Paul Brody
Interactive Brokers GroupAbout Paul Brody
Paul J. Brody is Chief Financial Officer, Treasurer, Secretary and a director of Interactive Brokers Group, Inc., roles he has held since November 2006; he joined the company in 1987 and has served as CFO of IBG LLC since December 2003 . He holds a BA in economics from Cornell University (1982) and is 64 years old . Over 2024, IBKR’s pay-versus-performance disclosure shows robust value creation: a $100 investment in IBKR since 2019 grew to $391 vs $197 for the S&P 500, with net income of $3,407 million and an adjusted pre-tax profit margin of 72% . IBKR evaluates executive performance qualitatively rather than using formulaic targets, tying compensation to leadership and company outcomes, and allocates a majority to equity-based awards to align executives with shareholders .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Interactive Brokers Group, Inc. | CFO, Treasurer, Secretary, Director | Nov 2006–present | Built and maintained strong financial/operational controls, prudent liquidity management, banking relationships, credit ratings, and regulator engagement . |
| IBG LLC | Chief Financial Officer | Dec 2003–present | CFO oversight of IBG LLC; member of Steering Committee contributing to strategic and day-to-day management . |
| Interactive Brokers (various subsidiaries) | Director and/or Officer | Ongoing | Governance and oversight roles across subsidiaries supporting finance and operations . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Options Clearing Corporation | Director; served part of the time as Vice Chairman | 2005–2012 | Industry infrastructure and clearing oversight experience . |
| Quadriserv Inc. | Director | 2009–2015 | Electronic securities lending platform governance and market structure expertise . |
Fixed Compensation
| Metric | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Base Salary ($) | $500,000 | $525,000 | $550,000 | $575,000 |
| Actual Bonus ($) | $2,150,000 | $2,250,000 | $2,350,000 | $2,420,000 |
| Director Fees ($) | $188,699 (included in “All Other”) | $202,940 (included in “All Other”) | $221,564 (breakdown includes $150,000 director fees) | $272,736 (breakdown includes $150,000 director fees) |
| Total Compensation ($) | $5,663,699 | $6,015,440 | $6,321,564 | $6,562,736 |
| Target Bonus % | Not disclosed; IBKR does not use specific targets |
Notes: IBKR sets executive pay qualitatively without formulaic performance goals and emphasizes equity awards; aggregate NEO mix in 2024 was ~10% salary, 25% cash bonus, 61% stock awards, 4% other .
Performance Compensation
Equity Grants (RSUs)
| Grant Detail | 2023 | 2024 |
|---|---|---|
| Grant Date | 12/31/2023 | 12/31/2024 |
| RSUs Granted (units) | 39,104 | 18,130 |
| Grant-Date Fair Value ($) | $3,175,000 | $3,270,000 |
| Board Service RSUs (units; $) | 302; $25,000 | 142; $25,000 |
| Pricing Basis | $81.19 VWAP Dec-2023 | $180.36 VWAP Dec-2024 |
Vesting Schedules (Unvested RSUs at 12/31/2024)
| Grant Date | Units Not Vested | Future Vesting Dates |
|---|---|---|
| 12/31/2018 | 7,067 | May 9, 2025 |
| 12/31/2019 | 17,008 | May 9, 2025; May 8, 2026 |
| 12/31/2020 | 20,946 | May 9, 2025; May 8, 2026; May 7, 2027 |
| 12/31/2021 | 14,523 | May 9, 2025; May 8, 2026 |
| 04/25/2022 | 77 | May 9, 2025; May 8, 2026 |
| 12/31/2022 | 24,470 | May 9, 2025; May 8, 2026; May 7, 2027 |
| 12/31/2023 | 31,284 | May 9, 2025; May 8, 2026; May 7, 2027; May 9, 2028 |
| 12/31/2024 | 18,130 | May 9, 2025; May 8, 2026; May 7, 2027; May 9, 2028; May 9, 2029 |
Cash Incentive Structure
| Metric | Weighting | Target | Actual | Payout Mechanics | Notes |
|---|---|---|---|---|---|
| Annual Cash Bonus | Discretionary (qualitative) | No specific targets | $2,420,000 (2024) | Based on individual and company performance | IBKR does not use formulaic financial goals; emphasizes leadership and outcomes . |
Stock Vested (2024)
| Item | Shares Vested | Value Realized |
|---|---|---|
| RSUs | 51,859 | $6,177,963 (at $119.13 on 5/9/2024) |
| Board Service RSUs | 142 | $25,000 (at $176.67 on 12/31/2024) |
Dividend equivalents are paid on unvested RSUs; Paul received $103,255 in 2024 as part of “All Other Compensation” .
Equity Ownership & Alignment
| Ownership Metric (as of Mar 3, 2025 unless noted) | Amount |
|---|---|
| Class A Shares Beneficially Owned | 659,516 (0.61% of outstanding) |
| Shares Beneficially Owned excluding near-term vesting | 610,061 |
| Stock Awards Vesting Within 60 Days | 49,455 |
| Unvested RSUs (12/31/2024) | 133,505 units; $23,586,328 market value (at $176.67) |
| Options | None; IBKR has never issued employee stock options |
| Hedging/Pledging | Prohibited (no hedging, short sales, or pledging of IBKR stock) |
| Ownership Guidelines | Not disclosed in proxy; compensation emphasizes long-term RSUs |
Tax withholding on RSU issuance may be effected via share withholding or facilitated open-market sales to remit taxes, which can create periodic selling pressure around vest dates .
Employment Terms
| Term | Detail |
|---|---|
| Employment Agreements | None; IBKR does not enter into employment/severance agreements with NEOs . |
| Severance | None; no severance provisions . |
| Change-of-Control | No automatic acceleration; committee may choose to vest or substitute awards; no contractual change-in-control payments . |
| Post-Employment RSU Vesting | If termination other than for cause: RSUs continue to vest subject to conditions; at age ≥59, 100% of unvested RSUs eligible to continue vesting; otherwise 50% eligible . |
| Conditions for Continued Vesting | Release of claims; up to 2 hours consulting per quarter; global non-compete; non-solicit; restrictions on trading/assisting competitors; info updates to company . |
| Clawback | Dodd-Frank compliant clawback for erroneously awarded compensation; separate recoupment policy for misconduct . |
| Perquisites | Standard employee benefits only (health, 401(k) match, PTO); no additional perqs . |
| Insider Trading Policy | Company-wide policy governs transactions; included as 10-K exhibit . |
Given Paul’s age (64), he is “retirement-eligible,” meaning all outstanding RSUs are eligible to continue vesting upon qualifying termination subject to conditions, which moderates retention risk but sustains equity alignment .
Board Governance
- Board Service: Director since November 2006; currently a management (non-independent) director .
- Committee Roles: No service on Audit, Compensation, or Nominating & Corporate Governance committees in 2024; committee memberships are dominated by Chairman and insiders due to controlled-company status .
- Attendance: The board met 4 times in 2024; with the exception of one director, all then-serving directors attended at least 75% of board/committee meetings, implying Brody met attendance expectations .
- Lead Independent Director: Dr. Lawrence Harris serves as Lead Independent Director, presides over executive sessions, and liaises with the Chairman .
- Controlled Company: IBKR is a controlled company under Nasdaq rules due to Thomas Peterffy’s ownership and Class B voting structure; not required to have majority independent directors or fully independent comp/nom/gov committees .
Director Compensation (Context and Paul’s Fees)
- Policy: Annual cash retainer $150,000; annual stock award $25,000 (immediate vesting for non-employee directors); committee chairs receive an additional $25,000 per committee; a one-time $75,000 stock award in the year of appointment for non-employee directors (5-year straight-line vesting) .
- Paul Brody: As an employee director, received $150,000 in director fees and a $25,000 board RSU grant in 2024, included in his compensation breakdown .
Compensation Structure Analysis
- Mix remains performance-heavy: Aggregate 2024 NEO pay was ~10% salary, 25% cash bonus, 61% stock awards, 4% other, consistent with equity-heavy alignment and conservative risk incentives .
- No formulaic targets or external compensation consultant: Decisions made by the Compensation Committee (comprised of Chairman and insiders) using qualitative judgments; IBKR does not benchmark to peers nor use a consultant .
- RSU practice and retirement eligibility: Long-dated vesting (to 2029) and retirement-eligibility provisions encourage tenure and reduce forced selling, but create predictable issuance/sale patterns around vesting and tax withholding dates .
Say-on-Pay & Shareholder Feedback
- Advisory vote on executive compensation is on the ballot annually (2025 proxy), with the board recommending approval of NEO pay structure; prior year included an advisory vote on frequency, with the board moving to annual votes .
Compensation Peer Group
- For pay-versus-performance, IBKR references the S&P 500 index; IBKR does not explicitly use a compensation benchmarking peer group for setting pay .
Risk Indicators & Red Flags
- Governance independence: Controlled-company status and a Compensation Committee comprised of insiders can reduce formal independence in pay decisions, though IBKR separates Chairman, CEO, and Lead Independent roles .
- Hedging/pledging ban and clawbacks: Policies prohibit hedging/pledging and support clawbacks, limiting misalignment and risk-taking .
- No severance/change-in-control guarantees: Absence of severance/CIC payments reduces golden parachute risk .
- Related-party/operational: Margin loans to insiders are permissible but on standard terms; legal representation relationships disclosed; no Paul Brody-specific red flags noted .
Investment Implications
- Strong alignment via equity-heavy pay and sustained TSR outperformance: High stock award mix and RSU vesting through 2029 align Brody with long-term value creation; IBKR’s TSR ($391 vs S&P 500 $197 since 2019) and 2024 net income of $3,407 million support pay-for-performance narratives .
- Retention risk moderated by retirement-eligible RSU vesting: At age 64, Brody’s unvested RSUs can continue vesting post-termination subject to strict non-compete/consulting conditions, reducing the need for cash severance while maintaining alignment .
- Expected periodic supply from RSU vesting/tax withholding: 51,859 shares vested for Brody in 2024, with 49,455 scheduled to vest within 60 days of March 3, 2025; withholding/sales to cover taxes can create predictable trading signals around vest dates .
- Governance considerations for investors: CFO serving as a director in a controlled-company structure with insider-led compensation oversight implies lower formal independence; monitor say-on-pay outcomes and committee practices for potential shifts .
IBKR policies explicitly prohibit hedging and pledging, maintain clawbacks, and avoid severance/CIC guarantees—favoring shareholder-friendly structures while relying on qualitative evaluations within an insider-led compensation framework **[1381197_0001140361-25-007437_ny20035746x2_def14a.htm:27]** **[1381197_0001140361-25-007437_ny20035746x2_def14a.htm:24]** **[1381197_0001140361-25-007437_ny20035746x2_def14a.htm:25]** **[1381197_0001140361-25-007437_ny20035746x2_def14a.htm:16]**.