UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
If you plan to attend the Annual Meeting and you are a registered stockholder, please bring a valid, government-issued photo identification (such as a driver's license or a passport). If you are the beneficial owner of shares held in "street name" through a bank, broker or other intermediary, in addition to a government-issued photo identification, you should bring proof of ownership of our common stock as of the Record Date. A recent brokerage statement or a letter from your bank, broker or other intermediary that shows your ownership of Virtu common stock as of the Record Date are examples of proof of ownership.
Use of cameras, recording devices, computers, and other electronic devices, such as smartphones and tablets, will not be permitted at the Annual Meeting. Photography and video are prohibited at the Annual Meeting.
the Internet as to how you would like your shares voted. Instructions are included on the proxy card and voting instruction form.
Robert Greifeld Chairman |
New York, New York
April 29, 2016
23, 2021
VIRTU FINANCIAL, INC.PROXY STATEMENT2016 ANNUAL MEETINGTABLE OF STOCKHOLDERSTO BE HELD ON JUNE 14, 2016
| 2021 Proxy Statement | | | i | |
We have four classes of authorized common stock. The Class A common stock andperformance, please review the Class C common stock have one vote per share. The Class B common stock and the Class D common stock have 10 votes per share. Shares of our common stock generally vote together as a single class on all matters submitted to a vote of our stockholders.
TJMT Holdings LLC (the "Founder Member"), an affiliate of Mr. Vincent Viola, our Founder and Executive Chairman, and other members of the Viola family, holds all of our issued and outstanding Class D common stock and controls approximately 93.1% of the combined voting power of our outstanding common stock. As a result, it is able to control any action requiring the general approval of our stockholders, including the election of our board of directors, the adoption of amendments to our certificate of incorporation and bylaws and the approval of any merger or sale of substantially all of our assets.
What information is included in this proxy statement?
The information in this proxy statement relates to the proposals to be voted on at the Annual Meeting, the voting process, our board of directors and board committees, the compensation of current directors and certain executive officers for the year ended December 31, 2015, and other information.
What are the Proxy Materials?
The "Proxy Materials" are this proxy statement and ourCompany’s 2020 Annual Report on Form 10-K for the fiscal year ended December 31, 2015.
(the “2020 Annual Report”).
| DATE: | | | Thursday, June 3, 2021 | | | LOCATION OF ANNUAL MEETING: | | | Virtual Annual Meeting accessible at www.virtualshareholdermeeting.com/VIRT2021 | |
| TIME: | | | 9:00 a.m. (Eastern Time) | |
Pursuant
Items of Business | | | Board Recommendation | | |||
1 | | | To elect four directors to our board of directors, each to serve as a Class III director for a term of three years expiring at the annual meeting of stockholders to be held in 2024 and until such director’s successor has been duly elected and qualified. | | | FOR each Nominee | |
2 | | | To approve, on an advisory basis, the compensation of our named executive officers as disclosed in the accompanying proxy statement. | | | FOR | |
3 | | | To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021. | | | FOR | |
What items will be voted on at the Annual Meeting and how does the board of directors recommend that I vote?
There are two proposals to be voted on at the Annual Meeting:
The board of directors recommends that you vote FOR both proposals.
Our amended and restated bylaws (our "bylaws") provide advance notice procedures for stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at any meeting of stockholders. We have not received any such proposals. We do not anticipate any other matters will come before the Annual Meeting. If any other matter comes before the Annual Meeting, the proxy holders appointed by our board of directors will have discretion to vote on those matters.
Who may vote at the meeting?
Holders of Class A common stock, Class C common stock and Class D common stock, together as a single class, as of the close of business on April 22, 2016, the Record Date, may vote at the Annual Meeting.
How many votes do I have?
As of the Record Date, there were:
There are no shares of Class B common stock outstanding.
Holders of Class A common stock are entitled to one vote per share of Class A common stock held as of the Record Date. Holders of Class C common stock are entitled to one vote per share of Class C common stock held as of the Record Date. Holders of Class D common stock are entitled to ten votes per share of Class D common stock held as of the Record Date.
What vote is required for each proposal?
For the election of directors, each director must be elected by a plurality of the votes cast. This means that the three nominees receiving the largest number of "for" votes will be elected as directors. We do not have cumulative voting.
The ratification of our independent registered public accounting firm and any other proposals that may come before the Annual Meeting will be determined by the affirmative vote of a majority in voting power of shares of stock present in person or represented by proxy and entitled to vote thereon.
The Founder Member controls approximately 93.1% of the combined voting power of our outstanding common stock and, as a result, controls any action requiring the general approval of our stockholders, including the election of our board of directors. The Founder Member has informed us that it intends to vote "for" the three nominated directors and the ratification of the appointment of
the Accounting Firm as our independent registered public accounting firm for our current fiscal year ending December 31, 2016.
How are abstentions and broker non-votes counted?
Abstentions (shares present at the meeting in person or by proxy that are voted "abstain") and broker non-votes (explained below) are counted for the purpose of establishing the presence of a quorum but are not counted as votes cast in respect of the two proposals to be voted on at the Annual Meeting.
What constitutes a "quorum"?
The holders of a majority of the voting power of the combined shares of Class A common stock, Class B common stock, Class C common stock and Class D common stock issued, outstanding and entitled to vote, either in person or represented by proxy, constitute a quorum.
What is the difference between a stockholder of record and a beneficial owner of shares held in street name?
How do I vote?
| | | | | | | | ||||
| INTERNET | | | TELEPHONE | | | | | VIRTUAL ANNUAL MEETING | | |
| Visit www.proxyvote.com to vote via the Internet. | | | Call toll-free 1-800-690-6903 in the United States or from foreign countries from any touch-tone telephone and follow the instructions. | | | Follow the instructions in your proxy materials. | | | All stockholders as of the close of business on the Record Date can vote electronically at the virtual Annual Meeting. | |
| 2021 Proxy Statement | | | 1 | |
and broker non-votes counted?" regarding whether your broker, bank or other holder of record may vote your uninstructed shares on a particular proposal.
| | | | | | | | | | | | Committee Membership | | |||||||||
Name and Primary Occupation | | | Director or Officer Since | | | Age | | | Independent | | | Audit | | | Compensation | | | Nominating and Corporate Governance | | | Risk | |
Vincent Viola Founder and Chairman Emeritus | | | 2015 | | | 65 | | | | | | | | | | | | | | | | |
Douglas A. Cifu Chief Executive Officer and Director | | | 2013 | | | 55 | | | | | | | | | | | | | | | | |
Robert Greifeld Chairman of the Board of Directors | | | 2017 | | | 63 | | | | | | | | | | | | | | |||
William F. Cruger, Jr. Director | | | 2015 | | | 62 | | | | | | | | | | | | | | | ||
Virginia Gambale Director | | | 2020 | | | 61 | | | | | | | | | | | | | | |||
Joseph J. Grano, Jr. Director | | | 2017 | | | 73 | | | | | | | | | | | | | | | ||
Glenn Hutchins Director | | | 2017 | | | 65 | | | | | | | | | | | | | | | ||
John D. Nixon Director | | | 2015 | | | 65 | | | | | | | | | | | | | | |||
Christopher C. Quick Director | | | 2016 | | | 63 | | | | | | | | | | | | | | |||
David J. Urban Director | | | 2018 | | | 57 | | | | | | | | | | | | | | | ||
Michael T. Viola Director | | | 2016 | | | 34 | | | | | | | | | | | | | | | ||
Stephen Cavoli Executive Vice President, Markets | | | 2017 | | | 52 | | | | | | | | | | | | | | | | |
Brett Fairclough Co-President and Co-Chief Operating Officer | | | 2019 | | | 38 | | | | | | | | | | | | | | | | |
Sean P. Galvin Executive Vice President and Chief Financial Officer | | | 2020 | | | 56 | | | | | | | | | | | | | | | | |
Joseph Molluso Co-President and Co-Chief Operating Officer | | | 2020 | | | 52 | | | | | | | | | | | | | | | | |
| 2 | | | 2021 Proxy Statement | |
Can I change my vote after submitting a proxy?
Stockholders of record may revoke their proxy at any time before it is exercised at the Annual Meeting by (i) delivering written notice, bearing a date later than the proxy, stating that the proxy is revoked to Virtu Financial, Inc., 900 Third Avenue, 29th Floor, New York, New York 10022, Attn: Secretary, (ii) submitting since Virtu’s IPO in April 2015 and had been a later-dated proxy relating to the same shares by mail, telephone or the Internet prior to the vote at the Annual Meeting, or (iii) attending the Annual Meeting and voting in person. If you are a beneficial stockholder, you may revoke your proxy or change your vote only by following the separate instructions provided by your broker, trust, bank or other nominee.
If I hold shares in street name through a broker, can the broker vote my shares for me?
If you hold your shares in street name and you do not vote, the broker or other organization holding your shares can vote on certain "routine" proposals but cannot vote on other proposals. Proposal 1 (electionmember of directors) is not considered a "routine" proposal. Proposal 2 (ratification of our independent registered public accounting firm) is a "routine" proposal. If you hold shares in street name and do not vote on Proposal 1, your shares will not be voted in respect of Proposal 1 and will be counted as "broker non-votes."
Who is paying for this proxy solicitation?
We are paying the costs of the solicitation of proxies. Members of ourVirtu Financial’s board of directors and officers and employees may solicit proxies by mail, telephone, fax, email or in person. We will not pay directors, officers or employees any extra amounts for soliciting proxies. We may, upon request, reimburse brokerage firms, banks or similar entities representing street name holders for their expenses in forwarding Proxy Materials to their customers who are street name holders and obtaining their voting instructions.
What do I need to do if I want to attend the meeting?
You will need to provide evidence that you aresince November 2011. He was a stockholder asprominent member of the Record Date. If you plan to attend the Annual Meetingindustry, serving a number of board and you areadvisory roles including CME Group Inc., E*Trade Futures, LLC, National Futures Association, Ryan Specialty Group, Echo Global Logistics, Inc. and Click Commerce Inc. He was also President and CEO of RB&H Financial Services, L.P., a registered stockholder, please bring a valid, government-issued photo identification (such as a driver's license or a passport). If you are the beneficial ownerfutures commission merchant and clearing firm and clearing firm of shares heldCME Group. Jack passed away in "street name" through a bank, broker or other intermediary, in addition to government-issued photo identification, you should bring proofMarch 2021. Our press release remembering Jack is accessible at https://ir.virtu.com/press-releases/press-release-details/2021/Virtu-Mourns-the-Passing-of-Longtime-Board-Member-Jack-Sandner/default.aspx.
| WHAT WE DO | | | WHAT WE DON’T DO | | ||||||
| | | Pay-for-performance: A portion of the compensation program for named executive officers is designed to encourage the executives to remain focused on both our short-term and long-term operational success and to reward outstanding individual performance. | | | | | No IRC Section 280G or 409A tax gross-ups: We do not provide tax gross-ups under our change in control provisions or deferred compensation programs. | | ||
| | | Align Incentives with Stockholders: Our executive compensation program is designed to focus our named executive officers on our key strategic, financial and operational goals that will translate into long-term value-creation for our stockholders. | | | | | | | | |
| | | Limited perquisites: We provide limited, reasonable perquisites that we believe are consistent with our overall compensation philosophy. | | | | | | | |
| 2021 Proxy Statement | | | 3 | |
Use of cameras, recording devices, computers, and other electronic devices, such as smartphones and tablets, will not be permitted at the Annual Meeting. Photography and video are prohibited at the Annual Meeting.
Where can I find voting results?
Final voting results from the Annual Meeting will be filed with the Securities and Exchange Commission ("SEC") on a Current Report on Form 8-K within four business days of the Annual Meeting (including the Annual Meeting date).
I share an address with another stockholder. Why did we receive only one set of Proxy Materials?
We may satisfy SEC rules regarding delivery of our Proxy Materials, including our proxy statement, or delivery of the Notice of Internet Availability of Proxy Materials by delivering a single copy of these documents to an address shared by two or more stockholders. This process is known as "householding." To the extent we have done so, we have delivered only one set of the Proxy Materials or one Notice of Internet Availability of Proxy Materials, as applicable, to stockholders who share an address with another stockholder, unless contrary instructions were received prior to the mailing date. We undertake to promptly deliver, upon written or oral request, a separate copy of our proxy statement, our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and/or our Notice of Internet Availability of Proxy Materials, as requested, to a stockholder at a shared address to which a single copy of these documents was delivered. To make such a request, please follow the instructions on our Notice of Internet Availability of Proxy Materials.
If your shares are held by a brokerage firm or bank and you prefer to receive separate copies of our proxy statement, our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and/or our Notice of Internet Availability of Proxy Materials, either now or in the future, please contact your brokerage firm or bank. If your brokerage firm or bank is unable or unwilling to assist you, please contact us at our executive office or by calling our offices at (212) 418-0100. Stockholders sharing an address who are receiving multiple copies of the Proxy Materials and/or our Notice of Internet Availability of Proxy Materials may do so by contacting our Investor Relations department at our executive office or by calling our offices at (212) 418-0100.
What is the deadline to propose actions for consideration at next year's annual meeting of stockholders or to nominate individuals to serve as directors?
Stockholder proposals intended to be presented at the 2017 Annual Meeting of Stockholders pursuant to Exchange Act Rule 14a-8 must be delivered to our Secretary at our executive office no later than the close of business on December 30, 2016, in order to be included in the our proxy materials for that meeting. Such proposals must also comply with all applicable provisions of Exchange Act Rule 14a-8.
Our bylaws also establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy statement. Stockholder proposals submitted for consideration at the 2017 Annual Meeting of Stockholders but not submitted for inclusion in our proxy materials pursuant to Exchange Act Rule 14a-8, including nominations for candidates for election as directors, must be delivered to our Secretary at our executive office no earlier than February 14, 2017 and no later than March 16, 2017 (assuming we do not change the date of the 2017 Annual Meeting of Stockholders by more than 30 days before or 90 days after the anniversary of the 2016 Annual Meeting) and comply with the other provisions of our bylaws.
Whom should I contact if I have additional questions?
You can contact our Investor Relations department, at (212) 418-0100 or at our executive office. Stockholders who hold their shares in street name should contact the organization that holds their shares for additional information on how to vote.
We make available, free of charge on our website, all of our filings that are made electronically with the SEC, including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. These filings are available on the Investor Relations page of our corporate website at www.virtu.com. Copies of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, including financial statements and schedules thereto filed with the SEC, are also available without charge to stockholders upon written request addressed to:
Virtu Financial, Inc.Attn: Investor Relations900 Third Avenue, New YorkNew York 10022
PROPOSAL 1: ELECTION OF DIRECTORS
At the Annual Meeting, stockholders will vote to elect the threefour nominees named in this proxy statement as Class IIII directors. Each of the Class IIII directors elected at the Annual Meeting will hold office until the 2019 Annual Meeting2024 annual meeting of Stockholdersstockholders and until his or her successor has been duly elected and qualified. Our board of directors has nominated William F. Cruger, Jr., Christopher C. QuickVirginia Gambale, John D. Nixon, David J. Urban and VincentMichael T. Viola to serve as Class IIII directors for terms expiring at the 2019 Annual Meeting2024 annual meeting of Stockholdersstockholders and until each of their successors has been duly elected and qualified. The persons named as proxies will vote to elect Messrs. Cruger, QuickNixon, Urban, Viola and ViolaMs. Gambale unless a stockholder indicates that his or her shares should be withheld with respect to one or bothmore of such nominees.
Our board of directors recommends that you vote FOR each of the nominees for our board of directors in this Proposal 1.
nominees for our board of directors in this proposal 1.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEDirectors and Executive Officers The following table sets forth certain information about our directors and executive officers as of the date of this proxy statement.
| 4 | | | 2021 Proxy Statement | |
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
|
Joseph Molluso to serve as the Company’s Co-Presidents and Co-Chief Operating Officers. For additional information, please see the Current Report on Form 8-K filed by the Company with the SEC on May 5, 2020.
| William F. Cruger, Jr. | | | Independent Director Age: 62 | | | Board Committees: • Audit | | | Director Since: 2015 | |
| BACKGROUND: Mr. Cruger became a member of our board of directors in April 2015 and was previously a member of the board of directors of Virtu Financial LLC (“Virtu Financial”), which is a subsidiary of the Company and was the entity through which we conducted our business prior to our initial public offering. He was most recently Vice Chairman of Investment Banking at J.P. Morgan and Co., where he was responsible for key client relationships on a global basis. Previously, Mr. Cruger held a number of senior positions at J.P. Morgan, including Managing Director in the Financial Institutions group from 1996 to 2011. During this time, he also oversaw the rationalization of the firm’s private equity investments in trading platforms and related ventures at Lab Morgan from 2000 to 2001. Prior to this, Mr. Cruger ran the firm’s investment banking practices in Japan from 1991 to 1996, Latin America from 1989 to 1991 and Emerging Asia from 1984 to 1988. Mr. Cruger currently serves on the board of MarketAxess Holdings Inc. and People’s United Financial, Inc., and has previously served on the boards of Archipelago Holdings, Inc., CreditTrade, Inc. and Capital IQ, Inc. He has an M.B.A. from Columbia University and a B.A. from Clark University. QUALIFICATIONS: Mr. Cruger’s diverse experience in investment banking at a global financial services firm and his extensive experience in financial markets and financial leadership adds significant value to our board of directors. | |
| 2021 Proxy Statement | | | 5 | |
| Glenn Hutchins | | | Independent Director Age: 65 | | | Board Committees: • Risk | | | Director Since: 2017 | |
| BACKGROUND: Glenn Hutchins is Chairman of North Island and North Island Ventures and a co-founder of Silver Lake. He is a director of AT&T, Virtu Financial and Digital Currency Group; Co-Chair of the Brookings Institution and CARE; Vice Chair of the Obama Foundation; on the Executive Committee of the Boston Celtics Basketball Team; and a board member of the New York Presbyterian Hospital. He is also a member of the International Advisory Board of GIC Private Limited, the sovereign wealth fund of Singapore. He was a Director and Chair of Audit and Risk Committee of the Federal Reserve Bank of New York from 2011-2020. Mr. Hutchins also served President Clinton in both the transition and the White House as a special advisor on economic and health-care policy. He was previously chairman of the board of SunGard Data Systems, Inc. and Instinet, Inc. and a long-time director of Nasdaq, Inc. He was also a director of the Harvard Management Company for a decade and co-chairman of Harvard University’s capital campaign.Mr. Hutchins and his wife, Debbie, founded the Hutchins Family Foundation which, among other projects, is supporting the construction of the Obama Presidential Center and has created the Hutchins Center for African & African American Research at Harvard University; the Hutchins Center on Fiscal and Monetary Policy at The Brookings Institution; and the Chronic Fatigue Initiative, which conducted basic research into the cause of chronic fatigue syndrome. Mr. Hutchins has published essays on economic and public policy in the Wall Street Journal, New York Times, Washington Post, Financial Times, Fortune and Foreign Affairs. He is also a Fellow of the American Academy of Arts and Sciences. Mr. Hutchins holds an A.B. from Harvard College, an M.B.A. from Harvard Business School, and a J.D. from Harvard Law School. QUALIFICATIONS: Mr. Hutchins’ qualifications to serve on our board of directors include his extensive experience and expertise in the technology and financial sectors, his public policy experience and his strong strategic focus. | |
| Christopher C. Quick | | | Independent Director Age: 63 | | | Board Committees: • Audit • Risk | | | Director Since: 2016 | |
| BACKGROUND: Mr. Quick became a member of our board of directors in April 2016. Mr. Quick has more than 30 years of experience in the securities and financial services industries. He is the former CEO of Banc of America Specialist, Inc., a wholly owned subsidiary of Bank of America Corporation and member firm of the New York Stock Exchange (“NYSE”). He is also a past Vice Chairman of Global Wealth and Investment Management with Bank of America. From 1982 to 2004, he served as Chairman and Chief Executive Officer of Q&R Specialist, JJC Specialist and Fleet Specialists where he remained following the firm’s acquisition by Bank of America Corporation. He is a member of the board of directors of Mutual of America and a Trustee of Fairfield University. He is also a former member of the NYSE Board of Directors, the board of directors of KCG Holdings, Inc. (“KCG”), the board of directors of The Alfred E. Smith Memorial Foundation Inc., and the Board of Trustees for the Boys Club of New York. Mr. Quick received a B.S. in Finance from Fairfield University in 1979. QUALIFICATIONS: Mr. Quick’s qualifications to serve on our board of directors include his significant experience in the financial services and securities industries, including in the specialist business, and in senior leadership roles and his substantial experience with post-merger and acquisition integration matters. | |
| 6 | | | 2021 Proxy Statement | |
| Vincent Viola | | | Director Age: 65 | | | Board Committees: • None | | | Director Since: 2017 | |
| BACKGROUND: Mr. Viola is our founder and has served as a member and Chairman Emeritus of our board of directors since July 2017. From November 2013 until July 2017, Mr. Viola served as our Executive Chairman and Chairman of our board of directors. He previously served as Chief Executive Officer and Chairman of the board of directors of Virtu and its predecessors since April 2008. Mr. Viola is one of the nation’s foremost leaders in electronic trading. He was the founder of Virtu Financial Operating LLC (“Virtu East”) in 2008, a founder of Madison Tyler Holdings, LLC (“Madison Tyler Holdings”) in 2002 and is the former Chairman of the New York Mercantile Exchange (“NYMEX”). Mr. Viola started his career in the financial services industry on the floor of the NYMEX and became Vice Chairman from 1993 to 1996 and Chairman from 2001 to 2004. Mr. Viola has launched a number of successful businesses during his career, including Virtu and Independent Bank Group Inc., a regional banking group in Texas that is now listed on NASDAQ (IBTX). Shortly after September 11, 2001, Mr. Viola was instrumental in founding the Combating Terrorism Center at West Point. Mr. Viola is currently the principal owner and serves as the Chairman and Governor for the Florida Panthers Hockey Club and its parent company, Sunrise Sports & Entertainment LLC. Mr. Viola graduated from the U.S. Military Academy at West Point in 1977. He later graduated from the U.S. Army Airborne, Infantry and Ranger Schools and served in the 101st Airborne Division. In 1983, he graduated from New York Law School. QUALIFICATIONS: Mr. Viola’s extensive business experience in the financial services industry provides our board of directors with valuable knowledge and experience in the electronic trading and market making business. In addition, as our founder, Mr. Viola has successfully led Virtu since its inception and provides our board of directors with valuable insight regarding strategic decisions and the future direction of our Company. | |
| Douglas A. Cifu | | | Director Age: 55 | | | Board Committees: None | | | Director Since: 2013 | |
| BACKGROUND: Mr. Cifu has been our Chief Executive Officer and a member of our board of directors since November 2013. He previously served as Virtu’s President and Chief Operating Officer and has served on its board of directors or the boards of its predecessors since co-founding the firm in April 2008. Prior to co-founding Virtu, Mr. Cifu was a partner at the international law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP, where he practiced corporate law from 1990 to 2008 and served as a member of the Management Committee and Deputy Chairman of the firm’s corporate department. Mr. Cifu also previously served on the board of directors of Independent Bank Group, Inc., a regional bank holding company. Mr. Cifu currently serves as a member of the board of directors of the U.S. Chamber of Commerce, as well as the Board of Visitors of Columbia College at Columbia University. Mr. Cifu also serves as Vice Chairman, Partner and Alternate Governor for the Florida Panthers Hockey Club and its parent company, Sunrise Sports & Entertainment LLC. Mr. Cifu completed his J.D. at Columbia Law School in 1990 and received his B.A. from Columbia University in 1987, from which he graduated magna cum laude. QUALIFICATIONS: Mr. Cifu’s extensive experience in global financial markets and market structure, his leadership acumen and his background as a corporate attorney add significant value to our Company and our Board of Directors. As a co-founder, Mr. Cifu has successfully led Virtu since its inception and provides our board of directors with valuable insight regarding strategic decisions and the future direction of our Company. | |
| 2021 Proxy Statement | | | 7 | |
| Joseph J. Grano, Jr. | | | Independent Director Age: 73 | | | Board Committees: • Audit | | | Director Since: 2017 | |
| BACKGROUND: Mr. Grano, Jr. became a member of our board of directors in October 2017. Mr. Grano has more than 30 years of experience in the securities and financial services industries. Mr. Grano currently serves as the Principal Partner of the JJG Family Office, which primarily engages in advisory services. From 2001 to 2004, he was Chairman and CEO of UBS Financial Services Inc. (formerly UBS PaineWebber), where he was instrumental in helping to bring about the merger of PaineWebber with UBS in 2000. Prior to joining PaineWebber, he held various senior management positions with Merrill Lynch & Co., including Director of National Sales. Mr. Grano previously served as Chairman of the Board of Governors of the National Association of Securities Dealers (NASD) (predecessor to the Financial Industry Regulatory Authority (FINRA)), and was formerly a member of the NASD’s Executive Committee. In addition to his industry experience, Mr. Grano serves as a member of the City University of New York’s Business Leadership Council and President of the Advisory Board of Law Enforcement Against Drugs, and from 2002 until 2005 served as the Chairman of the Homeland Security Advisory Council. He has also previously served as the Vice Chairman of the Queens College Foundation Board of Trustees, and has previously sat on the board of directors of the YMCA of Greater New York and on the board of Lenox Hill Hospital, among his other civic and philanthropic endeavors. Mr. Grano holds honorary Doctor of Laws degrees from Pepperdine University and Babson College as well as an honorary Doctor of Humane Letters degree from Queens College. In addition to being one of the financial service industry’s leading executives, Mr. Grano is involved in a wide range of educational and philanthropic endeavors. Mr. Grano also served in the U.S. Special Forces (Green Berets). He also won a Tony Award as a producer of the record-setting musical Jersey Boys. Mr. Grano is the author of the book “You Can’t Predict A Hero” which was on Businessweek’s best seller list in 2009. QUALIFICATIONS: Mr. Grano’s previous senior leadership roles in the financial securities industry and public company experience provide a valuable insight regarding strategic decisions and add value to our board of directors. | |
| Robert Greifeld | | | Independent Director Age: 63 | | | Board Committees: • Compensation • N&CG | | | Director Since: 2017 | |
| BACKGROUND: Mr. Greifeld became a member and the Chairman of our board of directors in July 2017. Mr. Greifeld is a co-founder of Ordinal Ventures, LLC (f/k/a North Island Ventures, LLC), currently the CEO and Chairman of Cornerstone Investment Capital Holdings Co., Managing Partner and Co-Founder at Cornerstone Investment Capital, a financial technology investment firm, a position he has held since September 2018, and a Board Member at Capital Rock, Financeware LLC, and Hudson Executive Investment Capital. He previously served as Chairman of the board of directors of The Nasdaq Stock Market LLC (“NASDAQ”) from January 2017 until May 2017 and as Chief Executive Officer of NASDAQ from 2003 to 2016. During his tenure, Mr. Greifeld led Nasdaq through a series of complex, innovative acquisitions that extended the company’s footprint from a single U.S. equity exchange to a global exchange and technology solutions provider and grew market capitalization over 20 times. Prior to joining NASDAQ, Mr. Greifeld was an Executive Vice President with SunGard Data Systems and, prior to joining SunGard, was President at Automated Securities Clearance. Mr. Greifeld founded and chairs the USA Track & Field Foundation, which supports emerging athletes and inner-city youth athletics. Mr. Greifeld is a member of the NYU Stern Board of Overseers and a CNBC Contributor. Mr. Greifeld holds a Master’s in Business from New York University, Stern School of Business, and a B.A. in English from Iona College. | |
| 8 | | | 2021 Proxy Statement | |
| QUALIFICATIONS: Mr. Greifeld’s previous industry leadership service adds significant value to our board of directors. | |
William F. Cruger, Jr.
| Virginia Gambale | | | Independent Director Age: 61 | | | Board Committees: • Audit • Risk | | | Director Since: 2020 | |
| BACKGROUND: Ms. Gambale became a member of our board of directors in January 2020. Ms. Gambale is Managing Partner of Azimuth Partners LLC, a technology advisory firm facilitating the growth and adoption of emerging technologies for financial services, consumer and technology companies. Prior to starting Azimuth Partners in 2003, Ms. Gambale was an Investment Partner at Deutsche Bank Capital and ABS Ventures from 1999 to 2003. Prior to that, Ms. Gambale held the position of Chief Information Officer at Bankers Trust Alex Brown and Merrill Lynch. Ms. Gambale currently serves as a Director for JetBlue Airways Corp. (NASDAQ:JBLU), First Derivatives plc (LSE:FDP.L), Regis Corp. (NYSE:RGS), Nutanix, Inc. (NASDAQ:NTNX) and serves on the NACD Risk Oversight Advisory Council. She has also served on numerous international public and private boards including Piper Jaffray Companies, Synchronoss Technologies, Motive, Inc., Workbrain and IQ Financial, among others. Ms. Gambale holds a B.S. from New York Institute of Technology-Old Westbury. QUALIFICATIONS: Ms. Gambale’s previous experience in senior leadership positions in finance and technology and previous services on the boards of other public companies adds significant value to our board of directors. | |
| John D. Nixon | | | Independent Director Age: 65 | | | Board Committees: • Compensation • N&CG | | | Director Since: 2015 | |
| BACKGROUND: Mr. Nixon became a member of our board of directors in May 2015. Mr. Nixon has more than 30 years of international experience in the interdealer broker industry with ICAP plc (“ICAP”) and, previously, with Tullett Prebon. He served as a non-executive director of ICAP from 1998 to 2002 and served as executive director from May 2008 until his retirement in March 2015. Mr. Nixon was a member of ICAP’s Global Executive Management Group from 2003 to 2015 with responsibility during that period for business divisions and strategic acquisitions. He represented the ICAP Americas businesses to the ICAP board, was chairman of the i-Swap business and had been responsible for the implementation of the ICAP Swap Execution Facility. In addition to serving on our board, Mr. Nixon serves as our representative on the board of Eris Exchange Holdings, LLC, as a senior financial services advisor to Temasek USA and as a member of the board of directors of Eastdil Secured on behalf of Temasek. Mr. Nixon holds a degree in Commerce from Queen’s University, Ontario. QUALIFICATIONS: Mr. Nixon’s extensive business experience in the interdealer broker industry as well as his operational and strategic expertise in the financial services industry adds significant value to our board of directors. | |
| 2021 Proxy Statement | | | 9 | |
Christopher C. Quick became a member of our board of directors in April 2016. Mr. Quick has more than 30 years of experience in the securities and financial services industries. He is the former CEO of Banc of America Specialist, Inc., a wholly-owned subsidiary of Bank of America Corporation and member firm of the New York Stock Exchange ("NYSE"). He is also a past Vice Chairman of Global Wealth and Investment Management with Bank of America. From 1982 to 2004, he served as Chairman and Chief Executive Officer of Q&R Specialist, JJC Specialist and Fleet Specialists where he remained following the firm's acquisition by Bank of America Corporation. He is a member of the board of directors of The Alfred E. Smith Memorial Foundation Inc. and on the Board of Trustees for
Catholic Relief Services, Fairfield University and Mutual of America. He is also a former member of the NYSE Board of Directors, the board of directors of KCG and the Board of Trustees for the Boys Club of New York. Mr. Quick received a B.S. in Finance from Fairfield University in 1979. Mr. Quick's qualifications to serve on our board of directors include his significant experience in the financial services and securities industries, including in the specialist business, and in senior leadership roles and his substantial experience with post-merger and acquisition integration matters.
Vincent Viola is our Founder and has served as our Executive Chairman since November 2013. He is also the Chairman of our board of directors. He previously served as Chief Executive Officer and Chairman of the board of directors of Virtu Financial and its predecessors since April 2008. Mr. Viola is one of the nation's foremost leaders in electronic trading. He was the founder of Virtu Financial Operating LLC ("Virtu East") in 2008, a founder of Madison Tyler Holdings, LLC ("Madison Tyler Holdings") in 2002 and the former Chairman of the New York Mercantile Exchange ("NYMEX"). Mr. Viola started his career in the financial services industry on the floor of the NYMEX and became Vice Chairman from 1993 to 1996 and Chairman from 2001 to 2004. Mr. Viola graduated from the U.S. Military Academy at West Point in 1977. He later graduated from the U.S. Army Airborne, Infantry and Ranger Schools and served in the 101st Airborne Division. In 1983, he graduated from New York Law School. Mr. Viola's extensive business experience in the financial services industry provides our board of directors with valuable knowledge and experience in the electronic trading and market making business. In addition, as our founder, Mr. Viola has successfully led Virtu since its inception and provides our board of directors with valuable insight regarding strategic decisions and the future direction of our Company.
Class II Directors
The term of the following two Class II directors will expire at the 2017 Annual Meeting of Stockholders.
Douglas A. Cifu has been our Chief Executive Officer and a member of our board of directors since November 2013. He previously served as Virtu Financial's President and Chief Operating Officer and has served on its board of directors since co-founding the firm in April 2008. Prior to co-founding Virtu, Mr. Cifu was a partner at the international law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP, where he practiced corporate law from 1990 to 2008. Mr. Cifu also serves on the board of directors of Independent Bank Group, Inc., a regional bank holding company. Mr. Cifu completed his J.D. at Columbia Law School in 1990 and received his B.A. from Columbia University in 1987, from which he graduated magna cum laude. Mr. Cifu's experience as a corporate attorney provides us with valuable insight regarding acquisitions, debt financings, equity financings and public markets.
John F. (Jack) Sandner became a member of our board of directors in April 2015 and has been a member of Virtu Financial's board of directors since November 2011. Mr. Sandner has served as a member of the board of directors of CME Group Inc. since 1978 and has been a member of CME for more than 30 years. He also served as Special Policy Advisor from 1998 to 2005. Previously, he served as Chairman of the board of CME Group Inc. for 13 years. Mr. Sandner has served as Chairman of E*Trade Futures, LLC since 2003. Mr. Sandner previously served as President and CEO of RB&H Financial Services, L.P., a futures commission merchant and clearing firm ("RB&H Financial Services"), from 1985 to 2003. RB&H Financial Services is now a division of MF Global. Mr. Sandner serves as a consultant to RB&H Financial Services. Mr. Sandner currently serves on the board of the National Futures Association and serves as one of our board representatives on the Dubai Mercantile Exchange. Mr. Sandner currently serves on the board of CME Group Inc. and Echo Global Logistics, Inc. and previously served on the board of Click Commerce Inc. Mr. Sandner's extensive business experience in the electronic market making business and his previous service on the boards of other public companies adds significant value to our board of directors.
Class III Directors
The term of the following three Class III directors will expire at the 2018 Annual Meeting of Stockholders.
General John Philip Abizaid (Ret.) became a member of our board of directors in April 2015 and has been a member of Virtu Financial's board of directors since July 2011. Since 2007, Gen. Abizaid has served as an international business and leadership consultant. Gen. Abizaid retired from the U.S. Army in 2007 after 34 years of service, during which time he rose from an infantry platoon leader to become a four-star general and the longest-serving commander of U.S. Central Command. During his distinguished career, his command assignments ranged from infantry combat to delicate international negotiations. Gen. Abizaid serves as the Distinguished Chair of the Combating Terrorism Center at West Point. He has been a member of the Council on Foreign Relations and the International Institute for Strategic Studies, and served as a Director of the George Olmsted Foundation. In addition to serving on our board, Gen. Abizaid serves on the board of directors for USAA and RPM, Inc.. Gen. Abizaid's extensive international, military and governmental experience and previous service on the boards of other companies adds significant value to our board of directors and to our Company.
John D. Nixon became a member of our board of directors in May 2015. Mr. Nixon has more than 30 years of international experience in the interdealer broker industry with ICAP plc ("ICAP") and, previously, with Tullett Prebon. He served as a non-executive director of ICAP from 1998 to 2002 and was appointed an executive director in May 2008. Mr. Nixon was a member of ICAP's Global Executive Management Group since 2003 with responsibility, over that period, for business divisions and strategic acquisitions. He represented the ICAP Americas businesses to the ICAP board, was chairman of the i-Swap business and had been responsible for the implementation of the ICAP Swap Execution Facility. Mr. Nixon holds a degree in Commerce from Queen's University, Ontario. On March 31, 2015, Mr. Nixon retired from the ICAP board. In addition to serving on our board, Mr. Nixon serves as a Senior Advisor to Teneo Holdings. Mr. Nixon's extensive business experience in the interdealer broker industry adds significant value to our board of directors.
Michael T. Viola became a member of our board of directors in April 2016. Mr. Viola previously served the Company in a variety of roles since 2011, most recently as a senior trader focused on foreign exchange products and global commodities. Mr. Viola currently serves as the President of the Viola family's private investment office, located in New York City. In addition, Mr. Viola is a member of the board of directors of Independent Bank Group, Inc., which he joined in February 2013. Mr. Viola also served on the board of a family-founded nonprofit organization focused on Catholic education initiatives in inner-city communities from 2010 to 2011. Mr. Viola's significant experience in electronic market making and his experience as the director of another public company adds significant value to our board of directors.
| David J. Urban | | | Independent Director Age: 57 | | | Board Committees: • Risk | | | Director Since: 2018 | |
| BACKGROUND: Mr. Urban became a member of our board of directors in December 2018. Mr. Urban is Executive Vice President, North American Corporate Affairs at ByteDance Ltd a global internet technology company. Previously, Mr. Urban served as President of the American Continental Group, a leading bi partisan government affairs and strategic consulting firm which provides strategic consulting services across the financial services and technology sectors, among others. Mr. Urban currently serves as a Director for several other private technology-focused companies. Mr. Urban previously served as the Chief of Staff for a United States Senator from 1997 to 2002, and from 1994 to 1997 was an attorney in private practice. From 1986 through 1991, Mr. Urban served as an artillery officer in the United States Army’s 101 Airborne Division. Mr. Urban holds a Bachelor of Science degree from the United States Military Academy at West Point, a Master of Government Administration degree from the University of Pennsylvania and a Juris Doctor from the Temple University School of Law. QUALIFICATIONS: Mr. Urban’s governmental relations experience and his previous industry leadership service adds significant value to our board of directors. | |
| Michael T. Viola | | | Director Age: 34 | | | Board Committees: • N&CG • Risk | | | Director Since: 2016 | |
| BACKGROUND: Mr. Viola became a member of our board of directors in April 2016. Mr. Viola previously served the Company in a variety of roles since 2011, most recently as a senior trader focused on foreign exchange products and global commodities. Since 2016, Mr. Viola has served as the President of the Viola family’s private investment office, located in New York City. In addition, Mr. Viola is a member of the board of directors of Independent Bank Group, Inc., which he joined in February 2013, as well as iAero Group, Cornerstone Investment Capital Holdings, Crowheart Energy LLC, Madava Financial LLC, the Viola Foundation, and the USA Track & Field Foundation. Mr. Viola holds a B.S. in Finance from Pepperdine University. QUALIFICATIONS: Mr. Viola’s significant experience in electronic market making and his experience as the director of another public company adds significant value to our board of directors. | |
| Stephen Cavoli | | | EVP Age: 52 | | | | | | Officer Since: 2017 | |
| BACKGROUND: Mr. Cavoli has been our Executive Vice President, Markets since December 2017, and previously served as our Senior Vice President, Strategy and Market Development since September 2015. Prior to joining Virtu, Mr. Cavoli was a Managing Director at Morgan Stanley in the electronic trading group, where he served in various roles from April 2004 to September 2015. Mr. Cavoli previously held positions at Instinet where he focused on U.S. equities trading and execution. Mr. Cavoli graduated from the U.S. Military Academy at West Point in 1992 and has served as an Infantry Officer in the United States Army. | |
| 10 | | | 2021 Proxy Statement | |
Venu Palaparthi has been our Senior Vice President for Compliance, Regulatory and Government Affairs since December 2014. Mr. Palaparthi also serves as Chief Executive OfficerProposal 1 Election of our two registered broker-dealers. Between 2011 and 2014, Mr. Palaparthi served as an officer at The NASDAQDirectors
| Brett Fairclough | | | Co-President and Co-COO Age: 38 | | | | | | Officer Since: 2019 | |
| BACKGROUND: Mr. Fairclough was appointed our Co-President and Co-Chief Operating Officer in May 2020. Mr. Fairclough has been an employee of the Company and its predecessors since 2007, previously serving as the Company’s Executive Vice President, Chief Operating Officer and Global Head of Business Development in 2019, as well as Managing Director of Asia Pacific and Chief Executive Officer of Virtu Singapore Pte. Ltd., the Company’s Singapore-based subsidiary, since 2014. Prior to that, he served as Chief Compliance Officer of the Company’s broker-dealer subsidiaries. He has also worked closely with exchanges and other industry participants to foster the growth and development of securities markets globally. Mr. Fairclough received a B.A. from the University of California at Los Angeles. | |
| Joseph Molluso | | | Co-President and Co-COO Age: 52 | | | | | | Officer Since: 2020 | |
| BACKGROUND: Mr. Molluso was appointed our Co-President and Co-Chief Operating Officer in May 2020. Mr. Molluso joined Virtu in November 2013 as Chief Financial Officer. After a brief departure in 2019 to serve as Chief Financial Officer of Capitolis, Mr. Molluso rejoined Virtu in 2020. Prior to joining Virtu, Mr. Molluso was a Managing Director in Investment Banking at J.P. Morgan from March 2006 to November 2013, where he provided strategic advice to financial institutions with a focus on market structure related companies. Mr. Molluso started his career as an investment banker specializing in financial services companies in 1997 at Donaldson, Lufkin & Jenrette and its successor, Credit Suisse, where he helped establish the global financial technology group. Mr. Molluso received his M.B.A. from New York University in 1997 and his B.B.A. from Pace University in 1991. | |
| Sean P. Galvin | | | CFO Age: 56 | | | | | | Officer Since: 2020 | |
| BACKGROUND: Mr. Galvin was appointed our Executive Vice President and Chief Financial Officer in August 2020. Mr. Galvin has more than 30 years of experience in the accounting and financial services fields and previously served as the interim Chief Financial Officer of KCG Holdings, Inc., the Chief Accounting Officer of BGC Partners, Inc., and in various other senior finance roles with Virtu, KCG Holdings Inc. and Knight Capital Group, Inc. Prior to joining Knight in 2000, Mr. Galvin was a Vice President at Donaldson, Lufkin & Jenrette and a Senior Tax Manager at PricewaterhouseCoopers LLP. Mr. Galvin earned a M.S. in Taxation from Fordham University as well as a B.S. in Accounting and Information Systems with a minor in Economics from Queens College, CUNY. Mr. Galvin is a Certified Public Accountant. | |
| 2021 Proxy Statement | | | 11 | |
Stock Market LLC ("NASDAQ") in the Global Trading and Market Services division. While at NASDAQ, he was CEO of NASDAQ's broker-dealer subsidiaries—Nasdaq Execution Services LLC, Execution Access LLC and NPM Securities LLC. Mr. Palaparthi was responsible for regulatory compliance for Transaction Services U.S. and led various market structure and post-execution initiatives for NASDAQ's U.S. marketplaces. Prior to NASDAQ, Mr. Palaparthi was Chief Compliance Officer of Instinet LLC ("Instinet") between 2008 and 2011. From 2000 to 2008, Mr. Palaparthi worked in a variety of functions at Instinet including Head of Business Audit and Technology Compliance Officer. Mr. Palaparthi started his career as an analyst at Reuters in 1994. Mr. Palaparthi received his M.B.A. from The University of Texas at Arlington in 1994. He earned a dual degree—BE (Honors) in Computer Science and M.Sc. (Honors) in Economics—from Birla Institute of Technology and Science in Pilani, India.
As the
Family Relationships of Directors and Executive Officers
| 12 | | | 2021 Proxy Statement | |
| 2021 Proxy Statement | | | 13 | |
consent four times.
| 14 | | | 2021 Proxy Statement | |
Our Audit Committee assists the board of directors in monitoring the audit of our financial statements, our independent auditors' qualifications and independence, the performance of our audit function and independent auditors and our compliance with legal and regulatory requirements. Our Audit Committee has direct responsibility for the appointment, compensation, retention (including termination) and oversight of our independent auditors, and our independent auditors report directly to the Audit Committee. Our Audit Committee also reviews and approves related party transactions as required by the rules of NASDAQ. Our board of directors has adopted a written charter for the Audit Committee, which is available on our corporate website at http://ir.virtu.com/corporate-governance.cfm. The information on our website is not part of this proxy statement.
Messrs. Cruger, Quick and Sandner are the members of our Audit Committee. The board of directors has determined that Mr. Cruger qualifies as an "audit committee financial expert" as such term is defined in Item 401(h) of Regulation S-K and that each of Messrs. Cruger, Quick and Sandner are "independent" for purposes of Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and under the listing standards of NASDAQ. The designation of "audit committee financial expert" does not impose on Mr. Cruger any duties, obligations or liabilities that are greater than are generally imposed on members of our Audit Committee and our board of directors.
Compensation Committee
Our Compensation Committee reviews and recommends policies relating to compensation and benefits of our directors and employees and is responsible for approving the compensation of our Chief Executive Officer and other executive officers. Our Compensation Committee will also administer the issuance of awards under our 2015 Management Incentive Plan (the "2015 Plan"). Our board of directors has adopted a written charter for the Compensation Committee, which is available on our corporate website at http://ir.virtu.com/corporate-governance.cfm. The information on our website is not part of this proxy statement.
Messrs. Abizaid and Sandner are the members of our Compensation Committee. Because we are a "controlled company" under the rules of NASDAQ, our Compensation Committee is not required to be fully independent, although if such rules change in the future or we no longer meet the definition of a controlled company under the current rules, we will adjust the composition of the Compensation Committee accordingly in order to comply with such rules.
Nominating and Corporate Governance Committee
Our Nominating
| AUDIT COMMITTEE Members William F. Cruger, Jr. Christopher C. Quick Joseph J. Grano, Jr. Virginia Gambale Number of Meetings Held in 2020: 9 | | | The Audit Committee’s responsibilities include: We have a separately designated standing Audit Committee established in accordance with section 3(a)(58)(A) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our Audit Committee assists the board of directors in monitoring the audit of our financial statements, our independent auditors’ qualifications and independence, the performance of our audit function and independent auditors and our compliance with legal and regulatory requirements. Our Audit Committee has direct responsibility for the appointment, compensation, retention (including termination) and oversight of our independent auditors, and our independent auditors report directly to the Audit Committee. Our Audit Committee also reviews and approves related party transactions as required by the rules of NASDAQ. Our board of directors has adopted a written charter for the Audit Committee, which is available on our corporate website at ir.virtu.com/corporate-governance/default.aspx. The information on our website is not part of this proxy statement. Messrs. Cruger, Quick, Grano and Ms. Gambale are the members of our Audit Committee. The board of directors has determined that Mr. Cruger qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5)(ii) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities Act”) and that each of Messrs. Cruger, Quick and Grano and Ms. Gambale is “independent” for purposes of Rule 10A-3 of the Exchange Act and under the listing standards of NASDAQ. The designation of “audit committee financial expert” does not impose on Mr. Cruger any duties, obligations or liabilities that are greater than are generally imposed on members of our Audit Committee and our board of directors. There were five regular meetings and four special meetings of the Audit Committee held during 2020. | |
| 2021 Proxy Statement | | | 15 | |
| COMPENSATION COMMITTEE Members Robert Greifeld John D. Nixon Number of Meetings Held in 2020: 2 | | | The Compensation Committee’s responsibilities include: Our Compensation Committee reviews and recommends policies relating to compensation and benefits of our directors and employees and is responsible for approving the compensation of our Chief Executive Officer and other executive officers. Our Chief Executive Officer annually reviews the performance of each of the other executive officers relative to individual and corporate annual performance goals established for the year. The Chief Executive Officer then presents his compensation recommendations based on these reviews to the Compensation Committee. Once the Compensation Committee has reviewed and evaluated executive performance, recommendations are made to the board of directors for approval. The board of directors subsequently approved 2020 director and executive compensation arrangements based on the Compensation Committee’s recommendations, the recommendations of the Compensation Committee’s compensation consultant (described below) and the collective judgment of the board’s members. Our board of directors has adopted a written charter for the Compensation Committee, which is available on our corporate website at ir.virtu.com/corporate-governance/default.aspx. The information on our website is not part of this proxy statement. Pursuant to the written charter of the Compensation Committee, the Compensation Committee may form and delegate authority to subcommittees when appropriate, provided that the subcommittees are composed entirely of directors who satisfy the applicable independence requirements of the Company’s corporate governance guidelines and the rules and regulations of NASDAQ, including any applicable “controlled company” exemption. Additionally, pursuant to its written charter, the Compensation Committee has the sole authority to retain and terminate a compensation consultant and to approve the consultant’s fees and all other terms of the engagement. Our Compensation Committee also administers the issuance of awards under the Virtu Financial, Inc. Amended and Restated 2015 Management Incentive Plan (as amended from time to time, the “2015 Plan”). Messrs. Nixon and Greifeld are the members of our Compensation Committee. Because we are a “controlled company” under the rules of NASDAQ (see “Controlled Company Status” on page 24 of this proxy statement), our Compensation Committee is not required to be fully independent, although if such rules change in the future or we no longer meet the definition of a controlled company under the current rules, we will adjust the composition of the Compensation Committee to the extent necessary in order to comply with such rules. There were two regular meetings of the Compensation Committee held during 2020. | |
| 16 | | | 2021 Proxy Statement | |
Messrs. Abizaid and Viola are the members of our Nominating and Corporate Governance Committee. Because we are a "controlled company" under the rules of NASDAQ, our Nominating and Corporate Governance Committee is not required to be fully independent, although if such rules change in the future or we no longer meet the definition of a controlled company under the current rules, we will adjust the composition of the Nominating and Corporate Governance Committee accordingly in order to comply with such rules.
| NOMINATING AND CORPORATE GOVERNANCE COMMITTEE Members Robert Greifeld John Nixon Michael T. Viola Number of Meetings Held in 2020: 1 | | | The Nominating and Corporate Governance Committee’s responsibilities include: Our Nominating and Corporate Governance Committee selects or recommends that the board of directors select candidates for election to our board of directors, develops and recommends to the board of directors corporate governance guidelines that are applicable to us and oversees board of director and management evaluations. In addition, our Nominating and Corporate Governance Committee recommends to our board of directors for approval director nominees, consistent with our director qualifications criteria and any obligations under certain contractual arrangements. Our board of directors has adopted a written charter for the Nominating and Corporate Governance Committee, which is available on our corporate website at ir.virtu.com/corporate-governance/default.aspx. The information on our website is not part of this proxy statement. Messrs. Greifeld, Nixon and Michael Viola are the members of our Nominating and Corporate Governance Committee. Because we are a “controlled company” under the rules of NASDAQ (see “Controlled Company Status” on page 24 of this proxy statement), our Nominating and Corporate Governance Committee is not required to be fully independent, although if such rules change in the future or we no longer meet the definition of a controlled company under the current rules, we will adjust the composition of the Nominating and Corporate Governance Committee accordingly in order to comply with such rules. Mr. Michael Viola is not independent. There was one regular meeting of the Nominating and Corporate Governance Committee held during 2020. | |
Specifically, the Nominating and Corporate Governance Committee charter provides that, in performing its responsibilities for identifying, recruiting and recommending candidates to the board of directors, the Nominating and Corporate Governance Committee shall actively seek to include in each candidate search qualified candidates who reflect diverse backgrounds, including diversity of gender, race and ethnicity.
Guidelines and in our bylaws; (3) comply with all duties of care, loyalty and confidentiality applicable to them as directors of publicly traded corporations organized in Delaware; and (4) adhere to our Code of Conduct and Ethics.
| 2021 Proxy Statement | | | 17 | |
| RISK COMMITTEE Members Christopher C. Quick Glenn Hutchins David Urban Michael T. Viola Virginia Gambale Number of Meetings Held in 2020: 5 | | | The Risk Committee’s responsibilities include: Our Risk Committee was established in 2017 and assists our board of directors in its oversight of the Company’s risk management activities, with particular focus on (i) cybersecurity, information security and information technology risk, (ii) trading, capital and liquidity risk, and (iii) enterprise risk. Our Risk Committee also oversees and receives reports from the Company’s Chief Risk Officer on the Company’s risk assessment and risk management activities and may conduct or oversee stress testing or scenario testing. Our board of directors has adopted a written charter for the Risk Committee, which is available on our corporate website at ir.virtu.com/corporate-governance/default.aspx. The information on our website is not part of this proxy statement. Messrs. Hutchins, Quick, Urban, Michael Viola and Ms. Gambale are the members of our Risk Committee. Our Risk Committee is not required to be fully independent, although if our Risk Committee becomes subject to any such independence requirement in the future, we will adjust the composition of the Risk Committee accordingly in order to comply with such requirement. There were five meetings of the Risk Committee held during 2020. | |
| 18 | | | 2021 Proxy Statement | |
SummaryProposal 2 Advisory Vote to Approve Compensation Tableof Named Executive Officers
| Our board of directors recommends that you vote “FOR” the approval, on an advisory basis, of the compensation of our named executive officers. | |
| 2021 Proxy Statement | | | 19 | |
| Douglas A. Cifu | | | Chief Executive Officer | |
| Brett Fairclough | | | Co-President and Co-Chief Operating Officer(1) | |
| Joseph Molluso | | | Co-President and Co-Chief Operating Officer(2) | |
| Sean P. Galvin | | | Executive President and Chief Financial Officer(3) | |
| Stephen Cavoli | | | Executive Vice President, Markets | |
| Alexander M. Ioffe | | | Former Executive Vice President and Chief Financial Officer(4) | |
| 20 | | | 2021 Proxy Statement | |
| 2021 Proxy Statement | | | 21 | |
Compensation Element | | | Brief Description | | | Objectives | |
Base Salary | | | Fixed compensation | | | Provide a competitive, fixed level of cash compensation to attract and retain talented and skilled executives | |
Annual Cash Bonus | | | Variable, performance-based cash compensation earned based on financial and individual performance | | | Retain and motivate executives to achieve or exceed financial goals and company objectives | |
Annual Equity Awards | | | Equity and equity-based compensation that is subject to vesting based on (i) continued employment and (ii) for certain named executive officers, achievement of pre-established financial and operational goals | | | The mix of equity and equity-based awards with time-based vesting assists in retention of key talent while also rewarding executives for exceptional performance | |
Employee Benefits and Perquisites | | | Participation in all broad-based employee health and welfare programs and retirement plans | | | Aid in retention of key executives in a highly competitive market for talent by providing an overall competitive benefits package | |
| 22 | | | 2021 Proxy Statement | |
Name | | | Cash | | | Restricted Stock Units | | | Common Stock | | | Total 2020 Variable Incentive Compensation | | ||||||||||||
Douglas A. Cifu | | | | $ | 2,500,000 | | | | | $ | 1,500,000 | | | | | $ | 1,000,000 | | | | | $ | 5,000,000 | | |
Joseph Molluso(1) | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Brett Fairclough | | | | $ | 1,325,000 | | | | | $ | 705,000 | | | | | $ | 470,000 | | | | | $ | 2,500,000 | | |
Stephen Cavoli | | | | $ | 1,325,000 | | | | | $ | 705,000 | | | | | $ | 470,000 | | | | | $ | 2,500,000 | | |
Sean Galvin | | | | $ | 450,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 450,000 | | |
Alexander M. Ioffe | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
| 2021 Proxy Statement | | | 23 | |
| 24 | | | 2021 Proxy Statement | |
| 2021 Proxy Statement | | | 25 | |
Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($) | | | Non-Equity Incentive Plan Compensation ($) | | | All Other Compensation ($) | | | Total ($) | | |||||||||||||||||||||
Douglas A. Cifu Chief Executive Officer | | | | | 2020 | | | | | $ | 1,000,000 | | | | | $ | 500,000(1) | | | | | $ | 8,759,525(2) | | | | | $ | 2,000,000(3) | | | | | $ | 4,270(4) | | | | | $ | 12,263,795 | | |
| | | 2019 | | | | | $ | 1,000,000 | | | | | $ | 360,000(1) | | | | | $ | 2,100,000(2) | | | | | $ | 1,040,000(3) | | | | | $ | 98,172(4) | | | | | $ | 4,598,172 | | | ||
| | | 2018 | | | | | $ | 1,000,000 | | | | | $ | 400,000(1) | | | | | $ | 5,298,240(2) | | | | | $ | 2,000,000(3) | | | | | $ | 71,367(4) | | | | | $ | 8,769,607 | | | ||
Joseph Molluso Co-President and Co-Chief Operating Officer | | | | | 2020 | | | | | | 273,973(5) | | | | | $ | 3,750,000(1) | | | | | $ | 7,138,500(6) | | | | | | — | | | | | | — | | | | | $ | 11,162,473 | | |
| | | 2019 | | | | | $ | 375,342 | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 1,250,000(7) | | | | | $ | 1,625,342 | | | ||
| | | 2018 | | | | | $ | 500,000 | | | | | $ | 700,000(1) | | | | | $ | 4,993,812(6) | | | | | | — | | | | | | — | | | | | $ | 6,193,812 | | | ||
Brett Fairclough Co-President and Co-Chief Operating Officer | | | | | 2020 | | | | | $ | 500,000 | | | | | $ | 250,000(1) | | | | | $ | 2,109,500(8) | | | | | | 1,075,000(9) | | | | | | — | | | | | $ | 3,934,500 | | |
| | | 2019 | | | | | $ | 160,452 | | | | | $ | 616,000(1) | | | | | $ | 924,000(8) | | | | | | — | | | | | $ | 419,991(10) | | | | | $ | 2,120,443 | | | ||
Sean Galvin Chief Financial Officer | | | | | 2020 | | | | | $ | 98,630(11) | | | | | $ | 450,000(1) | | | | | $ | 300,000(12) | | | | | | — | | | | | | — | | | | | $ | 848,630 | | |
Stephen Cavoli Executive Vice President, Markets | | | | | 2020 | | | | | $ | 500,000 | | | | | $ | 250,000(1) | | | | | $ | 2,109,500(13) | | | | | | 1,075,000(14) | | | | | | — | | | | | $ | 3,934,500 | | |
| | | 2019 | | | | | $ | 400,000 | | | | | $ | 520,000(1) | | | | | $ | 780,000(13) | | | | | | — | | | | | | — | | | | | $ | 1,700,000 | | | ||
| | | 2018 | | | | | $ | 400,000 | | | | | $ | 480,000(1) | | | | | $ | 320,000(13) | | | | | | — | | | | | | — | | | | | $ | 1,200,000 | | | ||
Alexander M. Ioffe Former Chief Financial Officer | | | | | 2020 | | | | | $ | 301,370(15) | | | | | | — | | | | | | — | | | | | | — | | | | | | 582,192(16) | | | | | $ | 883,562 | | |
| | | 2019 | | | | | $ | 127,397(15) | | | | | $ | 750,000(1) | | | | | $ | 3,750,000(17) | | | | | | — | | | | | $ | 20,000(18) | | | | | $ | 4,647,397 | | |
Name and Principal Position | Year | Salary($) | Bonus($) | Stock Awards($) | Option Awards($)(1) | All Other Compensation($) | Total ($)(2) | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Vincent Viola | 2015 | — | — | — | 8,201,481 | — | 8,201,481 | |||||||||||||||
Founder and Executive | 2014 | — | — | — | — | — | — | |||||||||||||||
Chairman | 2013 | — | — | — | — | — | — | |||||||||||||||
Douglas A. Cifu | 2015 | 1,000,000 | — | — | 1,182,195 | 56,621 | (3) | 2,238,816 | ||||||||||||||
Chief Executive Officer | 2014 | 1,000,000 | — | — | — | 41,774 | (3) | 1,041,774 | ||||||||||||||
2013 | 1,000,000 | — | — | — | — | 1,000,000 | ||||||||||||||||
Joseph Molluso | 2015 | 500,000 | 650,000 | 639,606 | (4) | 177,329 | — | 1,966,935 | ||||||||||||||
Executive Vice President | 2014 | 500,000 | 400,000 | 289,634 | (5) | — | — | 1,189,634 | ||||||||||||||
and Chief Financial Officer | 2013 | 76,293 | 975,000 | (6) | 3,209,919 | (7) | — | — | 4,261,212 | |||||||||||||
Venu Palaparthi | 2015 | 300,000 | 368,500 | 178,598 | (4) | 73,887 | — | 920,985 | ||||||||||||||
Senior Vice President, | 2014 | 17,307 | 600,000 | (8) | 482,723 | (9) | — | — | 1,100,030 | |||||||||||||
Compliance, Regulatory | ||||||||||||||||||||||
and Government Affairs |
| 26 | | | 2021 Proxy Statement | |
| 2021 Proxy Statement | | | 27 | |
| | | | | | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Possible Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock Units (#)(9) | | | Grant Date Fair Value of Stock Awards ($)(10) | | | ||||||||||||||||||||||||||||||||||||||
Name and Type of Award | | | Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | | |||||||||||||||||||||||||||||||||||
Douglas A. Cifu | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Annual Bonus(1) | | | | | | | | | | | — | | | | | | 2,500,000 | | | | | | 5,000,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | |
Restricted Shares(2) | | | | | 2/27/2020 | | | | | | — | | | | | | — | | | | | | — | | | | | | 75,000 | | | | | | — | | | | | | 150,000 | | | | | | — | | | | | $ | 2,803,500 | | | | ||
Special Award(3) | | | | | 2/1/2020 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 125,000 | | | | | $ | 3,456,025 | | | | ||
Joseph Molluso | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Annual Bonus(1) | | | | | | | | | | | — | | | | | | 2,500,000 | | | | | | 2,500,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | |
Restricted Shares(4) | | | | | 6/22/2020 | | | | | | — | | | | | | — | | | | | | — | | | | | | 25,000 | | | | | | — | | | | | | 50,000 | | | | | | | | | | | $ | 1,168,500 | | | | ||
Restricted Stock Units(5) | | | | | 6/22/2020 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 200,000 | | | | | $ | 4,720,000 | | | | ||
Brett Fairclough | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Annual Bonus(1) | | | | | | | | | | | — | | | | | | 1,500,000 | | | | | | 2,500,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | |
Restricted Shares(6) | | | | | 2/27/2020 | | | | | | — | | | | | | | | | | | | | | | | | | 25,000 | | | | | | | | | | | | 50,000 | | | | | | | | | | | $ | 934,500 | | | | ||
Sean Galvin | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Restricted Stock Units(7) | | | | | 8/12/2020 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 13,236 | | | | | $ | 300,000 | | | | ||
Stephen Cavoli | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Annual Bonus(1) | | | | | | | | | | | — | | | | | | 1,500,000 | | | | | | 2,500,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | |
Restricted Shares(8) | | | | | 2/27/2020 | | | | | | — | | | | | | — | | | | | | — | | | | | | 25,000 | | | | | | — | | | | | | 50,000 | | | | | | — | | | | | $ | 934,500 | | | |
2013. In connection with our initial public offering, the Class A-2 profits interests in Virtu Employee Holdco were reclassified into common units of Virtu Employee Holdco. Assumptions used in calculating this amount are described in Note 15 of the Company's audited financial statements10-K for the fiscal year ended December 31, 2014 included in the 2015 Form 10-K.
Each of Messrs. Cifu, Molluso and Palaparthi and affiliates of Mr. Viola have received, and will continue to receive, distributions in respect of their direct and indirect equity holdings in Virtu Financial.
The employment agreements
| 28 | | | 2021 Proxy Statement | |
| 2021 Proxy Statement | | | 29 | |
| 30 | | | 2021 Proxy Statement | |
agreement, Mr. Fairclough’s base salary is $500,000 and Mr. Fairclough is eligible to earn an annual bonus with a target bonus opportunity equal to $1,500,000 and a maximum bonus opportunity equal to $2,500,000. Eighty percent (80%) of the annual bonus will be based on the achievement of quantitative targets set by the Company’s Chief Executive Officer together with the Compensation Committee and 20% of the annual bonus will be based on the achievement of qualitative goals set by the Company’s Chief Executive Officer together with the Compensation Committee. To the extent earned, the annual bonus will be paid in a mix of cash, restricted stock units and fully vested shares of Class A common stock in accordance with the Company’s incentive and equity plans as in effect from time to time.
of our board of directors or our compensation committee in their or its sole discretion. The employment agreements with Messrs. Viola and Cifuagreement also provided for a special long-term equity award in the form of 150,000 restricted shares of Class A common stock that are subject to performance and service conditions, which was issued on February 27, 2020. The number of shares earned under each annual equity grant will be based on the percentage of budgeted EBITDA achieved in each of the three calendar years during the vesting period, with a minimum of 50% of shares earned upon at least 70% achievement and 100% of shares earned upon at least 75% achievement. To the extent any shares of Class A common stock optionsare earned with respect to an applicable calendar year, such shares will vest on the last day of our Class A common stock.
such calendar year to which such award relates.
The employment agreements for Messrs. Viola and Cifu provideFairclough provides for severance upon certain terminations of employment as described below under "Potential“Potential Payments Upon Termination of Employment or Change in Control."
”
Galvin
Employment Agreement with Mr. Palaparthi
Cavoli
| 2021 Proxy Statement | | | 31 | |
In connectionreceive perquisites, commensurate with his position, that are provided by the Company from time to time to senior executives generally, and to receive director and officer indemnification and insurance protection.
Unit Vesting, Equity Retention and Restrictive Covenant Agreementsemployment as described below under “Potential Payments Upon Termination of Employment or Change in Control.”
In connection
| 32 | | | 2021 Proxy Statement | |
In addition to the equity retention restrictions described above, in each equity retention agreementcontinued employment through the applicable equity restricted employee acknowledgesvesting date.
Outstanding Equity Awards at Fiscal 2015 Year End
The following tables providetable provides information about each of the outstanding equity awards of options to purchase our common stock and restricted stock units held by oureach named executive officersofficer as of December 31, 2015.
| | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||
Name | | | Number of Securities Underlying Unexercised Options Exercisable (#) | | | Number of Securities Underlying Unexercised Options Unexercisable (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Equity Incentive Plan Awards: Number of Unvested Stock Awards (#) | | | Equity Incentive Plan Awards: Market Value of Unvested Stock Awards ($)(1) | | ||||||||||||||||||
Douglas A. Cifu | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 16,058(2) | | | | | $ | 404,180 | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 36,030(3) | | | | | $ | 906,875 | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 80,523(4) | | | | | $ | 2,026,764 | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 75,000(5) | | | | | $ | 1,887,750 | | | ||
Joseph Molluso | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 200,000(6) | | | | | $ | 5,034,000 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 100,000(7) | | | | | $ | 2,517,000 | | | ||
Brett Fairclough | | | | | 75,000 | | | | | | — | | | | | $ | 19.00 | | | | | | 4/15/2025 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3,033(8) | | | | | $ | 76,341 | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 5,704(9) | | | | | $ | 143,570 | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 35,430(10) | | | | | $ | 891,773 | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 100,000(11) | | | | | $ | 2,517,000 | | | ||
Sean Galvin | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 13,236(12) | | | | | $ | 333,150 | | |
Stephen Cavoli | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,804(13) | | | | | $ | 120,917 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | 29,909(14) | | | | | $ | 752,801 | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 100,000(15) | | | | | $ | 2,517,000 | | |
| Option Awards | Equity or Stock Awards | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares of Stock and Common Units that Have Not Vested (#) | Market Value of Shares of Stock and Common Units That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares and Common Units That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares and Common Units That Have Not Vested ($) | |||||||||||||||||||
Vincent Viola | — | 2,775,000 | (2) | — | 19.00 | 4/15/2025 | — | — | — | — | ||||||||||||||||||
Douglas A. Cifu | — | 400,000 | (2) | — | 19.00 | 4/15/2025 | — | — | — | — | ||||||||||||||||||
Joseph Molluso | — | 60,000 | (2) | — | 19.00 | 4/15/2025 | — | — | — | — | ||||||||||||||||||
— | — | — | — | — | 17,323 | (3) | 392,193 | — | — | |||||||||||||||||||
— | — | — | — | — | 205,165 | (4) | 4,644,943 | — | — | |||||||||||||||||||
Venu Palaparthi | — | 25,000 | (2) | — | 19.00 | 4/15/2025 | — | — | — | — | ||||||||||||||||||
— | — | — | — | — | 4,837 | (3) | 109,510 | — | — | |||||||||||||||||||
— | — | — | — | 42,595 | (5) | 964,358 | — | — |
| 2021 Proxy Statement | | | 33 | |
| | | Option Awards | | | Stock Awards | | ||||||||||||||||||
Name | | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting (#)(6) | | | Value Realized on Vesting ($) | | ||||||||||||
Douglas A. Cifu(1) | | | | | 100,000 | | | | | | 411,000 | | | | | | 162,755 | | | | | | 3,229,338 | | |
Joseph Molluso(2) | | | | | — | | | | | | — | | | | | | 50,000 | | | | | | 1,258,500 | | |
Brett Fairclough(3) | | | | | — | | | | | | — | | | | | | 79,506 | | | | | | 1,710,475 | | |
Sean Galvin | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Stephen Cavoli(4) | | | | | — | | | | | | — | | | | | | 72,341 | | | | | | 1,601,050 | | |
Alexander M. Ioffe(5) | | | | | — | | | | | | — | | | | | | 114,927 | | | | | | 2,622,634 | | |
Messrs. Molluso and Palaparthi were awarded an equity-based interest in Virtu Employee Holdco (which in turn holds an interest in Virtu Financial) that allows them to share in distributions and
In connection with our initial public offering, all of Virtu Financial's outstanding Class A-2 profits interests were reclassified into vested and unvested non-voting common interest units of Virtu Financial ("Virtu Financial Units") based on a hypothetical liquidation of Virtu Financial and our initial public offering price per share of our Class A common stock. In addition, all of Virtu Employee Holdco's Class A-2 profits interests were reclassified into common units of Virtu Employee Holdco. The unvested Virtu Financial Units vest based on the time-based vesting schedule of the unvested Class A-2 profits interests from which they were reclassified. Upon termination of employment, all unvested Virtu Financial Units will be forfeited and any vested Virtu Financial Units will be subject to repurchase by Virtu Financial. Both the vested and unvested Virtu Financial Units will be entitled to receive distributions, if any, from Virtu Financial except that unvested Virtu Financial Units will no longer be entitled to any such distributions upon forfeiture. If any unvested Virtu Financial Units are forfeited, they will be cancelled by Virtu Financial for no consideration (and we will cancel the related shares of Class C common stock described below for no consideration). In connection with the reorganization transactions and our initial public offering, members of management who received Virtu Financial Units directly, and Virtu Employee Holdco on behalf of members of management who received Virtu Financial Units indirectly, subscribed for a number of shares of our Class C common stockwith a market value equal to the number of Virtu Financial Units they receive. Each share of Class C common stock paired withapplicable tax withholding amounts on their awards. As a Virtu Financial Unit is vested or unvested toresult, the same extent as the Virtu Financial Unit with which it is paired. There are no voting rights associated with the Virtu Financial Units, whether vested or unvested, but each share of Class C common stock carries one vote, including both vested and unvestedactual shares of Class C common stock. Vested Virtu Financial Units (along with the corresponding shares of our Class C common stock) may be exchanged for shares of Class A common stock on a one-for-one basis.
The common units of Virtu Employee Holdco vest over a four-year period for Mr. Molluso and a three-year period for Mr. Palaparthi, subject to the named executive officer's continued employment on each annual vesting date. In addition,acquired by accepting the award of common units of Virtu Employee Holdco, the Virtu Employee Holdco Limited Liability Company Agreement imposes non-competition and non-solicitation restrictions on the named executive officer so that his common units of Virtu Employee Holdco are subject to forfeiture if he violates those restrictions. Mr. Molluso's award of common units of Virtu Employee Holdco provides for acceleration of vesting upon a change in control as described below under "Potential Payments Upon Termination of Employment or Change in Control."
In connection with our initial public offering, we adopted the 2015 Plan, pursuant to which we are permitted to grant awards of non-qualified options, incentive (qualified) stock options, stock appreciation rights, restricted stock, RSUs, other stock-based awards, performance compensation awards (including cash bonus awards), other cash-based awards or any combination of the foregoing. At the time of our initial public offering, we granted awards for an aggregate of 3,260,000 shares of our Class A common stock to our named executive officers under the 2015 Plan. The awards consisted of 2,775,000 stock options for Mr. Viola, 400,000 for stock options for Mr. Cifu, 60,000 stock options for
Mr. Molluso and 25,000 stock options for Mr. Palaparthi. The stock options generally vest in four equal installments of 25% on each of the first four anniversaries of the date of grant and have an exercise price per share equal to the offering price of a share of our Class A Common Stock in our initial public offering and are otherwise subject to the terms of the 2015 Plan. The stock options for Messrs. Viola and Cifu provide for acceleration of vesting upon certain terminations of employment as described below under "Potential Payments Upon Termination of Employment or Change in Control."
Following our initial public offering, we granted 11,548 and 3,224 fully vested shares of our Class A common stock under the 2015 Plan to Messrs. Mollusso and Palaparthi, respectively. In addition, Messrs. Molluso, Fairclough Cavoli and Palaparthi were granted restrictedIoffe upon the vesting and settlement of their stock units under the 2015 Plan representing the right to receive 17,323awards was 23,390, 40,908. 40,266 and 4,837 shares of our Class A common stock,59,387, respectively. The restricted stock units vest in three equal installments of 33.33% on each of the first three anniversaries of the date of grant and are otherwise subject to the terms of the 2015 Plan.
As of December 31, 2015, Messrs. Molluso and Palaparthi were not entitled to any payments in connection with the termination of their employment.
| 34 | | | 2021 Proxy Statement | |
| 2021 Proxy Statement | | | 35 | |
change in control.
statutory share exchange or similar form of corporate transaction involving the Company or sale, transfer or other disposition of all or substantially all of the business or assets of the Company to an entity that is not an affiliate of the Company.
If Messrs. ViolaEstimated Payments Upon Termination of Employment or Cifu's employment with us or our affiliates is terminated (A) by us or our affiliates without cause (as defined in the executive's employment agreement), (B) by the executive for good reason (as defined in the executive's employment agreement), (C) due to the executive's death or (D) by us or our affiliates due to Disability (as defined in the executive's employment agreement), then all of their respective unvested stock options fully accelerate and become 100% vested shall become immediately vested as of the effective date of such termination.
If Mr. Molluso's employment with us is terminated without "cause," then all of his unvested common units of Virtu Employee Holdco will become 100% vested. "Cause" generally means (i) gross negligence or willful misconduct in the performance of duties; (ii) conviction of, or plea of guilty or nolo contendere to, a felony; or (iii) fraud or misappropriation, embezzlement of funds or property belonging to Virtu Financial, subject to up to a 15-day period to cure such breach or failure if susceptible to cure.
Change in Control Benefits
All of Mr. Molluso's outstanding unvested common units of Virtu Employee Holdco will become 100% vested upon a "change in control." A change in control generally means, the acquisition of ownership by any person or group (other than Mr. Viola, his affiliates, certain affiliates of Silver Lake Partners or any of their respective permitted transferees) of equity interests representing 40% or more of the aggregate ordinary voting power of the Company, and the percentage of such aggregate ordinary voting power is greater than the aggregate voting power of Mr. Viola, his affiliates, certain affiliates of Silver Lake Partners and their respective permitted transferees.
Calculations of Benefits to Which Executive Would Be Entitled
Assuming each named executive officer'sofficer’s (other than Mr. Ioffe) termination of employment occurred on December 31, 20152020 or a change in control occurred on December 31, 2015,2020, the dollar value of the payments and other benefits to be provided to each of the named executive officers are estimated in the table below.
Name | Death, Disability, Termination Without Cause or for Good Reason ($) | Death, Disability, Termination Without Cause or for Good Reason 60 Days Prior to or 24 Months Following a Change in Control ($) | Non-Renewal by the Company ($) | Non-Renewal by the Company 60 Days Prior to or 24 Months Following a Change in Control ($) | Change in Control ($) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Vincent Viola | ||||||||||||||||
Severance | 39,769 | (1) | 546,502 | (2) | 39,769 | (1) | 546,502 | (2) | — | |||||||
Stock Options(3) | 10,101,000 | 10,101,000 | 10,101,000 | 10,101,000 | — | |||||||||||
Douglas A. Cifu | ||||||||||||||||
Severance | 2,344,562 | (1) | 2,556,891 | (2) | 2,344,562 | (1) | 2,556,891 | (2) | — | |||||||
Stock Options(3) | 1,456,000 | 1,456,000 | 1,456,000 | 1,456,000 | — | |||||||||||
Joseph Molluso | ||||||||||||||||
Severance | — | — | — | — | — | |||||||||||
Stock Options | — | — | — | — | — | |||||||||||
Virtu Employee Holdco Common Units | $ | 4,644,943 | (4) | — | — | — | $ | 4,644,943 | (4) | |||||||
Venu Palaparthi | ||||||||||||||||
Severance | — | — | — | — | — | |||||||||||
Stock Options | — | — | — | — | — |
| 36 | | | 2021 Proxy Statement | |
Name | | | Death, Disability, Termination Without Cause or for Good Reason ($) | | | Death, Disability, Termination Without Cause or for Good Reason 60 Days Prior to or 24 Months Following a Change in Control ($) | | | Non-Renewal by the Company ($) | | | Non-Renewal by the Company 60 Days Prior to or 24 Months Following a Change in Control ($) | | | Resignation without Good Reason | | |||||||||||||||
Douglas A. Cifu | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Severance | | | | | 2,155,068(1) | | | | | | 11,781,096(2) | | | | | | 2,155,068(1) | | | | | | 11,781,096(2) | | | | | | — | | |
Restricted Stock | | | | | 7,551,000(3) | | | | | | 7,551,000(3) | | | | | | 7,551,000(3) | | | | | | 7,551,000(3) | | | | | | — | | |
Stock Options | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Joseph Molluso | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Severance | | | | | 1,339,041(4) | | | | | | 5,799,658(5) | | | | | | 1,339,041(4) | | | | | | 5,799,658(5) | | | | | | | | |
Restricted Stock & RSUs | | | | | 5,686,524(6) | | | | | | 5,686,524(6) | | | | | | 5,686,524(6) | | | | | | 5,686,524(6) | | | | | | | | |
Stock Options | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | |
Brett Fairclough | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Severance | | | | | 1,814,795(7) | | | | | | 5,336,712(8) | | | | | | 1,814,795(7) | | | | | | 5,336,712(8) | | | | | | | | |
Restricted Stock | | | | | 2,517,000(9) | | | | | | 2,517,000(9) | | | | | | 2,517,000(9) | | | | | | 2,517,000(9) | | | | | | | | |
Stock Options | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | |
Sean Galvin | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Severance | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | |
Restricted Stock | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | |
Stock Options | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | |
Stephen Cavoli | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Severance | | | | | 1,239,795(10) | | | | | | 4,661,712(11) | | | | | | 1,239,795(10) | | | | | | 4,661,712(11) | | | | | | | | |
Restricted Stock & RSUs | | | | | 2,517,000(12) | | | | | | 2,517,000(12) | | | | | | 2,517,000(12) | | | | | | 2,517,000(12) | | | | | | | | |
Stock Options | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | |
Alexander M. Ioffe | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Severance | | | | | 575,000(13) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
RSUs | | | | | 3,119,184(14) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Stock Options | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| 2021 Proxy Statement | | | 37 | |
| 38 | | | 2021 Proxy Statement | |
| 2021 Proxy Statement | | | 39 | |
Additionally, we have engaged Mr. Abizaid to provide leadership consulting services from time to time for specified projects globally, and Mr. Abizaid has provided these services in each of four global offices to our employees. We compensate Mr. Abizaid at a base rate of $5,000 per day for such services and also reimburse him for travel and other expenses incurred in connection with these engagements.
$225,000.
Name | | | Fees Earned or Paid in Cash ($)(1) | | | Equity Award(s)(2)(3) | | | All Other Compensation ($) | | | Total ($) | | ||||||||||||
Douglas A. Cifu | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
William F. Cruger, Jr | | | | | 100,000 | | | | | | 135,000 | | | | | | — | | | | | | 235,000 | | |
Virginia Gambale(4) | | | | | 70,521 | | | | | | 58,000 | | | | | | — | | | | | | 128,521 | | |
Joseph J. Grano, Jr. | | | | | 85,000 | | | | | | 135,000 | | | | | | — | | | | | | 220,000 | | |
Robert Greifeld | | | | | 240,000 | | | | | | 135,000 | | | | | | — | | | | | | 375,000 | | |
Glenn Hutchins | | | | | 95,000 | | | | | | 135,000 | | | | | | — | | | | | | 230,000 | | |
John D. Nixon | | | | | 102,500 | | | | | | 135,000 | | | | | | — | | | | | | 237,500 | | |
Christopher C. Quick | | | | | 92,500 | | | | | | 135,000 | | | | | | — | | | | | | 227,500 | | |
John F. (Jack) Sandner | | | | | 92,500 | | | | | | 135,000 | | | | | | — | | | | | | 227,500 | | |
David Urban | | | | | 82,500 | | | | | | 135,000 | | | | | | — | | | | | | 217,500 | | |
Michael T. Viola | | | | | 90,000 | | | | | | 135,000 | | | | | | — | | | | | | 225,000 | | |
Vincent Viola | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Name(1) | Fees Earned or Paid in Cash($)(2) | Equity Awards($)(3)(4) | All Other Compensation($ | Total($) | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
John P. Abizaid | 56,371 | 122,168 | 71,688 | (5) | 250,227 | ||||||||
Michael Bingle | — | — | — | — | |||||||||
Douglas A. Cifu | — | — | — | — | |||||||||
William F. Cruger, Jr. | 60,941 | 169,154 | — | 230,095 | |||||||||
John D. Nixon | 45,706 | 122,168 | 167,874 | ||||||||||
Joseph Osnoss | — | — | — | — | |||||||||
John F. (Jack) Sandner | 60,941 | 122,168 | — | 183,109 | |||||||||
Vincent Viola | — | — | — | — |
| 40 | | | 2021 Proxy Statement | |
| The board of directors recommends that you vote FOR the ratification of PricewaterhouseCoopers LLP as our independent auditor for the fiscal year ending December 31, 2021. | |
| 2021 Proxy Statement | | | 41 | |
| | | 2020 | | | 2019 | | ||||||
Audit fees | | | | $ | 6,482,647 | | | | | $ | 6,798,303 | | |
Audit-related fees | | | | $ | 693,833 | | | | | $ | 410,970 | | |
Tax fees | | | | $ | 1,644,556 | | | | | $ | 1,468,232 | | |
All other fees | | | | | — | | | | | | — | | |
Total | | | | $ | 8,821,037 | | | | | $ | 8,677,505 | | |
| 42 | | | 2021 Proxy Statement | |
| 2021 Proxy Statement | | | 43 | |
| 44 | | | 2021 Proxy Statement | |
| 2021 Proxy Statement | | | 45 | |
| | | Class A Common Stock (on a fully exchanged and converted basis) | | | Class B Common Stock (on a fully exchanged and converted basis)(1) | | | Combined Voting Power(2) | | |||||||||||||||||||||
| | | Number | | | Percentage | | | Number | | | Percentage | | | Percentage | | |||||||||||||||
| | | As of April 13, 2021 (unless otherwise stated in the footnotes below) | | |||||||||||||||||||||||||||
Name of Beneficial Owner | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
5% Equity holders | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
TJMT Holdings LLC(3) | | | | | 63,308,420 | | | | | | 32.8% | | | | | | 60,091,740 | | | | | | 100% | | | | | | 81.9% | | |
Virtu Employee Holdco LLC(4) | | | | | 5,006,801 | | | | | | 2.6% | | | | | | — | | | | | | — | | | | | | * | | |
Funds affiliated with Havelock Fund Investments Pte Ltd.(5) | | | | | 11,380,503 | | | | | | 5.9% | | | | | | — | | | | | | — | | | | | | 2.3% | | |
FMR LLC(6) | | | | | 11,050,415 | | | | | | 5.7% | | | | | | — | | | | | | — | | | | | | * | | |
The Vanguard Group(7) | | | | | 12,499,628 | | | | | | 6.5% | | | | | | — | | | | | | — | | | | | | * | | |
Ordinal Ventures, LLC (f/k/a North Island Ventures, LLC)(8) | | | | | 21,395,041 | | | | | | 11.1% | | | | | | — | | | | | | — | | | | | | 5.5% | | |
Directors and Executive Officers | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Vincent Viola(3)(4) | | | | | 69,008,971 | | | | | | 35.8% | | | | | | 60,091,740 | | | | | | 100% | | | | | | 83.4% | | |
Douglas A. Cifu(9) | | | | | 4,415,384 | | | | | | 2.3% | | | | | | — | | | | | | — | | | | | | * | | |
Stephen Cavoli | | | | | 119,979 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Sean Galvin | | | | | — | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Brett Fairclough(10) | | | | | 163,910 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Joseph Molluso | | | | | 187,836 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Alexander M. Ioffe | | | | | 10,737 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
William F. Cruger, Jr.(10) | | | | | 38,275 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Virginia Gambale | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Joseph J. Grano, Jr. | | | | | 6,325 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Robert Greifeld(9) | | | | | 21,413,211 | | | | | | 11.1% | | | | | | — | | | | | | — | | | | | | 2.9% | | |
Glenn Hutchins(9) | | | | | 21,413,211 | | | | | | 11.1% | | | | | | — | | | | | | — | | | | | | 2.9% | | |
John D. Nixon | | | | | 31,217 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Christopher C. Quick | | | | | 25,307 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
David J. Urban | | | | | 9,150 | | | | | | * | | | | | | — | | | | | | — | | | | | | * | | |
Michael T. Viola(3) | | | | | 68,403,883 | | | | | | 35.4% | | | | | | 60,091,740 | | | | | | 100% | | | | | | 83.3% | | |
All directors and executive officers as a group (16 persons) | | | | | 95,463,575 | | | | | | 49.5% | | | | | | 60,091,740 | | | | | | 100% | | | | | | 87.0% | | |
| Class A Common Stock (on a fully exchanged and converted basis) | Class B Common Stock (on a fully exchanged and converted basis)(1) | Combined Voting Power(2) | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Number | Percentage | Number | Percentage | Percentage | |||||||||||
| As of April 22, 2016 | |||||||||||||||
Name of Beneficial Owner | ||||||||||||||||
5% Equityholders | ||||||||||||||||
TJMT Holdings LLC(3) | 79,610,490 | 57.4 | 79,610,490 | 100 | 93.1 | |||||||||||
Virtu Employee Holdco LLC(4) | 14,747,877 | 10.6 | — | — | 1.7 | |||||||||||
Havelock Fund Investments Pte Ltd(5) | 12,317,682 | 8.9 | — | — | 1.4 | |||||||||||
AllianceBernstein L.P.(6) | 2,415,301 | 1.7 | — | — | * | |||||||||||
William Blair Investment Management, LLC(7) | 2,282,248 | 1.6 | — | — | * | |||||||||||
Directors and Executive Officers | ||||||||||||||||
Vincent Viola(3)(4) | 95,252,117 | 68.3 | 79,610,490 | 100 | 94.8 | |||||||||||
Douglas A. Cifu(8) | 3,750,546 | 2.7 | — | — | * | |||||||||||
Joseph Molluso(9)(10) | 496,186 | * | — | — | * | |||||||||||
John P. Abizaid(9)(10) | 14,240 | * | — | — | * | |||||||||||
William F. Cruger, Jr.(9)(10) | 12,968 | * | — | — | * | |||||||||||
Christopher C. Quick | — | — | — | — | * | |||||||||||
John D. Nixon(10) | 5,910 | * | — | — | * | |||||||||||
Venu Palaparthi(9)(10) | 72,175 | * | — | — | * | |||||||||||
John F. (Jack) Sandner(9)(10) | 14,240 | * | — | — | * | |||||||||||
Michael T. Viola(3) | 79,681,132 | 57.4 | — | — | 93.1 | |||||||||||
All directors and executive officers as a group (10 persons) | 99,077,278 | 71.0 | 79,610,490 | 100 | 95.3 |
| 46 | | | 2021 Proxy Statement | |
| 2021 Proxy Statement | | | 47 | |
Section 16(a) of the Exchange Act requires our directors, executive officersCertain Relationships and persons who own more than 10% of a registered class of the Company's equity securities (collectively, the "Reporting Persons"), to file with the SEC initial reports of stock ownership and reports of changes in ownership of common stock and other equity securities of the Company. All Reporting Persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. Based solely on our review of the copies of such forms received by us and upon written representations of the Reporting Persons received by us, we believe that there has been compliance with all Section 16(a) filing requirements applicable to such Reporting Persons with respect to fiscal 2015, except that (i) Form 4s for Joseph Molluso, Venu Palaparthi and Michael T. Viola reporting the Company's grant of restricted stock units on December 31, 2015 were filed on January 6, 2016 due to an administrative oversight; and (ii) a Form 4 for Virtu Employee Holdco reporting the repurchase of 57,106 shares of Class C common stock and corresponding Virtu Financial Units was filed late on March 22, 2016 due to an administrative oversight.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Related Party Transactions Policies and Procedures
Reorganization Agreement and Common Stock Subscription Agreement
In connection with the reorganization transactions completed on April 15, 2015, we entered into a reorganization agreement and related agreements with Virtu Financial, four of our wholly owned subsidiaries, and each of the Virtu Members.
The table below sets forth the consideration in Virtu Financial Units, Class A common stock, Class B common stock, Class C common stock and Class D common stock received by certain of our 5% equityholders, directors and executive officers received in the reorganization transactions:
Name | Virtu Financial Units Issued in the Reorganization Transactions | Class A Common Stock Issued in the Reorganization Transactions | Class B Common Stock Issued in the Reorganization Transactions | Class C Common Stock Issued in the Reorganization Transactions | Class D Common Stock Issued in the Reorganization Transactions | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
TJMT Holdings LLC | 79,610,490 | — | — | — | 79,610,490 | |||||||||||
SLP III EW Feeder I, L.P.(1) | — | 6,445,982 | — | — | — | |||||||||||
Silver Lake Technology Associates III L.P.(1) | 610,000 | — | — | 610,000 | — | |||||||||||
SLP Virtu Investors LLC(1) | 7,353,188 | — | — | 7,353,188 | — | |||||||||||
Havelock Fund Investments Pte Ltd.(2) | — | 12,317,682 | — | — | — | |||||||||||
Virtu Employee Holdco LLC | 16,254,370 | — | — | 16,254,370 | — | |||||||||||
Employee Trust(3) | 592,806 | — | — | 592,806 | — | |||||||||||
Vincent Viola | — | — | — | — | — | |||||||||||
Douglas A. Cifu(4) | 2,830,742 | — | — | 2,830,742 | — | |||||||||||
Cifu Family Trust | 819,804 | — | — | 819,804 | — | |||||||||||
Joseph Molluso | 473,907 | — | — | 473,907 | — | |||||||||||
John P. Abizaid | 7,661 | — | — | 7,661 | — | |||||||||||
Michael Bingle(5) | — | — | — | — | — | |||||||||||
William F. Cruger, Jr. | 6,389 | — | — | 6,389 | — | |||||||||||
Joseph Osnoss(6) | — | — | — | — | — | |||||||||||
John F. (Jack) Sandner | 7,661 | — | — | 7,661 | — |
Purchases from Equityholders
Immediately following our initial public offering, we used approximately $277.2 million of the net proceeds from our initial public offering to repurchase 3,470,724 shares of Class A common stock from an affiliate of Silver Lake Partners and 12,214,224 Virtu Financial Units and corresponding shares of Class C common stock from certain other Virtu Members, including 4,862,609 Virtu Financial Units and corresponding shares of Class C common stock from affiliates of Silver Lake Partners and 7,351,615 Virtu Financial Units and corresponding shares of Class C common stock from certain former employees, other investors and Virtu Employee Holdco on behalf of certain employees.
The following table sets forth the cash proceeds that certain of our 5% equityholders, directors and executive officers received from the purchase by us of shares of Class A common stock or Virtu Financial Units and corresponding shares of Class C common stock with the proceeds from our initial public offering:
Name | Number of shares of Class A common stock or Virtu Financial Units and corresponding shares of Class C common stock sold to us | Cash proceeds ($) | |||||
---|---|---|---|---|---|---|---|
SLP Virtu Investors, LLC(1) | 4,252,609 | 75,143,601 | |||||
SLP III EW Feeder I, L.P.(1) | 3,470,724 | 61,327,693 | |||||
Virtu Employee Holdco LLC on behalf of certain members | 1,395,644 | 24,661,029 | |||||
Silver Lake Technology Associates III, L.P.(1) | 610,000 | 10,778,700 |
Amended and Restated Virtu Financial Limited Liability Company Agreement
Following the reorganization transactions, and inAgreement (as it may be amended from time to time).
| 48 | | | 2021 Proxy Statement | |
and local income tax rate prescribed for an individual or corporate resident in New York, New York (taking into account the non-deductibility of certain expenses and the character of our income).
, or another rate as determined by the Company in its discretion for one or more holders.
| 2021 Proxy Statement | | | 49 | |
Stockholders Agreement
Prior to the consummation of our initial public offering, we entered into a Stockholders Agreement (the "Stockholders Agreement") with the Founder Member and certain affiliates of Silver Lake Partners. Under the Stockholders Agreement, certain affiliates of Silver Lake Partners were entitled to nominate one Class III director for election to our board of directors so long as certain affiliates of Silver Lake Partners continued to own at least 30% of the Class A common stock held by affiliates of Silver Lake Partners immediately prior to our initial public offering (calculated assuming that all of their Virtu Financial Units and corresponding shares of Class C common stock are exchanged for Class A common stock). Following our initial public offering in April 2015, certain affiliates of Silver Lake Partners no longer had the right to nominate any director to our board of directors.
The Stockholders Agreement also provided for the reimbursement of Mr. Viola's, the Founder Member's and certain affiliates of Silver Lake Partners' out-of-pocket expenses incurred or accrued in connection with the reorganization transactions and our initial public offering (other than taxes and underwriting discounts and commissions), up to a maximum amount of $850,000 for Mr. Viola and the Founder Member and $850,000 for certain affiliates of Silver Lake Partners. In April 2015, we
reimbursed $850,000 for certain affiliates of Silver Lake Partners for out-of-pocket expenses incurred or accrued in connection with the reorganization transactions and our initial public offering.
In connection with the reorganization transactions, we, Virtu Financial, two of our wholly owned subsidiaries, and certain affiliates of Temasek entered into a merger agreement, which provides for the reimbursement of Temasek's out-of-pocket expenses incurred or accrued in connection with the reorganization transactions and our initial public offering (other than taxes and underwriting discounts and commissions), subject to an agreed upon cap. In April 2015, we reimbursed $350,000 for certain affiliates of Temasek for out-of-pocket expenses incurred or accrued in connection with the reorganization transactions and our initial public offering.
Registration Rights Agreement
Prior to the consummation of our initial public offering, we entered into a Registration Rights Agreement (the "Registration Rights Agreement") with the Virtu Members.
Subject to several exceptions, including underwriter cutbacks and our right to defer a demand registration under certain circumstances, the Founder Member, certain affiliates of Silver Lake Partners and an affiliate of Temasek may require that we register for public resale under the Securities Act all shares of common stock constituting registrable securities that they request be registered at any time following our initial public offering so long as the securities requested to be registered in each registration statement have an aggregate estimated market value of least $50 million. Under the Registration Rights Agreement, we are not obligated to effectuate more than seven demand registrations for the Founder Member, or more than two demand registrations for the affiliates of Silver Lake Partners or more than two demand registrations for the affiliate of Temasek. If we become eligible to register the sale of our securities on Form S-3 under the Securities Act, the Founder Member, certain affiliates of Silver Lake Partners and the affiliate of Temasek have the right to require us to register the sale of the registrable securities held by them on Form S-3, subject to offering size and other restrictions.
If the Founder Member, certain affiliates of Silver Lake Partners or an affiliate of Temasek make a request for registration, the non-requesting parties to the Registration Rights Agreement are entitled to customary piggyback registration rights in connection with the request, and if the request is for an underwritten offering, such piggyback registration rights are subject to underwriter cutback provisions, with priority first for registration of shares going first to the Founder Member, certain affiliates of Silver Lake Partners or an affiliate of Temasek on a pro rata basis (provided that (a) for one year after the completion of our initial public offering, such priority will be allocated 75% to the certain affiliates of Silver Lake Partners or an affiliate of Temasek (to be allocated 45% to the affiliates of Silver Lake Partners and 30% to the affiliate of Temasek if they both elect to have their securities included in such registration) and 25% to the Founder Member until any of the affiliates of Silver Lake Partners, the affiliate of Temasek or the Founder Member have included all their securities sought to be included in such registration and (b) from the one year anniversary of the completion of our initial public offering until three demand registrations have been completed, such priority will be allocated 50% to the affiliates of Silver Lake and the affiliate of Temasek (to be allocated 30% to the affiliates of Silver Lake and 20% to the affiliate of Temasek if they both elect to have their securities included in such registration) and 50% to the Founder Member until any of the affiliates of Silver Lake, the affiliate of Temasek or the Founder Member have included all their securities sought to be included in such registration), second to the other parties with piggyback registration rights under the Registration Rights Agreement and third to other persons with a contractual right to include securities in the registration. In addition, the parties to the Registration Rights Agreement are entitled to piggyback registration rights with respect to any registration initiated by us or another stockholder, and if any such registration is in the form of an underwritten offering, such piggyback registration rights are subject to customary cutback provisions, with priority for registration of shares going first to us or such other stockholder, as applicable, second to the Founder Member, the affiliates of Silver Lake Partners
and the affiliate of Temasek as described above, third to the other parties, if any, with piggyback registration rights under the Registration Rights Agreement and fourth to other persons with a contractual right to include securities in the registration.
In addition, we undertook in the Registration Rights Agreement to file a registration statement as soon as we become eligible to register the sale of our securities on Form S-3 under the Securities Act and to use commercially reasonable efforts to have the registration statement declared effective as soon as practicable and to remain effective in order to register the shares of Class A common stock issuable upon the exchange of Virtu Financial Units, together with shares of Class C common stock, by Virtu Employee Holdco, the Employee Trust, certain other Virtu Members, including Mr. Cifu, and certain transferees thereof from time to time. Alternatively, under certain circumstances, we may instead file a shelf registration statement on Form S-3 to permit the resale of the shares of Class A common stock held by such persons. For so long as any such registration statement is effective and usable, neither Virtu Employee Holdco, the Employee Trust nor transferee thereof will have the piggyback registration rights described in the immediately preceding paragraph.
In connection with the transfer of their registrable securities, the parties to the Registration Rights Agreement may assign certain of their respective rights under the Registration Rights Agreement under certain circumstances. In connection with the registrations described above, we will indemnify any selling stockholders and we will bear all fees, costs and expenses (except underwriting commissions and discounts and fees and expenses of financial advisors of the selling stockholders and their internal and similar costs).
As a result of the exercise of demand registration rights by certain affiliates of Silver Lake Partners under the Registration Rights Agreement, in November 2015, a public offering of 6,473,371 shares of the Company's Class A common stock was completed by the Company and certain selling stockholders affiliated with Silver Lake Partners. The selling stockholders sold 6,075,837 shares of Class A common stock and the Company sold 397,534 shares of Class A common stock at a price to the public of $22.15 per share. The Company incurred approximately $1 million in expenses and costs in connection with the secondary offering.
Tax Receivable Agreements
affiliate of Temasek, and another affiliate of
| 50 | | | 2021 Proxy Statement | |
value of future payments (calculated using a discount rate equal to the lesser of 6.5% or LIBOR plus 100 basis points, which may differ from our, or a potential acquirer's,acquirer’s, then-current cost of capital) under the tax receivable agreement, which payment would be based on certain assumptions, including those relating to our future taxable income. In these situations, our obligations under the tax receivable agreements could have a substantial negative impact on our, or a potential acquirer's,acquirer’s, liquidity and could have the effect of delaying, deferring, modifying or preventing certain mergers, asset sales, other forms of business combinations or other changes of control. These provisions of the tax receivable agreements may result in situations where thecertain direct or indirect equity holders of Virtu MembersFinancial have interests that differ from or are in addition to those of our other shareholders.stockholders. In addition, we could be required
| 2021 Proxy Statement | | | 51 | |
2021, an affiliate of Temasek received $3.6 million, the Founder Member received $4.2 million and members and former members of Virtu Employee Holdco LLC received $2.3 million.
| 52 | | | 2021 Proxy Statement | |
| 2021 Proxy Statement | | | 53 | |
In the ordinary course of business, we purchase and lease computer equipment and maintenance and support
| 54 | | | 2021 Proxy Statement | |
Similarly, inRelated Party Transactions
In the ordinary course of business,Investment Technology Group, Inc., the Company purchases telecommunications services from Singapore Telecommunications Limited ("Singtel"makes commission-sharing arrangement (“CSA”) payments to affiliates of DBS Group Holdings (“DBS”). Temasek and its affiliates have a significant ownership interest in Singtel. During the year ended December 31, 2015, theDBS. The Company paid $0.1made payments of $0.2 million to Singtel for these purchases.
We have employed Michael T. Viola, the son of our Founder and Executive Chairman, as a trader. Michael T. Viola became a member of our board of directors in April 2016. We paid Mr. Viola approximately $0.8 million in compensationDBS for the year ended December 31, 2015. Michael T. Viola was also granted 60,0002020.
| 2021 Proxy Statement | | | 55 | |
| 56 | | | 2021 Proxy Statement | |
| 2021 Proxy Statement | | | 57 | |
| 58 | | | 2021 Proxy Statement | |
Additionally, in 2015 we entered intoClass C common stock have one vote per share. The Class B common stock and the Class D common stock have 10 votes per share. Shares of our common stock generally vote together as a sublease arrangement withsingle class on all matters submitted to a vote of our stockholders.
Our Audit Committeeto elect four directors to our board of directors, each to serve as a Class III director for a term of three years expiring at the annual meeting of stockholders to be held in 2024 and until such director’s successor has appointed Deloitte & Touchebeen duly elected and qualified;
| 2021 Proxy Statement | | | 59 | |
| 60 | | | 2021 Proxy Statement | |
Representativesyou return your signed voting instruction form but do not indicate your voting preferences, please see “How are abstentions and broker non-votes counted?” regarding whether your broker, bank or other holder of Deloitte & Touche LLPrecord may vote your uninstructed shares on each proposal.
The board of directorsthe Company recommends that you vote FORyour shares in advance, so that your vote will be counted if you later decide not to attend the ratificationAnnual Meeting.
| 2021 Proxy Statement | | | 61 | |
The policyIf your shares are held by a brokerage firm or bank and you prefer to receive separate copies of our Audit Committee is to review in advance, and pre-approve all audit or non-audit services to be provided by the Company's independent or other registered public accounting firm and to approve all related fees and other terms of engagement.
All of the audit-related, tax and all other services provided by Deloitte & Touche LLP to us subsequent toproxy statement, our initial public offering in 2015 were approved byannual report including our Audit Committee. All non-audit services provided subsequent to our initial public offering in 2015 were reviewed with the Audit Committee, which in each case concluded that the provision of such services by Deloitte & Touche LLP was compatible with the maintenance of that firm's independence in the conduct of its auditing functions.
Deloitte & Touche LLP Fees
The following table presents aggregate fees billed to us for services rendered by Deloitte & Touche LLPForm 10-K for the fiscal yearsyear ended December 31, 20152020 and/or our Notice of Internet Availability of Proxy Materials, either now or in the future, please contact your brokerage firm or bank. If your brokerage firm or bank is unable or unwilling to assist you, please contact our Investor Relations department at our executive office by calling (212) 418-0100. Stockholders sharing an address who are receiving multiple copies of the Proxy Materials and/or our Notice of Internet Availability of Proxy Materials may request to receive a single copy of the Proxy Materials and/or our Notice of Internet Availability of Proxy Materials, either now or in the future, by contacting our Investor Relations department at our executive office by calling (212) 418-0100.
| 2015 | 2014 | |||||
---|---|---|---|---|---|---|---|
Audit fees | $ | 2,675,000 | $ | 3,052,795 | |||
Audit-related fees | 259,000 | 1,118,000 | |||||
Tax fees | $ | 640,000 | 661,000 | ||||
All other fees | — | — | |||||
Total | $ | 3,574,000 | $ | 4,831,795 |
| 62 | | | 2021 Proxy Statement | |
This category includes the aggregate fees during 2015 and 2014 for audit services provided by
Audit-Related Fees
This category includes the aggregate fees during 201510-Q and 2014 for services related to the performance of the audits and reviews described in the preceding paragraph thatour Current Reports on Form 8-K. These filings are not included in the Audit Fees category, including fees associated with (i) accounting consultation and due diligence
related to certain transactions, (ii) services rendered in connection with our registration statements and (iii) the preparation and review of documents related to our securities offerings.
Tax Fees
This category includes the aggregate fees during 2015 and 2014 for professional tax services provided by the independent registered public accounting firm or its affiliates, including for tax compliance and tax advice.
The following is the report of the Audit Committee with respect to our audited financial statements for the year ended December 31, 2015. The information contained in this report shall not be deemed "soliciting material" or otherwise considered "filed" with the SEC, and such information shall not be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that we specifically incorporate such information by reference in such filing.
The Audit Committee hereby reports as follows:
1. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal accounting controls. The Audit Committee, in its oversight role, has reviewed and discussed the audited financial statements with the Company's management.
2. The Audit Committee has discussed with the Company's independent registered public accounting firm the overall scope of, and plans for, their audit. The Audit Committee has met with the independent registered public accounting firm to discuss the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU Section 380), as adopted by the Public Company Accounting Oversight Board (United States) in Rule 3200T regarding "Communication with Audit Committees.", as may be modified or supplemented.
3. The Audit Committee has received the written disclosures and the letter from Deloitte & Touche LLP required by applicable requirements of the PCAOB regarding Deloitte & Touche LLP's communications with the Audit Committee concerning independence, and has discussed with Deloitte & Touche LLP its independence. The Audit Committee has concluded that Deloitte & Touche LLP's provision of audit and non-audit services to the Company and its affiliates is compatible with Deloitte & Touche LLP's independence.
4. The Audit Committee has an established charter outlining the practices it follows. The charter is available on the Company'sInvestor Relations page of our corporate website at: http://ir.virtu.com/corporate-governance.cfm.
5. Based on the review and discussions referred to in paragraphs (1) through (4) above, the Audit Committee recommended to the Company's boardat www.virtu.com. Copies of directors, and the board has approved, that the audited financial statements be included in the Company'sour Annual Report on Form 10-K for the fiscal year ended December 31, 2015, for filing2020, including financial statements and schedules and amendments thereto filed with the Securities and Exchange Commission (the "Commission").
| 2021 Proxy Statement | |
| | |
63 |
aNNUal meeTiNG of sTocKholdeRs of viRTU fiNaNcial, June 14, 2016 iNc. iNTeRNeT - Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone.2, 2021. Have your proxy card availablecardin hand when you access the web page. TelephoNesite and follow the instructions to obtainyour records and to create an electronic voting instruction form.During The Meeting - Call toll-free 1-800-pRoXies (1-800-776-9437)Go to www.virtualshareholdermeeting.com/VIRT2021You may attend the meeting via the Internet and vote during the meeting. Havethe information that is printed in the United States or 1-718-921-8500 from foreign countries frombox marked by the arrow on your Noticeof Internet Availability of Proxy Materials available and follow the instructions.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone and follow theto transmit your voting instructions. Vote by11:59 P.M. ET on June 2, 2021. Have your proxy card availablein hand when you call. Vote online/phone until 11:59 P.M. ESTcalland then follow the day before the meeting. mail - Sign,instructions.VOTE BY MAILMark, sign and date and mail your proxy card and return it in the envelopepostage-paidenvelope we have provided or return it to Vote Processing, c/o Broadridge,51 Mercedes Way, Edgewood, NY 11717.For Against AbstainVIRTU FINANCIAL, INC.01) Virginia Gambale02) John D. Nixon03) David J. Urban04) Michael T. Viola1. Election of DirectorsNominees:The Board of Directors recommends you vote FORthe following:Please sign exactly as soonyour name(s) appear(s) hereon. When signing as possible. iN peRsoN - You may vote your sharesattorney, executor,administrator, or other fiduciary, please give full title as such. Joint owners should each signpersonally. All holders must sign. If a corporation or partnership, please sign in personfull corporateor partnership name by attending the Annual Meeting. Go GReeN - e-Consent makes it easyan authorized officer.2. Advisory Vote to go paperless. With e-Consent, you can quickly access your proxy materials, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.comApprove Compensation of Named Executive Officers.3. Proposal to enjoy online access. Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. 20330000000000001000 8 061416 Proposal 1 and FOR Proposal 2, the ratification ofratify the appointment of Deloitte & Touche DecemberPricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for fiscal year endingDecember 31, 2016.2021.The Board of Directors recommends you vote FOR the following proposals:NOTE: In their discretion, the proxies are authorized to vote uponon such other that changes to the registered name(s) on the account may not be submitted Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. The BoaRd of diRecToRs RecommeNds a voTe "foR" The elecTioN of diRecToRs aNd "foR" pRoposal 2. please siGN, daTe aNd ReTURN pRompTlY iN The eNclosed eNvelope. please maRK YoUR voTe iN BlUe oR BlacK iNK as shoWN heRe x 1. To elect three directors NomiNees: FOR ALL NOMINEESO William F. Cruger, Jr. O Christopher C. Quick WITHHOLD AUTHORITYO Vincent Viola FOR ALL NOMINEES FOR ALL EXCEPT (See instructions below) INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: FOR AGAINST ABSTAIN 2. The ratification of the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ended December 31, 2016. The board of directors recommends that you vote FOR each of the nominees listed in LLP as the independent registered public accounting firm for the fiscal year ended business as may properly come before the Annual Meeting andor any postponement(s) orand adjournment(s) thereof. If you vote your proxy by Internet or telephone, you do NOT need to mail back your proxy card. Your Internet or telephone vote authorizes
- 0 VIRTUwww.proxyvote.com.VIRTU FINANCIAL, INC. aNNUal meeTiNGINC.Annual Meeting of sTocKholdeRs – JUNe 14, 2016 ThisStockholdersJune 3, 2021 9:00 AM ETThis proxy is solicited by the boardBoard of directors for use at the virtu financial, inc. annual meeting of stockholders on June 14, 2016, or any postponement(s) or adjournment(s) thereof. The undersigned, having read the Notice of Annual Meeting of Stockholders and Proxy Statement, dated April 29, 2016, receipt of which is acknowledgedDirectorsThe stockholder(s) hereby does hereby appointappoint(s) Douglas A. Cifu and Joseph Molluso the attorneys andAlex Ioffe, or either of them, as proxies, of the undersigned, each with full power of substitutionthepower to appoint his substitute, and revocation, forhereby authorize(s) them to represent and in the name of the undersigned, to vote, and act at the Virtu Financial, Inc. Annual Meetingas designated on thereverse side of Stockholders to be held on the 29th floor of Virtu Financial, Inc., 900 Third Avenue, New York, NY 10022-0100, on June 14, 2016 at 9:00 A.M. EST, and at any postponement(s) or adjournment(s) thereof, with respect tothis ballot, all of the shares of common stock of VIRTU FINANCIAL, INC. that the undersigned, standing in the name of the undersigned or with respect to which the undersigned isstockholder(s)is/are entitled to vote or act, with all of the powers which the undersigned would possess if personally present and acting as set forth on the reverse. These proxies are authorized to vote and act in their discretion upon any other business that may properly come beforeat the Annual Meeting of Stockholders to be held at 9:00 AM, ET on June 3, 2021 heldvirtually at www.virtualshareholdermeeting.com/VIRT2021, and any adjournment or any postponement(s) or adjournment(s) thereof. All capitalized terms used in this proxy shall have the same meanings assigned to them in the Proxy Statement, dated April 29, 2016. Thispostponement thereof.This proxy, when properly executed, and returned in a timely manner, will be voted in the manner directed on the reverse side. ifherein. If no direction issuch directionis made, this proxy will be voted asin accordance with the boardBoard of directors recommends to the extent permitted by delaware law. (continuedDirectors' recommendations.Continued and to be signed on the reverse side.) 14475 1.1side