Cboe Global Markets CEO Edward Tilly has resigned after failing to disclose personal relationships with colleagues, the exchange operator said Tuesday, naming board member Fredric Tomczyk in his place.
Tilly joined Cboe in 1987 as a securities clerk and was promoted to CEO in 2013. His total compensation for 2022 was $11.9 million.
Tilly’s resignation follows the completion of an investigation by the board and an outside independent attorney that began in late August, the company said.
“The Board found that Tilly failed to disclose personal relationships with colleagues, which violated Cboe’s policies and is in stark contrast to the company’s values,” the company said.
Shares of Cboe closed up 2.8% at $155.87. Tilly did not immediately respond to a request for comment.
“An incident like this typically raises further questions about compliance and disclosure,” said Owen Lau, senior analyst at Oppenheimer & Co. “But the stock has risen… it appears that investors are not too worried about this event. “
Tomczyk, who joined Cboe’s board in July 2019, was previously CEO of TD Ameritrade Holding.
“The silver lining is that it doesn’t look like it’s related to strategic or financial issues for the company,” Lau said of the CEO’s resignation. “The board is acting quickly to resolve this issue and new CEO Fredric Tomczyk has extensive experience in this industry.”
Under his leadership, Cboe shares quadrupled from $39 to $157, LSEG data shows. It grew its annual revenue from $572 million to $1.7 billion last year, according to Andrew Bond, managing director and senior fintech analyst at Rosenblatt Securities.
“When he became CEO, he grew the company from a small options exchange to a global fintech and exchange leader. He really diversified the business. He was there to build an empire,” Bond said.
Steve Sosnick, chief strategist at Interactive Brokers, said Tilly has done a lot to make options trading more accessible to the general public.
“Probably the most significant move he made for Cboe shareholders was extending their exclusive contract with S&P, which gives Cboe a monopoly on a whole range of important products,” Sosnick said.
Cboe has the exclusive right to list flagship contracts linked to the Standard & Poor’s 500 stock index until 2032.
Last week, BP CEO Bernard Looney resigned without disclosing details of previous personal relationships with colleagues.