| (7) | Joined the Annual Meeting. We expect all current directors will attend the Annual Meeting.Committees of the Board
Overview
Our Board has the following six standing committees (each, a “Committee” and collectively, the “Committees”):
 the Audit Committee,
the Compensation Committee,
the Executive Committee,
the Finance and Strategy Committee,
the Nominating and Governance Committee; and
the Risk Committee.
Other than the members of the Executive Committee required to be on such Committee pursuant to our Bylaws, each of the members of the Committees was recommended by the Nominating and Governance Committee for approval by the Board for service on that Committee. Each of the
| Cboe Global Markets 2019 Proxy Statement
| 15
August 14, 2020. |
Committees has a charter, which is available on the Corporate Governance page of our Investor Relations section of our website at: http://ir.Cboe.com.
The following table is a listing of the composition of our standing Committees during 2018 and as of March 19, 2019, including the number of meetings of each Committee during 2018.
| | | | | | | | Finance and | | Nominating and | | | Director | | Audit | | Compensation | | Executive | | Strategy | | Governance | | Risk | Number of meetings | | 8 | | 6 | | — | | 5 | | 5 | | 5 | Edward T. Tilly(1) | | | | | | | | 
| | | | | | | | | | | Eugene S. Sunshine(1) | | | | | 
| (2) | |
| | | | | |
| (2,3) | | | | James R. Boris(4) | | | | | | | |
| (2) | | | | | | | | | | Frank E. English, Jr. | | | | |
| | | | | |
| | |
| (5) | | | | William M. Farrow, III | |
| | | | | |
| (5) | | | | | | | |
| (6) | Edward J. Fitzpatrick | |
| (2,7) | |
| (8) | |
| | |
| (2) | | | | |
| (5) | Janet P. Froetscher | | | | |
| | | | | | | | |
| (5) | |
| | Jill R. Goodman | | | | | | | |
| (5) | |
| (9) | |
| | | | | Christopher T. Mitchell(4) | | | | | | | | | | |
| (2) | | | | | | | Roderick A. Palmore | | | | | | | |
| | |
| (5) | |
| (3) | |
| (2,6) | James E. Parisi | |
| (5) | |
| (5) | | | | | | | | | | | | | Joseph P. Ratterman | | | | | | | | | | |
| | | | | | | | Michael L. Richter | |
| | | | | | | | | | | | | | |
| | Samuel K. Skinner(4) | | | | |
| (2,8) | |
| (2) | | | | |
| (2) | | | | Jill E. Sommers | | | | | | | | | | |
| (5) | | | | | | | Carole E. Stone | |
| (7) | | | | |
| | |
| (2,9) | |
| | |
| (5) |
= Chair = Member
| (1)
| | The Chairman and Lead Director are both members of the Executive Committee and invited guests to the meetings of each of the other standing Committees.
|
| (2)
| | Stepped down as a member of the Committee on May 17, 2018.
|
| (3)
| | Effective May 17, 2018, Mr. Palmore became Chair of the Nominating and Governance Committee and Mr. Sunshine stepped down as Chair and a member of the Nominating and Governance Committee.
|
| (4)
| | Messrs. Boris, Mitchell and Skinner stepped down as members of the Board and Committees in connection with the 2018 Annual Meeting of Stockholders on May 17, 2018.
|
| (5)
| | Joined the Committee on May 17, 2018.
|
| (6)
| | Effective May 17, 2018, Mr. Farrow became Chair of the Risk Committee and Mr. Palmore stepped down as Chair and a member of the Risk Committee.
|
| (7)
| | Effective May 17, 2018, Ms. Stone became Chair of the Audit Committee and Mr. Fitzpatrick stepped down as Chair and a member of the Audit Committee.
|
| (8)
| | Effective May 17, 2018, Mr. Fitzpatrick became Chair of the Compensation Committee and Mr. Skinner stepped down as Chair and a member of the Compensation Committee.
|
| (9)
| | Effective May 17, 2018, Ms. Goodman became Chair of the Finance and Strategy Committee and Ms. Stone stepped down as Chair and a member of the Finance and Strategy Committee.
|
16
| Cboe Global Markets 2019 Proxy Statement
| |
Audit Committee
The Audit Committee consists of 4 directors, all of whom are independent under BZX and Nasdaq listing rules, as well as under Rule 10A‑3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee consists exclusively of directors who are financially literate. In addition,
| (8) | Effective May 12, 2020, Mr. Parisi has been designated as our audit committee financial expert and meets the SEC definition of that position.The Audit Committee’s responsibilities include:
engaging our independent auditor and overseeing its compensation, work and performance,
reviewing and discussing the annual and quarterly financial statements and related press releases with management and the independent auditor, and
reviewing transactions with related persons for potential conflict of interest situations.
The Audit Committee also meets with our independent auditor in executive session without management present and our independent auditor may communicate directly, as needed, with membersbecame Chair of the Audit Committee and the Board at large.
Compensation Committee
The Compensation Committee consists of 4 directors, all of whom are independent under BZXMs. Stone stepped down as Chair and Nasdaq listing rules. The Compensation Committee has primary responsibility to approve or make recommendations to the Board for:
all elements and amounts of compensation for the executive officers, including any performance goals,
reviewing succession plans relating to the CEO and our other executive officers,
the adoption, amendment and termination of cash and equity-based incentive compensation plans,
approving any employment agreements, severance agreements or change in control agreements with executive officers, and
the level and form of non-employee director compensation and benefits.
Nominating and Governance Committee
Overview
The Nominating and Governance Committee consists of 5 directors, all of whom are independent under BZX and Nasdaq listing rules. The Nominating and Governance Committee’s responsibilities include making recommendations to the Board on:
persons for election as director,
director to serve as Chairmanmember of the Board and anAudit Committee.
|
Audit Committee The Audit Committee consists of 5 directors, all of whom are independent under BZX listing rules, as well as under Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee consists exclusively of directors who are financially literate. In addition, Mr. Parisi has been designated as our audit committee financial expert and meets the SEC definition of that position. The Audit Committee’s responsibilities include:  engaging our independent auditor and overseeing its compensation, work, and performance,
reviewing and discussing the annual and quarterly financial statements and related press releases with management and the independent auditor, and reviewing transactions with related persons for potential conflict of interest situations. The Audit Committee also meets with our independent auditor in executive session without management present and our independent auditor may communicate directly, as needed, with members of the Audit Committee and the Board at large. Compensation Committee The Compensation Committee consists of 4 directors, all of whom are independent under BZX listing rules. The Compensation Committee has primary responsibility to approve or make recommendations to the Board for: all elements and amounts of compensation for the executive officers, including any performance goals, reviewing succession plans relating to the CEO and our other executive officers, the adoption, amendment and termination of cash and equity-based incentive compensation plans, approving any employment agreements, severance agreements, or change in control agreements with executive officers, oversee the policies and strategies relating to talent, leadership, and culture, including diversity and inclusion, and the level and form of non-employee director compensation and benefits. Nominating and Governance Committee Overview The Nominating and Governance Committee consists of 5 directors, all of whom are independent under BZX listing rules. The Nominating and Governance Committee’s responsibilities include making recommendations to the Board on: persons for election as director, to serve as Lead Director, any stockholder proposals and nominations for director,
the appropriate structure, operations and composition of the Board and its Committees,
the Board and Committee annual self-evaluation process, and
the contents of the Corporate Governance Guidelines, Code of Business Conduct and Ethics and other corporate governance policies and programs.
| Cboe Global Markets 2019 Proxy Statement
| 17
|
| Cboe Global Markets 2021 Proxy Statement | 23 |
a director to serve as Chairman of the Board and an independent director to serve as Lead Director, any stockholder proposals and nominations for director, the appropriate structure, operations and composition of the Board and its Committees, the Board and Committee annual self-evaluation process, and the contents of the Corporate Governance Guidelines, Code of Business Conduct and Ethics, and other corporate governance policies and programs. The Nominating and Governance Committee is also responsible for overseeing environmental, social, and governance (“ESG”). For additional information, see “Corporate Governance—Corporate Social Responsibility”. Criteria for Directors We believe that each of the individuals serving on our Board has the necessary skills, qualifications and experiences to address the challenges and opportunities we face. The Nominating and Governance Committee is responsible for considering and recommending to the Board nominees for election as director, including considering each incumbent director’s continued service on the Board. The Committee annually reviews the skills and characteristics required of all directors in the context of the current composition of the Board, our operating requirements, targeted skills and experiences, and the long-term interests of our stockholders. In evaluating incumbent and new potential director candidates, the Committee takes into consideration many factors, including the individual’s educational and professional background, whether the individual has any special experience in a relevant area, personal accomplishments, and cultural experiences. In addition, the Committee may consider such other factors it deems appropriate when conducting its assessment of director candidates. 18
| Cboe Global Markets 2019 Proxy Statement
| |
Annual Board and Committee Self-Evaluations
The Board believes that a robust annual evaluation process is a critical part of its governance practices. The Nominating and Governance Committee is responsible for establishing and overseeing the Board’s and Committees’ annual self-evaluations to determine whether the Board and the Committees are functioning effectively and to identify potential areas of improvement. The annual self-evaluation process includes the following:
Stage in Process
| Board of Directors
| Committees
| Determine Discussion Topics
| Nominating and Governance Committee determines specific topics and subject areas to discuss with each director, such as roles, responsibilities, structure, skills, experience, background, composition and effectiveness
| Nominating and Governance Committee determines and distributes to each Committee a list of specific topics and subject areas to facilitate discussion about each Committee’s roles and responsibilities, structure, charter, policies, composition and effectiveness
| Discussions
| Chair of Nominating and Governance Committee and Lead Director interview each director in one-on-ones to discuss Board’s performance
| Chair of each Committee facilitates discussion of Committee’s performance in executive session and in one-on-ones
| Feedback
| Chair of Nominating and Governance Committee and Lead Director report results of discussions and recommendations to Nominating and Governance Committee for its consideration
| Chair of each Committee reports results of Committee self-evaluation and recommendations to Nominating and Governance Committee for its consideration
| Reviews
| Nominating and Governance Committee reviews results from Board and Committee self-evaluations and provides summary of assessments and recommendations to full Board
Board discusses results and, if necessary, provides additional recommendations
| Feedback Incorporated
| Changes and enhancements, if any, are implemented to governance policies and practices
|
In addition to the annual evaluation process, the Board and Committees meet in regular executive sessions, which provides the directors with opportunities to reflect and provide feedback on an ongoing basis to determine whether the Board and the Committees are functioning effectively and to identify potential areas of improvement.
| Cboe Global Markets 2019 Proxy Statement
| 19
|
Diversity While we do not currently have a formal diversity policy, our Corporate Governance Guidelines provide that the Nominating and Governance Committee will seek to recommend to the Board candidates for director with a diverse range of experiences, qualifications, and skills in order to provide varied insights and competent guidance regarding our operations, with a goal of having a Board that reflects diverse backgrounds, experience, and viewpoints. We believe that we benefit from having directors with a diversity of skills, characteristics, backgrounds, and cultural experiences. Identifying and Evaluating New Directors The Nominating and Governance Committee utilizes a variety of methods to identify, recruit, and evaluate potential new director candidates. The Committee considers various potential candidates for director, considering the criteria discussed above and qualifications of the individual candidate. Board nominees can be identified by current directors, management, third-party professional search firms, stockholders, or other persons. Prior to a potential new director’s nomination, the director candidate is planned to meet separately with the Chairman of the Board, the Chair of the Nominating and Governance Committee, and the independent Lead Director, who will each consider the potential director’s candidacy. New director candidates may also meet separately with other members of the Board. In addition, a background check is completed before a final recommendation is made to the Board. After a review and evaluation of a potential new director based on the criteria discussed above, the Nominating and Governance Committee will decide whether to recommend to the Board the candidate’s appointment as a director or nominee for election as a director, and the Board will decide whether to approve the candidate’s appointment as a director or a nominee. 24 | Cboe Global Markets 2021 Proxy Statement | |
Onboarding New Directors New directors participate in a robust all-day orientation program to familiarize themselves with the company and management. Our orientation program for new directors includes a discussion of a broad range of topics, including the background of the company, the Board and its governance model, subsidiary governance, regulatory oversight, strategy and business operations, financial statements and capital structure, the management team, key industry and competitive factors, the legal and ethical responsibilities of the Board, and other matters crucial to the ability of a new director to fulfill his or her responsibilities. Retirement Our Corporate Governance Guidelines provide that once an individual serving on our Board reaches age 71, the Board shall begin to discuss the retirement plan with respect to such director. The Board expects that no director shall be elected or reelected as a director once he or she reaches age 73. Any director who turns 73 while serving as a director may continue to serve for the remainder of their current term. | Cboe Global Markets 2021 Proxy Statement | 25 |
Annual Board and Committee Self-Evaluations The Board believes that a robust annual evaluation process is a critical part of its governance practices. The Nominating and Governance Committee is responsible for establishing and overseeing the Board’s and Committees’ annual self-evaluations to determine whether the Board and the Committees are functioning effectively and to identify potential areas of improvement. The annual self-evaluation process includes the following: Stage in Process | Board of Directors | Committees | Determine Discussion Topics ↓ |  Nominating and Governance Committee determines specific topics and subject areas to discuss with each director, such as roles, responsibilities, structure, skills, experience, background, composition, and effectiveness
| Nominating and Governance Committee determines and distributes to each Committee a list of specific topics and subject areas to facilitate discussion about each Committee’s roles and responsibilities, structure, charter, policies, composition, and effectiveness | Discussions ↓ | Chair of Nominating and Governance Committee and Lead Director interview each director in one-on-ones to discuss Board’s performance | Chair of each Committee facilitates discussion of Committee’s performance in executive session and in one-on-ones | Feedback ↓ | Chair of Nominating and Governance Committee and Lead Director report results of discussions and recommendations to Nominating and Governance Committee for its consideration | Chair of each Committee reports results of Committee self-evaluation and recommendations to Nominating and Governance Committee for its consideration | Reviews ↓ | Nominating and Governance Committee reviews results from Board and Committee self-evaluations and provides summary of assessments and recommendations to full Board Board discusses results and, if necessary, provides additional recommendations | Feedback Incorporated | Changes and enhancements, if any, are implemented to governance policies and practices |
In addition to the annual evaluation process, the Board and Committees meet in regular executive sessions, which provides the directors with opportunities to reflect and provide feedback on an ongoing basis to determine whether the Board and the Committees are functioning effectively and to identify potential areas of improvement. 26 | Cboe Global Markets 2021 Proxy Statement | |
Stockholder Nominations The Nominating and Governance Committee will consider stockholder recommendations for candidates for our Board and will consider those candidates using the same criteria applied to candidates suggested by management. Stockholders may recommend candidates for our Board by contacting the Corporate Secretary of Cboe Global Markets, Inc. at 400 South LaSalle Street, Chicago, Illinois 60605. In addition, stockholders may formally nominate candidates for our Board to be considered at an annual meeting of stockholders through the process described below under the heading “Stockholder Proposals.”“Other Items—Stockholder Proposals”. ATS Oversight Committee The ATS Oversight Committee, formed on November 20, 2020, is responsible for, among other things, overseeing the business and operations of BIDS Trading’s U.S. equities businesses, overseeing the adequacy and effectiveness of the information and other barriers established to maintain the separation of BIDS Trading’s U.S. equities businesses from Cboe Global Markets’ registered national exchange businesses, and helping to ensure that specified functions of those BIDS Trading’s U.S. equities businesses are independent of and not integrated with or otherwise linked to Cboe Global Markets’ registered national exchange businesses. Executive Committee The Executive Committee has the authority to exercise the powers and authority of the Board when the convening of the Board is not practicable, except as limited by its charter, the Company’s Bylaws and applicable law. Finance and Strategy Committee The Finance and Strategy Committee’s responsibilities include approving or making recommendations to the Board regarding the budget, capital allocation, strategic plans, and acquisition or investment opportunities. Risk Committee The Risk Committee is generally responsible for, among other things, overseeing the risk assessment and risk management of the Company, including risk related to cybersecurity, information technology, and the Company’s compliance with laws, regulations, and its policies. Compensation Committee Interlocks and Insider Participation No member of the Compensation Committee is a current or former officer or employee of ours. In addition, there are no compensation committee interlocks with other entities with respect to any member of the Compensation Committee. | Cboe Global Markets 2021 Proxy Statement | 27 |
Stockholder Engagement Cboe Global Markets and its Board are committed to fostering long-term and institution-wide relationships with stockholders and maintaining their trust and goodwill. As a result, each year we interact with stockholders through a variety of engagement activities. These engagements routinely cover strategy and performance, corporate governance, executive compensation, and other current and emerging issues to help ensure that our Board and management understand and address the issues that are important to our stockholders. Our key stockholder engagement activities in 20182020 included attending virtual investor and industry conferences, participating in informational fireside chats, conducting telephonic investor road shows, in major U.S. cities and hosting meetings at our 20
| Cboe Global Markets 2019 Proxy Statement
| |
corporate headquarters.telephonic meetings. Some of these conferences also featured webcasts and replays of the presentations so that our stockholders could listen remotely. In 2018,2020, we engaged with holders of approximately 4035 percent of our common stock outstanding.
In 20182020 and early 2019,2021, we also conducted an outreach specifically focused on corporate governance, executive compensation, and proxy season trends and issues, targeting our top ten stockholders that represent nearlyrepresented approximately 45 percent of institutional holdings.our common stock outstanding and engaged with holders of approximately 20 percent of our common stock outstanding. Through these discussions we gained valuable feedback, and this feedback was shared with the Board and its relevant Committees. We also took steps to address any areas of improvement, including by incorporating some of the disclosure suggestions into this Proxy Statement. In addition, our quarterly earnings calls are open to the general public and feature a live webcast. The Annual Meeting, to be held in Chicago, also includes a live webcast, so all of our stockholders may listen to the meeting remotely if they are unable to attend the meeting in person. Communications with Directors As provided in our Corporate Governance Guidelines, stockholders and other interested parties may communicate directly with our independent directors or the entire Board. Our policy and procedures regarding these communications are located in the Investor Relations section of our website at http://ir.Cboe.com. CORPORATE SOCIAL RESPONSIBILITY The Board of Directors recognizes that operating in a socially responsible manner helps promote the long-term interests of our stockholders, organization, associates, industry, and community. Our guiding principles help us deliver on our corporate mission and strategy, including good citizenship.  
BeingWe believe that being a good citizen means that we hold ourselves accountable for the integrity of the markets and to the communities we serve, seek to help resolve conflicts and build consensus, inform those impacted before taking action, lead by example, and serve as part of the solution. More specifically, beingWe also seek to be good citizens to the communities we serve means that we areby being committed to being environmentally conscious. Additionally, being good citizens also means that we strive to support our associates and better serve our industry and community through our human capital development, volunteerism and policies.
28 | Cboe Global Markets 20192021 Proxy Statement | 21
|
Additional information on our approach to ESG can be found in the Cboe Global Markets, Inc. ESG Report located in the Corporate Social Responsibility section of our website at https://markets.cboe.com/about/corporate-social-responsibility, which does not form a part of this Proxy Statement. Further, our 2020 Annual Report to Stockholders included in this mailing, which includes a copy of our Annual Report on Form 10-K for the year ended December 31, 2020, also contains relevant additional information under “Part I—Item 1. Business—Human Capital Management”. See also herein “Corporate Governance—Board Structure—Board Oversight of Human Capital”. | Cboe Global Markets 2021 Proxy Statement | 29 |
director compensation Compensation Philosophy and Summary The cash and stock retainers, committee meeting attendance fees, committee chair retainers and additional Lead Director fee paid to our non-employee directors are designed to be part of a competitive totalOur director compensation package when compared to market practices. Theprogram provides director fees that are generally designed to be paid at competitive levels that are near the median of director fees of our peer groups,group, which areis discussed in further detail below in the “Executive Compensation — Compensation—Compensation Discussion and Analysis” section. Typically, early in each year,This allows us to attract and retain individuals with the skills, qualifications, and experiences required to sit on our Board.
Annually, the Compensation Committee considersreviews a review of competitive market data analysis for Boardnon-employee director compensation fromproduced by Meridian Compensation Partners, LLC (“Meridian”), our independent compensation consultant, and recommends changes to our director compensation program, if any, to the Board for approval. For 2020, our director compensation program consisted of a mix of: cash and stock retainers, committee meeting attendance fees, committee chair retainers, and an additional Lead Director retainer. 2020 Elements of Director Compensation Program The compensation of our non-employee directors is based upon a compensation year beginning and ending in May at the time of our Annual Meeting of Stockholders. 2018 Elements of Director Compensation Program
The following table reflects the amount paid with respect to each component of our director compensation including any enhancements,program for the Board term ending with the 20182020 Annual Meeting of Stockholders and for the Board term ending with the Annual Meeting in 2019: 2021: Annual Fees | May 2017 —
May 2018 | | May 2018 —
May 2019 | May 2019 —
May 2020 | | May 2020 —
May 2021 | Cash retainer | $ | 90,000 | | $ | 90,000 | $ | 90,000 | | $ | 90,000 | Stock retainer, value based on closing price on date of grant | $ | 100,000 | | $ | 120,000 | $ | 130,000 | | $ | 145,000 | Committee chair cash retainer | | | | | | | | | | | ATS Oversight | | $ | — | | $ | 20,000 | Audit | $ | 25,000 | | $ | 25,000 | $ | 25,000 | | $ | 25,000 | Compensation | $ | 15,000 | | $ | 15,000 | $ | 15,000 | | $ | 15,000 | Finance and Strategy | $ | 15,000 | | $ | 15,000 | $ | 15,000 | | $ | 15,000 | Nominating and Governance | $ | 15,000 | | $ | 15,000 | $ | 15,000 | | $ | 15,000 | Risk | $ | 20,000 | | $ | 20,000 | $ | 20,000 | | $ | 20,000 | Lead Director cash retainer, in addition to above cash and stock retainers | $ | 150,000 | | $ | 50,000 | $ | 50,000 | | $ | 50,000 | Meeting Fees | | | | | | | | | | | Committee meeting attendance fee per meeting attended | $ | 1,500 | | $ | 1,500 | $ | 1,500 | | $ | 1,500 | Lead Director meeting attendance fee per Committee meeting attended for the Company and for each subsidiary board of directors or committee meeting attended | $ | — | | $ | 1,500 | $ | 1,500 | | $ | 1,500 |
30 | Cboe Global Markets 2021 Proxy Statement | |
In early 2018,2020, the Board increased the stock retainer to more closely align with the Broader Financial and Technology Industryour peer group compensation median. The Board also adjusted the stock retainer, and not the cash retainer, to better align with our peer groups’group’s pay mix and to continue tofurther align our directors’ interests with our stockholders. In addition, following the creation of the RiskThe ATS Oversight Committee in late 2017, the Board approved the Risk Committee chair received a pro rata cash retainer in early 2018. 2020. 22
| Cboe Global Markets 2019 Proxy Statement
| |
20182020 Director Compensation
The compensation of our non-employee directors for the year ended December 31, 20182020 for their service is shown in the following table. | | Fees Earned or | | Stock | | | | | | | Fees Earned or | | Stock | | All other | | | | Name | | Paid in Cash | | Awards(1) | Total | | Paid in Cash | | Awards(1) | | Compensation(2) | | Total | Eugene S. Sunshine (2)(3) | | $ | 180,000 | | $ | 120,085 | $ | 300,085 | | $ | 255,500 | | $ | 145,088 | | $ | 11,900 | | $ | 412,488 | James R. Boris (3) | | $ | 120,000 | | $ | — | $ | 120,000 | | Frank E. English, Jr. (4) | | | $ | 55,500 | | $ | — | | $ | — | | $ | 55,000 | William M. Farrow, III | | | $ | 132,500 | | $ | 145,088 | | $ | — | | $ | 277,588 | Edward J. Fitzpatrick | | $ | 131,000 | | $ | 120,085 | $ | 251,085 | | $ | 123,000 | | $ | 145,088 | | $ | — | | $ | 268,088 | Frank E. English, Jr. | | $ | 111,000 | | $ | 120,085 | $ | 231,085 | | William M. Farrow, III | | $ | 115,000 | | $ | 120,085 | $ | 235,085 | | Ivan K. Fong (5) | | | $ | 13,500 | | $ | 58,022 | | $ | — | | $ | 71,522 | Janet P. Froetscher | | $ | 106,500 | | $ | 120,085 | $ | 226,585 | | $ | 121,500 | | $ | 145,088 | | $ | 5,500 | | $ | 272,088 | Jill R. Goodman | | $ | 114,000 | | $ | 120,085 | $ | 234,085 | | $ | 127,500 | | $ | 145,088 | | $ | — | | $ | 272,588 | Christopher T. Mitchell(3) | | $ | 46,500 | | $ | — | $ | 46,500 | | Alexander J. Matturri, Jr. (5) | | | $ | 13,500 | | $ | 58,022 | | $ | — | | $ | 71,522 | Jennifer J. McPeek (5) | | | $ | 50,569 | | $ | 108,119 | | $ | — | | $ | 158,688 | Roderick A. Palmore | | $ | 121,000 | | $ | 120,085 | $ | 241,085 | | $ | 127,500 | | $ | 145,088 | | $ | — | | $ | 272,588 | James E. Parisi (4) | | $ | 98,875 | | $ | 120,085 | $ | 218,960 | | James E. Parisi (6) | | | $ | 197,250 | | $ | 145,088 | | $ | 10,000 | | $ | 352,338 | Joseph P. Ratterman | | $ | 97,500 | | $ | 120,085 | $ | 217,585 | | $ | 102,000 | | $ | 145,088 | | $ | — | | $ | 251,568 | Michael L. Richter | | $ | 105,000 | | $ | 120,085 | $ | 225,085 | | $ | 112,500 | | $ | 145,088 | | $ | 10,330 | | $ | 267,918 | Samuel K. Skinner (3) | | $ | 55,500 | | $ | — | $ | 55,500 | | Jill E. Sommers (5)(7) | | $ | 93,625 | | $ | 120,085 | $ | 213,710 | | $ | 261,000 | | $ | 145,088 | | $ | — | | $ | 406,088 | Carole E. Stone | | $ | 134,000 | | $ | 120,085 | $ | 254,085 | | $ | 74,000 | | $ | — | | $ | — | | $ | 74,000 | Fredric J. Tomczyk | | | $ | 105,000 | | $ | 145,088 | | $ | — | | $ | 250,088 |
| (1) | (1)
| | The non-employee directors then-serving on the Board received an equity grant of restricted stock on May 12, 2020, other than Ms. McPeek who received an equity grant of restricted stock on August 14, 2020 and Messrs. Fong and Matturri who each received an equity grant of restricted stock on December 17, 2018.2020. The equity grant vestsgrants vest on the earlier of the one year anniversary of the grant date or the completion of thetheir final year of director service. Each of thesethe listed directors who received an equity grant holds 1,1081,482 shares, other than Ms. McPeek who holds 1,225 shares and Messrs. Fong and Matturri who each holds 648 shares, of unvested restricted stock as of December 31, 2018. 2020. |
| (2) | (2)
Amounts shown in the All Other Compensation column represent matching gifts made to qualified non-profit organizations on behalf of non-employee directors and do not represent total charitable contributions made by them during the year. Amounts represent those provided through our Matching Gift Program that is available to full-time employees with typically at least one year of service and non-employee directors. During 2020, we matched eligible gifts from a minimum of $50 to an aggregate maximum gift of $10,000 per employee or non-employee director, per calendar year. In addition, in 2020, we matched at a rate of 1.5x eligible gifts from a minimum of $50 to $1,000 per employee or non-employee director, per calendar year to organizations that (i) support social justice and/or improve the lives of those in Black communities or (ii) provide services to COVID-19 global pandemic relief efforts. |
| (3) | | The amount shown in the Fees Earned or Paid in Cash column for Mr. Sunshine also includes fees of $6,000$28,500 for attending subsidiary Boardboard of Directorsdirectors or Committee meetings. |
| Cboe Global Markets 2021 Proxy Statement | 31 |
| (4) | (3)
| | Messrs. Boris, MitchellMr. English and SkinnerMs. Stone left the Board and Committees in connection with the 20182020 Annual Meeting of Stockholders on May 17, 2018.12, 2020. The amounts shown in the Fees Earned or Paid in Cash columnscolumn reflect the remaining cash retainers and Committee meeting fees while on the Board.
|
| (5) | (4)
Ms. McPeek and Messrs. Fong and Matturri who joined the Board on August 14, 2020 and December 17, 2020, respectively, also received the same compensation and equity as described above for all other directors, but on a pro-rata basis for the portion of time served in 2020. |
| (6) | | The amount shown in the Fees Earned or Paid in Cash column for Mr. Parisi also includes fees of $41,875$60,000 for his service as a member of the Boardsboards of Directorsdirectors of CFE and SEF. |
| (7) | (5)
| | The amount shown in the Fees Earned or Paid in Cash column for Ms. Sommers also includes fees of $42,625$160,500 for her service as a member of the Boardsboards of Directorsdirectors of our securities exchanges, CFE, and SEF. |
Director Stock Ownership and Holding Guidelines The Compensation Committee has adopted stock ownership and holding guidelines, which provide that each non-employee director should own stock equal to threefive times the cash annual retainer for directors within three five years of joining the Board.Board or within four years of May 2019 for directors then-serving when the guidelines were updated in May 2019. For purposes of this ownership and holding requirement, (a) shares owned outright or in trust and (b) restricted stock, including shares that have been granted but are unvested, are included. In addition, each non-employee director is required to hold all of their shares until the guidelines are met, except for sales of shares to pay taxes with respect to the vesting or exercising of equity grants. Other than Mr. Parisi, and Ms. Sommers, Ms. McPeek, and Messrs. Fong and Matturri, who were first elected to our Board in 2018, 2019 and, with respect to the last three, 2020, respectively, each of the non-employee incumbent directors has met the ownership requirement as of December 31, 2018. | Cboe Global Markets 2019 Proxy Statement
| 23
|
Director Hedging and Pledging Policies Under our Insider Trading Policy, our directors are prohibited from entering into transactions involving options to purchase or sell our common stock or other derivatives related to our common stock. Our Insider Trading Policy also prohibits directors from entering into any pledges or margin loans on shares of our common stock. None of the directors have existing hedges, pledges or margin loans on shares of our common stock. 2432
| Cboe Global Markets 20192021 Proxy Statement | |
executive Compensation PROPOSAL 2 - ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION In accordance with Section 14A of the Exchange Act, the Board is providing our stockholders with an advisory vote to approve executive compensation. This advisory vote, commonly known as a “say-on-pay” vote, is a non-binding vote to approve the compensation paid to our named executive officers as disclosed in this proxy statement in accordance with SEC rules. The Board has adopted a policy of providing for annual “say-on-pay” votes in accordance with the results of our last stockholder advisory vote. As discussed in the “Compensation Discussion and Analysis” section, our executive compensation program is designed to meet the following objectives:
The Compensation Committee has implemented the following best practices applicable to our executive officers in order to achieve these objectives:
incentive awards include financial measures and a relative stock price performance goal,
ofon pledging,
We believe that the compensation paid to the named executive officers is appropriate to align their interests with those of our stockholders to generate stockholder returns. Accordingly, the Board recommends that our stockholders vote in favor of the say-on-pay vote as set forth in the following non-binding resolution: RESOLVED, that our stockholders approve, on an advisory basis, the compensation paid to our named executive officers, as disclosed in this Proxy Statement, including under the heading “Compensation Discussion and Analysis,” the accompanying compensation tables and the corresponding narrative discussion. As this is an advisory vote, the outcome of the vote is not binding on us with respect to executive compensation decisions, including those relating to our named executive officers. Our Compensation Committee and Board value the opinions of our stockholders. The Compensation Committee and Board will consider the results of the say-on-pay vote and evaluate whether any actions should be taken in the future. | Cboe Global Markets 20192021 Proxy Statement | 2533
|
Non-binding approval of our executive compensation program requires that a majority of the shares cast on this matter be cast in favor of the proposal. Abstentions and broker non-votes will not be counted as votes cast and therefore will not affect the vote. The Board recommends that the stockholders vote FOR approval, in a non-binding resolution, of the compensation paid to our executive officers. COMPENSATION DISCUSSION AND ANALYSIS This Compensation Discussion and Analysis section is intended to provide our stockholders with an understanding of our compensation practices and philosophy, material elements of our executive compensation program, and the decisions made in 20182020 with respect to the total compensation awarded to, earned by, or paid to each of the following 20182020 “named executive officers” or “NEOs”: Name | Title* | Edward T. Tilly | Chairman, President and Chief Executive Officer (1) | Christopher R. ConcannonA. Isaacson | Executive Vice President and Chief Operating Officer (2) | Brian N. Schell | Executive Vice President, Chief Financial Officer and Treasurer | Christopher A. Isaacson
| Executive Vice President, Chief Information Officer (3)
| Mark S. HemsleyDavid Howson
| Executive Vice President, President Europe | Joanne Moffic-SilverBryan Harkins
| Former Executive Vice President, General Counsel and Corporate Secretary (4)Head of Markets Division
|
* | Titles are as of December 31, 2020. |
*Titles are as of December 31, 2018.
34 | (1)
| | Mr. Tilly was also appointed our President effective January 14, 2019.
|
| (2)
| | Mr. Concannon’s last day with the Company was January 14, 2019.
|
| (3)
| | Mr. Isaacson was appointed Executive Vice President and Chief Operating Officer effective January 14, 2019.
|
| (4)
| | Ms. Moffic-Silver’s last day with the Company was February 28, 2018.
|
26
| Cboe Global Markets 20192021 Proxy Statement | |
This Compensation Discussion and Analysis section is organized as follows: Executive Summary
The design of our executive compensation program, including compensation practices and independent oversight, is intended to align management’s interests with those of our stockholders and pay for our performance. Compensation awarded in 2018 reflects another year of record results and our continued successful integration with Bats.
| Cboe Global Markets 20192021 Proxy Statement | 2735
|
Executive Summary Principal Components of 2020 Executive Compensation | | 
| Base Salary (16% of CEO’s target pay mix) | | Fixed level of cash compensation based on performance, expertise, experience, and market value | | Target annual incentive is based on percentage of base salary | | Annual Incentive Bonus (26% of CEO’s target pay mix) | | Provides variable cash compensation payout opportunities to the extent pre-established EBITDA and net revenue corporate and individual performance goals are met over one-year performance period | | Individual performance goals include, among others, ESG related goals such as attracting, engaging, developing and retaining key talent, communicating with investors, promoting a culture of inclusion, succession planning, and overseeing a pipeline of diverse talent | | Payouts range 0% to 200% of executive’s target bonus opportunity | | Long-Term Equity Awards -Restricted Stock Units (29% of CEO’s target pay mix) | 
| Provides compensation in the form of Company shares to the extent three-year graded service period is met | | Aligns interests of our executives with those of our stockholders and encourages retention | | -Performance Share Units (29% of CEO’s target pay mix) | | Provides variable compensation in the form of Company shares to the extent pre-established relative total stockholder return (“TSR”) and earnings per share (“EPS”) goals are met over a 3-year period | | Aligns the interests of our executives with stockholders, provides significant incentive for retention, and motivates our executives to focus on our long-term growth and increased stockholder value | | Payouts range 0% to 200% of executive’s target number of PSUs |
Performance Affecting Fiscal 2020 Annual Incentive Pay Outcomes | | | 2020 Adjusted Net Revenues1 | | 2020 Adjusted EBITDA1 | $1,213 Million | | $865 Million | 
| |
| 96% of Target Earned | | 124% of Target Earned |
Performance Affecting 2018-2020 PSU Pay Outcomes | | | 3-Year Adjusted EPS1 | | 3-Year Relative TSR | $15.02 | | 14th Percentile |
| |
| 200% of Target PSUs Earned | | 0% of Target PSUs Earned |
1 Adjusted revenues less cost of revenues (“net revenues”), adjusted earnings before interest, taxes, depreciation, and amortization (“adjusted EBITDA”), and 3-year adjusted EPS are non-GAAP measures used by the Company and reconciliations to GAAP measures are provided in Appendix A. 36 | Cboe Global Markets 2021 Proxy Statement | |
Compensation Governance Practices What we do |
| What we don’t do |   Mitigate compensation risk
award agreements (beginning with the 2019 equity award agreements)awards and for severance benefits in employment agreements offer letter agreements and the Executive Severance Plan
| | Ä No hedging orof Company stock by executives
Ä No pledging of Company stock by executives Ä No tax gross-ups upon a change in control or otherwise
Ä No excessive use of employment contracts
Ä No payouts for below threshold level for corporate performance
Ä No excessive perquisites
Ä No guaranteed annual incentive payments
|
2018 Compensation Program Overview
2020 Business Highlights Cboe Global Markets and its Board are committed to a corporate mission and strategy designed to create long-term stockholder value. Our strategy to lead the industry in defining the markets of today and tomorrow is to: | (1) | build upon core proprietary products, |
| (2) | leverage leading proprietary trading technology, |
| (3) | diversify business mix with growth of non-transactional revenue, |
| (4) | broaden geographic reach, and |
| (5) | expand product lines across asset classes. |
The following is a brief summary of our 2018 executive compensation program. Market-competitive base salary.
High proportion of named executive officers’ total compensation was composed of performance-based compensation.
Annual cash incentive for 2018 was based on corporate performance (weighted 75%) measured against pre-established adjusted EBITDA, net revenue and synergies goals and individual performance (weighted 25%) measured against pre-established individual strategic goals.
Long-term incentive for 2018 was comprised of 50% time-based restricted stock units (“RSUs”) and 50% performance-based restricted stock units (“PSUs”), with performance contingent on achievement of relative total shareholder return and earnings per share goals
Market competitive retirement, medical, life and disability arrangements that are generally available to all employees.
28
| Cboe Global Markets 2019 Proxy Statement
| |
2018 Business Highlights
The following is a brief summary of our 20182020 business highlights as they relate to the ongoing commitment of our team and the Board to this strategy and the key performance metrics used in our performance-based compensation program as well as other business highlights.program.
| o | | Achieved record 2018 full year financial results.
|
| o
| | Net revenues of $1,217$1,254 million for 2018,2020, up 22%10% from $996$1,137 million for 2017, and up 14% from net revenues on a combined company basis of $1,068 million for 2017.1 2019. |
| o | | Diluted EPS of $3.76$4.27 for 2018,2020, up 2%28% from $3.69$3.34 for 2017, and adjusted diluted EPS of $5.02 for 2018, up 41% from adjusted diluted EPS on a combined company basis of $3.57 for 2017.1 2019. |
Business Results | o | | Adjusted EBITDA of $840 million for 2018, up 18% from adjusted EBITDA on a combined company basis of $709 million for 2017.1
|
Bats Acquisition Integration
| o
| | Exited 2018 with run rate expense synergies of $57 million, primarily seen in compensation and benefits and professional fees and outside services. We also continued to make solid progress executing on our integration plans.
|
| o
| | Increased our run-rate expense synergy target to $85 million, up by $20 million.
|
| o
| | On February 25, 2018 and May 14, 2018, we successfully completed the migrations of CFE and C2, respectively, to the Bats technology platform.
|
Business Segment Results
| o
| | Set new annual average daily volume (“ADV”) highs for trading in options, index options, SPX options,Launched mini VIX futures and FX.
options on S&P 500 ESG Index. |
| o | Acquired and integrating information solutions companies Hanweck, FT Options, and Trade Alert, in furtherance of the Company’s strategy to increase non-transactional revenue. |
| o
| | ADV growth for 2018 across each business segment.
|
| | o
| | Created two new Cboe corporate bond index futures.
|
| o
| | Cboe Europe prospered in post MiFID II environment with growth in our Periodic Auctions book, a MiFID II- compliant lit order book, and increased volume in our Large-In-Scale block trading platform.
|
| o
| | Grew our global FX market share to approximately 15% for the year, up from approximately 13% in 2017.2
|
| 1
| | Net revenues on a combined company basis, adjusted diluted EPS and adjusted diluted EPS on a combined company basis, adjusted EBITDA and adjusted EBITDA on a combined company basis are non-GAAP measures used by the Company and reconciliations to GAAP measures are provided in Appendix A.
|
| 2
| | Market Share represents Cboe FX volume divided by the total volume of publicly reporting spot FX venues (Cboe FX, EBS, Refinitiv, and FastMatch).
|
| Cboe Global Markets 20192021 Proxy Statement | 29
37 |
| o | Acquired MATCHNow, BIDS Trading, and EuroCCP to expand geographic reach and diversify product capabilities. |
| o | Started process to develop pan-European derivatives for a planned launch in 2021. |
Navigating COVID-19 Global Pandemic | o | Capitalized on increased engagement among retail investors, such that total options volume and total U.S. equities volume reached new all-time highs in 2020. |
| o | Successfully transitioned open outcry trading to all electronic trading when open outcry trading was temporarily suspended; then reopened the trading floor with a modified layout and stringent safety protocols in place. |
| o | Provided frequent communications to directors, employees, customers, regulators, critical vendors, technology equipment suppliers, data and disaster recovery centers, and other service providers. |
| o | Continued to operate our business and achieved solid results in 2020, while successfully shifting all global employees (except those deemed essential) to work from home on a temporary basis and implementing travel restrictions. |
We believe that the performance of the Company demonstrates that management is keenly focused on driving the Company for sustainable long-term growth and diversifying the Company’s business, while obtaining short-term results. Our business continued to generate strong cash flows from operations and we paid down debt, repurchased our stockwere able to return $520 million to stockholders through dividends and deployed capital to enhance stockholder returnsshare repurchases while retaining the flexibility to pursue new growth opportunities. To that end, in 2018: 2020: 15%17% to $0.31$0.42 per share and paid cash dividends of $130$171 million in 2018; 2020; and
we paid down $25 million of outstanding debt; and 1.33.5 million of our outstanding shares of common stock under a share repurchase program for a total of $141$349 million.
As a result ofDespite these business highlights andsolid results in 2020, capital allocation decisions, and successfully navigating the COVID-19 global pandemic, as of December 31, 2018,2020, we achieved a total stockholder return,returns, including reinvested dividends, of approximately 56%approximately:
-21% over the past year; -22% over the past three years and approximately 101%years; 53% over the past five years. Despite record results in 2018, as of December 31, 2018, we achieved a total stockholder return, including reinvested dividends, of approximately -21% for 2018. years; and 387% over the past ten years. Executive Compensation Program Practices Compensation Philosophy and Summary Our executive compensation program is designed to attract and retain talented and dedicated executives who are instrumental in our achievement of key strategic business objectives. To meet these objectives, the Compensation Committee designed and implemented a program that pays a substantial portion of executive compensation based on corporate and individual performance. The Compensation Committee believes that our executive compensation program plays a vital role in contributing to the achievement of key strategic business objectives that ultimately drive long-term business success. Accordingly, we designed our executive compensation program to focus our 38 | Cboe Global Markets 2021 Proxy Statement | |
executives on achieving critical corporate financial and strategic goals, while taking steps to position the business for sustained growth in financial performance over time. 30
| Cboe Global Markets 2019 Proxy Statement
| |
Our executive compensation program generally consists of the following elements, in addition to retirement, health, and healthwelfare benefits:  
The following table lists the various components included in total compensation for our executive officers and each element’s purpose. Later sections provide additional details regarding each component.
| Total Compensation ComponentCboe Global Markets 2021 Proxy Statement
| | Purpose
| Base salary
| | Provides a fixed amount of compensation based on the market value of the position
| Annual incentive (bonus)
| | Provides variable cash compensation payout opportunities designed to reward each executive for the achievement of certain annual corporate and individual performance metrics measured against pre-established performance goals
| Long-term equity awards
| | Provide variable compensation in the form of equity, aligning the interests of our executives with stockholders and motivating our executives to focus on our long-term growth and increased stockholder value
| Benefits (retirement, medical, life and disability)
| | Provide competitive health, welfare and retirement benefits39
|
The following charts show the approximate 20182020 total target compensation mix for the Chief Executive Officer and the other named executive officers as a group (excluding Ms. Moffic-Silver).group. For the Chief Executive Officer and the other named executive officers, the majority of 20182020 total target compensation is “at-risk” (i.e., linked to achievement of performance goals and/or the value is tied to our common stock price) and, further, the majority of “at-risk” pay is in the form of equity | Cboe Global Markets 2019 Proxy Statement
| 31
|
awards. Total target compensation is the sum of an executive officer’s 20182020 base salary, target annual incentive opportunity and target value for long-term equity awards (i.e., RSUs and PSUs). Company’s Response to Stockholder Vote on Say‑on‑PaySay-on-Pay At the 20182020 Annual Meeting of Stockholders, our “say-on-pay” proposal received the support of over 94%93% of the votes cast for approval of our 20172019 executive compensation program as disclosed in our 20182020 Proxy Statement, and every year since going public in 2010, we have received over 85% stockholder support of our executive compensation programs. The Compensation Committee has reviewed the results of the stockholder vote on our 20172019 executive compensation program and considered such results supportive of our executive compensation program and the Compensation Committee’s measured approach to modifying our compensation practices to enhance their alignment with stockholder interests. In addition, the Compensation Committee has determined that the vote result did not warrant any large-scale changes to our executive compensation program; however, the Compensation Committee continues to take steps, as described below, to help ensure our compensation practices remain aligned with best practices and stockholder interests. Compensation Refinements The Board and Compensation Committee did not make any in-cycle changes to the annual incentive program or long-term equity awards in 2020 as a result of the COVID-19 global pandemic. 40 | Cboe Global Markets 2021 Proxy Statement | |
The Board and Compensation Committee determine actual annual incentive bonus payouts based on achieved results measured against pre-established corporate and individual performance goals. As a result of our executives’ continued focus on thesuccessful integration of Bats and a larger focus on growing our revenues and earnings,individual performance, at the beginning of 2020 the Compensation Committee changedremoved the annual incentive award’s corporate performance synergy metric and redistributed its weighting to individual and other corporate performance metrics in 2018 to better align the interests of our executives with our business strategy and with stockholders. For 2018,2020, the metrics and weightings were updated as follows: | | | 2019 Metrics | | 20182020 Metrics
|
| | Individual Performance (weighted 30%) | | Individual Performance (weighted 25%)
|
| | Corporate Performance (weighted 70%) | | Corporate Performance (weighted 75%)
| | | | oAchievement of SynergiesAdjusted Net Revenue
| Achievement of Net Revenue | | | oAchievement of Net Revenue
| | | oAchievement of Adjusted EBITDA
| Achievement of Adjusted EBITDA | | | oAchievement of Business Unit Performance
| Achievement of Business Unit Performance | | |
Historically, the Compensation Committee approved granting PSUs that were one-half subject to relative total stockholder return goals and one-half subject to earnings per share goals. As a result of
32
| Cboe Global Markets 2019 Proxy Statement
| |
the Bats acquisition, the Compensation Committee determined not to grant PSUs subject to earnings per share goals in 2017, due to the difficulty in setting a meaningful long-term earnings per share goal immediately following the acquisition. Therefore, in 2017 the Compensation Committee approved granting all PSUs subject solely to the achievement of relative total stockholder return.
However, due to the continued successful integration of Bats and a better ability to set a meaningful long-term earnings per share goal, in 2018 the Compensation Committee approved granting PSUs (i) one-half subject to the achievement of relative total stockholder return measured against pre-determined performance goals over a three-year performance period and (ii) one-half subject to the achievement of earnings per share measured against pre-determined performance goals over a three-year performance period.
Following the 2018 compensation decisions, the Compensation Committee reviewed our two peer groups, the Securities Exchange Peer Group and the Broader Financial and Technology Industry Peer Group, and approved combining them into a single 25 company peer group that adds new companies and removes certain companies from each of those existing two peer groups. The Committee made this determination because, following the acquisition of Bats and our recent growth, the Company’s revenue, gross profit, market capitalization and number of employees grew to be more in-line with our larger securities exchange peers.
Further, in connection with the grants of equity awards in 2019, the award agreements provide that in the event of a Change in Control (as defined in the Second Amended and Restated Long-Term Incentive Plan (the “Plan”)), each award will be "double trigger" unless a successor entity cannot or will not provide a "replacement award" (as defined in the Plan). If a successor entity cannot or will not provide a replacement award, the award will accelerate and be deemed fully vested and exercisable and all vesting conditions on restricted stock units will lapse, with all performance conditions deemed satisfied at the greater of target or the level of performance actually achieved as of the Change in Control (with similar performance assumed to be achieved through the remainder of the performance period). If the successor entity, including the Company if it is the surviving entity, assumes, continues or replaces an outstanding award (each such assumed, continued or replacement award, a replacement award), then such replacement award shall remain outstanding and be governed by its respective terms. Upon termination of the Participant's employment for any reason other than cause or by Participant with good reason upon or within two years after a Change in Control, such replacement award will accelerate and become fully vested and/or exercisable, with all performance conditions deemed satisfied at the greater of target or the level of performance actually achieved as of the employment termination date (with similar performance assumed to be achieved through the remainder of the performance period).
20182020 Target Annual Pay Opportunities
The following chart shows the 20182020 total target compensation for each named executive officer. | | | | | | | | Target Long-Term | | | | | | | | | | Target Annual | | Equity Awards | | | | | | | | | | | | | | Target Long-Term | | | | | | | | | | Target Annual | | Equity Awards | | | | Named Executive Officer(1) | | Base Salary | | Incentive Bonus | | RSUs (2) | | PSUs (2) | | Total | | Base Salary | | Incentive Bonus | | RSUs (2) | | PSUs (2) | | Total | Edward T. Tilly | | $ | 1,265 | | $ | 2,087 | | $ | 1,650 | | $ | 1,650 | | $ | 6,652 | | $ | 1,265 | | $ | 2,087 | | $ | 2,350 | | $ | 2,350 | | $ | 8,052 | Christopher R. Concannon | | $ | 1,100 | | $ | 1,650 | | $ | 1,100 | | $ | 1,100 | | $ | 4,950 | | Christopher A. Isaacson | | | $ | 650 | | $ | 975 | | $ | 875 | | $ | 875 | | $ | 3,375 | Brian N. Schell | | $ | 521 | | $ | 729 | | $ | 359 | | $ | 359 | | $ | 1,968 | | $ | 525 | | $ | 735 | | $ | 750 | | $ | 750 | | $ | 2,760 | Christopher A. Isaacson | | $ | 540 | | $ | 810 | | $ | 325 | | $ | 325 | | $ | 2,000 | | Mark S. Hemsley (3) | | $ | 619 | | $ | 681 | | $ | 300 | | $ | 300 | | $ | 1,900 | | Joanne Moffic-Silver | | $ | 433 | | $ | 606 | | $ | 288 | | $ | 288 | | $ | 1,615 | | David Howson (3) | | | $ | 575 | | $ | 633 | | $ | 325 | | $ | 325 | | $ | 1,858 | Bryan Harkins | | | $ | 500 | | $ | 500 | | $ | 325 | | $ | 325 | | $ | 1,650 |
| (1) | (1)
| | All amounts are in thousands. |
| (2) | (2)
| | Represents the grant date value. target equity award value used to calculate the number of shares to grant. |
| (3) | Cboe Global Markets 2019 Proxy Statement
| 33
|
| (3)
| | Mr. HemsleyHowson receives his cash compensation in British pounds. The amounts reported were converted to U.S. dollars using a rate of £1.00 to $1.28,$1.37, which was the exchange rate as of December 31, 2018. 2020. |
This supplemental table is not required, but rather it is provided to demonstrate the link between performance and our named executive officers’ total directtarget compensation opportunity for 2018.2020. Please refer to the Summary Compensation Table below for complete disclosure of the total compensation of our named executive officers reported in accordance with the SEC disclosure requirements. Role ofExecutive Compensation Program Governance Cycle
Throughout the year, the Board and the Compensation Committee are heavily involved in reviewing, monitoring, and approving, as applicable, the executive compensation program. The Compensation Committee, composed of all independent directors, is responsible for reviewing the various components of the total compensation program for all executive officers. The Compensation Committee met 67 times in 2018.2020. The Compensation Committee either approves or makes recommendations to the Board regarding compensation related decisions. To provide the Compensation Committee with advice and assistance related to the design of our executive compensation program, the Compensation Committee engaged Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant. As described below in further detail, Meridian consultants regularly attend meetings of the Compensation Committee. In addition, Messrs. Tilly, ConcannonIsaacson, and Schell generally attended in 2018 portions of the 2020 meetings of the Compensation Committee to provide information and assistance, other than when the Compensation Committee discussed the respective executive’s compensation. | Cboe Global Markets 2021 Proxy Statement | 41 |
While specific topics may vary from meeting to meeting, the following illustration describes the general annual cycle of the Board’s and Compensation Committee’s activities. 
Independent Compensation Consultant For 2020, the Compensation Committee engaged Meridian ouras its independent compensation consultant to provide the Compensation Committee with advice and assistance related to the design of our executive compensation program. Meridian reviews our executive compensation program and advises the Compensation Committee on best practices and plan design to help improve the Company’s program’s effectiveness.effectiveness and alignment with market practices. In addition, the consultantMeridian provides advice to the Compensation Committee on the Company’s compensation peer groupsgroup and on the competitive positioning of the various components of the executive compensation program. The independent compensation consultantMeridian consultants regularly attend meetings of the Compensation Committee. Meridian also meets with the Compensation Committee in executive session without management present and may communicate directly, as needed, with members of the Compensation Committee and the Board at large. Based on a review of its engagement of the independent compensation consultantMeridian and consideration of factors set forth in SEC Nasdaq and BZX rules, the Compensation Committee determined that Meridian’s work did not raise any conflicts of interest and that it is independent from management. 42 | Cboe Global Markets 2021 Proxy Statement | |
Tally Sheets When reviewing compensation for the named executive officers, the Compensation Committee considersmay consider tally sheets that detail the various elements of compensation for each executive. These tally sheets, developed with the assistance of Meridian, are used to evaluate the appropriateness of theeach named executive officer’s total compensation package, to compare each executive’s total compensation opportunity with his or her actual payout, to assess the level of holding power in unvested equity awards, and to help ensure that the compensation appropriately reflects the executive compensation program’s focus on pay for performance and alignment with stockholder interests. Peer GroupsGroup and Comparative Data For the 20182020 compensation decisions, the Compensation Committee used twoa single peer groupsgroup from which to derive competitive market compensation data: (i) the Securities Exchange Peer Group and (ii) the Broader Financial and Technology Industry Peer Group.data. The Securities Exchange Peer Group24-company peer group was composed of sevenexchange holding companies, each with a heavy focus on our industry. The Broader Financial and Technology Industry Peer Group was composed of 20 companies, and included financial services firms, and technology-focused companies with corporate profiles similar to ours, with revenues ranging between one-third and three-timesours. Based on the then-available fiscal year 2019 data, the Company’s projected annual revenue. The 34
| Cboe Global Markets 2019 Proxy Statement
| |
Compensation Committee utilized this twoemployees fell below the median of the peer group model to derive meaningful compensation data due to our unique business model and to ensure that each named executive officer’s target total compensation is competitive.group. The Compensation Committee used thisthe market data derived from the peer group as points of reference, rather than as the sole determining factor in setting compensation for our named executive officers.
Securities Exchange Peer Group
| | ASX Limited
| Intercontinental Exchange, Inc.
| CME Group Inc.
| Nasdaq, Inc.
| Deutsche Borse AG
| TMX Group Limited
| London Stock Exchange Group plc
| |
Broader Financial and Technology Industry Peer Group
| Akamai Technologies, Inc.
| MarketAxess Holdings Inc.
| BGC Partners, Inc.
| MSCI Inc.
| The Dun & Bradstreet Corporation
| Piper Jaffray Companies
| E*TRADE Financial Corporation
| SEI Investments Company
| Euronet Worldwide, Inc.
| SS&C Technologies Holdings, Inc.
| FactSet Research Systems Inc.
| TransUnion
| Fair Isaac Corporation
| Tyler Technologies, Inc.
| GAIN Capital Holdings, Inc.
| The Ultimate Software Group, Inc.
| Jack Henry & Associates, Inc.
| Verint Systems Inc.
| Manhattan Associates, Inc.
| WEX Inc.
|
Following the 2018 compensation decisions, the Compensation Committee reviewed the two peer groups. The Committee reviewed the data provided by Meridian and compared our corporate performance to our peer groups in the areas of revenues, gross profit, market capitalization and number of employees. The Committee also considered business descriptions, complexity of business, company locations and other qualitative factors. Following the acquisition of Bats and our recent growth, the Company’s revenue, gross profit, market capitalization and number of employees grew, and now fall closer to the median revenue, gross profit, market capitalization and number of employees of the industry-specific Securities Exchange Peer Group. As a result, the Committee approved combining the two groups into a single peer group that adds new companies and removes certain companies of the existing Securities Exchange Peer Group and the Broader Financial and Technology Industry Peer Group. With respect to the updated single peer group, the Company’s annual revenue falls slightly below the median of the peer group, gross profit falls below the median of the peer group, market capitalization falls at the median of the peer group and number of
| Cboe Global Markets 2019 Proxy Statement
| 35
|
employees falls below the median of the peer group. The following is the updated 25 company single peer group:
Updated Single Peer Group
| Akamai Technologies, Inc. | London Stock Exchange Group plc | Broadridge Financial Solutions, Inc. | LPL Financial Holdings Inc. | Citrix Systems, Inc. | MarketAxess Holdings Inc. | CME Group Inc. | MSCI Inc. | Deutsche Borse AG | Nasdaq, Inc. | The Dun & Bradstreet CorporationEquifax Inc.
| SEI Investments Company | Equifax Inc.E*TRADE Financial Corporation
| SS&C Technologies Holdings, Inc. | E*TRADE Financial CorporationEuronet Worldwide, Inc.
| Stifel Financial Corp. | Euronet Worldwide, Inc.
| Synopsys, Inc.
| FactSet Research Systems Inc. | TransUnionSynopsys, Inc.
| Fortinet, Inc. | Verisk Analytics, Inc.TransUnion
| Intercontinental Exchange, Inc. | Virtu Financial,Verisk Analytics, Inc.
| Jack Henry & Associates, Inc. | |
The following companies were added and removed from the existing Securities Exchange Peer Group and the Broader Financial and Technology Industry Peer Group:
Added
| | Removed
| Broadridge Financial Solutions, Inc.
| | ASX Limited
| Citrix Systems, Inc.
| | BGC Partners, Inc.
| Equifax Inc.
| | Fair Isaac Corporation
| Fortinet, Inc.
| | GAIN Capital Holdings, Inc.
| LPL Financial Holdings Inc.
| | Manhattan Associates, Inc.
| Stifel Financial Corp.
| | Piper Jaffray Companies
| Synopsys, Inc.
| | TMX Group Limited
| Verisk Analytics, Inc.
| | Tyler Technologies, Inc.
| Virtu Financial, Inc. |
Following the 2020 compensation decisions, the Compensation Committee reviewed the peer group. The Committee reviewed the data provided by Meridian and compared our corporate performance to our peer group in the areas of revenues, gross profit, market capitalization, and number of employees. The Committee also considered business descriptions, complexity of business and other qualitative factors. The Committee approved one change to the peer group, removing SS&C Technologies Holdings, Inc. because the company’s compensation programs and practices are not representative of typical market practice. The change decreased the number of peers from 24 to 23 companies. | Cboe Global Markets 2021 Proxy Statement | The Ultimate Software Group, Inc.
| | | Verint Systems Inc.
| | | WEX Inc.43
|
2018
2020 Elements of Executive Compensation Program Base Salary The base salary for our named executive officers is designed to be part of a competitive total compensation package when compared to both of our peer groups.group. Base salary provides our named executive officers with a measure of certainty within their total compensation package and provides a baseline for their target payout opportunity under the annual incentive plan. In setting base salary, in addition to considering market benchmark data derived from our peer group, data, the Compensation Committee also considered for each named executive officer the following factors: 36
| Cboe Global Markets 2019 Proxy Statement
| |
For 2018,2020, the Compensation Committee approved or made recommendations to the Board regarding the base salaries for each of the named executive officers, with input in part from Mr. Tilly regarding the individual performances of Messrs. Concannon,Isaacson, Schell, IsaacsonHowson, and Hemsley and Ms. Moffic-Silver.Harkins. Below are the base salary amounts at December 31, 20182020 and 2017, and February 28, 2018 and December 31, 2017, with respect to Ms. Moffic-Silver,2019 for the named executive officers and the aggregate percent change. | | 2017 Base | | 2018 Base | | Percent | | | | | 2019 Base | | 2020 Base | | Percent | Named Executive Officer | | Salary (1) | | Salary (1) | | Change | | Salary (1) | | Salary (1) | | Change | Edward T. Tilly | | $ | 1,150 | | $ | 1,265 | | 10 | % | | $ | 1,265 | | $ | 1,265 | | 0 | % | Christopher R. Concannon | | $ | 1,000 | | $ | 1,100 | | 10 | % | | Christopher A. Isaacson | | | $ | 650 | | $ | 650 | | 0 | % | Brian N. Schell | | $ | 500 | | $ | 521 | | 4 | % | | $ | 521 | | $ | 525 | | 1 | % | Christopher A. Isaacson | | $ | 500 | | $ | 540 | | 8 | % | | Mark S. Hemsley (2) | | $ | 659 | | $ | 619 | | -6 | % | | Joanne Moffic-Silver | | $ | 433 | | $ | 433 | | 0 | % | | David Howson (2) | | | $ | 492 | | $ | 575 | | 17 | % | Bryan Harkins | | | $ | 500 | | $ | 500 | | 0 | % |
| (2) | (2)
| | Mr. HemsleyHowson receives his cash compensation in British pounds and his base salary did not change. Any changes were due to foreign currency fluctuations.pounds. The 20182020 amounts reported were converted to U.S. dollars using a rate of £1.00 to $1.28,$1.37, which was the exchange rate as of December 31, 2018.2020. The 20172019 amounts reported were converted to U.S. dollars using a rate of £1.00 to $1.35,$1.33, which was the exchange rate as of December 31, 2017. 2019. |
The base salariessalary for Messrs. Tilly and ConcannonMr. Howson increased due to the continued successful integration with Bats, our strong corporate performance in 2017, their assumptions of additional responsibilities in leading a larger company, and to more closely align their compensation with comparative market data provided by Meridian. Mr. Schell’s base salary increase of 3% was approved in February 2018 and then an increase of approximately 1.5% was approved in July 2018 due to his assumption of additional responsibilities and duties, successful migration of our financial processing systemsas the new Executive Vice President, President Europe and to more closely align compensation with comparative peer group market data provided by Meridian. The base salary for Mr. Isaacson increased due to his department’s continued successful integration with Bats, his additional responsibilities in leading a larger department and to more closely align compensation with comparative market data provided by Meridian. data. Annual Incentive Overview.Overview. The annual incentive, or bonus, component of the total compensation package paid to our named executive officers is intendeddesigned to reward performance relative to annual goals that were approved by the Board or Compensation Committee at the beginningachievement of the year. In the first quarter following the performance year, the Compensation Committee reviewskey corporate and individual performance for the yeargoals that drive our annual operating and approves or makes recommendations to the Board for annual incentives to be paid to the named executive officers.financial results. 44 | Cboe Global Markets 2021 Proxy Statement | |
The Compensation Committee established a target annual incentive opportunity for each of the named executive officers by considering market benchmark data derived from our two peer groups, in addition togroup and the following factors: | Cboe Global Markets 2019 Proxy Statement
| 37
|
The table below shows each named executive officer’s 20172019 and 20182020 target annual incentive opportunity, shown as a percentage of salary, and the change in percentage points. | | 2017 Target Annual | | 2018 Target Annual | | | | | | | | | Incentive | | Incentive | | | | | | | | | Opportunity as | | Opportunity as | | | | Change in | | | | | Percentage of | | Percentage of | | | | Percentage | | | | | | 2019 Target Annual | | 2020 Target Annual | | | | | | | | | Incentive | | Incentive | | | | | | | | | Opportunity as | | Opportunity as | | | | Change in | | | | | Percentage of | | Percentage of | | | | Percentage | | Named Executive Officer | | Base Salary | | Base Salary | | | | Points | | | Base Salary | | Base Salary | | | | Points | | Edward T. Tilly | | 165 | % | | 165 | % | | 0 | pts | | 165 | % | | 165 | % | | 0 | pts | Christopher R. Concannon | | 150 | % | | 150 | % | | 0 | pts | | Christopher A. Isaacson | | | 150 | % | | 150 | % | | 0 | pts | Brian N. Schell | | 140 | % | | 140 | % | | 0 | pts | | 140 | % | | 140 | % | | 0 | pts | Christopher A. Isaacson | | 140 | % | | 150 | % | | 10 | pts | | Mark S. Hemsley | | 95 | % | | 110 | % | | 15 | pts | | Joanne Moffic-Silver | | 140 | % | | 140 | % | | 0 | pts | | David Howson | | | 90 | % | | 110 | % | | 20 | pts | Bryan Harkins | | | 100 | % | | 100 | % | | 0 | pts |
Mr. Isaacson’sThe target annual incentive opportunity for Mr. Howson increased due to his role in the continued successful integration with Bats, hisassumption of additional responsibilities, in leading a larger departmentincluding as the new Executive Vice President, President Europe, and to more closely align Mr. Isaacson’s target annual incentive opportunitycompensation with comparative peer group market practice. Mr. Hemsley’s target annual incentive opportunity increased due to his leadership in managing the strong European business segment performance, his additional responsibilities in managing the impact of Brexit, navigating MIFID II and to more closely align Mr. Hemsley’s target annual incentive opportunity with comparative market practice.data.
The Compensation Committee determines actual annual incentive bonus payouts based on achieved results measured against pre-established performance goals. The use of pre-established performance metrics and related goals creates an annual incentive plan that rewards our executive officers for superiorstrong performance, reduces payouts when performance does not meet target and eliminates payouts if performance does not meet threshold. In addition, the performance metrics and related goals create a structured, formulaic annual incentive plan—the executive officers know throughout the year what needs to be accomplished and what specific bonus dollar amounts can be earned at different performance levels. The following is a graphical depiction ofshowing the formula used for determining annual incentive bonus payouts.  
| Cboe Global Markets 2021 Proxy Statement | 45 |
As more fully described below, for the 20182020 annual incentive plan the Compensation Committee approved two types of performance metrics: (i) corporate performance metrics (weighted 75%70%) and (ii) individual performance metrics (weighted 25%30%). The Compensation Committee established goals at threshold, target, and maximum performance levels with respect to the corporate performance metrics. However, given the nature of the individual performance metrics, the Compensation Committee did not set a range of individual performance levels. Rather, the Compensation Committee determined each named executive officer’s payout (expressed as a percentage of target annual incentive award opportunity) based on the assessment of the executive officer’s actual performance measured against pre-established individual performance goals. 38
| Cboe Global Markets 2019 Proxy Statement
| |
The Company will pay no annual incentive bonus if actual performance is below threshold. The following chart shows the bonus payout opportunity for each named executive officer at thesevarious performance levels. | | | | | Target Annual | | | | | | | | | | | | | | | | Incentive | | | | | | | | | | | | | | | | Opportunity as | | Annual Bonus Payout | | | | Base | | Percentage of | | Opportunity (1) | | | | | | | | Target Annual | | | | | | | | | | | | | | | | Incentive | | | | | | | | | | | | | | | | Opportunity as | | Annual Bonus Payout | | | | Base | | Percentage of | | Opportunity (1) | Named Executive Officer | | Salary (1) | | Base Salary | | Threshold | | Target | | Maximum | | Salary (1) | | Base Salary | | Threshold | | Target | | Maximum | Edward T. Tilly | | $ | 1,265 | | 165 | % | | $ | 157 | | $ | 2,087 | | $ | 4,018 | | $ | 1,265 | | 165 | % | | $ | 365 | | $ | 2,087 | | $ | 4,175 | Christopher R. Concannon | | $ | 1,100 | | 150 | % | | $ | 124 | | $ | 1,650 | | $ | 3,176 | | Christopher A. Isaacson | | | $ | 650 | | 150 | % | | $ | 171 | | $ | 975 | | $ | 1,950 | Brian N. Schell | | $ | 521 | | 140 | % | | $ | 55 | | $ | 729 | | $ | 1,404 | | $ | 525 | | 140 | % | | $ | 129 | | $ | 735 | | $ | 1,470 | Christopher A. Isaacson | | $ | 540 | | 150 | % | | $ | 61 | | $ | 810 | | $ | 1,559 | | Mark S. Hemsley (2) | | $ | 619 | | 110 | % | | $ | 34 | | $ | 681 | | $ | 1,328 | | Joanne Moffic-Silver | | $ | 433 | | 140 | % | | $ | 46 | | $ | 606 | | $ | 1,167 | | David Howson (2) | | | $ | 575 | | 110 | % | | $ | 111 | | $ | 633 | | $ | 1,266 | Bryan Harkins | | | $ | 500 | | 100 | % | | $ | 88 | | $ | 500 | | $ | 1,000 |
| (2) | (2)
| | Mr. HemsleyHowson receives his cash compensation in British pounds. The amounts reported were converted to U.S. dollars using a rate of £1.00 to $1.28,$1.37, which was the exchange rate as of December 31, 2018. 2020. |
In connection with Mr. Concannon’s voluntary termination of employment for a reason other than good reason effective January 14, 2019, he was not eligible to receive a 2018 annual incentive plan payout. His employment agreement is described more fully below under “Severance, Change in Control and Employment-Related Agreements.”
Corporate Performance.. For the 20182020 annual incentive plan, the Compensation Committee approved the following corporate performance metrics: (i) synergies, (ii)adjusted net revenue, (iii)(ii) adjusted EBITDA, and (iv)(iii) business unit performance. Given their corporate-wide responsibilities, business unit performance goals were not assigned to Messrs. Tilly or Isaacson. These performance metrics, in the aggregate, are weighted 75%70% of each named executive officer’s target annual incentive opportunity. The Compensation Committee approved these metrics for the following reasons: to align the interests of our executives with stockholders, and to focus our executive officers on the continued integration of Bats through cost savings, increasing revenues and earnings and enhancing specific business unit performance. More specifically, these metrics focus and reward management’s efforts to achieve key business strategy goals of synergies related to the transformational acquisition of Bats and to focusexecutives on long-term growth by continuing to increase our revenue and earnings by increasing trading in our products. These metrics alsoproducts, to allocate a larger weighting to adjusted EBITDA growth because executives are able to influence it to a larger degree than revenue growth, and to allocate different weightings of the corporate performance metrics based on whether an executive is a corporate or business unit leader, thereby driving the importance of certain metrics. metrics over which an executive has more impact. 46 | Cboe Global Markets 2021 Proxy Statement | |
The following shows the corporate performance metrics and their relative weightings for 20182020 for the named executive officers. Named Executive Officer | Synergies | | Net Revenue | Adjusted EBITDA | | Business Unit Performance | | Adjusted Net Revenue | Adjusted EBITDA | | Business Unit Performance | Edward T. Tilly | 15 | % | | 10 | % | 40 | % | | 10 | % | | 25 | % | 45 | % | | — | % | Christopher R. Concannon | 15 | % | | 10 | % | 40 | % | | 10 | % | | Christopher A. Isaacson | | | 25 | % | 45 | % | | — | % | Brian N. Schell | 15 | % | | 10 | % | 40 | % | | 10 | % | | 25 | % | 35 | % | | 10 | % | Christopher A. Isaacson | 15 | % | | 10 | % | 40 | % | | 10 | % | | Mark S. Hemsley | 10 | % | | 10 | % | 10 | % | | 45 | % | | Joanne Moffic-Silver | 15 | % | | 10 | % | 40 | % | | 10 | % | | David Howson | | | 15 | % | 15 | % | | 40 | % | Bryan Harkins | | | 15 | % | 15 | % | | 40 | % |
The Compensation Committee also established goals at threshold, target, and maximum performance levels and payouts to be met with respect to the corporate performance metrics. The Compensation Committee used straight-line interpolation to determine amountspayouts for anyperformance results in between the threshold and target performance levels and in between the target and maximum performance levels. The percentage payout of target incentive opportunity for each of the metrics other than synergies, is | Cboe Global Markets 2019 Proxy Statement
| 39
|
0% 25% for threshold, 100% for target, and 200% for maximum. The percentage payout of target incentive opportunity for
For each named executive officer, the achievement of synergies is 50% for threshold, 100% for target and 150% for maximum. With respect to all executive officers the following showstables below show the corporate performance metric threshold, target, and maximum goals, actual performances and percentage payouts of target for 2018. Mr. Concannon’s percentage payout2020. The tables below also show each officer’s 2020 Percentage Payout of target was 0%. Target based on achieved performance.
Messrs. Tilly’s and Isaacson’s 2020 Percentage Payout of Target As officers with corporate-wide responsibilities, Messrs. Tilly’s and Isaacson’s 2020 annual incentive awards were subject to achievement of adjusted net revenue and adjusted EBITDA for the Company performance goals. Corporate Performance Metrics | | Threshold* | | Target* | | Maximum* | | Actual* | | Percentage Payout of Target | Synergies | | $ | 38 | | $ | 50 | | $ | 75 | | $ | 57 | | 114% | Net Revenue | | $ | 1,056 | | $ | 1,112 | | $ | 1,167 | | $ | 1,217 | | 200% | Adjusted EBITDA (1) | | $ | 633 | | $ | 745 | | $ | 856 | | $ | 840 | | 186% |
Performance Metrics | | Weighting | | Threshold* | | Target* | | Maximum* | | Actual* | | Percentage
Payout of Target | Adjusted Net Revenue (Company) (1) | | 25% | | $ | 1,098 | | $ | 1,220 | | $ | 1,342 | | $ | 1,213 | | 96% | Adjusted EBITDA (Company) (1) | | 45% | | $ | 710 | | $ | 836 | | $ | 961 | | $ | 865 | | 124% |
* In millions
| (1) | Adjusted net revenue and adjusted EBITDA for the Company is aare non-GAAP measuremeasures used by the Company and a reconciliationreconciliations of actual performanceperformances to GAAP measures isare provided in Appendix A. |
Mr. Schell’s 2020 Percentage Payout of Target As the Executive Vice President, Chief Financial Officer and Treasurer and an officer with corporate wide responsibilities, Mr. Schell’s annual incentive award was subject to the achievement of adjusted net revenue and adjusted EBITDA for the Company and the finance, facilities and administrative | Cboe Global Markets 2021 Proxy Statement | 47 |
With respect to Messrs. Tilly and Concannon,
department budgetary goals. The specific goals for the following shows the business unit performance metric threshold, target and maximum goals, actual performance and percentage payout of targetdepartment metrics are not disclosed for 2018. Mr. Concannon’s percentage payout of target was 0%. competitive purposes. Business Unit Performance Metric | | Threshold* | | Target* | | Maximum* | | Actual* | | Percentage Payout of Target | Adjusted EBITDA (1) | | $ | 558 | | $ | 745 | | $ | 931 | | $ | 840 | | 152% |
| | | | | | | | | | | | | | | | | Performance Metrics | | Weighting | | Threshold* | | Target* | | Maximum* | | Actual* | | Percentage
Payout of Target | Adjusted Net Revenue (Company) (1) | | 25% | | $ | 1,098 | | $ | 1,220 | | $ | 1,342 | | $ | 1,213 | | 96% | Adjusted EBITDA (Company) (1) | | 35% | | $ | 710 | | $ | 836 | | $ | 961 | | $ | 865 | | 124% | Finance, Facilities & Admin | | 10% | | $ | — (2) | | $ | — (2) | | $ | — (2) | | $ | — (2) | | 153% |
* In millions
| (1) | Adjusted net revenue and adjusted EBITDA for the Company is aare non-GAAP measuremeasures used by the Company and a reconciliationreconciliations of actual performanceperformances to GAAP measures isare provided in Appendix A.A |
| (2) | Not disclosed for competitive purposes. |
Mr. Howson’s 2020 Percentage Payout of Target As leader of our European business unit, Mr. Howson’s annual incentive award was primarily subject to the achievement of the European business unit and also subject to adjusted net revenue and adjusted EBITDA for the Company performance goals. Performance Metrics (1) | | Weighting | | Threshold* | | Target* | | Maximum* | | Actual* | | Percentage
Payout of Target | Adjusted Net Revenue (Company) (2) | | 15% | | $ | 1,098 | | $ | 1,220 | | $ | 1,342 | | $ | 1,213 | | 96% | Adjusted EBITDA (Company) (2) | | 15% | | $ | 710 | | $ | 836 | | $ | 961 | | $ | 865 | | 124% | Adjusted Net Revenue (Europe) (3) | | 10% | | $ | 79 | | $ | 93 | | $ | 107 | | $ | 93 | | 98% | Adjusted EBITDA (Europe) (3) | | 30% | | $ | 41 | | $ | 51 | | $ | 62 | | $ | 58 | | 151% |
With respect to Mr. Hemsley, the following shows the business unit performance metric weightings, threshold, target and maximum goals, actual performances and percentage payouts of target for 2018, in each case as converted to U.S. dollars using a rate of £1.00 to $1.28, which was the exchange rate as of December 31, 2018.
Business Unit Performance Metrics | | Weighting | | Threshold* | | Target* | | Maximum* | | Actual* | | Percentage
Payout of Target | Net Revenue (Europe) | | 15% | | $ | 75 | | $ | 83 | | $ | 91 | | $ | 95 | | 200% | Adjusted EBITDA (Europe) (1) | | 30% | | $ | 38 | | $ | 45 | | $ | 52 | | $ | 56 | | 200% |
* In millions
| (1) | (1)
European performance goals were converted to U.S. dollars using a rate of £1.00 to $1.28, which was the budgeted exchange rate. |
| (2) | Adjusted net revenue and adjusted EBITDA for the Company are non-GAAP measures used by the Company and reconciliations of actual performances to GAAP measures are provided in Appendix A. |
| (3) | Adjusted net revenue and adjusted EBITDA for the European business unit is aare non-GAAP measuremeasures used by the Company and a reconciliationreconciliations of actual performanceperformances to GAAP measures isare provided in Appendix A. |
Mr. Harkins’ 2020 Percentage Payout of Target As the leader of the markets business unit, Mr. Harkins’ annual incentive award was primarily subject to the achievement of the markets business unit and also subject to adjusted net revenue and adjusted EBITDA for the Company performance goals. The markets business unit performance metrics for Messrs. Schellis 48 | Cboe Global Markets 2021 Proxy Statement | |
derived from the sum of the performances of the options, futures, North American (“NA”) equities, and Isaacson and Ms. Moffic-Silver were the finance, technology and legal department budgets, respectively, and the percentage payouts of target for 2018 were 150%, 136% and 141%, respectively. Specific goals for these metrics are not disclosed for competitive purposes. global FX business units. | | | | | | | | | | | | | | | | | Performance Metrics | | Weighting | | Threshold* | | Target* | | Maximum* | | Actual* | | Percentage
Payout of Target | Adjusted Net Revenue (Company) (1) | | 15% | | $ | 1,098 | | $ | 1,220 | | $ | 1,342 | | $ | 1,213 | | 96% | Adjusted EBITDA (Company) (1) | | 15% | | $ | 710 | | $ | 836 | | $ | 961 | | $ | 865 | | 124% | Options Adjusted Net Revenue (2) | | n/a | | $ | 524 | | $ | 617 | | $ | 709 | | $ | 632 | | n/a | Futures Net Revenue | | n/a | | $ | 118 | | $ | 139 | | $ | 160 | | $ | 106 | | n/a | NA Equities Adjusted Net Revenue (2) | | n/a | | $ | 268 | | $ | 315 | | $ | 362 | | $ | 324 | | n/a | Global FX Net Revenue | | n/a | | $ | 48 | | $ | 56 | | $ | 65 | | $ | 58 | | n/a | Adjusted Net Revenue (Markets) (2) | | 10% | | $ | 958 | | $ | 1,127 | | $ | 1,296 | | $ | 1,120 | | 97% | Options Adjusted EBITDA (2) | | n/a | | $ | 355 | | $ | 444 | | $ | 533 | | $ | 476 | | n/a | Futures Adjusted EBITDA (2) | | n/a | | $ | 68 | | $ | 85 | | $ | 102 | | $ | 57 | | n/a | NA Equities Adjusted EBITDA (2) | | n/a | | $ | 184 | | $ | 230 | | $ | 276 | | $ | 247 | | n/a | Global FX Adjusted EBITDA (2) | | n/a | | $ | 23 | | $ | 29 | | $ | 35 | | $ | 32 | | n/a | Adjusted EBITDA (Markets) (2) | | 30% | | $ | 630 | | $ | 787 | | $ | 945 | | $ | 812 | | 116% |
* | In millions, numbers may not foot due to rounding |
| (1) | Adjusted net revenue and adjusted EBITDA for the Company are non-GAAP measures used by the Company and reconciliations of actual performances to GAAP measures are provided in Appendix A. |
| (2) | Adjusted net revenue and adjusted EBITDA for each respective business unit, as applicable, are non-GAAP measures used by the Company and reconciliations of actual performances to GAAP measures are provided in Appendix A. |
The achievement of synergies is measured as of December 31, 2018 and the target of $50 million of 2018 run rate expense synergies, which includes $17 million of incremental synergies, was reviewed by the Board in February 2018 and thereafter publicly disclosed. The achievement of 2018adjusted net revenue, which is revenues less cost of revenues, adjusted EBITDA, and business unit performance 40
| Cboe Global Markets 2019 Proxy Statement
| |
performances are measured as of December 31, 2018. The target 2018 net revenues, adjusted EBITDA2020. Minor adjustments to the Options and Futures business unit performance projections were presented to and reviewed by the Board as part of the Company’s annual budgeting process. Adjustments to the synergies, adjusted EBITDA and certain of the business unit performance projectionsmetrics were further reviewed and approved in February 20192021 by the Board to account forbetter reflect organizational changes that occurred during 2018.budgeting. In February 2019, we publicly disclosed2021, the Board approved the actual performanceperformances of 2018 run rate expense synergies,adjusted net revenues, adjusted EBITDA, and European and markets business units. The actual adjusted net revenue and adjusted EBITDA results for the Company exclude our acquisitions completed in 2020 (MATCHNow, EuroCCP, TradeAlert, FT Options, and Hanweck). The actual adjusted net revenue and adjusted EBITDA results for the European business unit performance. For 2018,exclude our EuroCCP acquisition and the payout percentagerelated expenses in connection with the development of our European derivatives. The actual adjusted net revenue and adjusted EBITDA results for the markets business unit exclude our TradeAlert, FT Options, and Hanweck acquisitions from the options business unit and our MATCHNow acquisition from the NA equities business unit. The actual performance results exclude our 2020 acquisitions in order to allow for a more comparable measure of actual performance against the pre-established corporate performance of each named executive officer’s targetmetric goals, which were based on the 2020 annual incentive award opportunity ranged from 167%budget that was developed prior to, 187%, other than for Mr. Concannon, which was 0%. and does not include, the acquisitions.
Individual Performance.. For the 20182020 annual incentive plan, individual performance goals were 25%comprised 30% of each named executive officer’s target annual incentive opportunity. Based upon data and analysis on each goal as provided by management,the level of achievement for the individual performance goals, the Compensation Committee determined the payout percentage of target annual incentive award opportunity for individual performance for each named executive officer. | Cboe Global Markets 2021 Proxy Statement | 49 |
Early in 2018,2020, the Compensation Committee set the following corporate strategic goals for 2018: drive growth through product innovation, leading edge, state ofand considered the art technology and seamless trading solutions;
widen global access and distribution;
grow highest margin proprietary index suite; and
build strongfollowing achieved performance culture through effective pay for performance processes.
As discussed above in “2018 Business Highlights,” overall, we substantially performed on our targeted 2018 strategic goals.2020:
| | | Goal | | Performance | Build a strong performance culture that attracts, engages, develops and retains key talent | | Completed and analyzed employee engagement survey and started to implement organizational changes, such as unconscious bias trainings Initiated employee Diversity and Inclusion Committee Held routine succession planning meetings to determine appropriate talent pipeline, including a focus on diverse talent | Deploy our core strengths for the benefit of index and product partners | | Continued product innovation with the launch of mini VIX futures and options on S&P 500 ESG Index Launched target outcome indices on Russell 2000 Index Provided world class education on our products through virtual conferences | Mergers and acquisitions performance | | Reviewed mergers and acquisition performance and strategy Acquired companies that accelerated diversification of geographic and asset class offerings | Broaden geographic reach | | Planning launch of pan-European derivatives in 2021 Acquired companies that increased geographic presence in Canada and Europe |
The Compensation Committee received input from Mr. Tilly regarding the individual performances and recommendations regarding incentive compensation of the executive officers. The Compensation Committee, with input from the Board, also evaluated the individual performance of Mr. Tilly with respect to the following:Tilly. 50 | Cboe Global Markets 2021 Proxy Statement | |
The table below shows Mr. Tilly’s individual goals and achieved performance highlights in 2018 were to:2020. | | | Goal | | Performance | Manage the Company and its affiliates to achieve the corporate strategic goals listed above | | As discussed above and in “2020 Business Highlights,” overall, substantially performed on targeted 2020 strategic goals | Manage internal and external communications with the investment community, government and the public to promote integrity of the markets and/or products | | Engaged with holders of approximately 35% percent of our common stock outstanding at virtual investor and industry conferences, and by participating in informational fireside chats, conducting telephonic investor road shows, and hosting telephonic meetings Met with government officials ranging from U.S. Congressional representatives to SEC and CFTC officials | Manage business continuity in key departments as roles are being defined | | Held routine succession planning meetings to determine appropriate talent pipeline and retention risk | Work with the Compensation Committee and the Board to execute against the Company’s succession plan for all senior management positions | | Held succession planning meetings with Compensation Committee Identified and developed a successor talent bench across critical positions |
manage the Company and its affiliates to achieve the corporate strategic goals listed above;
manage communications with the investment community so as to cultivate a loyal stockholder base; and
work with the Compensation Committee and the Board in continuing to develop and enhance the Company’s succession plan for all senior management positions. The succession plan will identify and qualify multiple potential successors for each senior management position.
table below shows Mr. Concannon’s individual performance was not evaluated, because, in connection with Mr. Concannon’s voluntary termination of employment, he was not eligible to receive a 2018 annual incentive plan payout. Mr. Concannon’sIsaacson’s individual goals and achieved performance highlights in 2018 were to: achieve the corporate strategic goals listed above;
manage communications with the investment community so as to cultivate a loyal stockholder base;
manage the operation of the Company and its affiliates to ensure reliable and efficient service at a competitive cost;
2020. | | | Goal | | Performance | Manage the Company and its affiliates to achieve the corporate strategic goals listed above | | As discussed above and in “2020 Business Highlights,” overall, substantially performed on targeted 2020 strategic goals | Effectively communicate with the investment community and customers so as to cultivate a loyal stockholder base | | Engaged with holders of approximately 35% percent of our common stock outstanding at virtual investor and industry conferences, and by participating in informational fireside chats, conducting telephonic investor road shows, and hosting telephonic meetings Continued open dialogue with customers | Manage the operation of the Company and its affiliates to ensure reliable and efficient service at a competitive cost | |  Expense management is woven throughout the fabric of the Company and led to a 1.3% decrease in operating expenses compared to 2019
Seamless transition to work from home for global associate base without business disruption |
| Cboe Global Markets 20192021 Proxy Statement | 4151
|
maintain a high level of systems performance during the migration to the Bats technology platform;
maintain high levels of customer interaction as integration with Bats is completed; and
achieve retention of key talent and institutional knowledge by maintaining overall engagement during migration to the Bats technology platform.Maintain a high level of systems performance while driving innovation | | Oversaw successful transition of open outcry and hybrid options trading to all electronic trading due to COVID-19 global pandemic and eventual floor re-opening Integrating our information solutions acquisitions, Hanweck, FT Options, and Trade Alert, as well as initiating the MATCHNow acquisition integration 100% uptime across 14 of our 16 markets, including all Cboe’s regulated exchanges globally in 2020, a year marked by unprecedented volatility, volume, and system messaging | Assess risks to the Company and ensure they are monitored and minimized | | Reviewed and analyzed enterprise risk management program on a periodic basis with key Company leaders and the Risk Committee, including emerging risks due to COVID-19 global pandemic and numerous acquisitions | Ensure recruitment, retention and rewarding of key, top performing talent and institutional knowledge by maintaining overall engagement, including during integration of any mergers and acquisition | | Held routine succession planning meetings to determine appropriate talent pipeline, including focus on retention of key talent through the integration of several acquisitions in 2020 Continued to maintain high associate retention |
Based on the above factors and its deliberations, the Compensation Committee determined the payout percentage for individual performance the payout percentage of each named executive officer’s target annual incentive award opportunity. Such individual performance payout percentages of targetpayouts ranged from 100%115% to 130%, other than for Mr. Concannon, which was 0%. 120% of target.
52 | Cboe Global Markets 2021 Proxy Statement | |
Actual Performance.Performance and Payouts. For 2018,2020, the following table shows the combined payout percentage for corporate and individual performance of each named executive officer’s target annual incentive award opportunity. The “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table below reflects amounts paid under the annual incentive plan. In connection with Mr. Concannon’s voluntary termination of employment in early 2019, he was not eligible to receive a 2018 annual incentive plan payout. His employment agreement is described more fully below under “Severance, Change in Control and Employment-Related Agreements.”
Pursuant to the release agreement for Ms. Moffic-Silver, which is described more fully below under “Severance, Change in Control and Employment-Related Agreements,” she was entitled to a prorated 2018 annual incentive plan payout for the performance period completed at the time of termination based on actual performance.
| | 2018 Target Annual | | | | | | Incentive | | 2018 Percentage | | | | Opportunity as | | Payout of | | | | Percentage of | | Target Incentive | | | | | 2020 Target Annual | | | | | | Incentive | | 2020 Percentage | | | | Opportunity as | | Payout of | | | | Percentage of | | Target Incentive | Named Executive Officer | | Base Salary | | Opportunity | | Base Salary | | Opportunity | Edward T. Tilly | | 165% | | 154% | | 165% | | 116% | Christopher R. Concannon | | 150% | | 0% | | Christopher A. Isaacson | | | 150% | | 116% | Brian N. Schell | | 140% | | 154% | | 140% | | 119% | Christopher A. Isaacson | | 150% | | 153% | | Mark S. Hemsley | | 110% | | 172% | | Joanne Moffic-Silver | | 140% | | 151% | | David Howson | | | 110% | | 124% | Bryan Harkins | | | 100% | | 112% |
Technology Platform Migration Cash Incentive Plan
Mr. Isaacson's Offer Letter Agreement, described more fully below under “Severance, Change in Control and Employment-Related Agreements” provides that Mr. Isaacson is eligible for additional cash incentive awards of up to $1,500,000 in the aggregate if he achieves the successful migrations of CFE, C2 and C1 to the Bats technology platform during the three-year period following our acquisition of Bats. As a result of the successful migrations of CFE and C2 to the Bats technology platform on February 25, 2018 and May 14, 2018, respectively, the Compensation Committee, awarded Mr. Isaacson two cash awards in the aggregate amount of $1,000,000. The “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table reflects these cash awards paid to Mr. Isaacson.
Long-Term Incentive Plan Overview. The Compensation Committee strongly believes that a stock ownership culture enhances our long-term success. We have adopted the Second Amended and Restated Long-Term Incentive Plan, which was approved by stockholders at the 2016 Annual Meeting of Stockholders. Under the plan, the Compensation Committee may grant equity or cash awards, including restricted stock, 42
| Cboe Global Markets 2019 Proxy Statement
| |
restricted stock units, and options. Stock options were not featured in our long-term incentive program in 2018. 2020. The Compensation Committee believes that equity awards assist us in meeting the following goals: Board members and executive officers with the interests of our stockholders;
Board and executive compensation with that of our peers in terms of components and value;
Board members and executives; and
In connection with our acquisition of Bats, the Company assumed the Bats Global Markets, Inc. 2009 Stock Option Plan (the “2009 Plan”), the Bats Global Markets, Inc. Third Amended and Restated 2012 Equity Incentive Plan (the “2012 Plan”) and the Bats Global Markets, Inc. 2016 Omnibus Incentive Plan (the “2016 Plan”, and collectively, the “Bats Plans”). Restricted stock and stock options were granted to Bats’ employees under the Bats Plans and vest in equal annual installments over either three or four years. The stock options and some restricted stock granted under the Bats Plans are fully vested. Following Bats’ initial public offering, no new awards could be made under the 2009 Plan and 2012 Plan. No awards have been made under the Bats Plans subsequent to our acquisition of Bats. We will not grant any additional awards under the Bats Plans; however, there are still awards outstanding under these plans. Information on the outstanding awards and shares of common stock reserved under the Bats Plans is provided more fully below under “Equity Compensation Plan Information.”
20182020 Grants. The Compensation Committee andFor 2020, the Board granted equity awards in early 2018 for the 2018 service year and they were awarded at the target long-term incentive value for each executive. The Compensation Committee set each named executive officer’s 2020 target long-term incentive value based on comparative peer group market data and individual performance. Once the Compensation Committee set the target long-term incentive value for each named executive officer, one-half of the target value was granted in the form of time-based RSUs and one-half of the target value was granted in the form of PSUs.
the 2018each named executive officer’s 2020 total target long-term incentive award value and havevalue. These RSUs are subject to a three-year vesting period, with one-third of the RSUs vesting on each of the first, second, and third anniversaries of the grant date. The vesting of these awards is not subject to performance conditions. The Compensation Committee granted time-based RSUs to align the interests of management with those of our stockholders and to provide a retention incentive.
the 2018each named executive officer’s 2020 total target long-term incentive award value. As described below, one-half of PSU grants are subject to the achievement of relative total stockholder return (“TSR”)TSR measured against pre-determined performance goals and one-half of PSU grants are subject to the achievement of earnings per share (“EPS”)EPS measured against pre-determined performance goals, both over a
| Cboe Global Markets 2021 Proxy Statement | 53 |
three-year performance period. The PSU grants cliff-vest following the completion of the three-year performance period, to the extent performance goals are achieved. | o | | Performance-Based Restricted Stock Units subject to Relative Total Stockholder Return (“PSUs-TSR”). 25% of the 20182020 total target long-term incentive award value is subject to the achievement of relative TSR measured against pre-determined performance goals over a three-year performance period. The number of PSUs-TSR that will vest at the end of the three-year performance period will vary from 0% to 200% of the |
| Cboe Global Markets 2019 Proxy Statement
| 43
|
target number of PSUs-TSR granted to each named executive officer, based on our TSR relative to the TSR for the S&P 500 Index during the three-year performance period. We calculate TSR as the increase in our stock price over the performance period plus reinvested dividends, divided by the stock price at the beginning of the performance period. The Compensation Committee selected the relative TSR performance metric to incent management to increase TSR for the benefit of stockholders, and believes that tying a portion of each executive’s compensation to TSR compared to a broad index encourages management to generate superior returns. |
| o | | Performance-Based Restricted Stock Units subject to Earnings Per Share (“PSUs-EPS”). 25% of the 20182020 total target long-term incentive award value is subject to the achievement of cumulative EPS measured against pre-determined performance goals over a three-year performance period. The number of PSUs-EPS that will vest at the end of the three-year performance period will vary from 0% to 200% of the target number of PSUs-EPS granted to each named executive officer, based on our cumulative EPS during the three-year performance period, as adjusted for certain extraordinary, unusual or non-recurring items. The Compensation Committee selected the cumulative EPS performance metric to encourage management to continue growing the business and increasing trading and listings on our exchanges. Because of the operating leverage inherent in our business, the Compensation Committee believes that EPS growth over the next three years is an appropriate basisperformance measure for these awards. |
The Compensation Committee equally weighted PSUs-TSR and PSUs-EPS so thatare equally weighted to encourage management willto maintain an equal focus on enhancing Company TSR and profitably grow the Company to increase EPS.
The Company will settle vested RSUs and PSUs in shares of the Company’s common stock. For each vested RSU or PSU, the named executive officer will receive one share of our common stock. To receive shares earned under RSUs and PSUs, a named executive officer must be continuously employed during the applicable service period or performance period, subject to accelerationperiod. Vesting of RSUs and PSUs will be accelerated in the event of a change in control followed by a qualified termination or in the event of a participant’s earlier death, disability or qualified retirement. The following table shows the target grant date fairequity award value and number of time-based RSUs that were granted to each named executive officer on February 19, 2018. 2020. The target equity award value and the closing share price on February 11, 2020 were used to calculate the number of shares that were granted on February 19, 2020. Named Executive Officer | # of Shares | | Target Grant Date Fair Value of Stock | # of Shares | | Target Value of Stock | Edward T. Tilly | 14,049 | | $ | 1,650,000 | 19,058 | | $ | 2,350,000 | Christopher R. Concannon | 9,366 | | $ | 1,100,000 | | Christopher A. Isaacson | | 7,096 | | $ | 875,000 | Brian N. Schell | 3,059 | | $ | 359,275 | 6,083 | | $ | 750,000 | Christopher A. Isaacson | 2,768 | | $ | 325,000 | | Mark S. Hemsley | 2,555 | | $ | 300,000 | | Joanne Moffic-Silver | 408 | | $ | 44,220 | | David Howson | | 2,636 | | $ | 325,000 | Bryan Harkins | | 2,636 | | $ | 325,000 |
The following table shows the target grant date fairequity award value and number of PSUs (tied to TSR and EPS performance) that were granted to each named executive officer on February 19, 20182020 and the 54 | Cboe Global Markets 2021 Proxy Statement | |
number of PSUs that would be paid at achievement of threshold, target, and maximum performance goals. The target equity award value and the closing share price on February 11, 2020 were used to calculate the number of shares that were granted on February 19, 2020. 44
| Cboe Global Markets 2019 Proxy Statement
| |
| | | | # of Shares | | Target Value of Stock | | | | | Threshold | | Target | | Maximum | | | Named Executive Officer | | Performance Metric | | (50% Payout) | | (100% Payout) | | (200% Payout) | | | Edward T. Tilly | | 2020-2022 TSR | | 4,765 | | 9,529 | | 19,058 | | $ | 1,175,000 | | | 2020-2022 EPS | | 4,765 | | 9,529 | | 19,058 | | $ | 1,175,000 | Christopher A. Isaacson | | 2020-2022 TSR | | 1,774 | | 3,548 | | 7,096 | | $ | 437,500 | | | 2020-2022 EPS | | 1,774 | | 3,548 | | 7,096 | | $ | 437,500 | Brian N. Schell | | 2020-2022 TSR | | 1,521 | | 3,042 | | 6,083 | | $ | 375,000 | | | 2020-2022 EPS | | 1,521 | | 3,042 | | 6,083 | | $ | 375,000 | David Howson | | 2020-2022 TSR | | 659 | | 1,318 | | 2,636 | | $ | 162,500 | | | 2020-2022 EPS | | 659 | | 1,318 | | 2,636 | | $ | 162,500 | Bryan Harkins | | 2020-2022 TSR | | 659 | | 1,318 | | 2,636 | | $ | 162,500 | | | 2020-2022 EPS | | 659 | | 1,318 | | 2,636 | | $ | 162,500 |
goals. With respect to Ms. Moffic-Silver, the amounts do not reflect proration for the portion of the performance period completed at the time of termination.
| | | | # of Shares | | Target Grant Date Fair Value of Stock | | | | | Threshold | | Target | | Maximum | | Named Executive Officer | | Performance Metric | | (50% Payout) | | (100% Payout) | | (200% Payout) | | Edward T. Tilly | | 2018-2020 TSR | | 3,512 | | 7,025 | | 14,049 | | $ | 825,000 | | | 2018-2020 EPS | | 3,512 | | 7,025 | | 14,049 | | $ | 825,000 | Christopher R. Concannon | | 2018-2020 TSR | | 2,342 | | 4,683 | | 9,366 | | $ | 550,000 | | | 2018-2020 EPS | | 2,342 | | 4,683 | | 9,366 | | $ | 550,000 | Brian N. Schell | | 2018-2020 TSR | | 765 | | 1,530 | | 3,059 | | $ | 179,638 | | | 2018-2020 EPS | | 765 | | 1,530 | | 3,059 | | $ | 179,638 | Christopher A. Isaacson | | 2018-2020 TSR | | 692 | | 1,384 | | 2,768 | | $ | 162,500 | | | 2018-2020 EPS | | 692 | | 1,384 | | 2,768 | | $ | 162,500 | Mark S. Hemsley | | 2018-2020 TSR | | 639 | | 1,278 | | 2,555 | | $ | 150,000 | | | 2018-2020 EPS | | 639 | | 1,278 | | 2,555 | | $ | 150,000 | Joanne Moffic-Silver | | 2018-2020 TSR | | 612 | | 1,224 | | 2,448 | | $ | 143,750 | | | 2018-2020 EPS | | 612 | | 1,224 | | 2,448 | | $ | 143,750 |
The following table displays the threshold, target, and maximum performance goals for the PSU awards granted in 2018,2020, measured over the performance period frombeginning on January 1, 2018 through2020 and ending on December 31, 2020.2022. | | Threshold | | Target | | Maximum | | | | (50% Payout) | | (100% Payout) | | (200% Payout) | | | | | Threshold | | Target | | Maximum | | | | (50% Payout) | | (100% Payout) | | (200% Payout) | Relative TSR Compared to S&P 500 | | 20th Percentile | | 50th Percentile | | 80th Percentile | | 20th Percentile | | 50th Percentile | | 80th Percentile | Cumulative EPS | | $12.57 | | $13.48 | | $14.49 | | $15.36 | | $16.58 | | $17.88 |
For performance levels that fall between the goals shown above, the percentage of PSUs that vest will be determined by straight line interpolation, provided that no PSUs will vest if the performance does not equal or exceed the threshold amount. Pursuant to the terms of the equity award agreements, the 2018 RSU and PSU grants for Mr. Concannon were forfeited in early 2019 in connection with his voluntary termination of employment.
The 2018 time-based RSU grant for Ms. Moffic-Silver vested in 2018 in accordance with her release agreement. In addition, in accordance with her release agreement, Ms. Moffic-Silver became entitled to accelerated vesting of any outstanding PSUs, including the 2016, 2017 and 2018 grants of PSUs, prorated for the portion of the performance period completed at the time of termination and subject to attainment of the applicable performance goals through the full performance period. The release agreement is described more fully below under “Severance, Change in Control and Employment-Related Agreements.”
2016 PSU Grants Vested. In early 2019,On February 19, 2018, the Compensation Committee determined, with respect toapproved the 2016 grantsgrant of PSUs awarded on February 19, 2016,(“2018 PSUs”) to our named executive officers, except for Mr. Howson, who was not then an executive officer and did not receive a grant of 2018 PSUs. The 2018 PSUs were subject to the achievement of TSR and EPS measured against the pre-determined performance goals, both over a three-year performance period frombeginning on January 1, 2016 through2018 and ending on December 31, 2018. 2020. In early 2021, the Compensation Committee determined that the following performance was achieved resulting in the indicated payout:
The TSR percentile attained was the 77th14th percentile, and sowhich resulted in the vesting of 0% of the target number of PSUs-TSR granted to each applicable named executive officer. The 3- year adjusted EPS attained was $15.02 1, which resulted in the vesting of 200% of the target number of PSUs-TSR vested forPSUs-EPS granted to each applicable named executive officer. The cumulative EPS, as adjusted, attained was $10.11, and so approximately 200% of the target number PSUs-EPS vested for each applicable named executive officer.
(1) | The 3-year adjusted EPS is a non-GAAP measure used by the Company and a reconciliation to a GAAP measure is provided in Appendix A. |
The specific performance goals for the PSUs-TSR and PSUs-EPS for the 2016‑20182018-2020 performance period were previously disclosed in our proxy statement covering 20162018 compensation. Messrs. Concannon, Schell, Isaacson and Hemsley did not receive the 2016 grants of equity awards. | Cboe Global Markets 20192021 Proxy Statement | 4555
|
The 2016 grantstable below shows the number of equity awards for Ms. Moffic-Silver were prorated for the portion of the performance period completed2018 PSUs that vested at the time of separation and subject to attainmentconclusion of the applicable performance goals through the full performance period vested in accordance with her release agreement, which is described more fully below under “Severance, Change in Controlfor each applicable named executive officer and Employment-Related Agreements.” Certain details of the PSUs that vested based on achievement of 2016‑2018 TSR and EPS performance goals for Mr. Tilly and, as pro-rated with respect to Ms. Moffic-Silver, are as follows and dodoes not include the dividend equivalent payments. | | | | | | | | | | # of Shares | | | | | | | at Target | | # of Shares | | | | | | | | | | | | | | | | | # of Shares | | | | | | | | | at Target | | # of Shares | Named Executive Officer | Performance Metric | | (100% Payout) | | Vested | | | Performance Metric | | (100% Payout) | | Vested | Edward T. Tilly | 2016-2018 TSR | | 10,114 | | 20,228 | | | 2018-2020 TSR | | 7,025 | | 0 | | 2016-2018 EPS | | 10,114 | | 20,228 | | Joanne Moffic-Silver | 2016-2018 TSR | | 1,983 | | 2,858 | | | 2016-2018 EPS | | 1,983 | | 2,858 | | | | | | 2018-2020 EPS | | 7,025 | | 14,050 | Christopher A. Isaacson | | | | 2018-2020 TSR | | 1,384 | | 0 | | | | | 2018-2020 EPS | | 1,384 | | 2,768 | Brian N. Schell | | | | 2018-2020 TSR | | 1,530 | | 0 | | | | | 2018-2020 EPS | | 1,530 | | 3,060 | Bryan Harkins | | | | 2018-2020 TSR | | 1,277 | | 0 | | | | | 2018-2020 EPS | | 1,277 | | 2,554 |
Other Executive Compensation Program Considerations Stock Ownership and Holding Guidelines The Compensation Committee adopted stock ownership and holding guidelines, shown below, specifying the levels of stock ownership that each named executive officer must maintain while employed by us. For purposes of this ownership requirement, (a) shares owned outright or in trust and (b) restricted stock or stock units, including shares or units with time-based or performance conditions that have been granted but are unvested, are counted toward the guidelines. Each named executive officer has three five years to meet the guidelines from the date that such officer was appointed to his position or her position.within four years of May 2019 for named executive officers then-serving when the guidelines were updated in May 2019. Each named executive officer is required to hold all shares until the guidelines are met, except for sales of shares to pay taxes with respect to the vesting or exercising of equity grants. As of December 31, 2018,2020, each named executive officer has met the applicable holding requirement based on his position with us. Ms. Moffic-Silver met the applicable holding requirements of two times base salary as of February 28, 2018. | | | Named Executive Officer | | Holding Requirement | Edward T. Tilly | | FiveSix times base salary
| Christopher R. ConcannonA. Isaacson | | Four times base salary | Brian N. Schell | | TwoThree times base salary
| Christopher A. IsaacsonDavid Howson
| | TwoThree times base salary
| Mark S. HemsleyBryan Harkins
| | TwoThree times base salary
|
Hedging Policy Our Insider Trading Policy prohibits our executive officers and all employees, except as set forth below, from entering into transactions involving options to purchase or sell our common stock or other derivatives related to our common stock. None of our executive officers havehas existing hedges on shares of our common stock. Employees, other than our executive officers, may enter into the following types of security transactions on our common stock through the purchase or sale of exchange-traded options, provided that they otherwise comply with the remainder of our Insider Trading Policy: covered calls (i.e., the writing of exchange-traded call options covering a number of shares less than or equal to the total number of unrestricted shares and vested shares owned by the call writer); and 56 | Cboe Global Markets 2021 Proxy Statement | |
collars for hedging purposes (i.e., the sale of exchange-traded call options and the purchase of an equivalent number of put options, in each case, covering a number of shares less than or equal to the total number of unrestricted shares and vested shares owned by the holder). As one of the world’s largest exchange holding companies, offering cutting-edge trading and investment solutions to investors around the world and owning the largest options exchange, we believe options are first and foremost incredibly useful and powerful risk mitigation tools that can help protect an investor’s financial portfolio. From buying puts to hedge the downside risk of owning a stock to writing covered calls to collect income, listed options strategies are protective tools employed by institutions, pension funds, and individual investors. As such, we believe that it is appropriate for our employees, other than our executive officers, to engage in the above mentioned selected hedging transactions, because these strategies help empower our employees to preserve their investmentcapital and protect their financial future, while continuing to own our common stock and be invested in their workplace, employees are required to comply with our Insider Trading Policy and other policies, which may include trade monitoring, receiving certain pre-approvals, and observing blackout periods when purchasing or selling options, employees must wait generally one year until a portion of their equity grants vest before they are able to purchase or sell options on the related vested common stock, the interests of our employees continue to be aligned with our stockholders through their continued ownership of our common stock and ability to retain their rights to voting and dividends as Cboe stockholders, employees are able to collect income on their common stock from the sale of options without having to sell our stock, and due to their continued ownership of our common stock, employees continue to be discouraged from excessive risk-taking that could negatively impact our business and stock price over time. Pledging Policy Our Insider Trading Policy prohibits our executive officers and all employees from entering into any pledges or margin loans on shares of our common stock. None of our executive officers have existing pledges or margin loans on shares of our common stock. Clawbacks The Compensation Committee hasWe maintain a clawback policy for the clawback ofcovering cash incentive payments and long-term incentives based on the provisions of the Dodd-Frank Act. The policy provides that we will attempt to recover incentive amounts paid to executive officers in the event of a restatement of our financial statements due to any material noncompliance with any financial reporting requirement. The policy has a three-year look-back and
46
| Cboe Global Markets 2019 Proxy Statement
| |
applies to both current and former executives, regardless of such executive’s involvement in the noncompliance. The equity award agreements contain provisions applying the clawback policy to equity grants. Employee Benefit Plans, Severance, Change in Control and Employment-Related Agreements We makeprovide medical, life, and disability plans availableinsurance coverage to all of our employees, including our named executive officers. In addition, for named executive officers and certain other employees, we provide participation in the Supplemental Executive Retirement Plan (“SERP”) and the Executive Retirement Plan (“ERP”), which are described more fully below under “Summary Compensation – Compensation—Non-Qualified Deferred Compensation Plans.”Plans”. We offer these plansthis coverage in order to provide a | Cboe Global Markets 2021 Proxy Statement | 57 |
competitive benefits program, a level of protection for catastrophic events, and income during retirement. TheseThe SERP and ERP plans are defined contribution plans, and we do not provide any defined benefit retirement plans to our executive officers or employees. Effective January 1, 2017, the Company froze the Executive Retirement PlanERP to new executive officers and employees. As of December 31, 2018,2020, we had an employment agreementsagreement with Messrs.Mr. Tilly, and Concannon,an offer letter agreements with Messrs. Schell, Isaacson and Hemsley, a releaseemployment agreement with Ms. Moffic-SilverMr. Howson, and an Executive Severance Plan for other executive officers in order to encourage retention, maintain a consistent management team to effectively run our operations, assist with separation proceedings, and allow executives to focus on our strategic business priorities. The employment agreements with Messrs. Tilly and Concannon, offer letter agreements with Messrs. Schell, Isaacson and HemsleyHowson and the Executive Severance Plan contain severance and change in control provisions and are described more fully below under “Severance, Change in Control and Employment-Related Agreements.”Agreements”. Any payments under the employment agreements, offer letter agreements and the Executive Severance Plan upon a change in control will only occur if the named executive officer’s employment is terminated without cause or he or she resigns for good reason during a set period following the change in control, known as a double trigger provision. Tax and Accounting Considerations The Compensation Committee considers the tax and accounting implications of compensation to us and the tax implications to our named executive officers. Historically, to the extent possible, the Compensation Committee strove to provide compensation deductible under Section 162(m) of the Internal Revenue Code and, to that end, certified, as applicable, the level of attainment of the performance targets under the Second Amended and Restated Long-Term Incentive Plan annually in accordance with Section 162(m). Nonetheless, changes in tax laws or their interpretation and other outside factors may affect the deductibility of certain compensation payments. For example, the Tax Cuts and Jobs Act, which was signed into law December 22, 2017, limits the deductibility of compensation paid to our named executive officers to $1 million each year for taxable years beginning after December 31, 2017. Even though “performance-based” criteria is no longer relevant in determining whether compensation is deductible for tax purposes, the Compensation Committee plans to continue to apply such criteria in structuring future compensation arrangements. The Compensation Committee reserves the right to pay compensation that is not deductible for tax purposes when, in its judgment, such compensation is appropriate. Compensation Committee Report The Compensation Committee consists of Mr. Fitzpatrick, Chair, Mr. English, Ms. Froetscher, Mr. Parisi, and Mr. Parisi,Tomczyk, each of whom the Board has determined are independent under BZX and Nasdaq listing rules and our Corporate Governance Guidelines. The Compensation Committee has duties and powers as described in its written charter adopted by the Board. A copy of the charter can be found on our Investor Relations page at http://ir.Cboe.com. | Cboe Global Markets 2019 Proxy Statement
| 47
|
The Compensation Committee has reviewed and discussed with management the disclosures contained in the foregoing section entitled “Compensation Discussion and Analysis.”Analysis”. Based on this review and discussion, the Compensation Committee recommended to the Board that the section entitled “Compensation Discussion and Analysis” be included in this Proxy Statement for the Annual Meeting. Compensation Committee Edward J. Fitzpatrick, Chair Frank E. English, Jr.
Janet P. Froetscher James E. Parisi Fredric J. Tomczyk 58 | Cboe Global Markets 2021 Proxy Statement | |
Risk Assessment We believe that any potential risks arising from our employee compensation policies and practices are not likely to have a material adverse effect on us. With assistance from Meridian, the Compensation Committee reviewed and discussed a risk assessment of our compensation policies and practices for all employees for 2018,2020, including non-executive officers, in its oversight capacity. The Compensation Committee and management considered a number of factors, including the following factors, when reviewing potential risk from our employee compensation policies and practices:
48
| Cboe Global Markets 20192021 Proxy Statement | 59 |
SUMMARY COMPENSATION 20182020 Summary Compensation Table
The table below sets forth, for the years indicated below, the compensation earned by our named executive officers. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-Equity | | | | | | | | | | | | | | | | | Stock | | Incentive Plan | | All Other | | | | Name and Principal Position | | Year | | Salary | | Bonus | | Awards(1) | | Compensation(2) | | Compensation(3) | | Total | Edward T. Tilly | | 2018 | | $ | 1,265,000 | | $ | — | | $ | 3,237,079 | | $ | 3,219,374 | | $ | 731,684 | | $ | 8,453,137 | Chairman and Chief | | 2017 | | $ | 1,150,000 | | $ | — | | $ | 6,070,988 | | $ | 2,461,058 | | $ | 737,887 | | $ | 10,419,933 | Executive Officer (4) | | 2016 | | $ | 1,000,000 | | $ | — | | $ | 2,714,536 | | $ | 1,775,000 | | $ | 464,047 | | $ | 5,953,583 | Christopher R. Concannon | | 2018 | | $ | 1,100,000 | | $ | — | | $ | 2,157,973 | | $ | 0 | | $ | 99,633 | | $ | 3,357,606 | President and Chief | | 2017 | | $ | 833,333 | | $ | — | | | 4,179,168 | | $ | 1,945,500 | | $ | 38,187 | | $ | 6,996,188 | Operating Officer(5, 6) | | | | | | | | | | | | | | | | | | | | | Brian N. Schell | | 2018 | | $ | 521,000 | | $ | — | | $ | 704,928 | | $ | 1,122,984 | | $ | 68,845 | | $ | 2,417,757 | Executive Vice President, | | | | | | | | | | | | | | | | �� | | | | | Chief Financial Officer and | | | | | | | | | | | | | | | | | | | | | Treasurer | | | | | | | | | | | | | | | | | | | | | Christopher A. Isaacson | | 2018 | | $ | 540,000 | | $ | — | | $ | 637,761 | | $ | 2,236,384 | | $ | 147,587 | | $ | 3,561,732 | Executive Vice President, | | | | | | | | | | | | | | | | | | | | | Chief Information Officer (7) | | | | | | | | | | | | | | | | | | | | | Mark S. Hemsley | | 2018 | | $ | 619,379 | | $ | — | | $ | 588,566 | | $ | 1,175,272 | | $ | — | | $ | 2,383,217 | Executive Vice President, | | 2017 | | $ | 544,377 | | $ | — | | | 1,245,474 | | $ | 741,816 | | $ | 13,500 | | $ | 2,545,167 | President Europe(6, 8) | | | | | | | | | | | | | | | | | | | | | Joanne Moffic-Silver | | 2018 | | $ | 72,167 | | $ | — | | $ | 336,673 | | $ | 147,552 | | $ | 3,207,150 | | $ | 3,763,542 | Former Executive Vice | | 2017 | | $ | 433,000 | | $ | — | | $ | 1,174,484 | | $ | 877,171 | | $ | 299,331 | | $ | 2,783,986 | President, General Counsel | | 2016 | | $ | 427,583 | | $ | — | | $ | 532,175 | | $ | 535,477 | | $ | 215,849 | | $ | 1,711,084 | and Corporate Secretary(9) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-Equity | | | | | | | | | | | | | | | | | Stock | | Incentive Plan | | All Other | | | | Name and Principal Position | | Year | | Salary | | Bonus | | Awards(1) | | Compensation(2) | | Compensation(3) | | Total | Edward T. Tilly | | 2020 | | $ | 1,265,000 | | $ | — | | $ | 4,700,084 | | $ | 2,413,017 | | $ | 684,310 | | $ | 9,062,411 | Chairman, President and | | 2019 | | $ | 1,265,000 | | $ | — | | $ | 4,336,178 | | $ | 1,669,800 | | $ | 941,807 | | $ | 8,212,785 | Chief Executive Officer | | 2018 | | $ | 1,265,000 | | $ | — | | $ | 3,237,079 | | $ | 3,219,374 | | $ | 731,684 | | $ | 8,453,137 | Christopher A. Isaacson | | 2020 | | $ | 650,000 | | $ | — | | $ | 1,750,016 | | $ | 1,126,832 | | $ | 137,366 | | $ | 3,664,214 | Executive Vice President | | 2019 | | $ | 650,000 | | $ | — | | $ | 1,260,406 | | $ | 1,430,575 | | $ | 201,031 | | $ | 3,542,012 | and Chief Operating Officer | | 2018 | | $ | 540,000 | | $ | — | | $ | 637,761 | | $ | 2,236,384 | | $ | 147,587 | | $ | 3,561,732 | Brian N. Schell | | 2020 | | $ | 525,000 | | $ | — | | $ | 1,500,313 | | $ | 870,136 | | $ | 101,763 | | $ | 2,997,212 | Executive Vice President, | | 2019 | | $ | 521,000 | | $ | — | | $ | 1,310,893 | | $ | 581,376 | | $ | 142,845 | | $ | 2,556,114 | Chief Financial Officer and | | 2018 | | $ | 521,000 | | $ | — | | $ | 704,928 | | $ | 1,122,984 | | $ | 68,845 | | $ | 2,417,757 | Treasurer | | | | | | | | | | | | | | | | | | | | | David Howson | | 2020 | | $ | 575,400 | | $ | — | | $ | 650,090 | | $ | 784,055 | | $ | — | | $ | 2,009,545 | Executive Vice President, | | | | | | | | | | | | | | | | | | | | | President Europe (4) | | | | | | | | | | | | | | | | | | | | | Bryan Harkins | | 2020 | | $ | 500,000 | | $ | — | | $ | 650,090 | | $ | 558,625 | | $ | 23,320 | | $ | 1,732,035 | Executive Vice President, | | 2019 | | $ | 500,000 | | $ | — | | $ | 902,414 | | $ | 365,750 | | $ | 24,020 | | $ | 1,792,184 | Head of Markets | | | | | | | | | | | | | | | | | | | | |
| (1) | (1)
| | The amounts in the stock award column for 20182020 include the grant date aggregate fair value of the awards of RSUs granted on February19, 20182020 for service in 2018,2020, as computed in accordance with stock-based compensation accounting rules (Financial(Financial Standards Accounting Board ASC Topic 718), and for PSUs-TSR and PSUs-EPS, as computed in accordance with the Monte Carlo valuation model method, andmethod. Assumptions used in the calculation of these amounts are included in the footnotes to our 2020 consolidated financial statements, which are included in our Annual Report on Form10‑K for PSUs-EPS, we used the fair market value methodology to estimateyear ended December 31, 2020 filed with the fair value of the award. SEC. |
Assumptions used in the calculation of these amounts are included in the footnotes to our 2018 consolidated financial statements, which are included in our Annual Report on Form 10‑K for the year ended December 31, 2018 filed with the SEC.
| (2) | (2)
| | The amounts shown reflect awards to the named executive officers under our annual incentive plan. The amount shown for Mr.Isaacson also includes the achievement of the performance conditions with respect to two awards of $500,000 each in 2018 and one award of $500,000 in 2019 in recognition of his contributions to the successful migrations of CFE, C2, and C2C1 to Bats technology. For a discussion of our plans, please see “Compensation Discussion and Analysis—2018 Elements of Executive Compensation Program—Annual Incentive” and “—Technology Platform Migration Cash Incentive Plan” above. Annual incentive payments for services performed in 2016, 20172018, 2019, and 20182020 by named executive officers were paid in early 2017, 2018,2019, 2020, and 2019,2021, respectively. |
| (3) | (3)
| | The amounts shown represent separation payments and benefits that were, from time to time, made available to our executives, including retirement plan contributions. For more information on the amounts shown in this column for 2018,2020, please see the following “2018“2020 All Other Compensation Detail Table.Table” . |
| (4)
| | Mr. Tilly was also appointed our President effective January 14, 2019.
|
| (5)
| | Mr. Concannon stepped down as our President and Chief Operating Officer effective January 14, 2019. In connection with Mr. Concannon’s voluntary termination of employment for a reason other than good reason, he was not eligible to receive a 2018 annual incentive plan payout. His employment agreement is described more fully below under “Severance, Change in Control and Employment-Related Agreements.”
|
60 | Cboe Global Markets 20192021 Proxy Statement | 49
|
| (6)
| | Information presented for Messrs. Concannon and Hemsley for 2017 is from February 28, 2017, the date that each joined the Company with our acquisition of Bats, to December 31, 2017.
|
| (4) | (7)
| | Mr. Isaacson was appointed our Executive Vice President and Chief Operating Officer effective January 14, 2019. |
| (8)
| | Mr. HemsleyHowson receives his cash compensation in British pounds. The 20182020 amounts reported were converted to U.S. dollars using a rate of £1.00£1.00 to $1.28,$1.37, which was the exchange rate as of December31, 2018. The 2017 amounts reported were converted to U.S. dollars using a rate of £1.00 to $1.35, which was the exchange rate as of December 31, 2017.
2020. |
| (9)
| | Ms. Moffic-Silver stepped down as our Executive Vice President, General Counsel and Corporate Secretary effective February 28, 2018.
|
20182020 All Other Compensation Detail Table
| Qualified Defined | | Non-Qualified Defined | | | | | Matching Gift | | | | | | Qualified Defined | | Non-Qualified Defined | | | | | Matching Gift | Name | Contributions(1) | | Contributions(2) | | Insurance(3) | | Program (4) | | Other(5) | Contributions(1) | | Contributions(2) | | Insurance(3) | | Program (4) | Edward T. Tilly | $ | 22,000 | | $ | 707,878 | | $ | 1,806 | | $ | — | | $ | — | $ | 22,800 | | $ | 652,204 | | $ | 1,806 | | $ | 7,500 | Christopher R. Concannon | $ | 22,000 | | $ | 76,667 | | $ | 966 | | $ | — | | $ | — | | Christopher A. Isaacson | | $ | 22,800 | | $ | 103,646 | | $ | 420 | | $ | 10,500 | Brian N. Schell | $ | 22,000 | | $ | 38,379 | | $ | 966 | | $ | 7,500 | | $ | — | $ | 22,800 | | $ | 65,657 | | $ | 1,806 | | $ | 11,500 | Christopher A. Isaacson | $ | 22,000 | | $ | 117,667 | | $ | 420 | | $ | 7,500 | | $ | — | | Mark S. Hemsley(6) | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | Joanne Moffic-Silver | $ | 22,000 | | $ | 229,046 | | $ | 533 | | $ | — | | $ | 2,955,571 | | David Howson | | $ | — | | $ | — | | $ | — | | $ | — | Bryan Harkins | | $ | 22,800 | | $ | — | | $ | 420 | | $ | 100 |
| (1) | (1)
| | The amounts shown are matching contributions to our qualified 401(k) plan, the Cboe Global Markets SMART Plan (“SMART Plan”), on behalf of each of the officers listed. In 2018,2020, we matched 200% of employee contributions up to 4% of the employee’s compensation, subject to statutory limitations. |
| (2) | (2)
| | The amounts shown are our contributions to the non-qualified defined contribution plans on behalf of each named executive officer, including contributions, as applicable, made to the Supplemental Executive Retirement Plan and Executive Retirement Plan. We matched 200% of such employee’s contributions. These plans are described more fully below under “Non-Qualified Defined Contribution Plans.” Plans”. |
| (3) | (3)
| | Represents the amount attributable to taxable life insurance in excess of $50,000. |
| (4) | (4)
| | Amounts represent those provided through our Matching Gift Program that is available to all full-time employees with typically at least one year of service.service and our non-employee directors. During 2018,2020, we matched eligible gifts from a minimum of $50 to an aggregate maximum gift of $7,500$10,000 per employee or non-employee director, per calendar year. In addition, in 2020, we matched at a rate of 1.5x eligible gifts from a minimum of $50 to $1,000 per employee or non-employee director, per calendar year to organizations that (i) support social justice and/or improve the lives of those in Black communities or (ii) provide services to COVID-19 global pandemic relief efforts. Cboe will match donations to organizations that support COVID-19 global pandemic relief at the same rate.Amounts listedshown only represent matching gifts made to qualified non-profit organizations on behalf of the named executive officers and do not represent total charitable contributions made by them during the year. |
| Cboe Global Markets 2021 Proxy Statement | 61 |
2020 Grants of Plan-Based Awards Table The 2020 grants of plan-based awards are as follows and are explained in more detail below: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | All Other | | | | | | | | | | | | | | | | | | | | | | | Stock | | | | | | | | | | | | | | | | | | | | | | | Awards: | | Grant Date | | | | | Estimated Future Payouts Under | | | | | | | | Number of | | Fair Value of | | | | | Non-Equity Incentive Plan | | Estimated Future Payouts Under | | Shares of | | Stock and | | | | | Awards | | Equity Incentive Plan Awards | | Stock or | | Option | Name | | Grant Date | | Threshold | | Target | | Maximum | | Threshold (#) | | Target (#) | | Maximum (#) | | Units (#) | | Awards | Edward T. Tilly | | n/a | | $ | 365,269 | | $ | 2,087,250 | | $ | 4,174,500 | | — | | — | | — | | — | | | — | | | 2/19/2020 | | | — | | | — | | | — | | 4,765 | | 9,529 | | 19,058 | | — | | $ | 1,147,673 | | | 2/19/2020 | | | — | | | — | | | — | | 4,765 | | 9,529 | | 19,058 | | — | | $ | 1,147,673 | | | 2/19/2020 | | | — | | | — | | | — | | — | | — | | — | | 19,058 | | $ | 2,295,346 | Christopher A. Isaacson | | n/a | | $ | 170,625 | | $ | 975,000 | | $ | 1,950,000 | | — | | — | | — | | — | | | — | | | 2/19/2020 | | | — | | | — | | | — | | 1,774 | | 3,548 | | 7,096 | | — | | $ | 427,321 | | | 2/19/2020 | | | — | | | — | | | — | | 1,774 | | 3,548 | | 7,096 | | — | | $ | 427,321 | | | 2/19/2020 | | | — | | | — | | | — | | — | | — | | — | | 7,096 | | $ | 854,642 | Brian N. Schell | | n/a | | $ | 128,625 | | $ | 735,000 | | $ | 1,470,000 | | — | | — | | — | | — | | | — | | | 2/19/2020 | | | — | | | — | | | — | | 1,521 | | 3,042 | | 6,083 | | — | | $ | 366,318 | | | | | | | | | | | | | | | | | | | | | | | | | | 2/19/2020 | | | — | | | — | | | — | | — | | — | | — | | 6,083 | | $ | 732,637 | David Howson (1) | | n/a | | $ | 110,765 | | $ | 632,940 | | $ | 1,265,880 | | — | | — | | — | | — | | | — | | | 2/19/2020 | | | — | | | — | | | — | | 659 | | 1,318 | | 2,636 | | — | | $ | 158,740 | | | 2/19/2020 | | | — | | | — | | | — | | 659 | | 1,318 | | 2,636 | | — | | $ | 158,740 | | | 2/19/2020 | | | — | | | — | | | — | | — | | — | | — | | 2,636 | | $ | 317,480 | Bryan Harkins | | n/a | | $ | 87,500 | | $ | 500,000 | | $ | 1,000,000 | | — | | — | | — | | — | | | — | | | 2/19/2020 | | | — | | | — | | | — | | 659 | | 1,318 | | 2,636 | | — | | $ | 158,740 | | | 2/19/2020 | | | — | | | — | | | — | | 659 | | 1,318 | | 2,636 | | — | | $ | 158,740 | | | 2/19/2020 | | | — | | | — | | | — | | — | | — | | — | | 2,636 | | $ | 317,480 |
| (1) | (5)
| | This column includes the amounts paid to Ms. Moffic-Silver in 2018 pursuant to her release agreement. The release agreement is described more fully below under “Severance, Change in Control and Employment-Related Agreements.”
|
| (6)
| | Mr. HemsleyHowson receives his cash compensation in British pounds. The amounts reported were converted to U.S. dollars using a rate of £1.00 to $1.28,$1.37, which was the exchange rate as of December 31, 2018. 2020. |
50
| Cboe Global Markets 2019 Proxy Statement
| |
2018 Grants of Plan-Based Awards Table
The 2018 grants of plan-based awards are as follows and are explained in more detail below:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | All Other | | | | | | | | | | | | | | | | | | | | | | | Stock | | | | | | | | | | | | | | | | | | | | | | | Awards: | | Grant Date | | | | | Estimated Future Payouts Under | | | | | | | | Number of | | Fair Value of | | | | | Non-Equity Incentive Plan | | Estimated Future Payouts Under | | Shares of | | Stock and | | | | | Awards | | Equity Incentive Plan Awards | | Stock or | | Option | Name | | Grant Date | | Threshold | | Target | | Maximum | | Threshold (#) | | Target (#) | | Maximum (#) | | Units (#) | | Awards | Edward T. Tilly | | n/a | | $ | 156,544 | | $ | 2,087,250 | | $ | 4,017,956 | | — | | — | | — | | — | | | — | | | 2/19/2018 | | | — | | | — | | | — | | 3,512 | | 7,025 | | 14,049 | | — | | $ | 825,000 | | | 2/19/2018 | | | — | | | — | | | — | | 3,512 | | 7,025 | | 14,049 | | — | | $ | 825,000 | | | 2/19/2018 | | | — | | | — | | | — | | — | | — | | — | | 14,049 | | $ | 1,650,000 | Christopher R. Concannon (1) | | n/a | | $ | 123,750 | | $ | 1,650,000 | | $ | 3,176,250 | | — | | — | | — | | — | | | — | | | 2/19/2018 | | | — | | | — | | | — | | 2,342 | | 4,683 | | 9,366 | | — | | $ | 550,000 | | | 2/19/2018 | | | — | | | — | | | — | | 2,342 | | 4,683 | | 9,366 | | — | | $ | 550,000 | | | 2/19/2018 | | | — | | | — | | | — | | — | | — | | — | | 9,366 | | $ | 1,100,000 | Brian N. Schell | | n/a | | $ | 54,705 | | $ | 729,400 | | $ | 1,404,095 | | — | | — | | — | | — | | | — | | | 2/19/2018 | | | — | | | — | | | — | | 765 | | 1,530 | | 3,059 | | — | | $ | 179,638 | | | 2/19/2018 | | | — | | | — | | | — | | 765 | | 1,530 | | 3,059 | | — | | $ | 179,638 | | | 2/19/2018 | | | — | | | — | | | — | | — | | — | | — | | 3,059 | | $ | 359,275 | Christopher A. Isaacson | | n/a | | $ | 60,750 | | $ | 810,000 | | $ | 1,559,250 | | — | | — | | — | | — | | | — | | | 2/19/2018 | | | — | | | — | | | — | | 692 | | 1,384 | | 2,768 | | — | | $ | 162,500 | | | 2/19/2018 | | | — | | | — | | | — | | 692 | | 1,384 | | 2,768 | | — | | $ | 162,500 | | | 2/19/2018 | | | — | | | — | | | — | | — | | — | | — | | 2,768 | | $ | 325,000 | Mark S. Hemsley(2) | | n/a | | $ | 34,045 | | $ | 680,900 | | $ | 1,327,755 | | — | | — | | — | | — | | | — | | | 2/19/2018 | | | — | | | — | | | — | | 639 | | 1,278 | | 2,555 | | — | | $ | 150,000 | | | 2/19/2018 | | | — | | | — | | | — | | 639 | | 1,278 | | 2,555 | | — | | $ | 150,000 | | | 2/19/2018 | | | — | | | — | | | — | | — | | — | | — | | 2,555 | | $ | 300,000 | Joanne Moffic-Silver (3) | | n/a | | $ | 45,465 | | $ | 606,200 | | $ | 1,166,935 | | — | | — | | — | | — | | | — | | | 2/19/2018 | | | — | | | — | | | — | | 612 | | 1,224 | | 2,448 | | — | | $ | 143,750 | | | 2/19/2018 | | | — | | | — | | | — | | 612 | | 1,224 | | 2,448 | | — | | $ | 143,750 | | | 2/19/2018 | | | — | | | — | | | — | | — | | — | | — | | 408 | | $ | 44,220 |
| (1)
| | Pursuant to the terms of the equity award agreements, Mr. Concannon’s 2018 grants of plan-based awards were forfeited in early 2019 in connection with his voluntary termination of employment.
|
| (2)
| | Mr. Hemsley receives his cash compensation in British pounds. The amounts reported were converted to U.S. dollars using a rate of £1.00 to $1.28, which was the exchange rate as of December 31, 2018.
|
| (3)
| | Pursuant to Ms. Moffic-Silver’s release agreement, the restricted stock units not subject to performance conditions held by her were subject to accelerated vesting in full at the time of separation and the restricted stock units subject to performance conditions held by her will be subject to accelerated vesting and prorated for the portion of the performance period completed at the time of termination and subject to attainment of the applicable performance goals through the full performance period. The amounts do not reflect proration for the portion of the performance period completed at the time of termination. The release agreement is described more fully below under “Severance, Change in Control and Employment-Related Agreements.”
|
All of the equity incentive awards were made in restricted stock units, half of which are subject to performance conditions. TheExcept as noted in the table above, the restricted stock unit awards that are not subject to performance conditions have a three-year vesting schedule under which one-third of 62 | Cboe Global Markets 2021 Proxy Statement | |
the shares granted will vest each year on the anniversary of the grant date. Dividend equivalent payments are made on these restricted stock units. Half of the restricted stock units subject to performance conditions, or 25% of the total restricted stock units, have a performance condition under which the number of units that will ultimately be awarded will vary from 0% to 200% of the original grant, based on our total stockholder return (calculated as the increase in our stock price over the performance period plus reinvested dividends, divided by the stock price at the beginning of the performance period) relative to the total stockholder returns for the S&P 500 Index during the performance period. The remaining half of the performance share units, or 25% of the total restricted stock units, have a performance condition under which the number of units that will ultimately be awarded will vary from 0% to 200% of the original grant, based on our | Cboe Global Markets 2019 Proxy Statement
| 51
|
cumulative earnings per share during the performance period. Dividend equivalent payments on these restricted stock units accrue and are paid out in shares upon vesting. The restricted stock units subject to performance conditions cliff-vest following the completion of the three-year performance period and are issued following the determination of the achievement of the performance conditions. | Cboe Global Markets 2021 Proxy Statement | 63 |
For all of the awards, vesting will accelerate upon death, disability, or the occurrence of a change in control.control and qualified termination. Vesting will also accelerate upon a qualified retirement, except that the restricted stock units subject to performance conditions accelerate pro ratapro-rata based on the number of days in employment during the performance period and subject to attainment of the applicable performance goals through the full performance period. Under certain scenarios, Mr. Tilly’s employment agreement provides that he will be entitled to full vesting of his restricted stock units subject to performance conditions. Mr. Tilly’s employment agreement is described more fully below under “Severance, Change in Control and Employment-Related Agreements”. Qualified retirement eligibility occurs once satisfying 65 years of age and 5 years of service for grants awarded before 2017 and once satisfying 55 years of age and 10 years of service for grants awarded in and after 2017. With respect to Mr. Hemsley, grants awarded before 2018 did not provide for qualified retirement eligibility, however, for grants awarded in and after 2018, qualified retirement eligibility occurs once satisfyingupon attaining 55 years of age and 10 years of service. Unless retirement eligible, unvested portions of the restricted stock units will be forfeited if the executive officer terminates employment with us prior to the applicable vesting date. The restricted stock units are subject to non-compete, non-solicitation, and confidentiality covenants. 52
| Cboe Global Markets 2019 Proxy Statement
| |
20182020 Outstanding Equity Awards at Fiscal Year-End Table
The following table sets forth outstanding equity awards held by each named executive officer at December 31, 20182020 based on the market value of our common stock on December 31, 2018. | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | | | | | | | | | | | | | Equity | | | | | | | | | | | | | | | | | | | Incentive Plan | | | | | | | | | | | | | | | | | Equity | | Awards: | | | | | | | | | | | | | | | | | Incentive Plan | | Market or | | | | | | | | | | | | | | | | | Awards: | | Payout | | | | | | | | | | | | | | | | | Number of | | Value of | | | | | | | | | | | | | | | | Unearned | | Unearned | | | Number of | | Number of | | | | | | | Number of | | Market Value | | Shares, | | Shares, | | | Securities | | Securities | | | | | | | Shares or | | of Shares | | Units or | | Units or | | | Underlying | | Underlying | | | | | | Units of | | or Units | | Other Rights | | Other Rights | | | Unexercised | | Unexercised | | Option | | Option | | Stock That | | of Stock | | That Have | | That Have | | | Options (#) | | Options (#) | | Exercise | | Expiration | | Have Not | | That Have Not | | Not Yet | | Not Yet | Name | | Exercisable | | Unexercisable | | Price | | Date | | Vested (#) | | Vested | | Vested (#) | | Vested | Edward T. Tilly | | | | | | | | | | | | 6,743 | (1) | | $ | 659,668 | | | | | | | | | | | | | | | | | | | 20,730 | (2) | | $ | 2,028,016 | | | | | | | | | | | | | | | | | | | 12,438 | (2) | | $ | 1,216,810 | | | | | | | | | | | | | | | | | | | 14,049 | (3) | | $ | 1,374,414 | | | | | | | | | | | | | | | | | | | | | | | | | 20,228 | (4) | | $ | 1,978,906 | | | | | | | | | | | | | | | | | | | 20,228 | (5) | | $ | 1,978,906 | | | | | | | | | | | | | | | | | | | 18,657 | (6) | | $ | 1,825,214 | | | | | | | | | | | | | | | | | | | 7,025 | (7) | | $ | 687,256 | | | | | | | | | | | | | | | | | | | 7,025 | (8) | | $ | 687,256 | Christopher R. | | 122,281 | | — | (10) | | $ | 28 | | 11/30/2024 | | | | | | | | | | | | | Concannon(9, 19) | | 162,136 | | — | (10) | | $ | 28 | | 11/30/2024 | | | | | | | | | | | | | | | | | | | | | | | | | 18,616 | (11) | | $ | 1,821,203 | | | | | | | | | | | | | | | | | | | 10,498 | (12) | | $ | 1,027,019 | | | | | | | | | | | | | | | | | | | 4,446 | (13) | | $ | 434,952 | | | | | | | | | | | | | | | | | | | 24,876 | (14) | | $ | 2,433,619 | | | | | | | | | | | | | | | | | | | 8,292 | (15) | | $ | 811,206 | | | | | | | | | | | | | | | | | | | 9,366 | (3) | | $ | 916,276 | | | | | | | | | | | | | | | | | | | | | | | | | 12,438 | (6) | | $ | 1,216,810 | | | | | | | | | | | | | | | | | | | 4,683 | (7) | | $ | 458,138 | | | | | | | | | | | | | | | | | | | 4,683 | (8) | | $ | 458,138 | Brian N. Schell (9) | | | | | | | | | | | | 2,364 | (11) | | $ | 231,270 | | | | | | | | | | | | | | | | | | | 1,049 | (12) | | $ | 102,624 | | | | | | | | | | | | | | | | | | | 23,396 | (13) | | $ | 2,288,831 | | | | | | | | | | | | | | | | | | | 4,975 | (14) | | $ | 486,704 | | | | | | | | | | | | | | | | | | | 4,146 | (15) | | $ | 405,603 | | | | | | | | | | | | | | | | | | | 3,059 | (3) | | $ | 299,262 | | | | | | | | | | | | | | | | | | | | | | | | | 1,530 | (7) | | $ | 149,680 | | | | | | | | | | | | | | | | | | | 1,530 | (8) | | $ | 149,680 | Christopher A. Isaacson (9) | | 30,000 | | — | (16) | | $ | 22 | | 01/31/2020 | | | | | | | | | | | | | | | | | | | | | | | | | 2,379 | (11) | | $ | 232,738 | | | | | | | | | | | | | | | | | | | 1,053 | (12) | | $ | 103,015 | | | | | | | | | | | | | | | | | | | 2,234 | (13) | | $ | 218,552 | | | | | | | | | | | | | | | | | | | 22,671 | (17) | | $ | 2,217,904 | | | | | | | | | | | | | | | | | | | 6,219 | (14) | | $ | 608,405 | | | | | | | | | | | | | | | | | | | 2,074 | (15) | | $ | 202,899 | | | | | | | | | | | | | | | | | | | 2,768 | (3) | | | 270,793 | | 3,110 | (6) | | $ | 304,251 | | | | | | | | | | | | | | | | | | | 1,384 | (7) | | $ | 135,397 | | | | | | | | | | | | | | | | | | | 1,384 | (8) | | $ | 135,397 | Mark S. Hemsley(9) | | 14,039 | | — | (16) | | $ | 22 | | 01/31/2020 | | | | | | | | | | | | | | | | | | | | | | | | | 5,763 | (11) | | $ | 563,794 | | | | | | | | | | | | | | | | | | | 16,194 | (17) | | $ | 1,584,259 | | | | | | | | | | | | | | | | | | | 1,978 | (12) | | $ | 193,508 | | | | | | | | | | | | | | | | | | | 1,556 | (13) | | $ | 152,223 | | | | | | | | | | | | | | | | | | | 7,413 | (14) | | $ | 725,214 | | | | | | | | | | | | | | | | | | | 2,472 | (15) | | $ | 241,836 | | | | | | | | | | | | | | | | | | | 2,555 | (3) | | $ | 249,956 | | | | | | | | | | | | | | | | | | | | | | | | | 3,707 | (6) | | $ | 362,656 | | | | | | | | | | | | | | | | | | | 1,277 | (7) | | $ | 124,929 | | | | | | | | | | | | | | | | | | | 1,277 | (8) | | $ | 124,929 | Joanne Moffic-Silver (18) | | | | | | | | | | | | | | | | | | 2,858 | (4) | | $ | 279,598 | | | | | | | | | | | | | | | | | | | 2,858 | (5) | | $ | 279,598 | | | | | | | | | | | | | | | | | | | 1,383 | (6) | | $ | 135,299 | | | | | | | | | | | | | | | | | | | 65 | (7) | | $ | 6,359 | | | | | | | | | | | | | | | | | | | 65 | (8) | | $ | 6,359 |
| (1)
| | Grant of restricted stock units not subject to performance conditions on February 19, 2016. This portion of the restricted stock units vested on February 19, 2019.
|
2020. 64 | Cboe Global Markets 20192021 Proxy Statement | 53
|
| | | | | | | | | | | | Stock Awards | | | | | | Equity Incentive Plan Awards: | | Equity Incentive Plan Awards: | | | | | | Number of Unearned | | Market or Payout Value | | Number of Shares or | | Market Value of Shares | | Shares, Units or Other | | of Unearned Shares, Units | | Units of Stock That | | or Units of Stock | | Rights That Have | | or Other Rights That | Name | Have Not Vested (#) | | That Have Not Vested | | Not Yet Vested (#) | | Have Not Yet Vested | Edward T. Tilly | 4,683 | (1) | | $ | 436,081 | | | | | | | | 15,088 | (2) | | $ | 1,404,995 | | | | | | | | 19,058 | (3) | | $ | 1,774,681 | | | | | | | | 0 | (4) | | $ | 0 | | | | | | | | 14,050 | (5) | | $ | 1,308,336 | | | | | | | | | | | | | | 11,316 | (6) | | $ | 1,053,746 | | | | | | | | 5,658 | (7) | | $ | 526,873 | | | | | | | | 9,529 | (8) | | $ | 887,340 | | | | | | | | 4,765 | (9) | | $ | 443,670 | Christopher A. Isaacson | 923 | (1) | | $ | 85,950 | | | | | | | | 4,386 | (2) | | $ | 408,424 | | | | | | | | 7,096 | (3) | | $ | 660,780 | | | | | | | | 0 | (4) | | $ | 0 | | | | | | | | 2,768 | (5) | | $ | 257,756 | | | | | | | | | | | | | | 3,289 | (6) | | $ | 306,272 | | | | | | | | 1,645 | (7) | | $ | 153,136 | | | | | | | | 3,548 | (8) | | $ | 330,390 | | | | | | | | 1,774 | (9) | | $ | 165,195 | Brian N. Schell | 1,020 | (1) | | $ | 94,982 | | | | | | | | 4,562 | (2) | | $ | 424,813 | | | | | | | | 6,083 | (3) | | $ | 566,449 | | | | | | | | 0 | (4) | | $ | 0 | | | | | | | | 3,060 | (5) | | $ | 284,947 | | | | | | | | | | | | | | 3,421 | (6) | | $ | 318,564 | | | | | | | | 1,711 | (7) | | $ | 159,282 | | | | | | | | 3,042 | (8) | | $ | 283,271 | | | | | | | | 1,521 | (9) | | $ | 141,636 | David Howson | 454 | (1) | | $ | 42,276 | | | | | | | | 1,482 | (2) | | $ | 138,004 | | | | | | | | 2,636 | (3) | | $ | 245,464 | | | | | | | | 4,105 | (10) | | $ | 382,258 | | | | | | | | | | | | | | 1,318 | (8) | | $ | 122,732 | | | | | | | | 659 | (9) | | $ | 61,366 | Bryan Harkins | 852 | (1) | | $ | 79,338 | | | | | | | | 2,106 | (2) | | $ | 196,111 | | | | | | | | 2,636 | (3) | | $ | 245,464 | | | | | | | | 3,158 | (10) | | $ | 294,073 | | | | | | | | 0 | (4) | | $ | 0 | | | | | | | | 2,554 | (5) | | $ | 237,828 | | | | | | | | | | | | | | 1,579 | (6) | | $ | 147,036 | | | | | | | | 790 | (7) | | $ | 73,518 | | | | | | | | 1,318 | (8) | | $ | 122,732 | | | | | | | | 659 | (9) | | $ | 61,366 |
| (1) | (2)
| | Grant of restricted stock units not subject to performance conditions on February 19, 2017. This remaining portion of the restricted stock units vests one-half on each of February 19, 2019 and February 19, 2020.
|
| (3)
| | Grant of restricted stock units not subject to performance conditions on February 19, 2018. This portion of the restricted stock units vested on February 19, 2021. |
| Cboe Global Markets 2021 Proxy Statement | 65 |
| (2) | Grant of restricted stock units not subject to performance conditions on February 19, 2019. This remaining portion of the restricted stock units vested one-half on February 19, 2021 and will vest one-half on February 19, 2022. |
| (3) | Grant of restricted stock units not subject to performance conditions on February 19, 2020. These restricted stock units vested one-third on February 19, 2021 and will vest one-third on each of February 19, 2019, February 19, 20202022 and February 19, 2021.2023. |
| (4) | (4)
| | Grant of restricted stock units on February 19, 2016 subject to an earnings per share performance condition for the period from January 1, 2016 through December 31, 2018. As of December 31, 2018, our performance exceeded target performance and, therefore, under Rule 402 of Regulation S-K, these awards are shown at the maximum amount. These restricted stock units vested on February 12, 2019 upon certification of the achievement of the performance conditions. See “Compensation Discussion and Analysis—2018 Elements of Executive Compensation Program—Long-Term Incentive Plan—2016 PSU Grants Vested” for more details.
|
| (5)
| | Grant of restricted stock units on February 19, 2016 subject to a performance condition of total stockholder return relative to the S&P 500 Index for the period from January 1, 2016 through December 31, 2018. As of December 31, 2018, our performance exceeded target performance and, therefore, under Rule 402 of Regulation S-K, these awards are shown at the maximum amount. These restricted stock units vested on February 12, 2019 upon certification of the achievement of the performance conditions. See “Compensation Discussion and Analysis—2018 Elements of Executive Compensation Program—Long-Term Incentive Plan—2016 PSU Grants Vested” for more details.
|
| (6)
| | Grant of restricted stock units on February 19, 2017, with respect to Mr. Tilly and Ms. Moffic-Silver, and on February 28, 2017, with respect to Messrs. Concannon, Isaacson and Hemsley, subject to a performance condition of total stockholder return relative to the S&P 500 Index for the period from January 1, 2017 through December 31, 2019. Under Rule 402 of Regulation S-K, these awards are shown at the target performance amount. These restricted stock units vest on or about February 19, 2020 upon certification of the achievement of the performance conditions.
|
| (7)
| | Grant of restricted stock units on February 19, 2018 subject to an earnings per share performance condition for the period from January 1, 2018 through December 31, 2020. Under Rule 402 of Regulation S-K, these awards are shown at the target performance amount. These restricted stock units vest on or about February 19, 2021 upon certification of the achievement of the performance conditions.
|
| (8)
| | Grant of restricted stock units on February 19, 2018 subject to a performance condition of total stockholder return relative to the S&P 500 Index for the period from January 1, 2018 through December 31, 2020. These awards are shown at the actual performance amount. These restricted stock units were issued on February 10, 2021 upon determination of the achievement of the performance conditions. See “Compensation Discussion and Analysis—2020 Elements of Executive Compensation Program—Long-Term Incentive Plan—2018 PSU Grants Vested” for more details. |
| (5) | Grant of restricted stock units on February 19, 2018 subject to an earnings per share performance condition for the period from January 1, 2018 through December 31, 2020. These awards are shown at the actual performance amount. These restricted stock units were issued on February 10, 2021 upon determination of the achievement of the performance conditions. See “Compensation Discussion and Analysis—2020 Elements of Executive Compensation Program—Long-Term Incentive Plan—2018 PSU Grants Vested” for more details. |
| (6) | Grant of restricted stock units on February 19, 2019 subject to an earnings per share performance condition for the period from January 1, 2019 through December 31, 2021. Under RuleItem 402 of Regulation S-K, these awards are shown at the target performance amount. These restricted stock units vestwill be issued on or about February 19, 20212022 upon certificationdetermination of the achievement of the performance conditions. |
| (7) | (9)
| | PursuantGrant of restricted stock units on February 19, 2019 subject to a performance condition of total stockholder return relative to the merger agreement, each outstanding option to purchase Bats commonS&P 500 Index for the period from January 1, 2019 through December 31, 2021. Under Item 402 of Regulation S-K, these awards are shown at the threshold performance amount. These restricted stock (each, a “Bats stock option”)units will be issued on or about February 19, 2022 upon determination of the executive that was outstanding immediately priorachievement of the performance conditions.
|
| (8) | Grant of restricted stock units on February 19, 2020 subject to an earnings per share performance condition for the period from January 1, 2020 through December 31, 2022. Under Item 402 of Regulation S-K, these awards are shown at the target performance amount. These restricted stock units will be issued on or about February 19, 2023 upon determination of the achievement of the performance conditions. |
| (9) | Grant of restricted stock units on February 19, 2020 subject to a performance condition of total stockholder return relative to the effective timeS&P 500 Index for the period from January 1, 2020 through December 31, 2022. Under Item 402 of our acquisition of Bats (the “Effective Time”) was converted into an option to purchase our commonRegulation S-K, these awards are shown at the threshold performance amount. These restricted stock units will be issued on the same terms and conditions (including vesting schedule) as were applicable to such Bats stock option (but taking into account any changes, including any acceleration of vesting of such Bats stock option, occurring by reasonor about February 19, 2023 upon determination of the transactions contemplated by the merger agreement). The number of shares of our common stock subject to each such converted stock option equals the number of shares of Bats common stock subject to the corresponding Bats stock option immediately prior to the Effective Time, multiplied by the exchange ratio of 0.4452 (subject to certain adjustments and rounding). The exercise price per share for each such converted stock option equals the per share exercise price specified in the corresponding Bats stock option divided by the exchange ratio (rounded up to the nearest cent). |
Pursuant to the merger agreement, each award of restricted Bats common stock (“Bats restricted stock”) of the executive that was unvested immediately prior to the Effective Time was assumed by us and converted into an award of restricted shares of our common stock, subject to the same terms and conditions (including vesting schedule) that applied to the applicable Bats restricted stock immediately prior to the Effective Time (but taking into account any changes, including any acceleration of vesting of such Bats restricted stock, occurring by reason provided for in the merger agreement). The number of shares of our common stock subject to each such converted award of Bats restricted stock equals the number of shares of Bats common stock subject to the corresponding Bats restricted stock award multiplied by 0.4452.
| (10)
| | Grant of Bats stock options on December 1, 2014.
|
| (11)
| | Grant of Bats restricted stock on December 1, 2015. This portionachievement of the restricted stock will vest on December 1, 2019.
performance conditions. |
| (10) | (12)
| | Grant of Bats restricted stock on December 15, 2016. This portion of the restricted stock will vest on December 15, 2019.
|
| (13)
| | Grant of Bats restricted stock on January 13, 2017. This remaining portion of the restricted stock vests one-half on each of January 13, 2019 and January 13, 2020.
|
| (14)
| | Grant of restricted stock units not subject to performance conditions on February 28, 2017.19, 2019. These restricted stock units will vest in whole on February 28, 2020. 19, 2022. |
| (15)
| | Grant of restricted stock units not subject to performance conditions on February 28, 2017. This remaining portion of the restricted stock units vests one-half on each of February 28, 2019 and February 28, 2020.
|
| (16)
| | Grant of Bats stock options on February 1, 2010.
|
| (17)
| | Grant of Bats restricted stock on January 13, 2016. This remaining portion of the restricted stock vests one-half on each of January 13, 2019 and January 13, 2020.
|
5466
| Cboe Global Markets 20192021 Proxy Statement | |
| (18)
| | Pursuant to Ms. Moffic-Silver’s release agreement, the outstanding restricted stock units not subject to performance conditions held by her were subject to accelerated vesting in full at the time of separation and the outstanding unvested performance share units held by her are shown prorated for the portion of the performance period completed at the time of termination and subject to attainment of the applicable performance goals through the full performance period. The release agreement is described more fully below under “Severance, Change in Control and Employment-Related Agreements.”
|
| (19)
| | In connection with Mr. Concannon’s voluntary termination of employment, on January 14, 2019, pursuant to the terms of the equity award agreements, he forfeited his unvested grants of restricted stock units and Bats restricted stock. In addition, pursuant to the terms of the equity award agreements, Mr. Concannon’s grants of Bats stock options will be terminated, if not exercised, within ninety days of January 14, 2019.
|
20182020 Option Exercises and Stock Vested Table
The following table sets forth the options exercised and equity awards that vested during 2018.2020. | | | | | | | | | Option Awards | | Stock Awards | | Number of Shares | | Value Realized on | | Number of Shares | | Value Realized on | Name | Acquired on Exercise (#) | | Exercise | | Acquired on Vesting (#) | | Vesting | Edward T. Tilly | — | | $ | — | | 55,804 | | $ | 6,315,554 | Christopher R. Concannon | — | | $ | — | | 53,259 | | $ | 5,732,355 | Brian N. Schell | — | | $ | — | | 19,620 | | $ | 2,393,023 | Christopher A. Isaacson | 26,159 | | $ | 2,095,231 | | 19,138 | | $ | 2,354,451 | Mark S. Hemsley | — | | $ | — | | 24,803 | | $ | 2,873,500 | Joanne Moffic-Silver (1) | — | | $ | — | | 20,684 | | $ | 2,333,391 |
| (1)
| | Pursuant to Ms. Moffic-Silver’s release agreement, the table reflects the accelerated vesting in full of outstanding restricted stock units held by her. The release agreement is described more fully below under “Severance, Change in Control and Employment-Related Agreements” below.
|
| | | | | | | | | Option Awards | | Stock Awards | | Number of Shares | | Value Realized on | | Number of Shares | | Value Realized on | Name | Acquired on Exercise (#) | | Exercise | | Acquired on Vesting (#) | | Vesting | Edward T. Tilly | — | | $ | — | | 60,423 | | $ | 7,380,085 | Christopher A. Isaacson | — | | $ | — | | 28,090 | | $ | 3,286,953 | Brian N. Schell | — | | $ | — | | 22,046 | | $ | 2,547,247 | David Howson | — | | $ | — | | 4,104 | | $ | 478,045 | Bryan Harkins | — | | $ | — | | 22,643 | | $ | 2,607,126 |
20182020 Non-Qualified Deferred Compensation Table
| | | | | | | | Executive | | Registrant | | Aggregate | | | | | | | | Contributions | | Contributions | | Earnings | | Aggregate | | Aggregate | | | | in Last | | in Last | | in Last | | Withdrawals/ | | Balance at | | | | | | | | | | | | | | | | | | | | | | | | | | Executive | | Registrant | | Aggregate | | | | | | | | | | | | Contributions | | Contributions | | Earnings | | Aggregate | | Aggregate | | | | | | in Last | | in Last | | in Last | | Withdrawals/ | | Balance at | Name (1) | | | | FY (2) | | FY (3) | | FY (4) | | Distributions | | Last FYE | | | | FY (2) | | FY (3) | | FY (4) | | Distributions | | Last FYE | Edward T. Tilly | | SERP | | $ | 137,276 | | $ | 274,551 | | $ | | (26,008) | | $ | — | | $ | 2,311,819 | | SERP | | $ | 105,992 | | $ | 211,984 | | $ | | 11,268 | | $ | — | | $ | 3,461,899 | | | ERP | | $ | — | | $ | 433,327 | | $ | | 37,989 | | $ | — | | $ | 2,321,295 | | Christopher R. Concannon | | SERP | | $ | 47,917 | | $ | 76,667 | | $ | | 1,010 | | $ | — | | $ | 125,594 | | | | | ERP | | $ | — | | $ | 440,220 | | $ | | 99,561 | | $ | — | | $ | 3,499,808 | Christopher A. Isaacson | | | SERP | | $ | 647,788 | | $ | 103,646 | | $ | | 544,019 | | $ | — | | $ | 3,574,823 | Brian N. Schell | | SERP | | $ | 19,189 | | $ | 38,379 | | $ | | (4,230) | | $ | — | | $ | 53,338 | | SERP | | $ | 32,828 | | $ | 65,657 | | $ | | 68,972 | | $ | — | | $ | 426,435 | Christopher A. Isaacson | | SERP | | $ | 234,417 | | $ | 117,667 | | $ | | (69,789) | | $ | — | | $ | 783,294 | | Joanne Moffic-Silver | | SERP | | $ | 40,460 | | $ | 53,947 | | $ | | (48,004) | | $ | — | | $ | 1,956,751 | | | | ERP | | $ | — | | $ | 175,099 | | $ | | (79,735) | | $ | — | | $ | 3,300,764 | | Bryan Harkins | | | SERP | | $ | — | | $ | — | | $ | | — | | $ | — | | $ | — |
| (1) | (1)
| | Executive and registrant contributions include contributions during 2018.2020. Messrs. Concannon,Isaacson, Schell, and IsaacsonHarkins are not eligible to participate in the Executive Retirement Plan. Mr. Hemsley,Howson, as a U.K. based employee, iswas not eligible to participate in the Supplemental Executive Retirement Plan nor the Executive Retirement Plan. |
| (2) | (2)
| | The amount of executive contributions made by each named executive officer and reported in this column is included in each named executive officer’s compensation reported in the 2020 Summary Compensation Table under the column labeled “Salary.” “Salary”. |
| (3) | Cboe Global Markets 2019 Proxy Statement
| 55
|
| (3)
| | The amount of registrant contributions reported in this column for each named executive officer is also included in his or her compensation reported in the 2020 Summary Compensation Table under the column labeled “All Other Compensation.” Compensation”. |
| (4) | (4)
| | Earnings are based upon the investment fund selected by the named executive officer for each plan. |
Non-Qualified Defined Contribution Plans We do not have a defined benefit retirement plan. We currently have two non-qualified defined contribution plans in which the named executive officers may, as applicable, participate: the Supplemental Executive Retirement Plan (“SERP”) and the Executive Retirement Plan (“ERP”).Plan. The investment options for these plans only include investment options that are available under the qualified plans.plan. The SERP is designed for employees whose level of compensation exceeds the IRS defined annual compensation limit ($275,000285,000 for 2018)2020). Under the SERP, we match deferral contributions made by executivesthe employee under the SERP with respect to compensation in excess of the IRS compensation limit. These contributions mirror those under the 401(k) plan. In 2018,2020, we matched employee contributions | Cboe Global Markets 2021 Proxy Statement | 67 |
up to 4% of the employee’s compensation, subject to statutory limitations. We matched 200% of such contributions. Mr. Hemsley,Howson, as a U.K. based employee, iswas not eligible to participate in the SERP. Mr. Tilly is and Ms. Moffic-Silver was, eligible to participate in the ERP. Our 20182020 contribution to the ERP was 6% of each participant’s base salary and annual incentive, and, in the future, we expect to make further contributions consistent with this formula. Effective January 1, 2017, the ERP is frozen to new executive officers and employees. Messrs. Concannon,Isaacson, Schell, IsaacsonHowson, and HemsleyHarkins are not eligible to participate in the Executive Retirement Plan.ERP. In 2018,2020, Mr. Tilly and Ms. Moffic-Silver participated in the age-based component of the ERP. In addition to the contribution to the ERP described in the preceding paragraph, under the age-based component, we contribute to each eligible employee’s account an amount equal to a percentage of the employee’s base salary and cash incentive, based on such employee’s age at the start of the year, as set forth in the table below. | | | | | | | Contribution | | | Contribution
| Age of Participant | | Percentage | Under 45 | | 1 | % | 45 to 49 | | 3 | % | 50 to 54 | | 6 | % | 55 to 59 | | 9 | % | 60 to 64 | | 11 | % | 65 and over | | None | |
All of our contributions to non-qualified defined contribution plans vest 20% for each year of continuous service, identical to the qualified 401(k) plan. All of our participating named executive officers other than Messrs. Concannon and Hemsley, are fully vested in the plans. 5668
| Cboe Global Markets 20192021 Proxy Statement | |
SEVERANCE, CHANGE IN CONTROL AND EMPLOYMENT-RELATED AGREEMENTS As of December 31, 2018,2020, we had an employment agreementsagreement with Messrs.Mr. Tilly, an offer letter and Concannonemployment agreement with Mr. Howson, and the rest of theother named executive officers are covered by either the Executive Severance Plan, a release agreement or offer letter agreements.Plan. The material terms of the agreements and the plan are discussed below. Mr. Tilly’s Employment Agreement Under the Employment Agreement, as in effect on December 31, 2016, and as amended and restated on February 27, 201711, 2020 (the “Tilly Employment“Employment Agreement”), Mr. Tilly serves as our Chairman, President and CEO. The Tilly Employment Agreement is scheduled to expire on December 31, 2019,2022, and thereafter will be automatically renewed for successive one-year terms (each, a “Renewal Period”) unless either the Company or Mr. Tilly gives notice not to renew the agreement at least 180 days prior to the expiration of the then current term. The Tilly Employment Agreement provides for an annual base salary of at least $1,150,000. As further discussed in “Executive Compensation—Compensation Discussion and Analysis,” Mr. Tilly’s base salary increased to $1,265,000 in 2018.$1,265,000. Mr. Tilly is also eligible to receive cash and equity incentive awards, each in the sole discretion of the Board. Mr. Tilly is entitled to participate in all of our employee benefit and fringe benefit plans that are generally available to similarly situated members of senior management. Pursuant to the Tilly Employment Agreement, Mr. Tilly has agreed to certain non-compete and non-solicit provisions during the employment term and for two years thereafter, as well as indefinite confidentiality obligations. Under the Tilly Employment Agreement, upon a termination of employment by the Company without cause or by Mr. Tilly for good reason, or if Mr. Tilly’s employment is terminated due to death or disability, Mr. Tilly (or his estate, as applicable) will be entitled to receive the following:following (collectively, the “Benefits”): (i) accrued but unpaid base salary through the date of termination; (ii) a pro-rated bonus equal to the bonus that Mr. Tilly would have received for the calendar year in which termination occurs, based on actualtarget performance, pro-rated for the portion of the calendar year worked; (iii) a lump sum cash severance payment in an amount equal to the sum of (A) two times the annual base salary in effect on the date of termination and (B) two times the target bonus for the year of termination; (iv) a lump sum cash payment in an amount equal to the aggregate amount of all employer contributions Mr. Tilly would have received had his employment continued for a period of two years under the SMART Plan, the SERP and the ERP; and (v) Company-paid premiums for coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), or an amount equal to Mr. Tilly’s COBRA premiums, sufficient to cover full family health care for a period of 18 months following the termination of employment and, at the end of such period, reimbursement of premiums for six additional months of coverage under a comparable individual health policy. Mr. Tilly would also receive these same benefitsBenefits if he is terminated without cause or resigns for good reason within 1824 months after a change in control, except that he will be reimbursed for 18 months of individual health coverage following the expiration of his COBRA period, rather than six months. Mr. Concannon’s Employment Agreement
In connection with Mr. Concannon’s voluntary termination of employment for a reason other than good reason, his employment with the Company terminated effective January 14, 2019, and accordingly his employment agreement described below is no longer in effect, though he presently remains subject to certain non-competition, non-solicitation, confidentiality and other covenants. | Cboe Global Markets 2019 Proxy Statement
| 57
|
Under the Employment Agreement dated as of February 27, 2017 (the “Concannon Employment Agreement”), Mr. Concannon, effective upon our acquisition of Bats on February 28, 2017, served as our President and Chief Operating Officer through January 14, 2019. The Concannon Employment Agreement was scheduled to expire on December 31, 2019, and thereafter would have been automatically renewed for successive one-year terms unless either the Company or Mr. Concannon gave notice not to renew the agreement at least 180 days prioraddition to the expiration ofBenefits, under the then current term.
The Concannon Employment Agreement provided for an annual base salary of at least $1,000,000. As further discussed in “Executive Compensation—Compensation Discussion and Analysis,” Mr. Concannon’s base salary increased to $1,100,000 in 2018. Mr. Concannon was also eligible to receive cash and equity incentive awards, each in the sole discretion of the Board. In addition, the Concannon Employment Agreement provided for a special one-time grant of RSUs with a grant date value of $2,000,000, also known as the Sign-on Grant, which would have vested in full upon the third anniversary of the Effective Date (February 28, 2020) provided that Mr. Concannon remained in continuous employment through such date (subject to accelerated vesting as described below). Mr. Concannon was entitled to participate in all of our employee benefit and fringe benefit plans that were generally available to similarly situated members of senior management, other than the frozen ERP. Pursuant to the Concannon Employment Agreement, Mr. Concannon agreed to certain non-compete and non-solicit provisions during the employment term and for two years thereafter, as well as indefinite confidentiality obligations.
Under the Concannon Employment Agreement, upon a termination of employment by the Company without cause or by Mr. ConcannonTilly for good reason, Mr. Concannon would have beenTilly (or his estate, as applicable) will be also entitled to receive full vesting of outstanding performance based restricted stock units based on the level of actual performance achieved.
The Employment Agreement also provides that upon a voluntary termination of employment by Mr. Tilly without good reason, Mr. Tilly (or his estate, as applicable) will be entitled to receive the following: (i) accrued but unpaid base salary through the date of termination; (ii) a pro-ratedif not already paid prior to termination, bonus equal to the bonus that Mr. ConcannonTilly would have received for the calendar year inprior to which termination occurs, based on actual performance; (iii) if termination is on or after January 1, 2023, full vesting of outstanding performance pro-ratedbased restricted stock units granted prior to | Cboe Global Markets 2021 Proxy Statement | 69 |
January 1, 2023, based on the level of actual performance achieved; and (iv) if termination is after the completion of a Renewal Period, full vesting of outstanding performance based restricted stock units granted during such Renewal Period, based on the level of actual applicable performance achieved. Mr. Howson’s Offer Letter and Employment Agreement We entered into an offer letter agreement with Mr. Howson, dated December 19, 2019 (the “Offer Letter Agreement”), pursuant to which he indicated his intent to continue employment with us following a promotion in exchange for the portioncompensation specified therein. Under Mr. Howson’s Offer Letter Agreement, Mr. Howson would serve as our President, Cboe Europe Limited, effective January 1, 2020. Mr. Howson’s Offer Letter Agreement provides for an initial annual base salary of 420,000 GBP and an initial target annual bonus of 462,000 GBP. Mr. Howson’s Offer Letter Agreement also provides that Mr. Howson will be eligible for an initial target annual equity incentive award having a grant date value of $650,000. Mr. Howson continues to be eligible for the severance and other change in control benefits under his employment agreement with Bats Global Markets Holdings, Inc., a wholly owned subsidiary of the calendar year workedCompany, dated December 17, 2015 (the “Pro-Rated Bonus”“Howson Employment Agreement”); (iii). The Howson Employment Agreement expired on December 31, 2018, and thereafter automatically renews for successive one-year terms unless either the Company or Mr. Howson gives notice not to renew the agreement at least 90 days prior to the expiration of the then current term. Under the Howson Employment Agreement, upon a lump sum cash severance payment intermination of Mr. Howson’s employment by us without cause or by the executive for good reason, the terminated executive is entitled to: (i) one times his annual base salary; (ii) an amount equal to (1) if the terminationone times his target bonus; (iii) reimbursement for insurance premiums payable over twelve (12) months; and (iv) his pro rata bonus as of employment occurred within 24 months immediately following the Effective Date, the sum of (A) two times the annual base salary in effect on the date of termination and (B) two times the target bonus for the year of termination, or (2) if thebased on actual performance. Upon a voluntary termination of Mr. Howson’s employment occurred after the 24‑month period immediately following the Effective Date, the sum of (A)without good reason, he is entitled to one times thehis annual base salary during such time that we elect to enforce his covenant not to compete. Mr. Howson is entitled to certain severance compensation and benefits upon a change in effect oncontrol. The Howson Employment Agreement provides that if, within the 24-month period occurring immediately after a change in control, the executive is terminated by us without cause or terminates his employment for good reason, he is entitled to: (i) two times his annual base salary; (ii) an amount equal to two times his target annual bonus; (iii) reimbursement for twelve (12) months of insurance premiums payable in a lump sum; (iv) his pro rata bonus as of the date of termination and (B) one times thebased on target bonus for the year of termination; (iv) a lump sum cash payment in an amount equal to (1) if the termination of employment occurred within 24 months immediately following the Effective Date, the aggregate amount of all employer contributions Mr. Concannon would have received had his employment continued for a period of two years under the SMART Planperformance; and the SERP, or (2) if the termination of employment occurred after the 24‑month period immediately following the Effective Date, the aggregate amount of all employer contributions Mr. Concannon would have received had his employment continued for a period of one year under the SMART Plan and the SERP; (v) accelerated vesting of all outstanding equity awards granted by Bats prior toawards. If Mr. Howson retires, dies, becomes disabled, or his employment is terminated for cause, the consummationexecutive will not receive any cash severance benefits (except for any accrued obligations and the payment of the acquisitionexecutive’s pro rata bonus based on actual performance as of Bats and assumed pursuant to the related merger agreement (the “Bats Equity Acceleration”); (vi) accelerated vesting of any unvested portion of the Sign-on Grant; and (vii) Company-paid premiums for coverage under COBRA, or an amount equal to Mr. Concannon’s COBRA premiums, sufficient to cover full family health care for a period of either (A) 18 months following the termination of employment, if the termination of employment occurred within the 24‑month period immediately following the Effective Date, or (B) 12 months following the termination of employment, if the termination of employment occurred after the 24‑month period immediately following the Effective Date. Mr. Concannon would have also received these same benefits if he was terminated without cause or resigned for good reason within 18 months after a change in control, except that with respect to clauses (iii), (iv) and (vii), Mr. Concannon would have been entitled to the maximum amounts described above. If Mr. Concannon’s employment was terminated due to death or disability, Mr. Concannon (or Mr. Concannon’s estate, as applicable) would have been entitled to 58
| Cboe Global Markets 2019 Proxy Statement
| |
receive (i) annual base salary through the date of termination; (ii)termination due to the Pro-Rated Bonus;executive's death or disability). Mr. Howson may choose to continue medical and (iii)dental benefits through COBRA or his insurance at his own cost.
Under the Bats Equity Acceleration. AsHowson Employment Agreement, we are required to provide him with the minimum statutory notice requirements of the Employment Rights Act which are applicable to the work carried out by Mr. Concannon terminated his employment for a reason other than good reason effective January 14, 2019, he was entitled to receive accrued but unpaid annual base salary throughHowson in the date of his termination. UK. Executive Severance Plan Except as disclosed herein, the other named executive officers do not have employment agreements; however, the Compensation Committee believes it is appropriate to provide an Executive Severance Plan to encourage retention, maintain a consistent management team to effectively run our operations, and allow executives to focus on our strategic business priorities. In 2018,As of December 31, 2020, the plan participants covered Ms. Moffic-Silver, as well asMessrs. Isaacson, Schell, Harkins, and other officers. The plan also covers Messrs. Schell, Isaacson and Hemsley effective as 70 | Cboe Global Markets 2021 Proxy Statement | |
Under the plan, an executivea participant who experiences an involuntary termination (as defined in the plan, which includes termination by us without cause and by the executive for good reason) is entitled to receive the following severance benefits: executive’sparticipant’s accrued salary, unpaid expenses, accrued and unpaid vacation days through the date of termination, and any unpaid bonus earned in any year prior to the year in which the executive’sparticipant’s employment terminates,
(or, in the case of Ms. Moffic-Silver, based on actual performance for such year),
executive’sparticipant’s base salary and target annual bonus, (or, in the case of Ms. Moffic-Silver, two times the sum of her base salary and target annual bonus), and
In connection with her separation from the Company, the Board took action to provide the foregoing severance benefits to Ms. Moffic-Silver. Ms. Moffic-Silver also agreed to certain non-compete and non-solicitation provisions during her employment and for a period of two years following termination of her employment.
Under the terms of the plan, if the executive’sparticipant’s employment is terminated either by us for cause, or by the executiveparticipant other than for good reason (each as defined in the plan), we will pay the executiveparticipant any unpaid bonus and accrued benefits. If the executiveparticipant is terminated in connection with a change in control, which includes a termination without cause or a resignation for good reason that occurs within a period beginning six months before a change in control and ending two years after, such executiveparticipant will receive the severance benefits listed above. The plan also provides that we will require any successor to expressly assume and agree to maintain the plan. Offer Letter Agreements
We entered into offer letter agreementsTo help align with Messrs. Schell, Isaacson and Hemsley, dated February 27, 2017, September 25, 2016 and September 25, 2016, respectively (the “Offer Letter Agreements”), pursuant to which they indicated their intent to enter into employment with us following our acquisition of Bats in exchange for the compensation specified therein.
Under Mr. Schell’s Offer Letter Agreement, Mr. Schell, effective upon our acquisition of Batsbest practices, on February 28, 2017, initially served as our Deputy Chief Financial Officer. Mr. Schell now serves as
| Cboe Global Markets 2019 Proxy Statement
| 59
|
our Executive Vice President, Chief Financial Officer11, 2021, the Board approved an amendment and Treasurer. Mr. Schell's Offer Letter Agreement provided in 2017 for an initial annual base salary of $500,000 and an initial target annual bonus of $600,000, pro-rated for 2017. Mr. Schell’s Offer Letter Agreement also provided that Mr. Schell would be eligible in 2017 for an initial target annual equity incentive award having a grant date value of $500,000.
Under Mr. Isaacson's Offer Letter Agreement, Mr. Isaacson, effective upon our acquisition of Bats on February 28, 2017, serves as our Executive Vice President, Chief Information Officer. Mr. Isaacson's Offer Letter Agreement provided in 2017 for an initial annual base salary of $500,000 and an initial target annual bonus of $700,000. Mr. Isaacson's Offer Letter Agreement also provided that Mr. Issacson would be eligible in 2017 for an initial target annual equity incentive award having a grant date value of $500,000. We also agreed to pay Mr. Isaacson pursuant to the Technology Platform Migration Cash Incentive Plan cash incentive awards of up to $1,500,000 in the aggregate if he achieves certain performance milestones during the three-year period following our acquisition of Bats.
Under Mr. Hemsley’s Offer Letter Agreement, Mr. Hemsley, effective upon our acquisition of Bats on February 28, 2017, serves as our Executive Vice President, President Europe. Mr. Hemsley’s Offer Letter Agreement provided in 2017 for an initial annual base salary of 483,890 GBP and an initial target annual bonus of 459,696 GBP. Mr. Hemsley’s Offer Letter Agreement also provided that Mr. Hemsley would be eligible in 2017 for an initial target annual equity incentive award having a grant date value of $596,000.
Each of Messrs. Schell, Isaacson and Hemsley agreed in their Offer Letter Agreements not to assert that the transition from their former positions with Bats to their current positions with us, in connection with our acquisition of Bats, constitutes good reason for them to resign under their former employment agreements with Bats. In exchange for such agreements, in 2017 we granted Messrs. Schell, Isaacson and Hemsley awards of RSUs, also known as Sign-on Grants, with grant date values of $400,000, $500,000 and $596,000, respectively, that will vest on the third anniversary of our acquisition of Bats (February 28, 2020), subject to their continuous employment with us through such vesting date. Mr. Isaacson will become immediately fully vested in these RSUs if his employment with us terminates prior to the third anniversary of the completion of our acquisition of Bats due to either a termination by us without cause or a resignation by him for good reason (as such terms are defined in Mr. Isaacson's former employment agreement with Bats (as modified by his Offer Letter Agreement)). Messrs. Schell, Isaacson and Hemsley are entitled to participate in all of our employee benefit and fringe benefit plans that are generally available to similarly situated members of senior management, other than the frozen ERP and, and with respect to Mr. Hemsley, the SERP. Pursuant to the Offer Letter Agreements, Messrs. Schell, Isaacson and Hemsley further agreed to comply with the confidentiality, noncompetition, nonsolicitation and nondisparagement obligations in their employment agreements with Bats and agreed that those obligations will be for the benefit of both the Company and Bats.
Messrs. Schell, Isaacson and Hemsley continue to be eligible for the severance and other change in control benefits under their respective employment agreements with Bats, each dated December 17, 2015, and each as modified by the respective Offer Letter Agreement (collectively, the “Employment Agreements”), including the accelerated vesting of their Bats equity awards assumed in the acquisition (but not any Company awards granted after the acquisition of Bats). As discussed above, 24 months after the Effective Date (February 28, 2019), Messrs. Schell, Isaacson and Hemsley will become eligible for coverage under the Executive Severance Plan in lieu of any right to severance or other termination-related benefits under their Employment Agreements.
Under the Employment Agreements, upon a termination of Messrs. Schell’s, Isaacson’s or Hemsley’s employment by us without cause, following 90 days’ written notice in the case of Mr. Hemsley, or by the respective executive for good reason, the terminated executive is entitled to: (i) one times his annual base salary; (ii) an amount equal to one times his target bonus; (iii) the cost of COBRA
60
| Cboe Global Markets 2019 Proxy Statement
| |
premiums (or, in the case of Mr. Hemsley, reimbursement for insurance premiums) payable over twelve (12) months; and (iv) his pro rata bonus as of the date of termination based on actual performance. Upon a voluntary termination of Messrs. Schell’s, Isaacson’s or Hemsley’s employment without good reason, each is entitled to one times his annual base salary prorated for such time that we elect to enforce the executive’s covenant not to compete.
Messrs. Schell, Isaacson and Hemsley are each entitled to certain severance compensation and benefits upon a change in control. The Employment Agreements provide that if, within the 24‑month period occurring immediately after a change in control, the executive is terminated by us without cause or terminates his employment for good reason, he is entitled to: (i) two times his annual base salary; (ii) an amount equal to two times his (A) target annual bonus and (B) 15% of his annual base salary (as an approximate milestone bonus payment); (iii) the cost of 12 months of COBRA premiums (or, in the case of Mr. Hemsley, reimbursement for insurance premiums) payable in a lump sum; (iv) his pro rata bonus as of the date of termination based on target performance; and (v) accelerated vesting of all outstanding equity awards.
If the respective executive retires, dies or becomes disabled, or his employment is terminated for cause, the executive will not receive any cash severance benefits (except for the payment of the executive’s pro rata bonus based on actual performance as of the date of termination due to the executive’s death or disability). Messrs. Schell, Isaacson and Hemsley, or applicable covered spouse or dependents, may choose to continue medical and dental benefits through COBRA or his insurance at his own cost.
Under Mr. Hemsley’s Employment Agreement, we are required to provide him with 90 days’ written notice of termination of employment, except where termination is due to ill health or injury or events where an immediate termination is permitted under his Employment Agreement. In the event he is unable to work due to ill health or injury for an aggregate period of 130 working days in a 12‑month period, his employment may be terminated with notice of the statutory minimum plus one week. During his notice period, Mr. Hemsley is entitled to base salary and contractual benefits or, in our discretion, we may pay Mr. Hemsley his base salary and other contractual benefits in lieu of all or part of any notice period.
Under the 2009 Plan, all stock options are fully vested. Unvested restricted stock and unvested stock options granted under the 2012 Plan and the 2016 Plan and held by Messrs. Schell, Isaacson and Hemsley are subject to accelerated vesting upon the death or disability of the executive or upon his termination without cause within twelve (12) months following a change of control event, unless otherwise set forth in the Employment Agreements.
Release Agreement
Ms. Moffic-Silver separated from the Company effective as of February 28, 2018. In connection with her termination of employment, she became entitled to: (i) the severance benefits payable under the termsrestatement of the Executive Severance Plan, as discussed above, (ii) accelerated vesting in full of any outstanding RSUs held by her and (iii) accelerated vesting of any outstanding PSUs held by her prorated forwhich included the portionfollowing changes:
(i) designating the Chief Executive Officer of the performance period completed atCompany to determine from time to time the time of terminationexecutive vice president (“EVP”) and subject to attainment of the applicable performance goals through the full performance period. Ms. Moffic Silver was 65 years of age and, as such, was entitled to the accelerated vesting of her RSUs and PSUssenior vice president (“SVP”) participants in the manner describedplan; (ii) establishing a severance multiplier for SVPs and all other participants (other than EVPs) in clauses (ii)the plan of one times the sum of a participant’s annual base salary and target annual bonus; (iii) upon retirement.increasing the severance multiplier in the event a participant is terminated in connection with a change in control for EVP participants in the plan to two times the sum of a participant’s annual base salary and target annual bonus; (iv) establishing a severance multiplier in the event a participant is terminated in connection with a change in control for SVPs and all other participants (other than EVPs) in the plan of one and a half times the sum of a participant’s annual base salary and target annual bonus; (v) establishing company-paid premiums for COBRA for SVPs and all other participants (other than EVPs) in the plan of twelve (12) months; (vi) increasing company-paid premiums for COBRA in the event a participant is terminated in connection with a change in control for EVP participants in the plan to twenty-four (24) months; and (vii) establishing company-paid premiums for COBRA in the event a participant is terminated in connection with a change in control for SVPs and all other participants (other than EVPs) in the plan of eighteen (18) months. As of February 11, 2021, the plan participants covered Messrs. Isaacson, Schell, Harkins, and other officers. | Cboe Global Markets 2021 Proxy Statement | 71 |
Severance Payments The following table shows the potential additional payment to each officer pursuant to, for Messrs. Mr. Tilly his employment agreement, for Mr. Howson his offer letter and Concannon, their respective employment agreements,agreement, and for the other named executive officers, the Offer Letter Agreements,Executive Severance Plan, each discussed above, upon the termination of the executive’s employment by us without cause or by the executive for good reason (including following | Cboe Global Markets 2019 Proxy Statement
| 61
|
a change in control), upon the executive’s death or disability, qualified retirement (if eligible), and by the executive without good reason. The amounts shown assume that the termination or event occurred on December 31, 2018.2020. Mr. HemsleyHowson receives his cash compensation in British pounds. The amounts reported below were converted to U.S. dollars using a rate of £1.00 to $1.28$1.37, which was the exchange rate as of December 31, 2018. 2020. 6272
| Cboe Global Markets 20192021 Proxy Statement | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Cash | | Stock Vesting | | | | | | | | Name | | | | Salary | | Incentive(6) | | Acceleration(7) | | | Other(8) | | Total | Edward T. Tilly | | (1) | | $ | 2,530,000 | | $ | 6,261,750 | | $ | 8,806,265 | | | $ | 1,378,146 | | $ | 18,976,161 | | | (2) | | $ | 2,530,000 | | $ | 6,261,750 | | $ | 8,806,265 | | | $ | 1,392,215 | | $ | 18,990,230 | | | (3) | | $ | 2,530,000 | | $ | 6,261,750 | | $ | 8,806,265 | | | $ | 1,378,146 | | $ | 18,976,161 | | | (4) | | $ | 0 | | $ | 0 | | $ | 6,920,647 | | | $ | 0 | | $ | 6,920,647 | | | (5) | | $ | 0 | | $ | 0 | | $ | 6,920,647 | | | $ | 0 | | $ | 6,920,647 | Christopher A. Isaacson | | (1) | | $ | 650,000 | | $ | 1,950,000 | | $ | 257,756 | | | $ | 34,519 | | $ | 2,892,275 | | | (2) | | $ | 650,000 | | $ | 1,950,000 | | $ | 2,686,233 | | | $ | 34,519 | | $ | 5,320,752 | | | (3) | | $ | 0 | | $ | 0 | | $ | 2,686,233 | | | $ | 0 | | $ | 2,686,233 | | | (4) | | $ | 0 | | $ | 0 | | $ | 0 | | | $ | 0 | | $ | 0 | | | (5) | | $ | 0 | | $ | 0 | | $ | 257,756 | | | $ | 0 | | $ | 257,756 | Brian N. Schell | | (1) | | $ | 525,000 | | $ | 1,470,000 | | $ | 284,947 | | | $ | 32,745 | | $ | 2,312,692 | | | (2) | | $ | 525,000 | | $ | 1,470,000 | | $ | 2,574,861 | | | $ | 32,745 | | $ | 4,602,606 | | | (3) | | $ | 0 | | $ | 0 | | $ | 2,574,861 | | | $ | 0 | | $ | 2,574,861 | | | (4) | | $ | 0 | | $ | 0 | | $ | 0 | | | $ | 0 | | $ | 0 | | | (5) | | $ | 0 | | $ | 0 | | $ | 284,947 | | | $ | 0 | | $ | 284,947 | David Howson | | (1) | | $ | 575,400 | | $ | 1,568,110 | | $ | 0 | | | $ | 8,412 | | $ | 2,151,922 | | | (2) | | $ | 1,150,800 | | $ | 2,352,165 | | $ | 1,053,467 | | | $ | 8,412 | | $ | 4,564,844 | | | (3) | | $ | 0 | | $ | 784,055 | | $ | 1,053,467 | | | $ | 0 | | $ | 1,837,522 | | | (4) | | $ | 0 | | $ | 0 | | $ | 0 | | | $ | 0 | | $ | 0 | | | (5) | | $ | 575,400 | | $ | 0 | | $ | 0 | | | $ | 0 | | $ | 575,400 | Bryan Harkins | | (1) | | $ | 500,000 | | $ | 1,000,000 | | $ | 237,828 | | | $ | 34,519 | | $ | 1,772,347 | | | (2) | | $ | 500,000 | | $ | 1,000,000 | | $ | 1,592,352 | | | $ | 34,519 | | $ | 3,126,871 | | | (3) | | $ | 0 | | $ | 0 | | $ | 1,592,352 | | | $ | 0 | | $ | 1,592,352 | | | (4) | | $ | 0 | | $ | 0 | | $ | 0 | | | $ | 0 | | $ | 0 | | | (5) | | $ | 0 | | $ | 0 | | $ | 237,828 | | | $ | 0 | | $ | 237,828 |
The following table does not include the potential payments payable to Ms. Moffic-Silver because she separated from the Company effective February 28, 2018. Except as discussed above, Ms. Moffic-Silver received no additional payments or benefits in connection with her separation.
| | | | | | | | | | | | | | | | | | | | | | | | | | | Cash | | Stock Vesting | | | | | | | | Name | | | | Salary | | Incentive(6) | | Acceleration (7) | | | Other(8) | | Total | Edward T. Tilly | | (1) | | $ | 2,530,000 | | $ | 6,261,750 | | $ | 6,294,219 | | | $ | 1,809,042 | | $ | 16,895,011 | | | (2) | | $ | 2,530,000 | | $ | 6,261,750 | | $ | 8,478,633 | | | $ | 1,809,042 | | $ | 19,079,425 | | | (3) | | $ | 2,530,000 | | $ | 6,261,750 | | $ | 8,478,633 | | | $ | 1,809,042 | | $ | 19,079,425 | | | (4) | | $ | 0 | | $ | 0 | | $ | 6,294,219 | | | $ | 0 | | $ | 6,294,219 | | | (5) | | $ | 0 | | $ | 0 | | $ | 6,294,219 | | | $ | 0 | | $ | 6,294,219 | Christopher R. Concannon (9) | | (1) | | $ | 2,200,000 | | $ | 4,950,000 | | $ | 5,717,769 | | | $ | 622,949 | | $ | 13,490,718 | | | (2) | | $ | 2,200,000 | | $ | 4,950,000 | | $ | 9,978,342 | | | $ | 622,949 | | $ | 17,751,291 | | | (3) | | $ | 0 | | $ | 1,650,000 | | $ | 9,978,342 | | | $ | 0 | | $ | 11,628,342 | | | (4) | | $ | 0 | | $ | 0 | | $ | 0 | | | $ | 0 | | $ | 0 | | | (5) | | $ | 0 | | $ | 0 | | $ | 0 | | | $ | 0 | | $ | 0 | Brian N. Schell | | (1) | | $ | 1,042,000 | | $ | 2,344,500 | | $ | 2,622,672 | | | $ | 298,529 | | $ | 6,307,701 | | | (2) | | $ | 1,042,000 | | $ | 2,344,500 | | $ | 4,113,601 | | | $ | 298,529 | | $ | 7,798,630 | | | (3) | | $ | 0 | | $ | 729,400 | | $ | 4,113,601 | | | $ | 0 | | $ | 4,843,001 | | | (4) | | $ | 0 | | $ | 0 | | $ | 0 | | | $ | 0 | | $ | 0 | | | (5) | | $ | 521,000 | | $ | 0 | | $ | 0 | | | $ | 0 | | $ | 521,000 | Christopher A. Isaacson | | (1) | | $ | 1,080,000 | | $ | 2,592,000 | | $ | 2,771,278 | | | $ | 319,332 | | $ | 6,762,610 | | | (2) | | $ | 1,080,000 | | $ | 2,592,000 | | $ | 4,428,420 | | | $ | 319,332 | | $ | 8,419,752 | | | (3) | | $ | 0 | | $ | 810,000 | | $ | 4,428,420 | | | $ | 0 | | $ | 5,238,420 | | | (4) | | $ | 0 | | $ | 0 | | $ | 0 | | | $ | 0 | | $ | 0 | | | (5) | | $ | 540,000 | | $ | 0 | | $ | 0 | | | $ | 0 | | $ | 540,000 | Mark S. Hemsley | | (1) | | $ | 1,306,504 | | $ | 2,351,707 | | $ | 2,826,979 | | | $ | 0 | | $ | 6,485,190 | | | (2) | | $ | 1,306,504 | | $ | 2,351,707 | | $ | 4,323,256 | | | $ | 0 | | $ | 7,981,467 | | | (3) | | $ | 0 | | $ | 718,577 | | $ | 4,323,256 | | | $ | 0 | | $ | 5,041,833 | | | (4) | | $ | 0 | | $ | 0 | | $ | 333,242 | | | $ | 0 | | $ | 333,242 | | | (5) | | $ | 653,252 | | $ | 0 | | $ | 333,242 | | | $ | 0 | | $ | 986,494 |
| Cboe Global Markets 2021 Proxy Statement | 73 |
| (1) | (1)
| | Represents amounts to be paid in connection with a termination of the executive’s employment by us without cause or by the executive for good reason. |
| (2) | (2)
| | Represents amounts to be paid in connection with a termination of the executive’s employment by us without cause or by the executive for good reason following a change in control. |
| (3) | Cboe Global Markets 2019 Proxy Statement
| 63
|
| (3)
| | Represents amounts to be paid in connection with death or disability. |
| (4) | (4)
| | Represents amounts to be paid in connection with a qualified retirement. As of December 31, 2020, Messrs. Isaacson, Schell, Howson, and Harkins have not satisfied the retirement requirements of 55 years of age and 10 years of service. On March 1, 2021, Mr. Schell satisfied the retirement requirements of 55 years of age and 10 years of service. |
| (5) | (5)
| | Represents amounts to be paid in connection with a termination of the executive’s employment by the executive without good reason. |
| (6) | (6)
| | The amounts shown represent, in the aggregate, any unpaid bonus earned in any year prior to the year in which the executive’s employment terminates, a pro-rated target bonus amount, a pro-rated actual bonus amount with respect to Mr. Howson, and a bonus payment in an amount equal to one or two times target or actual bonus, as applicable. |
| (7) | (7)
| | If a retirement-eligible executive terminates for any reason, other than death or disability or a termination of the executive’s employment by us without cause or by the executive for good reason following a change in control, they are assumed to have taken a retirement. Amounts for Messrs.Mr. Tilly and Hemsley in rows 1, 4 and 5 include acceleration of vesting of certain equity awards, including full or pro-rata vesting of PSU awards, because eachhe has satisfied, as of December 31, 2020, the retirement requirements of 55 years of age and 10 years of service. Amounts for Messrs. Tilly, Isaacson, Schell and Harkins in rows 1 and 5 assume satisfaction of the performance period for the 2018 PSU awards as of December 31, 2020, which were certified and issued subsequent to the end of 2020. The amounts shown are based on the market value of our common stock on December 31, 2020 and amounts that include PSU awards are shown at the target performance amount, other than 2018 PSU awards, which are shown at actual performance amount. |
| (8) | (8)
| | The amounts shown represent amounts contributed on behalf of the executive under our qualified and non-qualified defined contribution plans in connection with such executive’s termination and estimated COBRA premium costs (based upon total monthly premiums as of December 31, 2018)2020) for 18 months of coverage.coverage or 24 months, in the case of a change in control. The reimbursement payable to Mr. Tilly at the end of the COBRA continuation period for an additional 6 months of medical insurance coverage (additional 18 months if termination is within 18 months of a change in control) is not included. All of the participating named executive officers other than Messrs. Concannon, Schell, Isaacson and Hemsley, are fully vested in our qualified and non-qualified defined contribution plans, so there is no acceleration of vesting on these events. events. |
74 | (9)Cboe Global Markets 2021 Proxy Statement
| | Mr. Concannon stepped down as our President and Chief Operating Officer effective January 14, 2019. His employment agreement is described more fully above under “Severance, Change in Control and Employment-Related Agreements.
|
PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the median of the annual total compensation of our employees (other than Mr. Tilly, our Chairman, President and Chief Executive Officer) and the annual total compensation of Mr. Tilly. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. For 2018,2020, the median of the annual total compensation of all employees of the Company (other than our CEO) was $159,496$177,330 and the annual total compensation of our CEO was $8,453,137,$9,062,411, as reported in the “Total” column of our 20182020 Summary Compensation Table above. Based on this information, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 5351 to 1. We identified the median employee by reviewing the annual total compensation of all full-time, part-time, and temporary employees employed by us on October 1, 2018November 15, 2020 as reflected in our payroll records. Annual total compensation included salary, commissions, bonus, value of equity grants, and value of benefits received. In making this determination, we used our employee population size of 852944 employees as of October 1, 2018.November 15, 2020, which excluded, under the non-U.S. de minimis exception to the pay ratio rule, all of our associates in Ecuador (approximately 13), Canada (approximately 5), Singapore (approximately 3), and Hong Kong (approximately 1), out of a total of 973 employees, or 97%. After identifying the median employee, we calculated annual total compensation for such employee using the same methodology we use for calculating total compensation for each of our named executive officers as set forth in the 20182020 Summary Compensation Table above. 64
| Cboe Global Markets 20192021 Proxy Statement | 75 |
EQUITY COMPENSATION PLAN INFORMATION The following is information about our equity compensation plans as of December 31, 2018.2020. | | | | | | | | | | | | | | | | | | Number of securities | | | | Number of securities | | | | remaining available for | | | | to be issued upon | | | | future issuance under | | | | exercise of | | Weighted-average | | equity compensation plans | | | | outstanding options, | | exercise price of | | (excluding securities | | | | warrants and | | outstanding options, | | reflected in column | | | | | | | | | | | | | | | | | | | | | Number of securities | | | | Number of securities | | | | remaining available for | | | | to be issued upon | | | | future issuance under | | | | exercise of | | Weighted-average | | equity compensation plans | | | | outstanding options, | | exercise price of | | (excluding securities | | | | warrants and | | outstanding options, | | reflected in column | Plan Category | | rights(a) | | warrants and rights(b) | | (a))(c) | | rights(a) | | warrants and rights(b) | | (a))(c) | Equity compensation plans approved by security holders | | N/A | (1) | | N/A | (1) | | 4,208,806 | | N/A | (1) | | N/A | (1) | | 4,345,708(2) | Equity compensation plans not approved by security holders | | — | | | — | | | — | | — | | | — | | | — | Total | | — | (1) | | — | (1) | | 4,208,806 | | — | (1) | | — | (1) | | 4,345,708(2) |
| (1) | (1)
| | The Company has grants of unvested restricted stock and restricted stock units covering a total of 565,964464,748 shares of our common stock as of December 31, 20182020 under the Second Amended and Restated Long-Term Incentive Plan. |
| (2) | Consists, as of December 31, 2020, of 3,653,276 shares of our common stock available for future issuance under the Second Amended and Restated Long-Term Incentive Plan and 692,432 shares of our common stock available for future issuance under the Employee Stock Purchase Plan. |
In connection with our acquisition of Bats, the Company assumed the Bats Plans. No awards were made under the Bats Plans subsequent to our acquisition of Bats. On March 1, 2017, we reserved 1,305,918 shares of our common stock for issuance under the Bats Plans. As of December 31, 2018, 369,483 shares of our common stock were covered by outstanding and unexercised options granted under the Bats Plans, which awards had a weighted average exercise price of $26.40 and all of which were exercisable as of December 31, 2018. Additionally, as of December 31, 2018, 217,642 shares of our common stock were covered by outstanding restricted stock awards granted under the Bats Plans. These shares are not included in the table above. We will not grant any future awards under the Bats Plans.
76 | Cboe Global Markets 20192021 Proxy Statement | 65
|
AUDIT MATTERS PROPOSAL 3 - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM General Deloitte,KPMG, an independent registered public accounting firm, served as our independent registered public accounting firm for the year ended December 31, 2018,2020, and our Audit Committee has again selected DeloitteKPMG to serve as our independent registered public accounting firm for the 20192021 fiscal year. Representatives of DeloitteKPMG will be present at the Annual Meeting, will have the opportunity to make a statement if they so desire, and will be available to respond to appropriate questions.
Although stockholder ratification is not required by our Bylaws or otherwise, the Board, as a matter of good corporate governance, is requesting that stockholders ratify the selection of DeloitteKPMG as our independent registered public accounting firm for the 20192021 fiscal year. If stockholders do not ratify Deloitte,KPMG, the Audit Committee will reconsider its appointment. The ratification of the appointment of DeloitteKPMG as our independent registered public accounting firm for the 20192021 fiscal year requires that a majority of the shares cast on this matter be cast in favor of the proposal. Your broker is permitted to vote your shares of common stock on this matter even when you have not given voting instructions. Abstentions will not be counted as votes cast and therefore will not affect the vote. The Board and the Audit Committee recommend that stockholders vote FOR ratification of the appointment of DeloitteKPMG as our independent registered public accounting firm for the 20192021 fiscal year. Former Independent Registered Public Accounting FeesFirm Following a competitive request for proposal process, on August 9, 2019, the Audit Committee approved the dismissal of Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm, effective following the conclusion of the audits for us and our subsidiaries’ fiscal year ending December 31, 2019. On the same day, the Audit Committee approved the engagement of KPMG as our independent registered public accounting firm for the fiscal year ending December 31, 2020. The reports of Deloitte on our consolidated financial statements for the year ended December 31, 2019 did not contain an adverse opinion or disclaimer of opinion, nor were such reports qualified or modified as to uncertainty, audit scope, or accounting principles. During the year ended December 31, 2019, there were no disagreements with Deloitte on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Deloitte, would have caused them to make reference thereto in their reports. During the year ended December 31, 2019, there were no “reportable events” requiring disclosure pursuant to Item 304(a)(1)(v) of Regulation S-K. We provided Deloitte with a copy of the Current Report on Form 8-K (the “Form 8-K”), which was later filed with the SEC on August 14, 2019, and requested that Deloitte provide us with a letter addressed to the SEC stating whether or not Deloitte agreed with the disclosure contained in the Form 8-K or, if not, stating the respects in which it did not agree. We received the requested letter from Deloitte and a copy of Deloitte’s letter was filed as Exhibit 16.1 to the Form 8-K. | Cboe Global Markets 2021 Proxy Statement | 77 |
Independent Registered Public Accounting Firm Fees for KPMG KPMG served as our independent registered public accounting firm for the year ended December 31, 2020 and is serving in such capacity for the 2021 fiscal year. The following table presents fees billed to us by Deloitte forKPMG in the years ended December 31, 20182020 and 2017:2019: | | | | | | | | | 2018 | | 2017 | | | | | | | | | | | | 2020 | | 2019 | Audit Fees | $ | 2,411,095 | | $ | 2,181,144 | $ | 2,760,545 | | $ | — | Audit-Related Fees | | 370,527 | | | 589,845 | | 232,820 | | | — | Tax Fees | | 293,999 | | | 498,763 | | 49,325 | | | 176,998 | All Other Fees | | — | | | — | | — | | | — | Total | $ | 3,075,621 | | $ | 3,269,752 | $ | 3,042,690 | | $ | 176,998 |
Audit Fees consist of the aggregate fees billed, or expected to be billed, for professional services rendered by KPMG for the integrated audit of our annual consolidated financial statements and internal control over financial reporting, quarterly reviews of our unaudited condensed consolidated financial statements, and audits of various domestic and international subsidiaries. Audit-Related Fees consist of the aggregate fees billed, or expected to be billed, for assurance and related services rendered by KPMG, including services rendered in connection with certain regulatory requirements of our subsidiaries. Tax Fees consist of the aggregate fees billed, or expected to be billed, for tax consulting services rendered by KPMG in various jurisdictions in which we operate. KPMG did not serve as our independent registered public accounting firm for the year ended December 31, 2019 and therefore the fees billed for services rendered by KPMG with respect to the 2019 fiscal year were not required to be pre-approved by the Audit Committee. Independent Registered Public Accounting Firm Fees for Deloitte Deloitte served as our independent registered public accounting firm for the year ended December 31, 2019. The following table presents fees billed to us by KPMG in the years ended December 31, 2020 and 2019: | | | | | | | | 2020 | | 2019 | Audit Fees | $ | 1,339,090 | | $ | 2,928,489 | Audit-Related Fees | | 29,000 | | | 26,594 | Tax Fees | | 421,614 | | | 341,428 | All Other Fees | | — | | | — | Total | $ | 1,789,704 | | $ | 3,296,511 |
Audit Fees consist of the aggregate fees billed, or expected to be billed, for professional services rendered by Deloitte for the integrated audit of our annual consolidated financial statements and internal control over financial reporting, quarterly reviews of our unaudited condensed consolidated financial statements, and audits of various domestic and international subsidiaries. Audit-Related Fees consist of the aggregate fees billed, or expected to be billed, for professional services rendered by Deloitte for assurance and auditrelated services, related to auditsincluding services rendered in connection with certain regulatory requirements of the employee benefit plan and Cboe Political Action Committee, services related to our acquisition of Bats and notes offerings, and other assurance services.subsidiaries. Tax Fees consist of the aggregate fees billed, or expected to be billed, for professional services rendered by Deloitte Tax LLP and Deloitte LLP, affiliates of Deloitte, for tax compliance, tax advice, tax planning, and the preparation of federal and state tax filings. 6678
| Cboe Global Markets 20192021 Proxy Statement | |
Pre-Approval Policies and Procedures The Audit Committee of the Board has adopted policies and procedures for the pre-approval of services provided by our independent registered public accounting firm. These services may include audit services, audit-related services, tax services, and other services. Such policies and procedures provide that the Audit Committee shall pre-approve all auditing and permitted non-audit services (including the fees and terms thereof). As permitted under the Sarbanes-Oxley Act of 2002 and its pre-approval policies and procedures, the Audit Committee has delegated certain pre-approval authority to its Chair and a majority of the Audit Committee members, one of which must be the Chair. The ChairAudit Committee member or members to whom such authority is delegated must then report any pre-approval decisions to the Audit Committee at the next scheduled Audit Committee meeting. REPORT OF THE AUDIT COMMITTEE The Audit Committee assists the Board in its oversight of the integrity of our consolidated financial statements, compliance with legal and regulatory requirements and the performance of the internal audit function. Management is responsible for our internal controlscontrol over financial reporting and financial reporting process. Deloitte,KPMG, our independent registered public accounting firm for fiscal year 2020, is responsible for performing an independent audit of our consolidated financial statements and for issuing a report on these consolidated financial statements and on the effectiveness of our internal control over financial reporting. In this context, the Audit Committee hereby reports as follows: DeloitteKPMG the audited consolidated financial statements.
DeloitteKPMG the matters required to be discussed by Statement on Auditing Standards No. 1301 (Communications with Audit Committees), as adopted bythe applicable requirements of the Public Company Accounting Oversight Board.Board (United States) (“PCAOB”) and the SEC.
DeloitteKPMG required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding its conversationscommunications with the Audit Committee concerning independence and has discussed with DeloitteKPMG its independence.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in our Annual Report on Form 10‑K10-K for the year ended December 31, 20182020 for filing with the SEC. We selected KPMG as our independent registered public accounting firm for fiscal year 2021. The Board is recommending that stockholders ratify that selection at the Annual Meeting. See “Proposal 3—Ratification of Appointment of Independent Registered Public Accounting Firm” for more information. Audit Committee CaroleJames E. Stone,Parisi, Chair
William M. Farrow III James E. ParisiAlexander J. Matturri, Jr.
Jennifer J. McPeek Michael L. Richter | Cboe Global Markets 20192021 Proxy Statement | 6779
|
OTHER ITEMS BENEFICIAL OWNERSHIP OF MANAGEMENT AND DIRECTORS The following table lists the shares of our common stock that were beneficially owned as of March 19, 2019,18, 2021, or as of the date otherwise indicated below, and the percentage of our common stock beneficially owned, based on 111,704,556107,125,123 shares outstanding on March 19, 2019,18, 2021, by each of:
| | | | | | | | | Number of | | Percent of | | | | | Shares of | | Voting | | | | | | | | | | | | | Number of | | Percent of | | | | | Shares of | | Voting | | Name | | Common Stock(1) | | Common Stock | | | Common Stock(1) | | Common Stock | | Edward T. Tilly (2) | | 206,887 | | * | | | 230,623 | | * | | Christopher R. Concannon (3) | | 413,178 | | * | | | Christopher A. Isaacson | | | 64,738 | | * | | Brian N. Schell | | 46,069 | | * | | | 42,058 | | * | | Christopher A. Isaacson (4) | | 94,644 | | * | | | Mark A. Hemsley (5) | | 105,127 | | * | | | Joanne Moffic-Silver (6) | | 82,311 | | * | | | Frank E. English, Jr. | | 3,137 | | * | | | David Howson | | | 15,461 | | * | | Bryan Harkins | | | 35,753 | | * | | William M. Farrow III | | 3,874 | | * | | | 6,592 | | * | | Edward J. Fitzpatrick | | 8,537 | | * | | | 11,255 | | * | | Ivan K. Fong | | | 648 | | | | Janet P. Froetscher | | 19,169 | | * | | | 13,887 | | * | | Jill R. Goodman | | 11,322 | | * | | | 14,040 | | * | | Alexander J. Matturri, Jr. | | | 648 | | * | | Jennifer J. McPeek | | | 2,225 | | * | | Roderick A. Palmore | | 18,869 | | * | | | 21,587 | | * | | James E. Parisi | | 1,108 | | * | | | 3,826 | | * | | Joseph P. Ratterman (7) | | 33,621 | | * | | | Joseph P. Ratterman (4) | | | 36,339 | | * | | Michael L. Richter | | 23,289 | | * | | | 22,171 | | * | | Jill E. Sommers | | 1,108 | | * | | | 3,826 | | * | | Carole E. Stone | | 15,349 | | * | | | Eugene S. Sunshine | | 19,169 | | * | | | 21,887 | | * | | All serving directors, nominees, NEOs and other executive officers as a group (23 persons) (8) | | 1,178,940 | | 1.06 | % | | T. Rowe Price Associates, Inc.(9) | | 15,538,694 | | 13.91 | % | | The Vanguard Group(10) | | 11,607,501 | | 10.39 | % | | BlackRock, Inc.(11) | | 7,829,908 | | 7.01 | % | | FMR LLC (12) | | 5,919,806 | | 5.30 | % | | Fredric J. Tomczyk | | | 9,652 | | * | | All serving directors, nominees, NEOs and other executive officers as a group (23 persons) (5) | | | 595,303 | | * | | The Vanguard Group (6) | | | 11,510,947 | | 10.7 | % | T. Rowe Price Associates, Inc. (7) | | | 10,356,063 | | 9.7 | % | BlackRock, Inc. (8) | | | 8,884,798 | | 8.3 | % |
* Less than 1%. 6880
| Cboe Global Markets 20192021 Proxy Statement | |
| (1) | (1)
| | Amounts include 1,108 1,482 shares, and 1,225 shares with respect to Ms. McPeek and 648 shares with respect of Messrs. Fong and Matturri, of unvested restricted common stock granted to each non-employee director pursuant to the Second Amended and Restated Long-Term Incentive Plan. The number of shares of unvested restricted common stock held by all directors as a group is 13,296.18,823. The restricted stock units granted to our executives, which do not entitle the holder to voting rights and are described in the “Executive Compensation—Summary Compensation” section of this proxy statement, are not included in this table. Beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act, pursuant to which a person or group of persons is deemed to have “beneficial ownership” of a security if that person has the right to acquire beneficial ownership of such security within 60 days. As such, amounts also include shares of common stock that the named executive officers and the other executive officers who are not named executive officers have or will have the right to acquire pursuant to presently exercisable employee stock options, or stock options that will become exercisable or restricted stock units that will become vested within 60 days following March 19, 2019. 18, 2021. |
| (2) | (2)
| | Amount includes 64,33948,363 shares of common stock that Mr. Tilly has the right to acquire and be issued within 60 days following March 18, 2021 upon the acceleration of vesting of certain restricted stock units in connection with a qualified retirement. |
| (3) | (3)
| | Amount includes 284,41715,286 shares of common stock that Mr. ConcannonSchell has the right to acquire upon the exercise of stock options that are all exercisable. Amounts are aand be issued within 60 s of January 13, 2019. |
| (4)
| | Amount includes 30,000 shares of common stock that Mr. Isaacson has the right to acquire upon the exercise of stock options that are all currently exercisable.
|
| (5)
| | Amount includes 14,039 shares of common stock that Mr. Hemsley has the right to acquire upon the exercise of stock options that are all currently exercisable. Amount also includes 3,407 shares of common stock that Mr. Hemsley has the right to acquiredays following March 18, 2021 upon the acceleration of vesting of certain restricted stock units in connection with a qualified retirement. On March 1, 2021, Mr. Schell satisfied the retirement requirements of 55 years of age and 10 years of service.
|
| (4) | (6)
| | As of December 31, 2018.
|
| (7)
| | Consists of 2,5631,482 shares of common stock held of record by Mr. Ratterman and 31,05834,857 shares of common stock held of record by the Joseph P. and Sandra M. Ratterman Trust. Joseph P. Ratterman and Sandra M. Ratterman, as Trustees of the Joseph P. and Sandra M. Ratterman Trust dated September 15, 2008, or their Successors in Trust, may be deemed to share voting power and dispositive power over the shares held by the Trust. |
| (5) | (8)
| | Amount includes 9601,292 shares of common stock that other executive officers have the right to acquire and be issued within 60 days following March 19, 201918, 2021 upon the vesting of restricted stock units.units and 6,535 shares of common stock that other executive officers have the right to acquire and be issued within 60 days following March 18, 2021 upon the acceleration of vesting of certain restricted stock units in connection with a qualified retirement. |
| (6) | (9)
| | Based on information set forth in a Schedule 13G/A filed with the SEC on February 14, 2019.10, 2021. The Schedule 13G/A reports that, as of December 31, 2018,2020, The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355, has sole dispositive power with respect to 11,027,303 shares of common stock. In addition, The Vanguard Group has shared voting power with respect to 186,110 shares of common stock and shared dispositive power with respect to 483,644 shares of common stock. |
| (7) | Based on information set forth in a Schedule 13G/A filed with the SEC on February 16, 2021. The Schedule 13G/A reports that, as of December 31, 2020, T. Rowe Price Associates, Inc., 100 E. Pratt Street, Baltimore, MD 21202, has sole voting power with respect to 4,971,3353,835,455 shares of common stock and sole dispositive power with respect to 15,538,69410,356,063 shares of common stock. |
| (8) | (10)
| | Based on information set forth in a Schedule 13G/A filed with the SEC on February 11, 2019.January 29, 2021. The Schedule 13G/A reports that, as of December 31, 2018, The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355, has sole voting power with respect to 136,854 shares of common stock and sole dispositive power with respect to 11,446,724 shares of common stock. In addition, The Vanguard Group has shared voting power with respect to 24,021 shares of common stock and shared dispositive power with respect to 160,777 shares of common stock. |
| (11)
| | Based on information set forth in a Schedule 13G/A filed with the SEC on February 4, 2019. The Schedule 13G/A reports that, as of December 31, 2018,2020, BlackRock Inc., 55 East 52nd Street New York, NY 10055, has sole voting power with respect to 6,935,0427,927,772 shares of common stock and sole dispositive power with respect to 7,829,9088,884,798 shares of common stock.
|
| Cboe Global Markets 2021 Proxy Statement | 81 |
| Cboe Global Markets 2019 Proxy Statement
| 69
|
| (12)
| | Based on information set forth in a Schedule 13G/A filed with the SEC on February 13, 2019. The Schedule 13G/A reports that, as of December 31, 2018, FMR LLC, 245 Summer Street, Boston, Massachusetts 02210, has sole voting power with respect to 615,922 shares of common stock and sole dispositive power with respect to 5,919,806 shares of common stock.
|
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires that our executive officers, directors and persons who own more than 10% of our common stock file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC. Executive officers, directors and greater-than-10% stockholders, if any, are required by regulation to furnish us with copies of all Forms 3, 4 and 5 that they file.
Based on our review of the copies of those forms, any amendments that we have received and written representations from our executive officers and directors, we believe that all executive officers and directors and the owners of more than 10% of our common stock complied with all of the filing requirements applicable to them with respect to transactions during the year ended December 31, 2018.
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS Our Audit Committee has responsibility for reviewing and approving all related party transactions. The Committee has adopted a related-party transactions approval policy. Under this policy, transactions between us and any executive officer, director or holder of more than 5% of our common stock, or any immediate family member of such person, must be approved or ratified by the Committee in accordance with the terms of the policy. Except as noted below, since January 1, 2018,2020, there were no transactions in which Cboe Global Markets or any of its subsidiaries was a party, in which the amount involved exceeded $120,000 and in which a director, a director nominee, an executive officer, a security holder known to own more than 5% of our common stock, or an immediate family member of any of the foregoing had, or will have, a direct or indirect material interest. Thomas Sexton, who serves as the Chief Executive Officer and President of the National Futures Association (“NFA”), is the brother of Patrick Sexton, our Executive Vice President, General Counsel and Corporate Secretary. TheThrough December 31, 2020, the NFA performs manyperformed regulatory functions on behalf of CFE our subsidiary, pursuant to a regulatory services agreement with CFE. Starting January 1, 2021, these regulatory functions were moved in-house from the NFA. The Company paid the NFA approximately $684,000$730,000 in fiscal year 20182020 for the performance of such services. Mr. Sexton recuses himself from matters relating to the NFA. The Company has long-term business relationships with several providers of market indices and some of those providers may be or may have been affiliated with members of the Board. For example, Mr. Matturri, a member of the Board, is the retired Chief Executive Officer of S&P, and as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, the Company is party to a license with S&P pursuant to which the Company has the exclusive right to offer exchange-listed options contracts in the United States on the S&P 500 Index, the S&P 100 Index, and the S&P Select Sector Indices through December 31, 2033, with an exclusive license to trade options on the S&P 500 Index through December 31, 2032. The Company believes that such relationships involved terms no less favorable to the Company than those that it believes would have been obtained in the absence of such affiliation. INCORPORATION BY REFERENCE To the extent that this Proxy Statement is incorporated by reference into any other filing by Cboe Global Markets with the SEC under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, the information contained in the section of this proxy statement entitled “Report of the Audit Committee” (to the extent permitted by the rules of the SEC) shall not be deemed to be “soliciting material” and will not be deemed incorporated, unless specifically provided otherwise in such filing. The information contained in the “Compensation Committee Report” shall not be deemed to be “soliciting material” and will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, other than Cboe Global Markets’ Annual Report on Form 10‑K,10-K, except to the extent specifically provided otherwise in such filing. STOCKHOLDER PROPOSALS Any stockholder who, in accordance with SEC rules, wishes to present a proposal for inclusion in the proxy materials to be distributed in connection with next year’s annual meeting must timely submit the proposal to the Corporate Secretary, Cboe Global Markets, Inc., 400 South LaSalle Street, Chicago, 70
| Cboe Global Markets 2019 Proxy Statement
| |
Illinois 60605. Stockholder proposals for inclusion in our proxy statement for the 20202021 Annual Meeting of Stockholders must be received on or before December 6, 20192, 2021 and must comply in all other respects with applicable SEC rules. 82 | Cboe Global Markets 2021 Proxy Statement | |
Any stockholder who wishes to propose any business or nominate a person for election to the Board to be considered by the stockholders at the 20202022 Annual Meeting of Stockholders, which proposal or nomination would not be included in the Company’s proxy statement, must notify the Corporate Secretary of Cboe Global Markets, Inc. in writing and provide the specified information described in our Bylaws concerning the proposed business or nominee. The notice must be delivered to or mailed to the address set forth in the preceding paragraph and received at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary of the date of the Annual Meeting. As a result, any notice given by a stockholder pursuant to these provisions of our Bylaws (and not pursuant to the SEC rules relating to stockholder proposals for inclusion in the proxy materials) must be received no earlier than 5:00 p.m., Eastern time, on January 17, 202013, 2022 and no later than 5:00 p.m., Eastern time, on February 16, 2020,12, 2022, unless our annual meeting date occurs more than 30 days before or more than 70 days after May 16, 2020,13, 2022, in which case the stockholder’s notice must be received not later than 5:00 p.m., Eastern time, on the tenth day following the day on which public announcement is first made of the date of the annual meeting. The requirements for such notice are set forth in our Bylaws, a copy of which can be obtained upon request directed to the Corporate Secretary at the address set forth above. VOTING INSTRUCTIONS Why did I receive these proxy materials? Our Board is asking for your proxy in connection with the Annual Meeting. By giving us your proxy, you authorize the proxyholders (Edward T. Tilly and Patrick Sexton) to vote your shares at the Annual Meeting according to the instructions that you provide. If the Annual Meeting is adjourned or postponed, your proxy will be used to vote your shares when the meeting reconvenes. Our 20182020 Annual Report to Stockholders, which includes a copy of our Annual Report on Form 10‑K10-K for the year ended December 31, 20182020 (excluding exhibits), as filed with the Securities and Exchange Commission (the “SEC”), is being mailed to stockholders with this Proxy Statement. Who can vote at the Annual Meeting? You are entitled to vote your shares of our common stock if you were a stockholder at the close of business on March 19, 2019,18, 2021, the record date for the Annual Meeting. On that date, there were 111,581,466107,106,300 shares of our common stock outstanding and 123,09018,823 unvested restricted shares of our common stock outstanding, which have been granted to our employees and directors and have voting rights at the Annual Meeting. Therefore, there are 111,704,556107,125,123 shares of voting common stock outstanding, each of which entitles the holder to one vote for each matter to be voted on at the Annual Meeting. Our outstanding common stock is held by approximately 260147 stockholders of record as of March 19, 2019.18, 2021. A list of stockholders of record will be open for examination by any stockholder for any purpose germane to the Annual Meeting for a period of 10 days prior to the Annual Meeting at our principal executive offices at 400 South LaSalle Street, Chicago, Illinois, 60605, and online during the Annual Meeting live audio webcast. Who is and is not a stockholder of record? If you hold shares of common stock registered in your name at our transfer agent, Computershare,Broadridge Corporate Issuer Solutions, Inc. (“Broadridge”), you are a stockholder of record. | Cboe Global Markets 2021 Proxy Statement | 83 |
If you hold shares of common stock indirectly through a broker, bank, or similar institution, or are an employee or director who holds shares of restricted stock at Fidelity, you are not a stockholder of record, but instead hold in “street name.”name”. Please see the information under the heading “If I hold my | Cboe Global Markets 2019 Proxy Statement
| 71
|
shares in “street name” and do not provide voting instructions, can my broker still vote my shares?” for important information. If you are a stockholder of record, ComputershareBroadridge is sending these proxy materials to you directly. If you hold shares in street name, these materials are being provided to you either by the broker, bank, or similar institution through which you hold your shares. What do I need to do to attend the Annual Meeting? AttendanceThe Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted via live audio webcast. The live audio webcast of the Annual Meeting will also be available for listening to the general public, but participation in the Annual Meeting, including voting shares and submitting questions, will be limited to stockholders. You are entitled to participate in the Annual Meeting only if you were a stockholder at the close of business on March 18, 2021, the record date for the Annual Meeting, or if you hold a valid proxy to vote at the Annual Meeting is generally limited to our stockholders and their authorized representatives. All stockholders must bring an acceptable formMeeting.
If you were a stockholder of identification, such as a driver’s license, in order to attend the Annual Meeting in person. In addition, if you hold shares of common stock in street name and would like to attend the Annual Meeting, you will need to bring an account statement or other acceptable evidence of ownership of sharesrecord as of the close of business on March 19, 2019, the record date18, 2021, or you hold a valid proxy for the Annual Meeting.Meeting, you will be able to attend the Annual Meeting via live audio webcast, vote your shares, and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/CBOE2021. To participate, you will need your 16-digit control number included in your proxy materials, on your proxy card, or on the instructions that accompanied your proxy materials. If you were not a stockholder of record, but you hold shares in street name and you want to vote your shares in person at the Annual Meeting, you must bring a legal proxy signed by your bank, broker or nominee to the Annual Meeting. Any representative of a stockholder who wishes to attend the Annual Meeting via live audio webcast, vote your shares, and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/CBOE2021, you must present acceptable documentation evidencing hisobtain, from the broker, bank, or her authority, acceptableother organization that holds your shares, the information required, including a 16-digit control number, and you may be required to provide proof of beneficial ownership, such as your most recent account statement as of the record date, a copy of the voting instruction form provided by your broker, bank, trustee, or nominee, or other similar evidence of ownership byownership.
If you are not a stockholder or if you have lost your 16-digit control number, you will be able to listen to the stockholderlive audio webcast of common stock as described above and an acceptable form of identification. We reserve the right to limit the number of representatives for any stockholder who may attend the Annual Meeting.Meeting by visiting www.virtualshareholdermeeting.com/CBOE2021, but you will not be able to vote or submit your questions during the meeting. The Annual Meeting will begin promptly at 9:00 a.m., Central time. We encourage you to access the meeting prior to the start time. Online access will open at 8:45 a.m., Central time, and you should allow ample time to log in to the meeting live audio webcast and test your computer audio system. We recommend that you carefully review the procedures needed to gain admission in advance. If you do not comply with the procedures described here for attending the Annual Meeting via live audio webcast, you will not be able to participate online. Please contact Investor Relations at investorrelations@Cboe.com or (312) 786‑5600786-7136 in advance of the Annual Meeting if you have questions about attending the Annual Meeting, including regarding the required documentation. Meeting. 84 | Cboe Global Markets 2021 Proxy Statement | |
If you planI am unable to attend the Annual Meeting, please provide adequate time to pass through the security process necessary to gain access to the meeting room. Willlive audio webcast of the Annual Meeting, be webcast?may I listen at a later date?
Yes. A live webcastYes, an audio replay of the Annual Meeting will be providedposted and publicly available on the Investor Relations section of our website at http://ir.Cboe.com. On the Events and Presentations page of our Investor Relations website click on “Listenat http://ir.Cboe.com. This audio replay will cover the entire Annual Meeting, including each stockholder question addressed during the Annual Meeting.
What if during the check-in period or during the Annual Meeting I have technical difficulties or trouble accessing the virtual meeting live audio webcast? During online check-in and continuing through the length of the virtual Annual Meeting, we will have technicians standing by to Webcast”assist you with any technical difficulties you may have accessing the live audio webcast. If you encounter any difficulties accessing the Annual Meeting during the check-in or at meeting time, please call (800) 586-1548 (U.S.) or (303) 562-9288 (International). Why is the Annual Meeting being conducted as a virtual meeting via live audio webcast? We believe a virtual meeting format for the Annual Meeting may facilitate stockholder attendance, dialogue, and participation by enabling stockholders to participate fully, and equally, from any location around the world, at no cost. We will be able to engage with all stockholders as opposed to just those who can afford to travel to an in-person meeting. The virtual format will also allow stockholders to submit questions and comments during the meeting. We are utilizing technology from Broadridge, a leading virtual meeting solution. The platform is expected to accommodate most, if not all, stockholders. Both we and Broadridge will test the platform technology before going “live” for the Annual Meeting. If you miss How do I submit questions or comments for the Annual Meeting? Stockholders can submit questions or comments online during the Annual Meeting via live audio webcast by visiting www.virtualshareholdermeeting.com/CBOE2021. We will answer timely submitted questions or comments on a matter to be voted on at the Annual Meeting before voting is closed on the matter. Then, we will address appropriate general questions or comments from stockholders regarding the Company. Questions or comments received during the Annual Meeting will be presented as submitted, uncensored and unedited, except that we may omit certain personal details for data protection issues or we may edit profanity or other inappropriate language. Questions or comments regarding general economic, political, or other views that are not directly related to the business of the meeting, you can viewthat are of an individual concern to a replay ofstockholder or that are not an appropriate subject matter for general discussion, are not pertinent to the webcast on that site. Please note that youmeeting and therefore will not be ablepresented. If we receive substantially similar questions, we may group those questions together and provide a single response to vote your shares or ask questions via the webcast. Please submit your vote in advanceavoid repetition. | Cboe Global Markets 2021 Proxy Statement | 85 |
How do I vote? You may cast your vote in one of four ways: Internet.Internet before the Annual Meeting. The web address for Internet voting is www.investorvote.com/Cboewww.proxyvote.com and is also on the enclosed proxy card. Internet voting is available 24 hours a day.
By Internet during the Annual Meeting. You may vote online during the Annual Meeting (see “What do I need to do to attend the Annual Meeting?”). However, even if you plan to participate in the Annual Meeting via live audio webcast, we recommend that you also vote by Internet as described above so that your votes will be counted if you later decide not to participate in the Annual Meeting. 1‑800‑652‑VOTE (8683)1-800-690-6903 and is also on the enclosed proxy card. Telephone voting is available 24 hours a day.
At the Annual Meeting.You may vote in person at the Annual Meeting (see “What do I need to do to attend the Annual Meeting?”).
If you choose to vote by Internet by telephonebefore or atduring the Annual Meeting or by telephone, then you do not need to return the proxy card. To be valid, your vote by Internet telephonebefore the Annual Meeting or mailtelephone must be received by 11:59 p.m., Eastern time, on May 15, 2019,12, 2021 for shares held directly, the deadline specified on the proxy card. If you vote by Internet before the Annual Meeting or telephone and 72
| Cboe Global Markets 2019 Proxy Statement
| |
subsequently obtain a legal proxy from your account representative, then your prior vote will be revoked regardless of whether you vote that legal proxy. The Internet and telephone voting procedures are designed to authenticate stockholders’ identities, allow stockholders to give their voting instructions, and confirm that stockholders’ instructions have been recorded properly. Stockholders voting by Internet or telephone should understand that, while we do not charge any fees for voting by Internet or telephone, there may nevertheless be costs that must be borne by you. May I change my vote? If you are a stockholder of record, you may revoke your proxy or change your vote at any time before it is voted at the Annual Meeting by:
appearing in person and voting atonline during the Annual Meeting.
If you are a stockholder of record and need a new proxy card, to change your vote or otherwise, please contact the Corporate Secretary at the address above or via email at CorporateSecretary@Cboe.com. If your bank, broker, or other nominee holds your shares in “street name,” you may revoke your proxy or change your vote only by following the separate instructions provided by your bank, broker, or nominee. To vote in person at the Annual Meeting, you must attend the meeting and cast your vote in accordance with the voting provisions established for the Annual Meeting. Attendance at the Annual Meeting without voting in accordance with the voting procedures does not, by itself, revoke a proxy. If your bank, broker or other nominee holds your shares and you want to attend and vote your shares at the Annual Meeting, you must bring a legal proxy signed by your bank, broker or nominee to the Annual Meeting.
86 | Cboe Global Markets 2021 Proxy Statement | |
If I submit a proxy by Internet, telephone or mail, how will my shares be voted? If you properly submit your proxy by one of these methods, and you do not subsequently revoke your proxy, your shares of common stock will be voted in accordance with your instructions. If you sign, date, and return your proxy card but do not give voting instructions, your shares of common stock will be voted as follows:
DeloitteKPMG as our independent registered public accounting firm for our 20192021 fiscal year, and
In addition, if you properly submit your proxy by one of these methods, and you do not subsequently revoke your proxy, and any other matters are properly presented at the Annual Meeting, your shares | Cboe Global Markets 2019 Proxy Statement
| 73
|
of common stock will be voted in accordance with the judgment of the persons voting the proxy on such matters. We are not aware of any other matters that will be considered at the Annual Meeting. If I hold my shares in “street name” and do not provide voting instructions, can my broker still vote my shares? Under the rules of various securities exchanges, brokers that have not received voting instructions from their customers 10 days prior to the meeting date may vote their customers’ shares in the brokers’ discretion on the proposal regarding the ratification of the appointment of DeloitteKPMG as our independent registered public accounting firm for our 20192021 fiscal year, because the rules of the exchanges currently deem this a “discretionary” matter. Absent instruction, brokers will not be able to vote on any of the other matters included in this Proxy Statement. If brokers exercise their discretion in voting on the proposal regarding the ratification of Deloitte,KPMG, a “broker non-vote” will occur as to the other matters presented for a vote at the Annual Meeting, unless you provide voting instructions. What vote is required for adoption or approval of each matter? Election of Directors. You may vote FOR or AGAINST each of the director nominees or you may ABSTAIN. Each nominee must receive the affirmative vote of a majority of the votes cast with respect to his or her election in order to be elected. Each nominee has tendered his or her resignation, contingent on failing to receive a majority of the votes cast in this election and acceptance by the Board. In the event any director fails to receive a majority of votes cast, the Nominating and Governance Committee will consider and make a recommendation to the Board as to whether to accept the resignation. Advisory Vote to Approve Executive Compensation. You may vote FOR or AGAINST the advisory proposal to approve our executive compensation or you may ABSTAIN. A majority of the shares of common stock cast must be voted FOR approval of the advisory proposal in order for it to pass. Votes cast FOR or AGAINST with respect to the proposal will be counted as shares cast on the proposal. Ratification of the Appointment of our Independent Registered Public Accounting Firm. You may vote FOR or AGAINST the ratification of the appointment of our independent registered public accounting firm or you may ABSTAIN. A majority of the shares of common stock cast must be voted FOR ratification in order for it to pass. Votes cast FOR or AGAINST with respect to this matter will be counted as shares cast on the matter. | Cboe Global Markets 2021 Proxy Statement | 87 |
Abstentions and Broker Non-Votes. Abstentions and broker non-votes will not be considered a vote cast either for or against any of the matters being presented in this proxy statement. If you do not provide your broker with voting instructions, the broker cannot vote your shares on any matter other than the ratification of the appointment of our independent registered public accounting firm. A “broker non-vote” occurs when your broker submits a proxy for the meeting with respect to discretionary matters, but does not vote on non-discretionary matters because you did not provide voting instructions on these matters. In the case of a discretionary matter (i.e., the ratification of the appointment of our independent registered public accounting firm), your broker is permitted to vote your shares of common stock even when you have not given voting instructions (as described above under “If I hold my shares in “street name” and do not provide voting instructions, can my broker still vote my shares?”). How many votes are required to transact business at the Annual Meeting? A quorum is required to transact business at the Annual Meeting. The holders of a majority of the outstanding shares of our common stock as of March 19, 2019,18, 2021, present in person or represented by proxy and entitled to vote, will constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes are treated as present for quorum purposes. 74
| Cboe Global Markets 2019 Proxy Statement
| |
What happens if the meeting is postponed or adjourned? Your proxy will remain valid and may be voted at the postponed or adjourned meeting. You will be able to change or revoke your proxy until it is voted. How do I obtain more information about Cboe Global Markets, Inc.? A copy of our 20182020 Annual Report to Stockholders, which includes our Annual Report on Form 10‑K,10-K, is enclosed with this Proxy Statement. The 20182020 Annual Report, our Annual Report on Form 10‑K10-K for the fiscal year ended December 31, 20182020 filed with the SEC, our Corporate Governance Guidelines, our Code of Business Conduct and Ethics and,and the charters for our Audit, Compensation, and Nominating and Governance Committees are available on our website at http://ir.Cboe.com. In addition, we intend to disclose any future amendments to certain provisions of our Code of Business Conduct and Ethics, or any waivers of such provisions, applicable to any principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions on our website at http://ir.Cboe.com. These documents may also be obtained, free of charge, by writing to: Cboe Global Markets, Inc., 400 South LaSalle Street, Chicago, Illinois 60605, Attn: Investor Relations; or by sending an e-mail to: investorrelations@Cboe.com. These documents, as well as other information about us, are also available on our website at http://ir.Cboe.com. Information on our website does not form a part of this Proxy Statement. How do I sign up for electronic delivery of proxy materials? This Proxy Statement and our 20182020 Annual Report to Stockholders are available on our website at http://ir.Cboe.com. If you would like to help reduce our costs of printing and mailing future materials, you can consent to access these documents in the future over the Internet rather than receiving printed copies in the mail. 88 | Cboe Global Markets 2021 Proxy Statement | |
If you are a stockholder of record, you may sign up for this service by contacting our transfer agent in writing at www.computershare.com.Broadridge, 51 Mercedes Way, Edgewood, NY 11717 or calling (866) 540-7095. If you hold shares of common stock in “street name,” you can contact your account representative at the broker, bank, or similar institution through which you hold your shares for information regarding electronic delivery of future materials. Your consent to electronic delivery will remain in effect until you revoke it. Who pays the expenses of this proxy solicitation? The Company will pay the expenses of the preparation of our proxy materials and the solicitation of proxies by the Company for the Annual Meeting. Certain of our directors, officers or employees may make solicitations in person, telephonically, electronically, or by other means of communication. We have also engaged Morrow Sodali LLC to assist in the solicitation and distribution of proxies. Our directors, officers, and employees will receive no additional compensation for any such solicitation, and we will pay Morrow Sodali LLC a fee of $8,500 for its services, as well as reimbursements for certain expenses. We will request that banks, brokerage houses, and other custodians, nominees, and fiduciaries forward all of our solicitation materials to the beneficial owners of the shares that they hold of record. We will reimburse these record holders for customary clerical and mailing expenses incurred by them in forwarding these materials to customers. If you have any questions about the Annual Meeting or need additional copies of this Proxy Statement or additional proxy cards, please contact Morrow Sodali LLC at 470 West Avenue, Stamford, Connecticut 06902. Banks and brokerage firms may call (203) 658‑9400658-9400 and stockholders may call toll-free at (800) 662-5200. | Cboe Global Markets 2019 Proxy Statement
| 75
|
Who will count the vote? The Company has engaged ComputershareBroadridge to serve as the inspector of elections for the Annual Meeting. As inspector of elections, ComputershareBroadridge will tabulate the voting results. What does it mean if I get more than one proxy or voting instruction card? If your shares are registered in more than one name or in more than one account, you will receive more than one card. This may occur if you hold common stock in multiple accounts, such as with different brokers in street name and as the record holder with Computershare.Broadridge. Please complete and return all of the proxy or voting instruction cards that you receive (or vote by telephone or through the Internet all of the shares on all of the proxy or voting instruction cards received) to ensure that all of your shares are voted. 76
| Cboe Global Markets 20192021 Proxy Statement | 89 |
APPENDIX APPENDIX A—RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES In addition to disclosing results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), Cboe Global Markets, Inc. has disclosed certain non-GAAP measures of operating performance.performance in this Proxy Statement. These measures are not in accordance with, or a substitute for, GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. The non-GAAP measures provided in this Proxy Statement are adjusted net revenues, on a combined company basis, adjusted diluted EPS on a combined company basis, adjusted EBITDA, 3-year adjusted EPS, Options, North American Equities and European equities segmentEquities segments adjusted EBITDAnet revenues, and Options, Futures, North American Equities, Global FX and European Equities segments adjusted EBITDA on a combined company basis.EBITDAs. Management believes that the non-GAAP financial measures presented in this Proxy Statement provide athe appropriate means to determine compensation payouts under our annual incentive plan. The Company also believes that providing a discussion of these metrics provides management and investors an additional perspective on the Company’s financial and operational performance and trends. The non-GAAP unaudited combined financial measures have been prepared by recording combined adjustments to the historical consolidated financial statements of Cboe Global Markets, Inc. The combined financial measures for the twelve months ended December 31, 2017 have been prepared as if the Bats acquisition closed on January 1, 2017. The combined financial measures are not necessarily indicative of the financial position or results of operations that would have occurred had the transaction been effected on the assumed date. Additionally, future results may vary significantly from the results reflected in the combined financial measures.
| | | | | | | Twelve Months Ended | (in millions, except per share amounts) | | December 31, 2017 | Reconciliation of revenues less cost of revenues to non-GAAP: | | | | | Revenue less cost of revenues | | $ | 995.6 | | Non-GAAP adjustments | | | 71.9 | (1) | Combined revenue less cost of revenues | | $ | 1,067.5 | | | | | | | Reconciliation of net income allocated to common stockholders to non-GAAP: | | | | | Net income allocated to common stockholders | | $ | 396.7 | | Non-GAAP adjustments | | | (129.5) | (2) | Non-GAAP expense adjustments as detailed below | | | 130.5 | | Adjusted combined net income allocated to common stockholders | | $ | 397.7 | | Adjusted combined diluted EPS | | $ | 3.57 | | Non-GAAP Adjustments: | | | | | Compensation and benefits | | $ | 9.1 | | Amortization of acquired intangible assets | | | 169.8 | | Other | | | 1.4 | | Total non-GAAP expense adjustments | | $ | 180.3 | | Tax effect | | | (53.6) | | Total non-GAAP adjustments, net of tax | | $ | 130.5 | |
| | | | Twelve Months Ended | (in millions) | December 31, 2020 | Reconciliation of Net Revenue to Non-GAAP | | | Net revenues | $ | 1,254.3 | Non-GAAP adjustments | | | Acquisition revenues less cost of revenues | | (41.4) | Adjusted Net Revenue | $ | 1,212.9 |
| | | | | | Twelve Months Ended | (in millions) | | December 31, 2020 | Reconciliation of Net Income Allocated to Common Stockholders to EBITDA and Adjusted EBITDA | | | Net income allocated to common stockholders | | $ | 467.0 | Interest | | | 37.6 | Income tax provision | | | 192.2 | Depreciation and amortization | | | 158.5 | EBITDA | | $ | 855.3 | | | | | Non-GAAP adjustments not included in above line items | | | | Acquisition-related expenses | | | 45.2 | Provision for notes receivable | | | 6.7 | Bargain purchase gain (1) | | | (32.6) | Acquisition EBITDA | | | (9.4) | Adjusted EBITDA | | $ | 865.2 |
| (1) | (1)
| | Reflects adjustmentsThis amount represents the bargain purchase gain related to include the activityacquisition of Bats for JanuaryEuroCCP on July 1, 2017 through February 28, 2017 of $71.9 million of revenue less cost of revenues.
2020. |
90 | Cboe Global Markets 20192021 Proxy Statement | 77
|
| (2)
| | Reflects adjustments to include the activity of Bats for January 1, 2017 through February 28, 2017 of ($0.2) million and adjustments to reduce Bats historical amortization of acquired intangibles by $4.5 million and increase amortization of acquired intangibles by $28.0 million for the periods January and February 2017. Also reflects adjustments to reduce acquisition costs by $65.2 million for Cboe historical, reduce professional fees for Bats historical by $23.4 million which are costs associated with the Bats merger and $13.6 million to adjust for the extinguishment of Bats historical debt as well as the income tax impact of the previous adjustments of $20.7 million.
|
| | | | | | Twelve Months Ended | Thirty Six Months Ended | (in millions, except per share amounts) | December 31, 2018 | December 31, 2020 | Reconciliation of Net Income Allocated to Common Stockholders to Non-GAAP | | | | Reconciliation of 3-Year Net Income Allocated to Common Stockholders to Non-GAAP | | | | Net income allocated to common stockholders | $ | 422.1 | $ | 1,261.8 | Non-GAAP adjustments | | | | | Acquisition-related expenses (1) | | 30.0 | | 123.7 | Amortization of acquired intangible assets (2) | | 160.6 | | 423.8 | Provision for notes receivable (3) | | | 30.1 | Bargain purchase gain | | | (32.6) | Change in redemption value of noncontrolling interests | | 1.3 | | 1.8 | Change in fair value of contingent consideration | | 0.1 | | Tax provision re-measurements | | (0.4) | | Change in contingent consideration | | | 0.1 | Total Non-GAAP adjustments | | 191.6 | | 546.9 | Income tax expense related to the items above | | (49.4) | | (138.1) | Tax provision re-measurements | | | 3.7 | Impairment charges attributed to noncontrolling interests | | | (3.6) | Net income allocated to participating securities - effect on reconciling items | | (0.9) | | (2.2) | Adjusted net income allocated to common stockholders | $ | 563.4 | | | | | | Reconciliation of Diluted EPS to Non-GAAP | | | | Adjusted 3-year net income allocated to common stockholders | | $ | 1,668.5 | | | | | Reconciliation of 3-Year Diluted EPS to Non-GAAP | | | | Diluted earnings per common share | $ | 3.76 | $ | 11.37 | Per share impact of non-GAAP adjustments noted above | | 1.26 | | 3.65 | Adjusted diluted earnings per common share | $ | 5.02 | | 3-year Adjusted diluted earnings per common share | | $ | 15.02 |
| (1) | (1)
| | This amount includes professional fees and outside services, severance, facilities expenses, impairment charges and other costs related to the company’s acquisition of Bats. acquisitions. |
| (2) | (2)
| | This amount represents the amortization of acquired intangible assets related to the company’s acquisitions. |
| (3) | This amount represents the provision for Bats.notes receivable, recorded in other expenses on the consolidated statements of income, associated with the funding for the development of the consolidated audit trail (“CAT”). |
| Cboe Global Markets 2021 Proxy Statement | 91 |
| | | | | | Twelve Months Ended
| (in millions)
| | December 31, 2017
| Reconciliation of Combined Net Income Allocated to Common Stockholders to EBITDA and Adjusted EBITDA
| | | Combined net income allocated to common stockholders
| | $
| 454.6 | Interest
| | | 45.4 | Income tax provision
| | | (47.3) | Depreciation and amortization
| | | 222.4 | Combined EBITDA
| | $
| 675.1 | | | | | Non-GAAP adjustments not included in above line items
| | | | Compensation and benefits (accelerated stock-based compensation)
| | | 9.1 | Acquisition-related expenses
| | | 19.2 | Other
| | | 5.2 | Adjusted Combined EBITDA
| | $
| 708.6 |
78
| Cboe Global Markets 2019 Proxy Statement
| |
| | | | | | Twelve Months Ended
| (in millions)
| | December 31, 2018
| Reconciliation of Net Income Allocated to Common Stockholders to EBITDA and Adjusted EBITDA
| | | Net income allocated to common stockholders
| | $
| 422.1 | Interest
| | | 38.2 | Income tax provision
| | | 146.0 | Depreciation and amortization
| | | 204.0 | EBITDA
| | $
| 810.3 | | | | | Non-GAAP adjustments not included in above line items
| | | | Acquisition-related expenses
| | | 30.0 | Change in fair value of contingent consideration
| | | 0.1 | Adjusted EBITDA
| | $
| 840.1 |
| | | | Twelve Months Ended | (in millions) | December 31, 2020 | Reconciliation of Options Segment Net Revenues to Non-GAAP | | | Net revenues | $ | 649.7 | Non-GAAP adjustments | | | Acquisition revenues less cost of revenues | | (17.3) | Options Segment Adjusted Net Revenues | $ | 632.4 |
| | | | | | | (in millions) | | Twelve Months Ended
December 31, 2020 | Reconciliation of Options Segment Net Income Allocated to Common Stockholders to Non-GAAP | | | Net income allocated to common stockholders | | $ | 278.6 | Interest | | | — | Income tax provision | | | 151.8 | Depreciation and amortization | | | 30.9 | EBITDA | | | 461.3 | Acquisition-related costs | | | 12.9 | Provision for notes receivable | | | 1.7 | Net income allocated to participating securities | | | 0.7 | Acquisition EBITDA | | | (1.0) | Options Segment Adjusted EBITDA | | $ | 475.6 | | | |
| | | | Twelve Months Ended | (in millions) | December 31, 2020 | Reconciliation of North American Equities Segment Net Revenues to Non-GAAP | | | Net revenues | $ | 326.6 | Non-GAAP adjustments | | | Acquisition revenues less cost of revenues | | (2.9) | North American Equities Segment Adjusted Net Revenues | $ | 323.7 |
| | | | | | | (in millions) | | Twelve Months Ended
December 31, 2020 | Reconciliation of North American Equities Segment Net Income Allocated to Common Stockholders to Non-GAAP | | | Net income allocated to common stockholders | | $ | 132.0 | Interest | | | — | Income tax provision | | | 27.3 | Depreciation and amortization | | | 68.7 | EBITDA | | | 228.0 | Acquisition-related costs | | | 15.1 | Provision for notes receivable | | | 5.0 | Net income allocated to participating securities | | | 0.3 | Acquisition EBITDA | | | (1.8) | North American Equities Segment Adjusted EBITDA | | $ | 246.6 |
92 | | | | | | | (in millions)
| | Twelve Months Ended
December 31, 2018
| Reconciliation of European Equities segment net income allocated to common stockholders to non-GAAP
| | | Net income (loss) allocated to common stockholders
| | $
| 19.2 | Interest
| | | (0.2) | Income tax provision
| | | 4.8 | Depreciation and amortization
| | | 31.3 | EBITDA
| | | 55.1 | Acquisition-related costs
| | | 1.5 | European Equities Segment Adjusted EBITDA
| | $
| 56.6 | | | |
| Cboe Global Markets 20192021 Proxy Statement | 79
|
| | | | (in millions) | | Twelve Months Ended
December 31, 2020 | Reconciliation of Futures Segment Net Income Allocated to Common Stockholders to Non-GAAP | | | Net income allocated to common stockholders | | $ | 25.4 | Interest | | | — | Income tax provision | | | 28.3 | Depreciation and amortization | | | 3.2 | EBITDA | | | 56.9 | Acquisition-related costs | | | — | Futures Segment Adjusted EBITDA | | $ | 56.9 |
| | | | (in millions) | | Twelve Months Ended
December 31, 2020 | Reconciliation of Global FX Segment Net Income Allocated to Common Stockholders to Non-GAAP | | | Net income allocated to common stockholders | | $ | 5.8 | Interest | | | — | Income tax provision | | | — | Depreciation and amortization | | | 26.6 | EBITDA | | | 32.4 | Acquisition-related costs | | | — | Global FX Segment Adjusted EBITDA | | $ | 32.4 |
| | | | Twelve Months Ended | (in millions) | December 31, 2020 | Reconciliation of European Equities Segment Net Revenues to Non-GAAP | | | Net revenues | $ | 114.4 | Non-GAAP adjustments | | | Acquisition revenues less cost of revenues | | (21.1) | European Equities Segment Adjusted Net Revenues | $ | 93.2 |
| | | | | | | (in millions) | | Twelve Months Ended
December 31, 2020 | Reconciliation of European Equities Segment Net Income Allocated to Common Stockholders to Non-GAAP | | | Net income (loss) allocated to common stockholders | | $ | 46.7 | Interest | | | 6.9 | Income tax provision | | | 12.4 | Depreciation and amortization | | | 29.1 | EBITDA | | | 95.1 | Bargain purchase gain | | | (32.0) | Net income allocated to participating securities | | | 0.1 | Acquisition EBITDA | | | (6.4) | European derivatives development related expenses | | | 1.6 | European Equities Segment Adjusted EBITDA | | $ | 58.4 |
80
| Cboe Global Markets 20192021 Proxy Statement | 93 |
94 | Cboe Global Markets 20192021 Proxy Statement | |
| Cboe Global Markets 2021 Proxy Statement | 8195
|
|
= Chair 
= Member
13 of the 
(4)
