Edward Tilly, chairman and CEO of Cboe Global Market Inc., speaks at the Sandler O'Neill + Partners Global Exchange and Brokerage Conference, in New York, on June 7, 2018.BRENDAN MCDERMID/Reuters
Cboe Global Markets CBOE-A CEO Edward Tilly has resigned after failing to disclose personal relationships with colleagues, the exchange operator said on Tuesday, bringing his leadership at the exchange he ran for the past decade to an abrupt end.
Cboe said board member Fredric Tomczyk, 68 will replace him.
Tilly resigned after an investigation in late August by the board and outside independent counsel found that he did not disclose personal relationships with colleagues, the company said.
Cboe declined to say whether those relations happened while Tilly was CEO or prior to his tenure at the helm. The exchange operator also declined to say what sparked the investigation.
Tilly did not respond to LinkedIn messages seeking comment.
His resignation is the latest in a string of high-profile exits by CEOs whose personal conduct ran afoul of company policy.
“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 in a statement.
Cboe shares were up about 4%.
“It appears that investors are not too concerned about this event,” said Owen Lau, senior analyst at Oppenheimer & Co.
Tilly’s total compensation was $11.9 million for 2022. A September 18 filing with U.S. Securities and Exchange Commission shows that Tilly will keep a prorated amount of stock options and performance-based restricted stocks, to be paid out up to his departure.
Tilly joined Cboe as a trading floor clerk in 1987 and rose through the ranks to become CEO in 2013, before which he was president and chief operating offer from November 2011. Prior to that, he served as executive vice chairman from 2006 to 2011.
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.
“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.
Tomczyk, who joined Cboe’s board in July 2019, was previously the CEO of TD Ameritrade Holding from 2008 to 2016.
“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 resignation. “The Board acts swiftly to resolve this, and new CEO Fredric Tomczyk has lots of experience in this industry.”