Kendal Vroman
About Kendal Vroman
Kendal Vroman is CME Group’s Chief Transformation Officer (since November 2021), with 24 years at CME after joining in 2001; he previously led International and Optimization Services (from February 2020) and Cash Markets & Optimization Services (from 2018) and held senior roles in Planning & Execution, Commodities/OTC Solutions, and Corporate Development . Age 53 as of the FY2024 Form 10-K . Company performance under CME’s management team in 2024 included record revenue of $6.1B, net income of $3.5B, diluted EPS of $9.67, ADV of 26.5M (+9% YoY), and total shareholder return of ~+15% including dividends; adjusted operating margin was ~68% . CME ties senior management pay to cash earnings (annual bonus) and three‑year equity metrics (relative TSR and absolute net income margin), supporting pay-for-performance alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| CME Group | Chief Transformation Officer | Nov 2021–present | Enterprise change leadership across platform, operations, and product strategy |
| CME Group | Senior Managing Director, International & Optimization Services | Feb 2020–Nov 2021 | Drove international growth and client optimization services |
| CME Group | Senior Managing Director, Cash Markets & Optimization Services | 2018–Feb 2020 | Advanced cash market businesses and optimization capabilities |
| CME Group | Managing Director, Planning & Execution | Various (prior to 2018) | Led program execution for strategic initiatives |
| CME Group | Global Head, Commodity Products & OTC Solutions | Various (prior to 2018) | Expanded commodity and OTC product strategy |
| CME Group | Managing Director & Chief Corporate Development Officer | Various (prior to 2018) | Led M&A/partnerships and corporate strategy |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| marchFirst Inc. | Vice President, Corporate Operations / Chief of Staff to CEO | Pre-2001 | Executive operations and CEO support at a large consulting/tech firm |
Fixed Compensation
Specific salary/bonus amounts for Vroman are not disclosed; he is not listed among CME’s named executive officers (NEOs) in proxies. CME’s design targets base pay at market median, with annual cash bonuses funded by cash earnings and long-term incentives granted annually (September) .
NEO group mix (program context, 2023):
| Component | Share of Total Compensation | Notes |
|---|---|---|
| Base Salary | ~11% | Market median targeting |
| Annual Cash Bonus | ~31% | Funded by cash earnings vs targets |
| Annual Equity (RS + PSUs) | ~54% | 50% RS, 50% PSUs per program |
| Other | ~4% | Pension/deferred comp, perquisites |
Performance Compensation
Program terms (applies to senior management group; Vroman’s specific grants not disclosed):
| Metric | Weighting | Measurement Period | Payout Curve | Caps / Conditions | Vesting |
|---|---|---|---|---|---|
| Relative TSR vs S&P 500 | 50% of PSUs | 3 years (e.g., 2025–2027) | 0% <25th; 50% at 25th; 100% at 50th; 200% at 75th percentile | If absolute TSR negative over 3 years, payout capped at 100% | Cliff vest after performance certification; paid in shares |
| Absolute Net Income Margin (Adjusted) | 50% of PSUs | 3 years (e.g., 2025–2027) | 0% below threshold; 50% at threshold; 100% at target; 200% at max | Goal disclosed after period; uses non-GAAP adjusted calculations per Appendix A | Cliff vest after performance certification; paid in shares |
| Time-vested Restricted Stock (RS) | 50% of annual equity value | Service-based | N/A | N/A | Time-based vesting; annual grants typically in September |
Program notes:
- Annual equity awards approved in September; PSUs split 50/50 between TSR and NIM with three-year periods; RS time-vested .
- Prior cycle (2022–2024) TSR certified at 52.2nd percentile, paying 108.7% of target .
Equity Ownership & Alignment
- Stock ownership guidelines: CEO ≥5× salary; other NEOs ≥3×; senior management group is monitored annually; as of 2024 review, all NEOs met guidelines and other senior management members were on track; shares counted exclude unearned PSUs/options; valued at greater of FMV or acquisition/vesting value .
- Hedging/pledging: Company prohibits hedging and restricts pledging by directors and executive officers; no current pledged Class A shares by board or executives; insider policy prohibits short selling and hedging .
- Beneficial ownership: Proxy discloses holdings for directors and NEOs; Vroman is not listed, and his individual ownership is not disclosed in the table .
Employment Terms
- CME uses executive employment contracts selectively; the Chairman & CEO’s amended agreement details severance and vesting mechanics, but no individual employment agreement for Vroman is disclosed in proxies/8‑Ks .
- Change-of-control: The Omnibus Stock Plan was amended in 2024 to “double trigger” vesting for future awards not otherwise subject to an employment agreement; performance awards vest based on actual performance; this applies broadly to future grants .
- Clawbacks: CME has recoupment policies for Section 16 executive officers (and other senior employees) requiring recovery of unearned performance-based compensation upon financial restatement per SEC/Nasdaq rules .
Investment Implications
- Alignment: Senior management incentives emphasize cash earnings, TSR, and multi-year net income margin—supporting shareholder value creation and discouraging short-term risk-taking; clawback and anti-hedging/pledging policies further align interests .
- Retention: Vroman’s 24-year tenure and portfolio of transformation/international responsibilities suggest high internal mobility and commitment; equity mix (50% RS/50% PSUs) and multi-year vesting create retention hooks, even though his individual grants are not disclosed .
- Selling/pledging risk: Pledging is restricted and none of the board/executives have pledged Class A shares; hedging is prohibited—reducing forced-selling or leverage-related risks .
- Transparency: As he is not an NEO, specific compensation and ownership data are not disclosed, limiting precision in pay-for-performance analysis; however, program design changes (e.g., adding absolute NIM and TSR cap; double-trigger CoC) and improved say-on-pay support indicate governance responsiveness and reduced structural red flags .