Earl Nemser

About Earl Nemser

Earl H. Nemser (age 78) is Vice Chairman of Interactive Brokers Group, Inc. and has served as Director since November 2006; he has been Vice Chairman of IBG LLC and predecessors since 1988. He holds a BA in Economics from NYU (1967) and a JD, magna cum laude, from Boston University School of Law (1970) . Nemser’s board service includes membership on the Compensation Committee and Chair of the Nominating & Corporate Governance Committee; he is not listed as an independent director, and IBKR operates as a “controlled company” under Nasdaq rules, which has implications for committee independence . Performance context: over the last five fiscal years, IBKR’s TSR rose to a $391 value on a $100 initial investment versus $197 for the S&P 500, and reported net income increased from $1,842 million (2022) to $3,407 million (2024) .

Past Roles

External Roles

Fixed Compensation

All Other Compensation (2024):

• Director Fees: $175,000; Dividend Equivalents: $32,981; 401(k) Match: $15,250; Vacation Payout: $21,154; Total: $244,385 .

Performance Compensation

Bonuses (Actual Paid):

RSU Grants (2024):

Stock Vested (2024):

Performance Compensation Design (metrics, weighting, payout, vesting):

• Bonuses: qualitative, no specific financial/operating targets; committee discretion based on individual and company performance .
• Equity awards: RSUs, typically vest over ~4–5 years; designed to align with long-term performance and discourage short-term risk-taking .

Equity Ownership & Alignment

Beneficial Ownership (as of March 3, 2025):

Vested/Unvested Equity (as of Dec 31, 2024):

Key alignment policies:

• Hedging and pledging prohibited for all directors and officers (including Nemser) .
• Dividend equivalents paid on unvested RSUs; tax withholding may be effected by share redemption or facilitated sale .

Insider Selling Pressure Indicators:

• EN Holdings LLC (Nemser-affiliated) adopted Rule 10b5-1 plan on Aug 20, 2024 to sell up to 100,000 shares through July 27, 2025 .
• A Nemser-affiliated LLC adopted a Rule 10b5-1 plan on Aug 19, 2020 to sell up to 1,000,000 shares received via redemption, citing diversification/liquidity objectives .

Employment Terms

• No employment agreements; no severance arrangements .
• Change-of-control: Stock Incentive Plan does not provide automatic acceleration; the Compensation Committee may vest or have awards assumed/substituted on substantially similar terms .
• Post-employment RSU vesting: If not terminated for cause, continued vesting subject to strict conditions; age 59+ eligible for 100% of previously granted but unearned awards; under 59 eligible for 50% .
• Post-employment conditions include: release of claims; up to two hours/quarter consulting; non-compete (no professional trading or competing businesses worldwide in products IBKR trades); non-solicit; provide employment details on request .

Board Service History and Governance Considerations

• Board Roles: Member, Compensation Committee; Chairman, Nominating & Corporate Governance Committee; Vice Chairman of IBKR .
• Independence: Not listed among independent directors; IBKR is a controlled company under Nasdaq, reducing requirements for fully independent committees .
• Attendance: The board held four meetings in 2024; all then-serving directors except one attended ≥75% of meetings (not individually specified) .
• Director Compensation Program: Annual retainer $150,000; committee chair retainer $25,000 per committee; annual stock award $25,000; one-time $75,000 new director grant vesting over five years .

Performance Context

Pay vs Performance, TSR and Net Income:

IBKR Revenues and EBITDA (last 3 fiscal years):

Values retrieved from S&P Global.*

Compensation Committee Analysis

• Composition: Thomas Peterffy (Chair), Earl H. Nemser, Milan Galik; operates under written charter .
• Consultants: IBKR has not utilized compensation consultants; compensation decisions are committee-driven and qualitative without formal targets .
• Peer group: S&P 500 Index used for pay-versus-performance disclosure .

Related-Party Transactions and Conflicts

• Legal representation: IBKR uses Dechert LLP among law firms; Nemser is an unpaid Independent Advisor to Dechert; previously Special Counsel (2005–2018) .
• Margin accounts: IB LLC may extend margin credit to directors/officers on standard terms; disclosed as routine and non-preferential .
• Governance oversight of related parties: Audit Committee, CEO, and General Counsel review/monitor transactions; Nominating & Corporate Governance Committee evaluates independence/conflicts .

Risk Indicators & Red Flags

• Dual role: Executive officer serving on Compensation Committee and chairing Nominating & Corporate Governance Committee under a controlled company structure; independence concerns for pay/governance oversight .
• Insider selling pressure: Active 10b5-1 plans historically and in 2024–2025 .
• Hedging/pledging: Prohibited (mitigates misalignment risk) .
• Clawback/Recoupment: Robust policies aligned with SEC/Nasdaq rules; recoupment for wrongdoing and restatements .

Investment Implications

• Alignment: Significant unvested RSU holdings with long-dated, multi-tranche vesting, dividend equivalents, and strict post-employment covenants create retention and long-term alignment; hedging/pledging prohibitions reduce misalignment risk .
• Governance risk: Controlled company status with Nemser’s executive/committee dual roles can weaken independent oversight of compensation and nominations; monitor say-on-pay outcomes and committee composition changes .
• Trading signals: 10b5-1 plan activity (100,000 shares 2024–2025; historical 1,000,000 plan) indicates potential supply over plan horizons; RSU vesting each May may trigger withholding-related share redemptions or facilitated sales .
• Performance backdrop: Strong TSR and rising reported net income provide supportive fundamentals, but absence of formal performance metrics in incentives increases reliance on committee discretion; monitor consistency of bonus/RSU grant practices relative to outcomes .