Thomas Frank
Interactive Brokers GroupAbout Thomas A. Frank
Dr. Thomas A. Frank is Executive Vice President at Interactive Brokers Group, Inc. (IBKR), with long-tenured service among the named executive officers; IBKR’s named executives average 39 years of tenure and the compensation program emphasizes qualitative assessment rather than preset quantitative targets . In 2024, management highlighted Dr. Frank’s contributions to risk management and global technical infrastructure . Company performance during his recent tenure includes a 5-year cumulative IBKR Total Shareholder Return (TSR) rising to $391 on a $100 initial investment vs. $197 for the S&P 500 as of 2024, net income of $3,407 million, and an adjusted pre-tax profit margin of 72% . IBKR operates under a controlled company structure with Thomas Peterffy controlling Class B voting power, which shapes governance and compensation oversight .
Fixed Compensation
Multi-year cash pay (documented amounts):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $525,000 | $550,000 | $575,000 |
| All Other Compensation ($) | $23,276 | $48,792 | $75,863 |
Notes:
- All Other Compensation components for 2024 include dividend equivalents ($39,460) and 401(k) match ($15,250), plus vacation payout ($21,154) .
Performance Compensation
IBKR does not set formulaic performance goals; bonuses and equity awards are determined subjectively based on individual and company performance. The Compensation Committee does not use a compensation consultant and does not benchmark against peers; it pays a modest fixed salary with substantial variable pay (cash bonuses and RSUs) .
Cash bonus history:
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Bonus ($) | $775,000 | $825,000 | $425,000 |
Equity awards (grants and vesting):
| Grant Date | RSUs (#) | Grant Date Fair Value ($) | Scheduled Vesting |
|---|---|---|---|
| 12/31/2024 | 6,709 | $1,210,000 | Five equal installments on May 9, 2025; May 8, 2026; May 7, 2027; May 9, 2028; May 9, 2029 |
| 12/31/2023 | Unvested 12,071 | Market value $2,132,584 at 12/31/24 | Four equal installments on May 9, 2025; May 8, 2026; May 7, 2027; May 9, 2028 |
| 12/31/2022 | Unvested 9,381 | Market value $1,657,341 at 12/31/24 | Three equal installments on May 9, 2025; May 8, 2026; May 7, 2027 |
| 12/31/2021 | Unvested 5,706 | Market value $1,008,079 at 12/31/24 | Two equal installments on May 9, 2025; May 8, 2026 |
| 04/25/2022 | Unvested 77 | Market value $13,604 at 12/31/24 | Two equal installments on May 9, 2025; May 8, 2026 |
| 12/31/2020 | Unvested 7,845 | Market value $1,385,976 at 12/31/24 | Three equal installments on May 9, 2025; May 8, 2026; May 7, 2027 |
| 12/31/2019 | Unvested 6,371 | Market value $1,125,565 at 12/31/24 | Two equal installments on May 9, 2025; May 8, 2026 |
| 12/31/2018 | Unvested 2,649 | Market value $467,999 at 12/31/24 | Vesting on May 9, 2025 |
Performance metrics considered by the Committee (qualitative, no preset weights/targets):
- Adjusted income before income taxes; Adjusted pre-tax profit margin; 3-year adjusted net revenue growth .
Company performance context (for pay-versus-performance disclosure):
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| IBKR TSR: $100 investment value | $132 | $173 | $158 | $182 | $391 |
| S&P 500 TSR: $100 investment value | $118 | $152 | $125 | $158 | $197 |
| Net Income ($mm) | $1,179 | $1,636 | $1,842 | $2,812 | $3,407 |
| Adjusted Pre-Tax Profit Margin (%) | 61% | 67% | 67% | 71% | 72% |
Vesting/cancellation provisions and payout mechanics:
- RSUs include dividend equivalents; unvested RSUs pay dividend equivalents consistent with common dividends .
- Tax withholding on vesting may be satisfied by share redemptions or facilitated open-market sales, creating potential supply around vesting dates .
- IBKR has never issued stock options to employees (no option overhang or repricing risk) .
Equity Ownership & Alignment
| Ownership Item | Value |
|---|---|
| Class A shares beneficially owned | 43,555 (including 24,729 issued/vested and 18,826 vesting within 60 days) |
| % of Class A outstanding | <0.5% (“*” denoted in proxy) |
| RSUs outstanding (unvested) | 50,809 with market value $8,976,427 at 12/31/24 (price $176.67) |
| Dividend equivalents (2024) | $39,460 |
Alignment policies and restrictions:
- Hedging and pledging of company stock are prohibited for directors and employees, including named executive officers .
- Stock ownership guidelines are not disclosed in the proxy; IBKR is a controlled company with Class B voting dominated by Holdings (Peterffy), which influences overall alignment dynamics .
Employment Terms
| Provision | Details |
|---|---|
| Employment agreement | None; IBKR does not enter into employment agreements with NEOs |
| Severance | None; no severance arrangements; RSU post-employment vesting governed by plan terms |
| Post-employment RSU vesting | If termination not for cause and post-employment conditions met: 50% of unearned RSUs continue vesting; if age ≥59 at termination, 100% continue vesting per schedule |
| Conditions for continued vesting | Release of claims; up to 2 hours/quarter consulting; non-compete globally across IBKR lines; non-solicit; provide employment details; other restrictions |
| Change-of-control | No automatic acceleration; Committee may choose to fully vest, honor/assume, or substitute comparable rights |
| Clawback | Dodd-Frank compliant Clawback Policy for erroneously awarded compensation; separate Compensation Recoupment Policy for misconduct |
| Perquisites | Only standard company-wide benefits (health, dental, life, disability, paid time off, 401(k) match); no special perquisites |
| Retirement/401(k) | Company matches 50% of employee contributions up to 10% of eligible earnings; Dr. Frank received $15,250 match in 2024 |
| Insider trading policy | Comprehensive insider trading policy governs directors, officers, employees and related parties |
Compensation Structure Analysis
- Increased equity mix in 2024: RSU grant of $1.21M aligns pay toward long-term stock performance; IBKR emphasizes RSUs with graded vesting and dividend equivalents, and does not issue options (lower risk of option-based volatility) .
- Discretionary bonuses adjusted materially: Bonus declined to $425k in 2024 from $825k in 2023, reflecting subjective performance evaluation and company priorities .
- Governance risk factor: As a controlled company, the Compensation Committee includes non-independent members (Chairman and CEO), potentially raising oversight concerns for pay-for-performance alignment .
- Vesting dates cluster each May (9/8/7) across grants, creating predictable supply from RSU issuance and tax-related share redemptions/sales .
Risk Indicators & Red Flags
- Controlled company status with ~74.2% voting power at Holdings; may limit external influence on executive pay and governance .
- No employment/severance agreements; retention relies on RSU overhang and post-employment vesting provisions, which could extend obligations post-departure .
- Clawback/recoupment frameworks in place (positive), but qualitative bonus setting without disclosed targets limits external verification of pay-for-performance .
- Hedging/pledging prohibited (positive alignment) .
- No option repricing risk; options not used .
Investment Implications
- RSU Overhang and predictable vesting calendar suggest potential selling pressure or float increases around May vest dates and year-end grant timing; tax withholding mechanics may add to supply near vesting .
- Alignment is primarily via unvested RSUs and dividend equivalents; direct Class A ownership is modest (<0.5%), but IBKR’s strong 5-year TSR and rising net income provide supportive performance context .
- Governance dynamics of a controlled company and non-independent compensation oversight may constrain external pressure on pay design; monitor qualitative bonus outcomes vs. disclosed company performance metrics (adjusted pre-tax margin and net income) .
- Retention risk is mitigated by significant unvested RSUs with continuation provisions; however, global non-compete and consulting obligations post-termination indicate IBKR’s strong protection of proprietary technology and risk functions, central to Dr. Frank’s remit .