Cboe Global Markets CEO Edward Tilly has resigned after failing to disclose personal relationships with colleagues, the exchange operator said on Tuesday, and named board member Fredric Tomczyk in his place.
Tilly joined Cboe as a trading floor clerk in 1987 and rose through the ranks to become CEO in 2013. His total compensation was $11.9 million for 2022.
Tilly’s resignation follows the conclusion of an investigation by the board and an outside independent counsel that was launched in late August, the company said.
“The Board of Directors determined that Tilly did not disclose personal relationships with colleagues, which violated Cboe’s policies and stands in stark contrast to the company’s values,” the company said.
Cboe shares closed up 2.8%, at $155.87. Tilly did not immediately respond to a request for comment.
“Incident like this usually raises more questions about compliance and disclosures,” said Owen Lau, senior analyst at Oppenheimer & Co. “But the stock is up … it appears that investors are not too concerned about this event.”
Edward Tilly joined Cboe as a trading floor clerk in 1987 and rose through the ranks to become CEO in 2013. REUTERSTomczyk, who joined Cboe’s board in July 2019, was previously the CEO of TD Ameritrade Holding.
“The silver lining is it doesn’t look like it is related to strategic or financial issue for the company,” Lau said of the CEO’s resignation. “The Board acts swiftly to resolve this, and new CEO Fredric Tomczyk has lots of experience in this industry.”
Under his leadership, Cboe’s stock nearly quadrupled to $157 from $39, LSEG data show. He grew its annual revenues from $572 million to $1.7 billion last year, according to data provided by Andrew Bond, managing director and senior fintech analyst at Rosenblatt Securities.
Tilly’s resignation follows the conclusion of an investigation by the board and an outside independent counsel that was launched in late August, Cboe said. REUTERS“When he became CEO, he grew that business from a little options exchange to a global, fintech and exchange leader. He really diversified the business. He was there to build an empire,” said Bond.
Steve Sosnick, chief strategist at Interactive Brokers, said Tilly did much to make options trading more accessible to the general public.
“Probably the most meaningful move he made for Cboe shareholders was re-upping their exclusive contract with S&P, which gives Cboe a monopoly on an entire suite of key products,” Sosnick said.
Cboe has exclusive rights to list flagship contracts linked to the Standard & Poor’s 500 stock index through 2032.
Last week, BP CEO Bernard Looney resigned failing to fully disclose details of past personal relationships with colleagues.
