Lawrence Harris
Interactive Brokers GroupAbout Lawrence E. Harris
Independent director at Interactive Brokers Group, Inc. since July 2007; currently Lead Independent Director and Chair of the Audit Committee. He is age 68, a professor of Finance and Business Economics at USC’s Marshall School (Fred V. Keenan Chair), former Chief Economist of the U.S. SEC, a CFA charterholder, and recognized as an “audit committee financial expert.” His board role includes presiding over executive sessions of independent directors and serving as liaison between independent directors and the Chairman.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| U.S. Securities and Exchange Commission | Chief Economist | Not disclosed | Market microstructure and regulatory expertise applied to oversight; determined to be Audit Committee Financial Expert under SEC rules |
| University of Southern California (Marshall School of Business) | Professor; Fred V. Keenan Chair in Finance | Current | Academic leadership and finance expertise informing audit oversight |
External Roles
| Organization | Role | Public/Private | Notes |
|---|---|---|---|
| Davis Fundamental ETF Trust | Trustee | Registered investment company | Governance of publicly traded ETFs; fund board oversight |
| Institute for Quantitative Research in Finance | Research Coordinator | Non-profit/academic | Industry-academic link; market microstructure research |
Board Governance
- Independence: Board determined Dr. Harris is independent under Nasdaq and SEC rules; he serves as Lead Independent Director (presides over independent director executive sessions; liaison to Chairman).
- Committee assignments: Audit Committee Chair; members are all independent and financially literate; Harris designated “audit committee financial expert.”
- Meetings and engagement: Board met 4 times in FY2024; each then-serving director except William Peterffy attended at least 75% of Board and committee meetings. Audit Committee held 8 meetings in FY2024.
- Controlled company context: IBKR is a controlled company under Nasdaq rules given Thomas Peterffy’s ownership; compensation and nominating committees are not composed entirely of independent directors.
Committee Roles and Activity (FY2024)
| Committee | Role | Meetings Held |
|---|---|---|
| Audit | Chair (Harris) | 8 |
| Compensation | Not a member | 3 |
| Nominating & Corporate Governance | Not a member | 2 |
Fixed Compensation (Director Compensation – FY2024)
| Component | Amount | Notes |
|---|---|---|
| Cash fees | $175,000 | Annual retainer $150,000 plus $25,000 for Audit Committee chair |
| Stock awards | $25,000 | Annual grant on Dec 31, vests immediately |
| All other comp | $0 | No dividend equivalents paid to Harris in 2024 |
| Total | $200,000 | Sum of cash plus stock |
Policy framework:
- Directors receive $150,000 annual retainer, plus $25,000 per committee chair; annual stock grant valued at $25,000 (immediate vest). One-time $75,000 stock award vesting over five years in year of appointment; not applicable now for Harris (appointed 2007).
Performance Compensation
| Performance Metric | Disclosure (FY2024) |
|---|---|
| Financial/operational targets tied to director pay | None disclosed; director equity grants are fixed-value retainer-based, vest immediately; no options used |
Related policies affecting alignment and risk:
- Hedging/pledging prohibitions for directors (no hedging, short selling, or pledging of IBKR stock).
Other Directorships & Interlocks
| Entity | Role | Potential Interlock/Conflict |
|---|---|---|
| Davis Fundamental ETF Trust | Trustee | No IBKR-related transaction disclosed; standard RIC board oversight |
| Institute for Quantitative Research in Finance | Research Coordinator | Academic/industry forum; no IBKR-related transaction disclosed |
No related-party transactions disclosed involving Harris; margin loans may be extended by IB LLC to directors in the ordinary course on market terms; not specific to Harris.
Expertise & Qualifications
- Audit committee financial expert; extensive accounting, economics, and finance knowledge supporting audit oversight.
- Ph.D. in Economics (University of Chicago); CFA charterholder; USC endowed chair.
- Market microstructure authority; former SEC Chief Economist; author of Trading and Exchanges.
Equity Ownership
| Metric | Value |
|---|---|
| Total Class A shares beneficially owned | 63,426 (less than 0.5%) |
| Ownership as % of shares outstanding | <0.5% |
| Vested vs. unvested | 2024 director grant vests immediately; one-time $75,000 grant only at appointment year (2007) |
| Shares pledged as collateral | Prohibited by policy (no pledging, hedging, or short selling) |
Group context: All current directors and executive officers as a group own 3,258,461 Class A shares (2.99% of Class A) as of March 3, 2025.
Governance Assessment
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Strengths
- Independent Lead Director role and active Audit Committee leadership; Audit Committee composed entirely of independent directors; Harris designated audit financial expert.
- Clear director pay structure with modest cash retainer and small, fixed-value equity grants that vest immediately; no options; supports alignment without excessive risk.
- Hedging/pledging bans for directors enhance alignment and reduce risk signals.
-
Risks and potential red flags
- Controlled company status: Thomas Peterffy, via Class B structure, holds ~74.2% of voting power; Compensation and Nominating committees include non-independent members (insider-led), limiting minority shareholder influence over governance and pay structures.
- Margin lending to directors permitted in ordinary course by IB LLC (on market terms); while typical for broker-dealers, it introduces potential optics risk; no adverse features disclosed.
- Attendance disclosure for FY2024 is aggregate (≥75% for all except William Peterffy); individual director attendance not itemized, reducing transparency.
-
Overall implication
- Harris brings strong audit and market microstructure expertise and independence to the board, which is positive for investor confidence. However, IBKR’s controlled-company framework and insider composition of key committees temper board independence—investors should monitor committee decisions (especially compensation and nominations) and any related-party exposures.