deferral Plan .
Performance Compensation
Directors do not receive performance‑conditioned equity; non‑employee director equity is time‑based RSUs that vest on the earlier of one year from grant or completion of the director’s service year, subject to continuous service . Stock options are not featured; RSU grants are part of an annual mix of cash and equity to align interests near peer median levels per Meridian’s review .
| Grant Type | Grant Date | Shares/Units | Vesting Schedule | Notes |
|---|---|---|---|---|
| Annual Director RSU | May 16, 2024 | 937 (typical cohort holding as of 12/31/2024) | Vest on earlier of one-year anniversary or completion of final year of director service | Applies to then‑serving directors; cohort detail per proxy |
| Annual Director RSU (Farrow Form 4) | May 6, 2025 | 729 | Vest May 6, 2026 | Reported on Form 4; beneficially owned post‑grant 12,205 shares |
Other Directorships & Interlocks
| Company | Relationship to Cboe | Potential Interlock/Conflict Notes |
|---|---|---|
| WEC Energy Group, Inc. | None disclosed as customer/supplier | No related‑party transaction disclosed for Farrow |
| CoBank, Inc.; Endeavor Health | Financial cooperative; health system | No related‑party transaction disclosed for Farrow |
| Broader board interlocks (context) | Index providers and banks affiliated with other directors (e.g., S&P via Matturri; Goldman/Barclays via Mansfield) | Company believes terms were no less favorable than arm’s‑length; Audit Committee oversees related‑party review |
Expertise & Qualifications
- Strategy and management of large organizations; financial markets and products; government/regulatory; corporate governance; international; risk management; technology/cybersecurity—Farrow is marked in the Board’s skills matrix across these categories .
- Background and credentials provide financial services breadth and IT/cyber familiarity; Board notes his suitability as Chairman .
Equity Ownership
| Holder | Beneficial Ownership (Shares) | % of Outstanding | Notes |
|---|---|---|---|
| William M. Farrow, III | 11,476 | <1% | As of March 18, 2025; includes shares acquirable within 60 days (e.g., director RSUs) |
| Post 5/6/2025 Form 4 | 12,205 | <1% | Reflects RSU grant of 729 units; vests 5/6/2026 |
Ownership alignment policies:
- Director stock ownership guideline: 5× the cash annual retainer within 5 years; incumbents (other than new 2024 directors) met the guideline as of 12/31/2024 .
- Hedging/pledging prohibitions: Directors are prohibited from hedging Cboe stock or pledging/margin loans; none of the directors had hedges or pledges in 2024 .
- Required holding of shares from annual equity awards until guideline met (tax sales permitted) .
Governance Assessment
- Board effectiveness: Farrow’s dual roles as Non‑Executive Chairman and Executive Committee Chair, plus his invited‑guest status across committees, indicate strong coordination and independent oversight of management agendas and information flow .
- Independence and attendance: Independent status; robust 2024 attendance; 6 independent‑only sessions—supports board accountability and investor confidence .
- Compensation alignment: Mix of cash and time‑based RSUs with deferral options, no options, no performance equity for directors; ownership guidelines and holding requirements enhance alignment; Risk Committee member retainer increased to reflect duties, signaling appropriate calibration rather than pay inflation .
- Conflicts/related parties: No related‑party transactions disclosed for Farrow; Audit Committee oversees RPTs, and disclosed interlocks for other directors were judged arm’s‑length .
- Special situations: Farrow chaired the Special Committee during a sensitive internal investigation, a sign of engagement and willingness to address governance issues promptly .
- Shareholder sentiment: Say‑on‑pay support ~84% in 2024; ongoing outreach and governance refinements (e.g., 25% special meeting right) reflect responsiveness to shareholders .
RED FLAGS: None disclosed specific to Farrow—no related‑party transactions, pledging/hedging, or attendance issues reported .
Insider Trades (Section 16)
| Date | Form | Security | Action | Qty | Price | Beneficial Ownership After | Vesting/Notes |
|---|---|---|---|---|---|---|---|
| May 6, 2025 | Form 4 | RSU (common stock underlying) | Award (A) | 729 | $0 | 12,205 | Vests 5/6/2026; Rule 16b‑3 compliant |
| May 8, 2025 | IR log | Form 4 filing posted | — | — | — | — | Cboe IR filings index shows multiple Form 4s in May–June 2025 |
Director Compensation Structure Analysis
- Year‑over‑year calibration: Risk Committee member retainer increased to $12,000 in 2024 to reflect heightened responsibilities; other retainers unchanged, indicating targeted adjustments rather than broad inflation .
- Mix: Cash ($90k base) plus time‑based RSUs ($170k value) and role‑based retainers (Chair $150k); no meeting fees unless above baseline threshold; structure emphasizes steady alignment rather than at‑risk incentives for directors .
- Deferral programs: Cash deferral (notional investment options) and equity deferral (stock unit accounts) available from 2023; Farrow deferred his 2024 equity award, supporting long‑term alignment .
Say‑on‑Pay & Shareholder Feedback (Context)
- Say‑on‑pay support ~84% at 2024 meeting; committee considered feedback and did not enact large‑scale changes, instead implementing refinements like supplemental clawbacks and retirement vesting notice requirements for executives (contextual signal of governance responsiveness) .
Compensation Committee Analysis (Context)
- Independent consultant (Meridian); committee independence affirmed; no interlocks reported; seven Compensation Committee meetings in 2024; robust governance cycle .
Expertise & Qualifications
| Area | Evidence |
|---|---|
| Strategy/Management | Marked in skills matrix; executive leadership roles |
| Financial Markets/Products | CIO at CBOT; industry experience |
| Government/Regulatory | Federal Reserve Bank of Chicago board; governance knowledge |
| Corporate Governance | Multiple public/private boards; Chair role |
| Risk Management | Skills matrix and CIO experience |
| Technology/Cybersecurity | CIO background; Board oversight of information security |
Equity Ownership Details
- Beneficial ownership: 11,476 shares as of March 18, 2025 (<1%); director RSUs acquirable within 60 days counted; cohort RSU holdings of 937 units typical at YE 2024 .
- Policies: 5× retainer ownership guideline; holding until compliance; hedging/pledging prohibited; no hedges/pledges in 2024 .
Governance Assessment
Farrow’s independent Chair role, committee leadership, and Special Committee stewardship underpin strong board oversight. No Farrow‑specific conflicts or attendance issues are disclosed; ownership and trading policies reduce alignment risks; director pay is measured and linked to service rather than performance metrics, consistent with governance best practices at exchange operators .