mktx-def14a_20220608.htm

 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

(Amendment No.         )

 

 

Filed by the Registrant 

Filed by a Party other than the Registrant 

 

 

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to § 240.14a-12

MarketAxess Holdings Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

No fee required.

Fee paid previously with preliminary materials.

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 

 


 

 


 

 

Market Axess 2022 Proxy Statement and Notice of Annual Meeting of Stockholders

 

 

 

MarketAxess Holdings Inc.

55 Hudson Yards, 15th Floor

New York, New York 10001

April 27, 2022

TO THE STOCKHOLDERS OF MARKETAXESS HOLDINGS INC.:

You are invited to attend the 2022 Annual Meeting of Stockholders (the “Annual Meeting”) of MarketAxess Holdings Inc. (the “Company”) scheduled for Wednesday, June 8, 2022 at 10:00 a.m., Eastern Daylight Time. The Annual Meeting will be a virtual meeting of stockholders.  You will be able to participate in the Annual Meeting, vote and submit your questions via live webcast by visiting www.virtualshareholdermeeting.com/MKTX2022. The Company’s Board of Directors and management look forward to your participation.

Details of the business to be conducted at the Annual Meeting are given in the attached Notice of Annual Meeting and Proxy Statement, which you are urged to read carefully.

We are pleased to take advantage of the U.S. Securities and Exchange Commission (“SEC”) rules that allow issuers to furnish proxy materials to their stockholders on the Internet. We believe these rules allow us to provide our stockholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of our Annual Meeting. On April 27, 2022, we expect to mail to our stockholders a Notice of Internet Availability of Proxy Materials (“Notice”) containing instructions on how to access our Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2021 online and how to vote. The Notice contains instructions on how you can receive a paper copy of the Proxy Statement, proxy card and Annual Report if you only received a Notice by mail.

Your vote is important to us. Whether or not you plan to attend the Annual Meeting, your shares should be represented and voted. After reading the Proxy Statement, please cast your vote via the Internet or telephone or complete, sign, date and return the proxy card in the pre-addressed envelope that we have included for your convenience if you received paper copies. If you hold your shares in a stock brokerage account, please check your proxy card or contact your broker or nominee to determine whether you will be able to vote via the Internet or by telephone or how to instruct your broker to vote on your behalf.

On behalf of the Board of Directors, thank you for your continued support.

 

Sincerely,

Richard M. McVey

Chief Executive Officer and Chairman of the Board of Directors

 

 


 

NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS

Attend the Annual Meeting at:

 

www.virtualshareholdermeeting.com/MKTX2022

 

Your vote is very important, regardless of the number of shares you own. Please read the attached Proxy Statement carefully and complete and submit your proxy card via the Internet or sign and date your paper proxy card as promptly as possible and return it in the envelope that was enclosed if you received paper copies. Alternatively, you may be able to submit your proxy by touch-tone phone as indicated on the Notice or proxy card.

 

 

 

TO THE STOCKHOLDERS OF MARKETAXESS HOLDINGS INC.:

NOTICE IS HEREBY GIVEN that the 2022 Annual Meeting of Stockholders (the “Annual Meeting”) of MarketAxess Holdings Inc., a Delaware corporation (the “Company”), will be held via live webcast on Wednesday, June 8, 2022, at 10:00 a.m., Eastern Daylight Time. You can participate in the Annual Meeting, vote and submit your questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/MKTX2022. You must have your 16-digit control number included on your Notice of Internet Availability of Proxy Materials or your proxy card (if you received a printed copy of the proxy materials) to join the Annual Meeting.

At the Annual Meeting we will:

1.  vote to elect the 13 nominees named in the attached Proxy Statement as members of the Company’s Board of Directors for terms expiring at the 2023 Annual Meeting of Stockholders;

2.  vote to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2022;

3.  hold an advisory vote to approve the compensation of the Company’s named executive officers as disclosed in the attached Proxy Statement;

4.  approve the MarketAxess Holdings Inc. 2022 Employee Stock Purchase Plan (the “2022 ESPP”); and

5.  transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

 

 

BY INTERNET

Visit 24/7

www.proxyvote.com

 

 

 

 

 

BY PHONE

Call 1-800-690-6903

in the U.S. or Canada to vote your shares

 

 

 

 

 

BY MAIL

If you received printed copies of the proxy materials, cast your ballot, sign your proxy card and return

 

 

 

 

 

PARTICIPATE IN THE

ANNUAL MEETING

Vote during the Annual Meeting at www.virtualshareholdermeeting.com/MKTX2022 using your 16-digit control number

 

 

These items are more fully described in the Company’s Proxy Statement accompanying this notice.

The record date for the determination of the stockholders entitled to notice of, and to vote at, the Annual Meeting, or any adjournment or postponement thereof, was the close of business on April 11, 2022. You have the right to receive this Notice and vote at the Annual Meeting if you were a stockholder of record at the close of business on April 11, 2022. Please remember that your shares cannot be voted unless you cast your vote by one of the following methods: (1) vote via the Internet or call the toll-free number as indicated on the Notice or proxy card; (2) sign and return a paper proxy card; or (3) vote during the Annual Meeting at www.virtualshareholdermeeting.com/MKTX2022.

 

By Order of the Board of Directors,

Scott Pintoff

General Counsel and Corporate Secretary

New York, New York

April 27, 2022

 

 


 

TABLE OF CONTENTS

 

 

 

PROXY SUMMARY

 

1

 

 

 

Annual Meeting information

 

1

 

 

 

Voting items

 

1

 

 

 

How to vote

 

1

 

 

 

PROPOSAL 1 — ELECTION OF DIRECTORS

 

2

 

 

 

Your vote

 

2

 

 

 

Qualifications for director nominees

 

3

 

 

 

Board of Directors skills and expertise

 

3

 

 

 

Director diversity

 

4

 

 

 

Director Information

 

6

 

 

 

CORPORATE GOVERNANCE AND BOARD MATTERS

 

13

 

 

 

Director independence

 

13

 

 

 

Board Refreshment

 

13

 

 

 

Board diversity policy

 

13

 

 

 

How nominees to our Board are selected

 

14

 

 

 

Board leadership structure

 

14

 

 

 

Board committees

 

15

 

 

 

Meetings and attendance

 

16

 

 

 

Board involvement in risk oversight

 

17

 

 

 

Board evaluations

 

18

 

 

 

Succession planning and talent management

 

18

 

 

 

Code of Conduct, Code of Ethics and other governance documents

 

18

 

 

 

Communicating with our Board members

 

19

 

 

 

Director compensation

 

19

 

 

 

Certain relationships and related person transactions

 

23

 

 

 

ENVIRONMENTAL, SOCIAL AND GOVERNANCE STRATEGY AND INITIATIVES

 

24

 

 

 

Board and management oversight of ESG matters

 

24

 

 

 

Carbon footprint

 

24

 

 

 

Commercial ESG initiatives

 

24

 

 

 

PROPOSAL 2 — RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

26

 

 

 

Your vote

 

26

 

 

 

Audit and other fees

 

27

 

 

 

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

 

28

 

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

29

 

 

 

EXECUTIVE OFFICERS

 

31

 

 

 

A LETTER FROM OUR COMPENSATION AND TALENT COMMITTEE

 

33

 

 

 

COMPENSATION DISCUSSION AND ANALYSIS

 

34

 

 

 

Responding to stockholders; evolving pay practices

 

34

 

 

 

Executive summary

 

35

 

 

 

Executive compensation practices and governance

 

40

 

 

 

How we determine pay levels

 

44

 

 

 

2021 compensation detail

 

45

 

 

 

Additional compensation information

 

56

 

 

 

REPORT OF THE COMPENSATION AND TALENT COMMITTEE OF THE BOARD OF DIRECTORS

 

60

 

 

 

EXECUTIVE COMPENSATION

 

61

 

 

 

Summary compensation table

 

61

 

 

 

Grants of plan-based awards

 

62

 

 

 

Outstanding equity awards at fiscal year-end

 

64

 

 

 

Option exercises and stock vested

 

66

 

 

 

Nonqualified deferred compensation

 

66

 

 

 

Employment agreements and severance arrangements with our Named Executive Officers

 

68

 

 

 

Potential termination or change in control payments and benefits

 

72

 

 

 

Compensation Committee interlocks and insider participation

 

80

 

 

 

PROPOSAL 3 — ADVISORY VOTE ON EXECUTIVE COMPENSATION

 

81

 

 

 

Your vote

 

81

 

 

 

PROPOSAL 4 — APPROVAL OF THE COMPANY’S 2022 ESPP

 

82

 

 

 

Summary of the 2022 ESPP

 

82

 

 

 

U.S. federal income tax consequences relating to the 2022 ESPP

 

86

 

 

 

Non-U.S. federal income tax consequences relating to the 2022 ESPP

 

87

 

 

 

Securities authorized for issuance under equity compensation plans

 

87

 

 

 

Your vote

 

87

 

 

 

CEO PAY RATIO

 

88

 

 

 

OTHER INFORMATION

 

89

 

 

 

General information

 

89

 

 

 

Solicitation of proxies

 

90

 

 

 

Voting

 

90

 

 

 

Availability of certain documents

 

93

 

 

 

Other matters

 

93

 

 

 

Stockholder proposals for 2022 Annual Meeting

 

93

 

 

 

APPENDIX A – Reconciliation of Non-GAAP Amounts

 

A-1

 

 

-

APPENDIX B – 2022 ESPP

 

B-1

 

 

 

 


 

PROXY SUMMARY

This summary contains highlights about MarketAxess Holdings Inc. (“MarketAxess”, the “Company”, “we” or “our”) and the upcoming 2022 Annual Meeting of Stockholders (the “Annual Meeting”).  This summary does not contain all of the information you should consider in advance of the Annual Meeting and we encourage you to read the entire Proxy Statement before voting. This Proxy Statement, the accompanying Notice of Annual Meeting of Stockholders and proxy card are first being mailed to stockholders on or about April 27, 2022. Whenever we refer in this Proxy Statement to the “Annual Meeting,” we are also referring to any meeting that results from any postponement or adjournment of the June 8, 2022 meeting.

Annual Meeting information

 

Date and Time:

Wednesday, June 8, 2022, at 10:00 a.m., Eastern Daylight Time

Virtual Meeting:

www.virtualshareholdermeeting.com/MKTX2022

Record Date:

Monday, April 11, 2022

Due to the continuing public health impact of the coronavirus outbreak (COVID-19) (the “Pandemic”) and to support the health and well-being of our stockholders and other participants at the Annual Meeting, the Annual Meeting will be held in virtual format only.

Voting items

 

The following table summarizes the items that we are asking our stockholders to vote on at the Annual Meeting, along with the voting recommendations of our Board of Directors (the “Board” or “Board of Directors”).

 

Item

Board Recommendation

Required Approval

Page Reference

1.    Election of Directors

FOR

Majority of votes cast for each nominee

2

2.    Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2022

FOR

Majority of shares of Common Stock having voting power present in person or represented by proxy

26

3.    Advisory vote to approve the compensation of the Company’s named executive officers as disclosed in the attached Proxy Statement

FOR

Majority of shares of Common Stock having voting power present in person or represented by proxy

81

4.   Approval of the 2022 ESPP

FOR

Majority of shares of Common Stock having voting power present in person or represented by proxy

82

How to vote

 

Your vote is important.  Stockholders of record as of the Record Date are entitled to vote through one of the following options:

 

By Mail:

If you received printed copies of the proxy materials, cast your ballot, sign your proxy card and return.

Via the Internet:

To vote before the meeting, visit www.proxyvote.com.

To vote at the meeting, visit www.virtualshareholdermeeting.com/MKTX2022. You will need the control number printed on your Notice, proxy card or voting instruction form.

By Telephone:

Call the phone number located on your Notice or proxy card.

 

 

 

2022 Proxy Statement

1

 


 

 

PROPOSAL 1 — ELECTION OF DIRECTORS

The first proposal to be voted on at the Annual Meeting is the election of directors. Our Board currently consists of 13 directors, 11 of whom are not our employees, and all of whom are nominees for election at the Annual Meeting. Each of the nominees for director was elected by the Company’s stockholders on June 9, 2021, except for Xiaojia Charles Li, who was appointed to the Board as of July 13, 2021. The directors are nominated for a term that begins at the Annual Meeting and ends at the 2023 Annual Meeting of Stockholders. Each director will hold office until such director’s successor has been elected and qualified, or until such director’s earlier resignation, retirement or removal.  The Board will continue to evaluate its composition as part of its focus on self-assessment and board refreshment.

Your vote

 

If you sign the attached or enclosed proxy card and return it to the Company, your proxy will be voted FOR all directors, for terms expiring at the 2023 Annual Meeting of Stockholders, unless you specifically indicate on the proxy card that you are casting a vote against one or more of the nominees or abstaining from such vote.

A vote of the majority of the votes cast is required for the election of each director. Abstentions and broker non-votes are not treated as votes cast and will therefore have no effect on the outcome of the vote.

 

P

 

BOARD RECOMMENDATION

The board unanimously recommends that you vote “FOR” the election of each of the following nominees:

 

 

 

     Richard M. McVey

     Nancy Altobello

     Steven L. Begleiter

     Stephen P. Casper

     Jane Chwick

     Christopher R. Concannon

     William F. Cruger

     Kourtney Gibson

     Justin G. Gmelich

     Richard G. Ketchum

     Xiaojia Charles Li

     Emily H. Portney

     Richard L. Prager

 

Each of these nominees is currently serving as a director on our Board, and each nominee has agreed to continue to serve on the Board if such nominee is elected at the Annual Meeting. If any nominee is unable (or for good cause declines) to serve as a director at any time before the Annual Meeting, proxies may be voted for the election of a qualified substitute designated by the current Board, or else the size of the Board will be reduced accordingly. Biographical information about each of the nominees is included below under “Director information.”

 

 

 

2

2022 Proxy Statement

 

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Qualifications for director nominees

 

Our Board has adopted minimum qualifications for our directors: 

substantial experience working as an executive officer for, or serving on the board of, a public company;

significant accomplishment in another field of endeavor; or

an ability to make a meaningful contribution to the oversight and governance of a company having a scope and size similar to our Company.

A director must have an exemplary reputation and record for honesty in his or her personal dealings and business or professional activity. All directors must demonstrate strong leadership skills and should possess a basic understanding of financial matters; have an ability to review and understand the Company’s financial and other reports; and be able to discuss such matters intelligently and effectively. A director also needs to exhibit qualities of independence in thought and action. A candidate should be committed first and foremost to the interests of the stockholders of the Company. The key experience, qualifications and skills each of our directors brings to the Board that are important in light of our business are included in their individual biographies below.

Board of Directors skills and expertise

 

The Company’s directors are selected on the basis of specific criteria set forth in our Corporate Governance Guidelines.  All of our directors possess financial industry experience and a history of strategic leadership.  In addition to those qualifications, listed below are the skills and experience that we consider important for our director nominees.  More detailed information is provided in each director nominee’s biography.

 

 

Corporate

Governance

Fixed

Income/

Electronic

Trading

Regulatory

Technology/

Cybersecurity

Mergers

and

Acquisitions

Finance / Accounting

Risk

Management

Other

Public

Company

Board

Experience

Talent

Management

Richard M. McVey

 

 

Nancy Altobello

 

 

Steven L. Begleiter

 

 

 

Stephen P. Casper

 

 

Jane Chwick

 

 

 

Christopher R. Concannon

 

 

William F. Cruger

 

 

 

Kourtney Gibson

 

 

 

 

Justin G. Gmelich

 

 

 

 

Richard G. Ketchum

 

 

 

 

Xiaojia Charles Li

 

 

 

Emily H. Portney

 

 

 

 

Richard L. Prager

 

 

 

 


 

 

2022 Proxy Statement

3

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Director diversity

 

 

 

The Company recognizes and embraces that having a diverse Board enhances both the Board’s effectiveness in fulfilling its oversight role and the Company’s performance. See “Corporate governance and Board matters — Board diversity policy” for more information. Shown below are the number of director nominees that self-identify as diverse directors (four women directors and two underrepresented minority directors).

 

We are subject to the new Nasdaq Listing Rule 5605(f), which after a transition period, will require us to have, or explain why we do not have, at least two members of our Board who are diverse, including at least one diverse director who self-identifies as female and at least one director who self-identifies as an underrepresented minority or LGBTQ+. We welcome this important step in diversifying corporate boards and we currently meet the diversity objectives of this requirement.

 

In addition, we are also subject to the new Nasdaq Listing Rule 5606, which requires each Nasdaq-listed company, subject to certain exceptions, to provide statistical information about the company’s board of directors, related to each director’s self-identified gender, race, and self-identification as LGBTQ+. Below, please find the board diversity matrix for the Company:

Board Diversity Matrix (As of April 27, 2022)

Total Number of Directors

13

 

Female

Male

Part I: Gender Identity

Directors

4

9

Part II: Demographic Background

African American or Black

1

0

Asian

0

1

White

3

8

 


 

4

2022 Proxy Statement

 

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Listed below is the tenure and age of our director nominees:

TENURE

AGE

 

 

2022 Proxy Statement

5

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Director information

 

At the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated the persons named below to serve as directors of the Company for a term beginning at the Annual Meeting and ending at the 2023 Annual Meeting of Stockholders.

 

 

Richard M. McVey

Age:  62

Director since: April 2000

Chairman of the Board of Directors

Board Committees:

   None

Public Company Directorships:

MarketAxess (NASDAQ: MKTX)

 

 

Qualifications and Career Highlights:

Richard M. McVey has been our Chief Executive Officer and Chairman of our Board of Directors since our inception. As an employee of J.P. Morgan & Co., one of our founding broker-dealers, Mr. McVey was instrumental in the founding of MarketAxess in April 2000. Prior to founding MarketAxess, Mr. McVey was Managing Director and Head of North America Fixed-Income Sales at J.P. Morgan, where he managed the institutional distribution of fixed-income securities to investors. Mr. McVey led MarketAxess through the Company’s IPO in 2004, and since that time, MarketAxess has been one of the fastest growing financial technology companies in the U.S. public markets, with industry leading total stockholder returns.  Mr. McVey was named the Ernst & Young National Entrepreneur of the Year for financial services in 2012, and he has been named to the Institutional Investor Tech 40 list 15 times. Mr. McVey was a member of the SEC Fixed Income Market Structure Advisory Committee, for which he chaired the Technology and Electronic Trading Sub-Committee from November 2017 to March 2021. Mr. McVey serves on the Board of Trustees of Colby College. He previously served on the Board of Directors of Miami (Ohio) University Foundation and Blue Mountain Credit Alternatives L.P., an asset management fund focused on the credit markets and equity derivatives markets. Mr. McVey received a B.A. in finance from Miami (Ohio) University and an M.B.A. from Indiana University.

Mr. McVey’s role as one of our founders and his service as our Chief Executive Officer for over 20 years give him deep knowledge and understanding of all aspects of the business and operations of MarketAxess. Mr. McVey’s extensive experience in the financial services industry, including significant leadership roles at J.P. Morgan, has provided the Company with comprehensive knowledge of the financial markets that we serve and the institutions and dealers that are our clients.

Nancy Altobello

Age:  64

Director since: April 2019

Board Committees:

    Audit (Chair)

    Compensation and Talent

Public Company Directorships:

MarketAxess (NASDAQ: MKTX)

Amphenol Corporation (NYSE: APH)

Wex Inc. (NYSE: WEX)

Qualifications and Career Highlights:

Nancy Altobello was most recently Global Vice Chair, Talent of Ernst & Young (“EY”), a professional services firm, where she was responsible for EY’s talent and people strategy worldwide from July 2014 until her retirement in June 2018. Previously, Ms. Altobello held a number of senior positions at EY, including Americas Vice Chair, Talent from 2008 to 2014, Managing Partner, Northeast Region Audit and Advisory Practices from 2003 to 2008 and Managing Partner, North American Audit Practice from 1999 to 2003. Throughout this time, Ms. Altobello also served as an audit partner for a number of leading global organizations.  She currently serves on the Board of Directors of Amphenol Corporation and Wex Inc. as well as on the Board of Trustees of Fidelity Charitable. She previously served on the Board of Directors of CA Technologies, Cornerstone OnDemand and MTS Systems Corporation until each of their respective acquisitions. Ms. Altobello received a B.S. in accounting from Fairfield University, earned a Corporate Director Certificate from Harvard Business School and is a licensed Certified Public Accountant in New York and Connecticut.

Ms. Altobello was selected to serve on the Board due to her financial, audit and Sarbanes Oxley compliance expertise, her knowledge of talent and people strategy, and her global business experience.

 

 

 

 

 

 

 

 

 

 

 

6

2022 Proxy Statement

 

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

Steven L. Begleiter

Age:  60

Director since: April 2012

Board Committees:

    Finance (Chair)

Public Company Directorships:

MarketAxess (NASDAQ: MKTX)

Great Ajax Corp. (NYSE: AJX)

Qualifications and Career Highlights:

Steven L. Begleiter has been employed with Flexpoint Ford, LLC, a private equity group focused on investments in financial services and healthcare, since October 2008, where he currently serves as Managing Director. Prior to joining Flexpoint Ford, Mr. Begleiter spent 24 years at Bear Stearns & Co., serving first as an investment banker in the Financial Institutions Group and then as Senior Managing Director and member of its Management and Compensation Committee from 2002 to September 2008. Mr. Begleiter also served as head of Bear Stearns’ Corporate Strategy Group. Mr. Begleiter currently serves on the Board of Directors of Great Ajax Corp. and certain portfolio companies of Flexpoint Ford, LLC. He previously served on the Board of Directors of WisdomTree Investments, Inc. Mr. Begleiter received a B.A. with Honors in economics from Haverford College.

Mr. Begleiter brings many years of leadership experience in the financial services and private equity industries to the Board. Mr. Begleiter also has extensive industry knowledge and expertise relating to mergers and acquisitions and capital formation.

 

Stephen P. Casper

Age:  72

Director since: April 2004

Lead Independent Director

Board Committees:

    Nominating and Governance

Public Company Directorships:

MarketAxess (NASDAQ: MKTX)

Qualifications and Career Highlights:

Stephen P. Casper was most recently the President of TRG Management L.P., the investment manager of the TRG Global Opportunity Master Fund, Ltd., a private equity fund from April 2010 to August 2012. From September 2008 to April 2010, Mr. Casper was a partner of Vastardis Capital Services, which provides fund administration and securities processing outsourcing services to hedge funds, funds of funds and private equity funds and their investment management sponsors. Prior to this, Mr. Casper was Chairman and Chief Executive Officer of Charter Atlantic Corporation, the holding company of Fischer Francis Trees & Watts, Inc. (“FFTW”), a specialist manager of U.S., global and international fixed-income portfolios for institutional clients, and Malbec Partners, a manager of single-strategy hedge funds. From April 2004 to January 2008, Mr. Casper was the President and CEO of FFTW. Mr. Casper joined FFTW as Chief Financial Officer in 1990 and was appointed Chief Operating Officer in May 2001. From 1984 until 1990, Mr. Casper was Treasurer of the Rockefeller Family Office. Mr. Casper has been a member of the Board of Directors of multiple fixed income hedge funds managed by KLS Diversified Asset Management since July 2012. Mr. Casper is Vice-Chairman of the Board of Directors of GMO LLC, a global investment management firm providing clients with asset management solutions and services, since May 2014 and a member of the Investment Committee of the Brooklyn Museum. Mr. Casper is a Certified Public Accountant and received a B.B.A. in accounting from Baruch College, from which he graduated magna cum laude, Beta Gamma Sigma, and an M.S. in finance and accounting from The Wharton School at the University of Pennsylvania.

Mr. Casper’s experience in the fixed-income markets and financial services industry and his experience in financial reporting and accounting roles bring extensive public accounting, financial reporting, risk management and leadership skills to the Board.

 

 

 

 

 

 

 

2022 Proxy Statement

7

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Jane Chwick

Age:  59

Director since: October 2013

Board Committees:

    Nominating and Governance

    Risk (Chair)

Public Company Directorships:

MarketAxess (NASDAQ: MKTX)

M&T Bank Corporation (NYSE: MTB)

Thoughtworks Holding, Inc. (NASDAQ: TWKS)

Voya Financial, Inc. (NYSE: VOYA)

 

Qualifications and Career Highlights:

Jane Chwick was most recently the Co-Founder and Co-CEO of Trewtec, Inc., a technology advisory firm designed to help board members and CEOs evaluate the technology function in their companies, from September 2014 until the firm ceased operations in August 2017. Prior to this role, she was a Partner and Co-Chief Operating Officer of the Technology Division of Goldman Sachs Group, Inc. where she was responsible for financial and business planning, technical strategy and ongoing management of an 8,000-person organization until her retirement in April 2013. During her 30-year career at Goldman Sachs, Ms. Chwick held a number of senior positions, including Global Head of Technology of the Securities Division and Global Head of Derivatives Technology. Ms. Chwick served on many governance committees at Goldman Sachs, including the firm’s Finance Committee, the firm-wide New Activity Committee and the Technology Risk Committee, and served as co-chair of the Technology Division Operating Committee. During her tenure, she drove the design, build and integration of technology across all of Goldman Sachs’ derivatives businesses, including fixed income, commodities, currencies and equities. Ms. Chwick is a member of the Board of Directors of M&T Bank Corporation, Thoughtworks Holding, Inc. and Voya Financial, Inc., and Ms. Chwick previously served on the Board of Directors of Essent Group and People’s United Financial, Inc. until its acquisition by M&T Bank Corporation. Ms. Chwick received a B.A. in mathematics from Queens College and an M.B.A. from St. John’s University with a concentration in MIS and quantitative analysis.

Ms. Chwick’s extensive technology leadership experience gained in a global financial services firm, combined with her depth of market knowledge and industry insight, bring valuable skills and strategic perspective to the Board.

Christopher R. Concannon

Age:  54

Director since: January 2019

Board Committees:

    None

Public Company Directorships:

MarketAxess (NASDAQ: MKTX)

 

 

 

 

 

 

Qualifications and Career Highlights:

Christopher R. Concannon has been our President and Chief Operating Officer since January 2019. Mr. Concannon previously served as President and Chief Operating Officer of Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, a position he was appointed to upon Cboe’s acquisition of Bats Global Markets, Inc. in 2017. At Cboe, he was responsible for the company’s transaction businesses, including global derivatives, U.S. and European equities, and global foreign exchange – as well as overseeing Cboe’s technology, operations, risk, and marketing divisions. Until Bats’ acquisition by Cboe, Mr. Concannon served as President of Bats from December 2014, director from February 2015, and Chief Executive Officer from March 2015. Mr. Concannon has more than 20 years of experience as an executive at Nasdaq, Virtu Financial, Instinet and as an attorney at Morgan, Lewis & Bockius, LLP and the SEC. Mr. Concannon has received a B.A. from Catholic University, an M.B.A. from St. John’s University, and a J.D. from Catholic University’s Columbus School of Law.

 

Mr. Concannon brings to the Board extensive experience leading companies in the global exchange industry. Mr. Concannon also has deep and critical knowledge regarding automated trading, the delivery of innovative technology solutions, market structure and clearing operations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

2022 Proxy Statement

 

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

William F. Cruger

Age:  63

Director since: November 2013

Board Committees:

    Audit

    Finance

    Nominating and Governance (Chair)

Public Company Directorships:

MarketAxess (NASDAQ: MKTX)

M&T Bank Corporation (NYSE: MTB)

Virtu Financial, Inc. (NASDAQ: VIRT)

Qualifications and Career Highlights:

William F. Cruger was most recently Vice Chairman of Investment Banking at JPMorgan Chase & Co., a multinational investment bank and financial services company, where he was responsible for key client relationships on a global basis until his retirement in August 2013. Previously, Mr. Cruger held a number of senior positions at J.P. Morgan, including Managing Director in the Financial Institutions group from 1996 to 2011. During this time, he oversaw the rationalization of the firm’s private equity investments in trading platforms and related ventures at LabMorgan from 2000 to 2001. Prior to this, Mr. Cruger ran the firm’s investment banking practices in Japan from 1991 to 1996, Latin America from 1989 to 1991 and Emerging Asia from 1984 to 1988. He currently serves on the Board of Directors of M&T Bank Corporation and Virtu Financial, Inc., and has previously served on the Boards of Directors of Archipelago, Credittrade, Capital IQ. and People’s United Financial, Inc. until its acquisition by M&T Bank Corporation. Mr. Cruger received a B.A. from Clark University and an M.B.A. from Columbia University.

Mr. Cruger’s diverse experience in investment banking at a global financial services firm, his extensive knowledge of financial institutions and financial markets, his leadership roles as a director of other financial services firms, and his international business experience bring critical skills and strategic insight to the Board.

Kourtney Gibson

Age:  40

Director since: July 2020

Board Committees:

    Audit

    Compensation and Talent

Public Company Directorships:

MarketAxess (NASDAQ: MKTX)

lululemon athletica inc. (NASDAQ: LULU)

 

Qualifications and Career Highlights:

Kourtney Gibson has been the Executive Vice Chairman of Loop Capital Markets, an investment bank, brokerage and advisory firm, since March 2022. Prior to this role, Ms. Gibson served in various roles at Loop Capital Markets, including as President from June 2016 to March 2022, Head of the Fixed Income Division from January 2015 to June 2016 and Head of the Equity Division from June 2005 to December 2015. Ms. Gibson currently serves on the Board of lululemon athletica inc. and is a member of The Economic Club of Chicago and the Treasury Market Practices Group sponsored by the Federal Reserve Bank of New York. Ms. Gibson also currently serves on the Board of Trustees at the University of Miami and Viterbo University, the Board of the Dibia Dream Foundation and the Board of the Chicago Scholars Foundation. Ms. Gibson received an M.B.A. from the Kellogg School of Management at Northwestern University and a B.B.A. from the University of Miami.

Ms. Gibson brings to the Board her wealth of experience relating to the evolving market structure of both the fixed income and equity markets, as well her broad-based experience with institutional investor clients.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022 Proxy Statement

9

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Justin G. Gmelich

Age:  53

Director since: October 2019

Board Committees:

    Audit

    Finance

Public Company Directorships:

MarketAxess (NASDAQ: MKTX)

Qualifications and Career Highlights:

Justin G. Gmelich has been a Partner and Global Head of Markets with King Street Capital Management, a global investment management company, since January 2020, where he is also a member of the Management Committee, the Global Investment Committee and the Real Estate Investment Committee.  Prior to this, Mr. Gmelich was the Global Chief Operating Officer for Fixed Income, Commodities, and Currencies (“FICC”) at Goldman Sachs from November 2017 to March 2019, prior to which he was Global Head of Credit at Goldman Sachs since March 2012.  Additionally, while at Goldman Sachs, he was a member of the Firm’s Management Committee, Firmwide Risk Committee, Securities Division Executive Committee, Securities Division Volcker Committee and the Global Recruiting Council. Earlier in his career, Mr. Gmelich worked as an associate trader at Chase and was a vice president at Salomon Brothers. Mr. Gmelich serves as the Chair of the Villanova University Board of Trustees, where he also chairs the Investment Committee, and serves on the Boards of Teddy’s Fund and Trinity Hall. Mr. Gmelich received a B.S. in Finance from Villanova University, an M.S. in Accounting/Taxation from the University of Southern California and an M.B.A. in Finance from Columbia University.

Mr. Gmelich brings to the Board a deep knowledge of fixed income market structure and valuable experience in electronic trading.  Mr. Gmelich also provides key insight into the perspectives of our dealer customer base.

Richard G. Ketchum

Age:  71

Director since: April 2017

Board Committees:

    Risk

Public Company Directorships:

MarketAxess (NASDAQ: MKTX)

 

Qualifications and Career Highlights:

Richard G. Ketchum was most recently Chief Executive Officer of the Financial Industry Regulatory Authority, Inc. (“FINRA”) from March 2009 to July 2016 and served as Chairman of FINRA’s Board of Governors from March 2009 to August 2016.  Prior to joining FINRA, Mr. Ketchum held a range of senior regulatory positions in the financial industry over twenty years, including as Chief Executive Officer of NYSE Regulation, Inc., President of the NASDAQ OMX Group Inc., a predecessor of Nasdaq, Inc., President and Chief Operating Officer of the National Association of Securities Dealers Inc., a predecessor of FINRA, and Director of the Division of Market Regulation at the SEC.  Mr. Ketchum was also the General Counsel of the Corporate and Investment Bank of Citigroup Inc.   Mr. Ketchum is on the Board of Directors of GSS, a subsidiary of BNY Mellon.  He previously served as Non-Executive Chairman of the Board of Directors of Sculptor Capital Management, Inc.  Mr. Ketchum received a B.A. from Tufts University and a J.D. from New York University School of Law.

Mr. Ketchum brings to the Board substantial regulatory experience in the securities industry and deep knowledge of the legal and compliance issues facing companies in the financial services industry.

 

 

 

 

 

 

 

 

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2022 Proxy Statement

 

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Xiaojia Charles Li

Age:  61

Director since: July 2021

Board Committees:

    None

Public Company Directorships:

MarketAxess (NASDAQ: MKTX)

 

Qualifications and Career Highlights:

Xiaojia Charles Li has been Founder and Chairman of Micro Connect, a Hong Kong-based exchange group, since January 2021. Previously, he was Chief Executive of Hong Kong Exchanges and Clearing Limited (“HKEX”) from January 2010 to December 2020. During this time, he orchestrated some of the most significant strategic initiatives in HKEX's history, including the launch of the Shanghai-Hong Kong Stock Connect cross-border trading scheme in 2014, Shenzhen-Hong Kong Stock Connect in 2016 and Bond Connect in 2017. Prior to joining HKEX in 2009, Mr. Li served as Chairman of JP Morgan China from 2003 to 2009 and worked at Merrill Lynch from 1994 to 2003, where he served as President of Merrill Lynch China from 1999 to 2003. Earlier in his career, Mr. Li practiced law in New York as an Associate at Brown & Wood LLP from 1993 to 1994 and Davis Polk & Wardwell LLP from 1991 to 1993. He currently serves on the Council of the University of Hong Kong and the Board of Trustees of Asia Business Council. Mr. Li received a B.A. in English Literature from Xiamen University in China, an M.A. in Journalism from the University of Alabama and a J.D. from Columbia Law School.

Mr. Li brings to the Board his international leadership experience in the financial services sector, in particular his expertise in market infrastructure development in Asia. Mr. Li also provides key insights into the evolving financial regulatory landscape in China.

 

Emily H. Portney

Age:  50

Director since: October 2017

Board Committees:

    Risk

Public Company Directorships:

MarketAxess (NASDAQ: MKTX)

 

Qualifications and Career Highlights:

Emily H. Portney has been Chief Financial Officer of BNY Mellon, a global investment banking services company, since July 2020. In this role, she is responsible for global financial strategy and finance functions, including controllership, business CFO teams, treasury, capital management, tax, corporate development, investor relations, procurement and real estate. Prior to this role, Ms. Portney was Head of Asset Servicing, Americas for BNY Mellon from October 2018 to July 2020. In that role, she oversaw the business unit that provides investment administration, and operational and technology solutions to alternative investment managers, asset managers, asset owners, insurance companies, banks and broker-dealers.  Ms. Portney was Chief Financial Officer of Barclays International, a division of Barclays PLC, a British universal bank from September 2016 to September 2018, where she helped to establish the non-ring-fenced bank, and led a global organization spanning the Corporate and Investment Bank, the Private Bank, and the Cards and Payments businesses. From April 2016 to August 2016, she served as North America Chief Financial Officer for Visa, Inc. Prior to that, from June 1993 to January 2016, Ms. Portney worked at JPMorgan Chase & Co., serving in various senior roles including Global Head of Clearing, Collateral Management, and Execution; Chief Financial Officer of Equities and Prime Services; and Chief Operating Officer of Futures and Options. Ms. Portney previously served on the Board of Directors of The Depository Trust & Clearing Corporation (DTCC).  Ms. Portney received a B.A. from Duke University and an M.B.A. from Columbia University.

Ms. Portney brings leadership experience from a number of financial institutions. Ms. Portney also has in-depth experience relating to clearing operations and strategies and the requirements of operating a firm in a highly regulated industry.

 

 

 

2022 Proxy Statement

11

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Richard L. Prager

Age:  62

Director since: July 2019

Board Committees:

    Compensation and Talent (Chair)

    Risk

Public Company Directorships:

MarketAxess (NASDAQ: MKTX)

Qualifications and Career Highlights:

Richard L. Prager has been a Senior Advisor at Tresata, a data analytics firm, since July 2019. From May 2016 to July 2019, Mr. Prager was a Senior Managing Director of BlackRock Inc. and served on the firm’s Global Executive Committee. In that role, he led the firm’s global trading, cash management and securities lending teams and played a leadership role in managing BlackRock’s global investment platform for both active portfolios and the iShares ETF business. Mr. Prager joined BlackRock in 2008 during the financial crisis as a Managing Director in their Financial Market Advisory business where BlackRock assisted the U.S. Government and many financial firms navigating the crisis. After BlackRock acquired BGI in 2009, Mr. Prager moved internally to the investment platform where he initially headed fixed income trading and soon thereafter, oversaw all asset class trading. In 2012 he assumed responsibility of the firm’s cash management and securities lending businesses in addition to global trading. Before joining BlackRock in 2008, Mr. Prager worked in various senior roles for Bank of America from 2000 to 2008 including Global Head of Rates, Currencies and Commodities. He has also held senior roles at GenRe from 1999 to 2000, ING from 1993 to 1999 and Westpac from 1984 to 1993. Mr. Prager received a B.S. from Duke University.

Mr. Prager possesses valuable expertise in the financial markets, and has been an industry leader in the areas of electronic trading and trading technology. Mr. Prager also brings significant experience in the areas of global asset management, risk management and settlements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12

2022 Proxy Statement

 

 


 

CORPORATE GOVERNANCE AND BOARD MATTERS

Director independence

 

The Board of Directors has determined that each of our current directors, other than Mr. McVey, our Chief Executive Officer (“CEO”) and Chairman of the Board of Directors (“Chairman”) and Mr. Concannon, our President and Chief Operating Officer (“President & COO”), currently meet the independence requirements contained in the NASDAQ listing standards and applicable securities rules and regulations. In determining the independence of each of our non-employee directors, the Board considered the transactions described under “Certain relationships and related person transactions – Other transactions.” None of our non-employee directors has a relationship with the Company or its subsidiaries that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Board refreshment

 

We do not have director age or term limits, as we believe our efforts to regularly refresh the Board with new directors, as well as natural turnover, have achieved the appropriate balance between maintaining longer-term directors with deep institutional knowledge and new directors who bring new perspectives and diversity to our Board. Our Board reviews director tenure every year in connection with its director independence determinations. We plan to continue to refresh our Board of Directors to ensure that it is composed of high functioning, qualified and diverse members.

Currently, 7 of our 13 directors have served for less than five years. See “Proposal 1 — Election of Directors — Director Diversity” for more information.

In addition, on an annual basis, the Nominating and Governance Committee reviews and makes recommendations to the Board related to the size, structure and composition of the Board and its Committees.  

Board diversity policy

 

The Company recognizes and embraces that having a diverse Board enhances both the Board’s effectiveness in fulfilling its oversight role and the Company’s performance. The Company’s Board Diversity Statement, included in our Corporate Governance Guidelines, cites diversity at the Board level as an essential element in the attainment of its strategic objectives and in achieving sustainable and balanced development. In designing the Board’s composition, diversity is considered in a number of respects, including but not limited to diversity of gender, age, race, ethnicity, nationality, cultural and educational background, professional experience, skills, knowledge and length of service. In any formal search for Board candidates, the Nominating and Corporate Governance Committee includes, and requests that any search firm that it engages include, qualified candidates with a diversity of race/ethnicity and gender in the initial pool from which the Committee selects director candidates.  The ultimate decision on all Board nominations is based on merit and the contributions that the selected candidates will bring to the Board, having due regard for the benefits of diversity.

The Nominating and Corporate Governance Committee annually reviews the approval criteria for the selection of new directors and the evaluation and renomination of existing directors, including with regard to the Board Diversity Statement. This annual evaluation enables the Board and the Nominating and Corporate Governance Committee to update the skills and experience they seek in the Board as a whole, and in individual directors, as the Company’s needs evolve and change over time, and to assess the effectiveness of efforts at promoting diversity.

 

 

2022 Proxy Statement

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CORPORATE GOVERNANCE AND BOARD MATTERS

 

We are subject to the new Nasdaq Listing Rule 5605(f), which, after a transition period, will require us to have, or explain why we do not have, at least two members of our Board who are diverse, including at least one diverse director who self-identifies as female and at least one director who self-identifies as an underrepresented minority or LGBTQ+. We welcome this important step in diversifying corporate boards and we currently meet the diversity objectives of this requirement. See “Proposal 1 Election of Directors Director Diversity for more information.

How nominees to our Board are selected

 

Candidates for election to our Board of Directors are nominated by our Nominating and Corporate Governance Committee and ratified by our full Board of Directors for election by the stockholders. The Nominating and Corporate Governance Committee operates under a charter, which is available in the Investor Relations — Corporate Governance section of our corporate website at www.marketaxess.com.

The Nominating and Corporate Governance Committee will give the same consideration to properly submitted candidates recommended by stockholders as they do candidates suggested by other parties. Stockholders may recommend candidates for the Nominating and Corporate Governance Committee’s consideration by submitting such recommendations directly to the Nominating and Corporate Governance Committee as described below under “— Communicating with our Board members.” In making recommendations, stockholders should be mindful of the discussion of minimum qualifications set forth above under “— Qualifications for director nominees” though meeting such minimum qualification standards does not imply that the Nominating and Corporate Governance Committee will necessarily nominate the person recommended by a stockholder. The Nominating and Corporate Governance Committee may also engage outside search firms to assist in identifying or evaluating potential nominees.

Board leadership structure

 

Our CEO also serves as the Chairman of our Board, and we have a Lead Independent Director who is responsible for, among other things, consulting with the Chairman regarding the agenda and meeting schedules for each Board meeting, coordinating the activities of the non-employee directors, including presiding over the executive sessions of non-employee directors, and serving as a liaison between the Chairman and the non-employee directors. We believe that this structure is appropriate for the Company because it allows one person to speak for and lead the Company and the Board, while also providing for effective oversight by an independent Board through a Lead Independent Director. Our CEO, as the individual with primary responsibility for managing the Company’s strategic direction and day-to-day operations, is in the best position to provide Board leadership that is aligned with our stockholders’ interests, as well as the Company’s needs. Our overall corporate governance policies and practices, combined with the strength of our independent directors, serve to minimize any potential conflicts that may result from combining the roles of CEO and Chairman.

Mr. Casper has been appointed by our independent directors to serve as our Lead Independent Director.  Our Corporate Governance Guidelines provide that the Chairman of the Nominating and Corporate Governance Committee shall act as the Lead Independent Director, unless otherwise determined by a majority vote of the independent directors of the Board.

The Board has established other structural safeguards that serve to preserve the Board’s independent oversight of management. The Board is comprised almost entirely of independent directors who are highly qualified and experienced, and who exercise a strong, independent oversight function. The Board’s Audit Committee, Compensation and Talent Committee, Nominating and Corporate Governance Committee, Risk Committee and Finance Committee are comprised entirely of, and are chaired by, independent directors. Independent oversight of our CEO’s performance is provided through a number of Board and committee processes and procedures, including regular executive sessions of non-employee directors and annual evaluations of our CEO’s performance against pre-determined goals. The Board believes that these safeguards preserve the Board’s

 

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2022 Proxy Statement

 

 


CORPORATE GOVERNANCE AND BOARD MATTERS

 

independent oversight of management and provide a balance between the authority of those who oversee the Company and those who manage it on a day-to-day basis.

Board committees

 

Audit Committee

The Audit Committee of the Board of Directors oversees the accounting and financial reporting process of the Company and the audits of the financial statements of the Company. The Audit Committee is also responsible for preparing the audit committee report required to be included in this Proxy Statement, and the Audit Committee is directly responsible for the appointment, retention, compensation and oversight of the Company’s outside auditor. The Audit Committee currently consists of Ms. Altobello (Chair), Mr. Cruger, Ms. Gibson and Mr. Gmelich.

The Board of Directors has determined that each member of the Audit Committee is an independent director in accordance with NASDAQ listing standards and Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board has determined that each member of the Audit Committee is able to read and understand fundamental financial statements, including the Company’s balance sheet, income statement and cash flow statement, as required by NASDAQ rules. In addition, the Board has determined that each member of the Audit Committee satisfies the NASDAQ rule requiring that at least one member of our Board’s Audit Committee have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background that results in the member’s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities. The Board has also determined that each member of the Audit Committee is an “audit committee financial expert” as defined by the SEC.  For information regarding the experience and qualifications of our Audit Committee members, see the information in this Proxy Statement under the section heading “Proposal 1 – Election of Directors — Director information.”

Compensation and Talent Committee

The Compensation and Talent Committee of the Board of Directors (the “Compensation Committee”) is responsible for reviewing and approving, and, as applicable, recommending to the full Board for approval, the compensation of the CEO and all other officers of the Company, as well as the Company’s compensation philosophy, strategy, program design and administrative practices. The compensation programs reviewed and approved by the Compensation Committee consist of all forms of compensation, including salaries, cash incentives, and stock-based awards and benefits. The Compensation Committee is also responsible for oversight of the Company’s talent management processes, including talent acquisition, leadership development and succession planning for key roles, reviewing the Company’s diversity, equity and inclusion programs, and reviewing the Company’s corporate culture.  The Compensation Committee currently consists of Mr. Prager (Chair), Ms. Altobello and Ms. Gibson. The Board of Directors has determined that each member of the Compensation Committee is an “independent director” in accordance with NASDAQ listing standards and a “non-employee director” under the applicable SEC rules and regulations.

Finance Committee

The Finance Committee assists the Board with its oversight of the Company’s global treasury activities, mergers, acquisitions, divestitures, strategic investments, capital structure and capital allocation strategy, financing and liquidity requirements, dividends, stock repurchase authorizations, investor relations activities and insurance and self-insurance programs. The Finance Committee currently consists of Messrs. Begleiter (Chair), Cruger and Gmelich.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee of the Board of Directors identifies individuals qualified to become Board members and recommends for selection by the Board the director nominees to stand for

 

 

2022 Proxy Statement

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CORPORATE GOVERNANCE AND BOARD MATTERS

 

election at each annual meeting of the Company’s stockholders. In connection therewith, the Nominating and Corporate Governance Committee reviews certain policies regarding the nomination of directors and recommends any changes in such policies to the Board for its approval; identifies individuals qualified to become directors; evaluates and recommends for the Board’s selection nominees to fill positions on the Board; and recommends changes in the Company’s corporate governance policies, including the Corporate Governance Guidelines, to the Board for its approval. The Nominating and Corporate Governance Committee oversees the annual review of the performance of the Board of Directors, each director and each committee. The Nominating and Corporate Governance Committee also oversees the Company’s environmental, social and governance strategy and initiatives. See “Environmental, social and governance strategy and initiatives.” The Nominating and Corporate Governance Committee currently consists of Mr. Cruger (Chair), Mr. Casper and Ms. Chwick. The Board of Directors has determined that each member of the Nominating and Corporate Governance Committee is an independent director in accordance with NASDAQ listing standards.

Risk Committee

The Risk Committee assists the Board with its oversight of the Company’s risk management activities, with particular responsibility for overseeing designated areas of risk that are not the primary responsibility of another committee of the Board or retained for the Board’s direct oversight. Items delegated to the Risk Committee by the Board include technology and cyber-security risk, credit risk, clearing risk and regulatory risk. The Risk Committee also oversees and receives reports related to the Company’s cyber-security insurance policies and data security policies and procedures. The Risk Committee currently consists of Ms. Chwick (Chair), Mr. Ketchum, Ms. Portney and Mr. Prager.

Meetings and attendance

 

The following table sets forth the chairs and membership structure of the Board and each standing Board committee as of April 27, 2022, and the number of Board and Board committee meetings held during 2021.

 

 

The non-management directors met in executive session without management directors or employees at each of the meetings of the Board during 2021. We expect each director to attend each meeting of the full Board and of the committees on which such director serves and to attend the annual meeting of stockholders. All directors, except Xiaojia Charles Li, attended at least 75% of the meetings of the full Board and the meetings of the committees on which they served. Mr. Li joined the Board in July 2021 and attended two of the three Board meetings held during 2021 during the time he was serving as a director. He missed the October 2021 meeting due to the time difference and travel restrictions imposed on travel between the Unites States and China during the Pandemic. Twelve of the thirteen directors who were serving on our Board at the time attended our 2021 annual meeting of stockholders (the “2021 Annual Meeting”).

 

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CORPORATE GOVERNANCE AND BOARD MATTERS

 

Board involvement in risk oversight

 

The Company’s management is responsible for defining the various risks facing the Company, formulating risk management policies and procedures, and managing the Company’s risk exposures on a day-to-day basis. The Board’s responsibility is to oversee the Company’s risk management processes by informing itself of the Company’s material risks and evaluating whether management has reasonable controls in place to address the material risks. The Board is not responsible, however, for defining or managing the Company’s various risks.

The Board of Directors and its committees oversee risk through regular reports from management. The Board’s committees report on the matters discussed at the committee level to the full Board. The Risk Committee assists the Board with its oversight of the Company’s risk management activities, including operational risks, technology risks relating to information security, business resiliency and continuity, software change management and deployment and system capacity, credit and settlement risks and regulatory risks. The Audit Committee assists the Board in its oversight of the Company’s significant financial risk exposures. In addition, the Compensation Committee is charged with reviewing and assessing risks arising from the Company’s compensation policies. Risk management is a factor that the Board and the Nominating and Corporate Governance Committee consider when determining who to nominate for election as a director of the Company and which directors serve on each Committee. In addition, the Nominating and Corporate Governance Committee is charged with overseeing risk related to the Company’s environmental, social and governance strategy and initiatives. The Board believes this division of responsibilities provides an effective and efficient approach for addressing risk management.

The Company’s Global Management Team assists management’s efforts to assess and manage risk. The Global Management Team is chaired by the CEO and is comprised of the Company’s senior managers with global oversight. The Global Management Team assesses the Company’s business strategies and plans and ensures that appropriate policies and procedures are in place for identifying, evaluating, monitoring, managing and measuring significant risks. The Chief Risk Officer regularly prepares updates and reports for the Global Management Team, Risk Committee and the Board of Directors.

We have assembled a cross-functional team, which includes several of our executive officers, for continuously monitoring the impact of the Pandemic on our employee base and business operations. Throughout the Pandemic, the Board has overseen this risk management initiative, working closely with management to maintain information flow and timely review of issues arising from the Pandemic. For information on the effect of the Pandemic on our business, see “Management’s Discussion and Analysis — Critical Factors Affecting our Industry and our Company — Economic, Political and Market Factors” in the Company’s Annual Report on ‌

Form ‌10‌-‌K.

 

 

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CORPORATE GOVERNANCE AND BOARD MATTERS

 

Board evaluations

 

Each year, the members of the Board of Directors conduct a confidential written assessment of the Board’s performance that is reviewed and summarized by the Company’s Lead Independent Director and the Chair of the Nominating and Corporate Governance Committee. As part of the evaluation process, the Board reviews its overall composition, including director tenure, board leadership structure, diversity, including the effectiveness of its diversity policy, and individual skill sets, to ensure it serves the best interests of stockholders and positions the Company for future success. Each Board committee also conducts an annual written self-assessment of its performance during the prior year.  The results of the assessments are then summarized and communicated back to the appropriate committee chairpersons and our Lead Independent Director. After the evaluations, the Board and management work to improve upon any issues or focus points disclosed during the evaluation process. As part of the evaluation process, each committee reviews its charter annually.

Succession planning and talent management

 

The Board is committed to positioning MarketAxess for further growth through ongoing talent management, succession planning and the deepening of our leadership bench.  Management facilitates a formal talent management and leadership development review on an annual basis for the Board.  The review is focused on both immediate, short-term coverage plans for all executives in the event of an unforeseen situation, as well as longer-term, strategic succession planning.  A critical element of the review is an evaluation of the Company’s formal leadership development and talent acquisition initiatives in order to ensure that our leadership team has the skills, capabilities and experience to effectively lead our existing, and future, global business.  The review also focuses on the retention of key managers.  The annual talent management and leadership development review is supplemented by an additional year-end review by the Board of the individual performance and year-end compensation proposals for the executive management team and other key staff.

The Board values diversity among the management team and strives to increase the diversity of the executive management team, as well as the management teams reporting to them.  The Board considers formal and informal initiatives to promote diversity as part of their annual talent management review.  In addition, in any external searches for executive management team candidates in which the Company considers candidates that are not employees of the Company, the Company will request that any search firm that it engages include qualified candidates with a diversity of race/ethnicity and gender in the initial pool from which the Company selects such executive management team candidates.  

The Board has formal exposure to the executive team at Board meetings, as well as at Board committee meetings and other discussions.  There are other opportunities for more informal interaction with employees across the organization throughout the year through various events and collaborative experiences.

Code of Conduct, Code of Ethics and other governance documents

 

The Board has adopted a Code of Conduct that applies to all officers, directors and employees, and a Code of Ethics for the CEO and Senior Financial Officers, which includes Mr. Gerosa, our Chief Financial Officer (“CFO”). Both the Code of Conduct and the Code of Ethics for the CEO and Senior Financial Officers can be accessed in the Investor Relations — Corporate Governance section of our website at www.marketaxess.com.  We intend to satisfy any disclosure obligations regarding waivers of or amendments to our Code of Conduct and Code of Ethics for the CEO and Senior Financial Officers by posting such information on our website at www.marketaxess.com.  

You may also obtain a copy of these documents without charge by writing to MarketAxess Holdings Inc., 55 Hudson Yards, 15th Floor, New York, New York 10001, Attention: Investor Relations.

 

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CORPORATE GOVERNANCE AND BOARD MATTERS

 

Copies of the charters of our Board’s Audit Committee, Compensation Committee, Finance Committee, Risk Committee and Nominating and Corporate Governance Committee, as well as a copy of the Company’s Corporate Governance Guidelines, can be accessed in the Investor Relations — Corporate Governance section of our website.

Communicating with our Board members

 

Although our Board of Directors has not adopted a formal process for stockholder communications with the Board, we make every effort to ensure that the views of stockholders are heard by the Board or by individual directors, as applicable, and we believe that this has been an effective process to date. Stockholders may communicate with the Board by sending a letter to the MarketAxess Holdings Inc. Board of Directors, c/o General Counsel, 55 Hudson Yards, 15th Floor, New York, New York 10001. The General Counsel will review the correspondence and forward it to our CEO and Chairman and the Lead Independent Director, or to any individual director or directors to whom the communication is directed, as appropriate. Notwithstanding the above, the General Counsel has the authority to discard or disregard any communication that is unduly hostile, threatening, illegal or otherwise inappropriate or to take any other appropriate actions with respect to such communications.

In addition, any person, whether or not an employee, who has a concern regarding the conduct of the Company or our employees, including with respect to our accounting, internal accounting controls or auditing issues, may, in a confidential or anonymous manner, communicate that concern in writing by addressing a letter to the Chairman of the Audit Committee, c/o Corporate Secretary, at our corporate headquarters address, which is 55 Hudson Yards, 15th Floor, New York, New York 10001, or electronically, at our corporate website, www.marketaxess.com under the heading “Investor Relations — Corporate Governance,” by clicking the “Confidential Ethics Web Form” link.

Director compensation

 

For 2021, our Compensation Committee retained the services of Grahall, LLC (“Grahall”) as its independent compensation consultant for purposes of advising on non-employee director compensation. Grahall reports directly to the Compensation Committee and prepares an annual review of director compensation for the Compensation Committee. The Compensation Committee then submits any proposed changes in pay level or program structure of our non-employee director compensation to the full Board for its consideration, and if appropriate, approval.

Grahall reviews and recommends compensation structure and adjustments based on the board compensation of the following:

Proxy peer group (see “Compensation discussion and analysis — How we determine pay levels — Peer group”);

ISS peer group (updated by ISS annually); and

Industry data sources, including the National Association of Corporate Directors.

All directors, other than Mr. McVey and Mr. Concannon, are non-employee and independent directors. Mr. McVey and Mr. Concannon receive no additional compensation for service as a director.

In 2021, (i) the value of the Board member equity retainer was increased from $120,000 to $140,000 per year, (ii) the Lead Independent Director fee was increased from $45,000 to $50,000, per year; (iii) committee chair fees (other than for audit) were increased to $20,000 per year; and (iv) committee member fees (other than for audit) were increased to $10,000 per year, in each case, as recommended by Grahall. The changes were effective as of

 

 

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CORPORATE GOVERNANCE AND BOARD MATTERS

 

July 1, 2021. The changes were made to better align director compensation with the above-referenced market data provided by Grahall.

A summary of the structure of our director pay program that is in effect as of July 2021 is as follows:

Director Compensation Pay Structure - Effective July 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Board Cash Retainer

 

 

Cash Committee

Chair / LID Fee 1

 

 

Cash Committee Membership Fee 1

 

 

Board Equity Retainer

 

Annual Retainer - All

 

$

85,000

 

 

-

 

 

-

 

 

$

140,000

 

Audit Committee

 

-

 

 

$

25,000

 

 

$

12,500

 

 

-

 

Compensation / Talent Committee

 

-

 

 

$

20,000

 

 

$

10,000

 

 

-

 

Governance / Nominating Committee

 

-

 

 

$

20,000

 

 

$

10,000

 

 

-

 

Finance Committee

 

-

 

 

$

20,000

 

 

$

10,000

 

 

-

 

Risk Committee

 

-

 

 

$

20,000

 

 

$

10,000

 

 

-

 

Lead Independent Director2

 

-

 

 

$

25,000

 

 

-

 

 

$

25,000

 

 

(1)

Committee members serving as chair do not also receive a membership fee.

(2)

The Lead Independent Director may choose to receive the retainer in cash or a combination of cash and equity.

In August 2021, we granted 300 shares of restricted stock or restricted stock units (“RSUs”) to each non-employee director except for Mr. Li, who was granted a prorated amount of 271 RSUs in August 2021 after joining the Board in July 2021.  Mr. Casper, as Lead Director, received 53 additional shares of restricted stock, equating to half of his Lead Independent Director Fee.  All shares are scheduled to vest on the date of the next annual stockholders’ meeting. The number of shares of restricted stock or RSUs granted was determined on the grant date by dividing the equity grant value of $140,000 (or $126,575 for Mr. Li) by the average of the closing price of our Common Stock for the ten trading days up to and including the grant date.  We expect to continue to compensate our non-employee directors with a combination of cash and equity awards. All equity awards to non-employee directors are made under the Company’s 2020 Equity Incentive Plan.

 

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CORPORATE GOVERNANCE AND BOARD MATTERS

 

Below is a summary of the amount and form of actual compensation received by each non-employee director in 2021:

Director Compensation for Fiscal 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name

 

Fees Earned or Paid in Cash 1

 

 

Stock Awards 2,4

 

 

All Other Compensation 3

 

 

Total

 

 

 

(S)

 

 

(S)

 

 

(S)

 

 

(S)

 

Stephen P. Casper

 

 

117,500

 

 

 

167,735

 

 

 

713

 

 

 

285,948

 

Nancy Altobello

 

 

118,750

 

 

 

142,551

 

 

 

0

 

 

 

261,301

 

Steven L. Begleiter

 

 

110,948

 

 

 

142,551

 

 

 

0

 

 

 

253,499

 

Jane Chwick

 

 

113,750

 

 

 

142,551

 

 

 

5,557

 

 

 

261,858

 

William F. Cruger

 

 

121,250

 

 

 

142,551

 

 

 

600

 

 

 

264,401

 

Kourtney Gibson

 

 

102,953

 

 

 

142,551

 

 

 

527

 

 

 

246,031

 

Justin Gmelich

 

 

102,651

 

 

 

142,551

 

 

 

0

 

 

 

245,202

 

Richard Ketchum

 

 

93,750

 

 

 

142,551

 

 

 

600

 

 

 

236,901

 

Xiaojia Charles Li

 

 

39,728

 

 

 

128,771

 

 

 

0

 

 

 

168,499

 

Emily Portney

 

 

93,750

 

 

 

142,551

 

 

 

600

 

 

 

236,901

 

Richard Prager

 

 

108,255

 

 

 

142,551

 

 

 

600

 

 

 

251,406

 

John Steinhardt

 

 

45,337

 

 

 

0

 

 

 

600

 

 

 

45,936

 

 

(1)

The amounts represent Board, Committee, Committee Chair and Lead Independent Director cash retainers earned in 2021. For Messrs. Li and Steinhardt, the amounts represent Board retainers earned for the portion of the year that each director served on the Board. Mr. Li joined the Board in July 2021. Mr. Steinhardt left the Board following the 2021 Annual Meeting in June 2021.

(2)

The amounts represent the aggregate grant date fair value of stock awards granted by the Company in 2021, computed in accordance with FASB ASC Topic 718.  For further information on how we account for stock-based compensation, see Note 11 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.  Mr. Li received a prorated number of 271 RSUs based on his length of service in 2021.  

(3)

Represents accrued dividends paid on restricted stock or RSUs, as applicable.

(4)

The table below sets forth information regarding the aggregate number of unvested stock awards outstanding at the end of fiscal year 2021 for each non-employee director, including unvested stock awards granted in fiscal year 2021 and, in relation to Messrs. Begleiter, Cruger, and Gmelich and Ms. Altobello, RSUs for which the director previously elected to defer receipt.  There are no stock option awards granted to directors in fiscal year 2021 and no stock options outstanding at fiscal year end.  

 

Equity Awards Outstanding

 

 

Name

Aggregate Number of Stock Awards Outstanding at Fiscal Year End

Stephen P. Casper

353

Nancy Altobello

538

Steven L. Begleiter

1,056

Jane Chwick

300

William F. Cruger

1,272

Kourtney Gibson

300

Justin Gmelich

538

Richard Ketchum

300

Xiaojia Charles Li

271

Emily Portney

300

Richard Prager

300

John Steinhardt

0

 

 

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CORPORATE GOVERNANCE AND BOARD MATTERS

 

 

Share ownership & holding guidelines

To keep the interests of non-employee directors and stockholders aligned, the Board of Directors has adopted stock ownership guidelines for our non-employee directors.  Non-employee directors are required to hold not less than the number of shares of Common Stock equal in value to five times the annual cash retainer payable to a director, or $425,000.  The holding requirement must be achieved within five years after the director has become a Board member and maintained throughout the non-employee director’s service with the Company. All shares of Common Stock beneficially owned by the director, including shares purchased and held personally, vested and unvested restricted shares, vested and unvested restricted stock units, settled performance shares, and shares deferred under a non-qualified deferred compensation arrangement, count toward the minimum ownership requirement. Vested and unvested stock options and unearned performance shares are excluded.

In addition to the ownership guidelines, all non-employee directors must hold all shares granted for service for a minimum of five years from the date of grant. Directors are also required, for a period of six months following his or her departure from the Board, to comply with the Company’s Insider Trading Policy that, among other things, prohibits trading in the Company’s securities during specified blackout periods.  

As of April 1, 2022, the holding requirement was equal to 1,004 shares, calculated using a price of $423.21 per share, which was the average of the daily closing price of our Common Stock for the twelve-month period ended on March 31, 2022. All of our non-employee directors have either achieved the designated level of ownership or are in the five-year period following their appointment or election to the Board during which they are expected to achieve compliance:

 

Directors' Stock Ownership

 

 

 

 

 

 

Name

 

Appointed

 

Requirement

(multiple of cash retainer)

Current Holdings

(multiple of cash retainer)

Stephen P. Casper

 

April 2004

 

5.0x

267.7x

Nancy Altobello

 

April 2019

 

5.0x

4.5x

Steven L. Begleiter

 

April 2012

 

5.0x

45.0x

Jane Chwick

 

October 2013

 

5.0x

30.8x

William F. Cruger

 

November 2013

 

5.0x

30.7x

Kourtney Gibson

 

July 2020

 

5.0x

2.5x

Justin Gmelich

 

October 2019

 

5.0x

3.7x

Richard Ketchum

 

April 2017

 

5.0x

10.3x

Xiaojia Charles Li

 

July 2021

 

5.0x

1.4x

Emily Portney

 

October 2017

 

5.0x

9.0x

Richard Prager

 

July 2019

 

5.0x

9.1x

 

Our equity plan provides for the accrual of dividends (or dividend equivalents) on unvested shares.   However, dividends are not paid and are subject to forfeiture until all restrictions on the shares have lapsed.

We do not provide any retirement benefits or other perquisites to our non-employee directors.

 

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CORPORATE GOVERNANCE AND BOARD MATTERS

 

Certain relationships and related person transactions

 

Related person transactions

Our related persons include our directors, director nominees, executive officers, holders of more than five percent of the outstanding shares of our Common Stock and the foregoing persons’ immediate family members. We review relationships and transactions in which the Company and our related parties are or will be participants to determine whether such related persons have a direct or indirect material interest. As required under SEC rules, related person transactions that involve in excess of $120,000 and are determined to be directly or indirectly material to a related person are disclosed in this Proxy Statement. In addition, the Audit Committee reviews and, if appropriate, approves or ratifies any related person transaction that is required to be disclosed.

Since January 1, 2021, there has not been, nor is there currently proposed, any related person transaction in which the Company was a participant, the amount involved exceeded or will exceed $120,000 and in which any related person had or will have a direct or indirect material interest.

Other transactions

Although not considered related person transactions that are required to be disclosed under SEC rules, each of the 5% stockholders that are listed under “Security ownership of certain beneficial owners and management” or their affiliated entities is a party to a user agreement, dealer agreement or data agreement that governs their access to, and activity on, our electronic trading platforms and access to our data products.

In addition, certain entities for which some of our directors serve as employees or officers have entered into transactions with the company, including user agreements, dealer agreements and data agreements that govern their access to, and activity on, our electronic trading platforms and access to our data products. Each of these agreements were entered into in the ordinary course of business and, subject to our usual trade terms, provide for the fees and expenses to be paid by such entities for the use of the platform or access to data. For example, in May 2021, we launched the Diversity Dealer Initiative, a series of technology enhancements that enable leading buy-side institutions and minority-, women- and veteran-owned broker dealers to more easily trade with one another on our platforms. One of our directors, Kourtney Gibson, serves as the President of Loop Capital Markets LLC, a minority-owned broker dealer that is a participating Diversity Dealer in the program. While these transactions are not considered related person transactions that are required to be disclosed under SEC rules, our Audit Committee reviews and approves such transactions on an annual basis.

 

 

 

 

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23

 


 

ENVIRONMENTAL, SOCIAL AND GOVERNANCE STRATEGY AND INITIATIVES

We are focused on growing our business sustainably by delivering long-term value for our customers, suppliers, stockholders, employees and the communities where we live and work. At MarketAxess, we think of our environmental, social and governance (“ESG”) strategy as one that encompasses both corporate and commercial objectives. We aim to operate the Company responsibly while managing risks and using our resources wisely.  As further described in the Company’s 2021 ESG Report, MarketAxess demonstrated its ESG commitment in 2021 by completing its first ESG non-financial materiality and prioritization assessment and continuing our efforts to implement our effective diversity, equity and inclusion and human capital management strategies.  The report also details other topics identified by the assessment, including customer privacy, data security, ethical conduct of business and employee health and wellbeing. Our 2021 ESG Report, including the results of the non-financial ESG materiality and prioritization assessment, can be accessed in the Investor Relations — Corporate Governance section of our website, but is not, and will not be deemed to be, a part of this Proxy Statement or incorporated by reference into any of our filings with the SEC.

Board and management oversight of ESG matters

 

The Company’s ESG strategy and initiatives are generally overseen by the Board’s Nominating and Corporate Governance Committee.  In addition, other Board committees have oversight of specific topics that fall within our ESG umbrella. For example, the Compensation Committee oversees the Company’s efforts with respect to diversity, equity and inclusion and the Risk Committee oversees the Company’s cybersecurity policies and procedures. Our President & COO and General Counsel & Corporate Secretary share management oversight over our ESG strategy and initiatives.

During 2021, the Nominating and Governance Committee received presentations from management and discussed our ESG strategy, including the non-financial materiality and prioritization assessment. The results of this assessment are discussed in our 2021 ESG Report, which can be accessed in the Investor Relations — Corporate Governance section of our website.  

Carbon footprint

 

We support the Paris Agreement Under the United Nations Framework Convention on Climate Change. Part of our support is developing an understanding of how our Company’s operations contribute to global carbon emissions. For that reason, in January 2022, we began measuring our Scope 1, 2 and some of our 3 emissions and, once measured, we plan to put measurable environmental goals in place. More information can be found in our 2021 ESG Report, which can be accessed in the Investor Relations — Corporate Governance section of our website.  

Commercial ESG initiatives

 

In 2021, we launched the Diversity Dealer Initiative (DDI) to enable buy side firms to trade more easily with minority-, women- and veteran-owned broker-dealers, while still achieving best execution. The DDI leverages our anonymous all-to-all Open Trading marketplace and provides enhanced trading connections by allowing institutional investor clients to select a diversity dealer to intermediate an Open Trading transaction.

 

 

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2022 Proxy Statement

 

 


ENVIORNMENTAL, SOCIAL AND GOVERNANCE STRATEGY AND INITIATIVES

 

In addition, in 2019 we launched our “Trading for Trees” program, under which five trees are planted by One Tree Planted, our partner charitable organization, for every $1 million of green bond trades executed on our platforms.  

Green bonds are fixed income instruments designed to fund projects that have positive environmental and/or climate benefits.  In 2021, $51.1 billion in corporate and municipal green bond trading volume was executed globally on the MarketAxess platforms, an increase of 89.3% from 2020. In the U.S., where public data is available, MarketAxess ranks as the largest municipal and corporate green bond marketplace with an estimated market share of 20.9% in municipal and TRACE-reported corporate green bond volume.

The third year of our “Trading for Trees” initiative proved successful. Our clients’ green bond trading on the MarketAxess platform resulted in over 255,000 trees being planted across six countries, including India, Côte d’Ivoire, Rwanda, and Canada. The impact of our projects was focused on wildfire restoration and enhanced biodiversity, and provided local communities with resources to fight hunger and climate change.

 

 

 

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25

 


 

PROPOSAL 2 — RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of our Board has appointed PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm to audit our consolidated financial statements for the year ending December 31, 2022 and to audit the Company’s internal control over financial reporting as of December 31, 2022, and the Board is asking stockholders to ratify that selection. PwC has audited our consolidated financial statements each year since our formation in 2000. The Audit Committee periodically considers whether there should be a rotation of independent registered public accounting firms and the Audit Committee currently believes that the continued retention of PwC is in the best interests of the Company and our stockholders. Although current law, rules and regulations, as well as the charter of the Audit Committee, require our independent registered public accounting firm to be engaged, retained and supervised by the Audit Committee, the Board considers the selection of our independent registered public accounting firm to be an important matter of stockholder concern and considers a proposal for stockholders to ratify such selection to be an important opportunity for stockholders to provide direct feedback to the Board on an important issue of corporate governance. In the event that stockholders fail to ratify the appointment, the Audit Committee will reconsider whether or not to retain PwC, but may ultimately determine to retain PwC as our independent registered public accounting firm. Even if the appointment is ratified, the Audit Committee, in its sole discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and its stockholders.

In 2011, the Company, in the ordinary course of its business, entered into a bulk data agreement with PwC for the purpose of supporting valuation conclusions reached by PwC in the normal course of PwC’s audit and other work for its clients, which has been amended from time to time. Pursuant to the agreement, the Company provides bond pricing data to PwC on terms consistent with the terms of similar data sales agreements entered into by the Company. The aggregate annual revenue to the Company from the data agreement is $295,000. On an annual basis, the Audit Committee evaluates the effect of such agreement on the independence of PwC and has concurred with the opinion of the Company’s management and PwC that the arrangement constitutes an “arm’s-length” transaction that would not affect PwC’s independence.

Representatives of PwC will be present at our Annual Meeting, will have the opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions from stockholders.

Your vote

 

Unless proxy cards are otherwise marked, the persons named as proxies will vote FOR the ratification of PwC as the Company’s independent registered public accounting firm for the year ending December 31, 2022. Approval of this proposal requires the affirmative vote of the holders of a majority of the shares of Common Stock having voting power present in person or represented by proxy. Abstentions will have the same effect as a vote AGAINST this proposal. Brokers have discretionary authority to vote on Proposal 2 and, therefore, there will be no broker non-votes on Proposal 2.

 

BOARD RECOMMENDATION

 

The board unanimously recommends that you vote “FOR” ratification of PwC as the Company’s independent registered public accounting firm for the year ending December 31, 2022.

 

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2022 Proxy Statement

 

 


PROPOSAL 2 – RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTING FIRM

 

Audit and other fees

 

The aggregate fees billed by our independent registered public accounting firm for professional services rendered in connection with the audit of our annual financial statements set forth in our Annual Report on Form 10-K for the years ended December 31, 2021 and 2020 and the audit of our broker-dealer subsidiaries’ annual financial statements, as well as fees paid to PwC for tax compliance and planning, if any, and other services, are set forth below.

Except as set forth in the following sentence, the Audit Committee, or a designated member thereof, pre-approves 100% of all audit, audit-related, tax and other services rendered by PwC to the Company or its subsidiaries. The Audit Committee has authorized the CEO and the CFO to purchase permitted non-audit services rendered by PwC to the Company or its subsidiaries up to, and including, a limit of $10,000 per service and an annual aggregate limit of $20,000 for all such services.

Immediately following the completion of each fiscal year, the Company’s independent registered public accounting firm submits to the Audit Committee (and the Audit Committee requests from the independent registered public accounting firm), as soon as possible, the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence.

Immediately following the completion of each fiscal year, the independent registered public accounting firm also submits to the Audit Committee (and the Audit Committee requests from the independent registered public accounting firm), a formal written statement of the fees billed by the independent registered public accounting firm to the Company in each of the last two fiscal years for each of the following categories of services rendered by the independent registered public accounting firm: (i) the audit of the Company’s annual financial statements and the reviews of the financial statements included in the Company’s Quarterly Reports on Form 10-Q or services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements; (ii) assurance and related services not included in clause (i) that are reasonably related to the performance of the audit or review of the Company’s financial statements, in the aggregate and by each service; (iii) tax compliance, tax advice and tax planning services, in the aggregate and by each service; and (iv) all other products and services rendered by the independent registered public accounting firm, in the aggregate and by each service.

Set forth below is information regarding fees paid by the Company to PwC during the fiscal years ended December 31, 2021 and 2020.

Fee Category

 

2021

 

 

2020

 

Audit Fees(1)

 

$

2,690,747

 

 

$

2,765,478

 

All Other Fees(2)

 

 

1,720

 

 

 

4,460

 

Total

 

$

2,692,467

 

 

$

2,769,938

 

 

 

(1)

The aggregate fees incurred include amounts for the audit of the Company’s consolidated financial statements (including fees for the audit of our internal control over financial reporting), the audit of our broker-dealer subsidiaries’ annual financial statements and the audits of our foreign subsidiaries’ annual statutory financial statements.

 

(2)

Other Fees are comprised of annual subscription fees for accounting related research and service fees related to XBRL conversion services.

 

 

 

 

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27

 


 

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The Audit Committee currently consists of Ms. Altobello (Chair), Mr. Cruger, Ms. Gibson and Mr. Gmelich. Each member of the Audit Committee is independent, as independence is defined for purposes of Audit Committee membership by the listing standards of NASDAQ and the applicable rules and regulations of the SEC.

The Audit Committee appoints our independent registered public accounting firm, reviews the plan for and the results of the independent audit, approves the fees of our independent registered public accounting firm, reviews with management and the independent registered public accounting firm our quarterly and annual financial statements and our internal accounting, financial and disclosure controls, reviews and approves transactions between the Company and its officers, directors and affiliates, and performs other duties and responsibilities as set forth in a charter approved by the Board of Directors.

During fiscal year 2021, the Audit Committee met five times. The Company’s senior financial management and independent registered public accounting firm were in attendance at such meetings. Following each quarterly meeting during 2021, the Audit Committee conducted a private session with the independent registered public accounting firm, without the presence of management. The Audit Committee also had one joint meeting with the Risk Committee during 2021.

The management of the Company is responsible for the preparation and integrity of the financial reporting information and related systems of internal controls. The Audit Committee, in carrying out its role, relies on the Company’s senior management, including particularly its senior financial management, to prepare financial statements with integrity and objectivity and in accordance with generally accepted accounting principles, and relies upon the Company’s independent registered public accounting firm to review or audit, as applicable, such financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”).

We have reviewed and discussed with senior management the Company’s audited financial statements for the year ended December 31, 2021 which are included in the Company’s 2021 Annual Report on Form 10-K. Management has confirmed to us that such financial statements (i) have been prepared with integrity and objectivity and are the responsibility of management and (ii) have been prepared in conformity with generally accepted accounting principles.

In discharging our oversight responsibility as to the audit process, we have discussed with PwC, the Company’s independent registered public accounting firm, the matters required to be discussed by the applicable requirements of the PCAOB and the SEC.

We have received the written disclosures and the letter from PwC concerning their communications with us concerning independence, as required by applicable requirements of the PCAOB, and we have discussed with PwC their independence.

Based upon the foregoing review and discussions with our independent registered public accounting firm and senior management of the Company, we recommended to our Board that the financial statements prepared by the Company’s management and audited by its independent registered public accounting firm be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, that was filed with the SEC.

 

Submitted by the Audit Committee of the

Board of Directors:

 

Nancy Altobello — Chair

William F. Cruger

Kourtney Gibson

Justin G. Gmelich

 

 

 

 

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2022 Proxy Statement

 

 


 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of the Company’s Common Stock as of April 11, 2022 by (i) each person or group of persons known by us to beneficially own more than five percent of our Common Stock, (ii) each of our named executive officers (“NEOs”), (iii) each of our directors and nominees for director and (iv) all of our directors and executive officers as a group.

The following table gives effect to the shares of Common Stock issuable within 60 days of April 11, 2022 upon the exercise of all options and other rights beneficially owned by the indicated stockholders on that date. Beneficial ownership is determined in accordance with Rule 13d-3 promulgated under Section 13 of the Exchange Act and includes voting and investment power with respect to shares. The percentage of beneficial ownership is based on 37,451,233 shares of Common Stock outstanding at the close of business on April 11, 2022. Except as otherwise noted below, each person or entity named in the following table has sole voting and investment power with respect to all shares of our Common Stock that such person or entity beneficially owns.

Unless otherwise indicated, the address of each beneficial owner listed below is c/o MarketAxess Holdings Inc., 55 Hudson Yards, 15th Floor, New York, New York 10001.

 

 

Number of

Shares

Beneficially

Owned

 

Percentage

of Stock

Owned

5% Stockholders

 

 

 

 

The Vanguard Group 1

 

4,159,090

 

11.11%

T. Rowe Price Associates, Inc. 2

 

3,668,968

 

9.80%

BlackRock, Inc. 3

 

3,563,993

 

9.52%

NEOs and Directors

 

 

 

 

Richard M. McVey 4

 

528,929

 

1.41%

Nancy Altobello 5

 

668

 

*

Steven Begleiter 6

 

8,285

 

*

Stephen P. Casper 7

 

53,761

 

*

Jane Chwick 8

 

6,177

 

*

Christopher Concannon 9

 

35,668

 

*

William F. Cruger 10

 

5,192

 

*

Kourtney Gibson 11

 

509

 

*

Justin Gmelich 12

 

508

 

*

Richard G. Ketchum 13

 

2,060

 

*

Xiaojia Charles Li 14

 

271

 

*

Emily H. Portney 15

 

1,797

 

*

Richard Prager 16

 

1,826

 

*

Antonio L. DeLise 17

 

8,482

 

*

Christopher N. Gerosa 18

 

802

 

*

Kevin McPherson 19

 

69,232

 

*

Naineshkumar Shantilal Panchal 20

 

 

*

Scott Pintoff 21

 

4,661

 

*

Christophe Roupie 22

 

5,815

 

*

Nicholas Themelis 23

 

5,355

 

*

All Executive Officers and Directors as a Group (18 persons) 24

 

726,161

 

1.94%

 

*

Less than 1%.

 

(1)

Information regarding the number of shares beneficially owned by The Vanguard Group was obtained from a Schedule 13G filed by The Vanguard Group with the SEC on February 10, 2022. The principal business address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.

 

 

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29

 


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

(2)

Information regarding the number of shares beneficially owned by T. Rowe Price Associates, Inc. was obtained from a Schedule 13G filed by T. Rowe Price Associates, Inc. with the SEC on February 14, 2022. The principal business address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, MD 21202.

(3)

Information regarding the number of shares beneficially owned by BlackRock, Inc. was obtained from a Schedule 13G filed by BlackRock, Inc. with the SEC on February 3, 2022. The principal business address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.

(4)

Consists of (i) 440,273 shares of Common Stock owned individually; (ii) 2,000 shares of Common Stock owned by immediate family members; (iii) 37,742 shares of unvested restricted stock; and (iv) 48,914 shares of Common Stock issuable pursuant to stock options granted to Mr. McVey that are or become exercisable within 60 days. Does not include (i) 163,673 shares of Common Stock issuable pursuant to stock options that are not exercisable within 60 days; (ii) 4,150 unvested restricted stock units; (iii) 223,066 deferred restricted stock units or (iv) 12,531 performance shares and performance stock units.

(5)

Consists of (i) 368 shares of Common Stock owned individually; and (ii) 300 unvested restricted stock units that vest within 60 days. Does not include (i) 238 deferred restricted stock units.

(6)

Consists of (i) 7,985 shares of Common Stock owned individually; and (ii) 300 unvested restricted stock units that vest within 60 days. Does not include 756 deferred restricted stock units.

(7)

Consists of (i) 8,600 shares of Common Stock owned individually; (ii) 44,808 shares of Common Stock held indirectly in a trust for which Mr. Casper’s spouse is the trustee; and (iii) 353 unvested restricted stock awards that vest within 60 days.

(8)

Consists of (i) 5,877 shares of Common Stock owned individually; and (ii) 300 unvested restricted stock awards that vest within 60 days.

(9)

Consists of (i) 15,273 shares of Common Stock owned individually; (ii) 18,914 shares of unvested restricted stock; and (iii) 1,481 shares of Common Stock issuable pursuant to stock options granted to Mr. Concannon that are or become exercisable within 60 days. Does not include (i) 86,008 shares of Common Stock issuable pursuant to stock options that are not exercisable within 60 days; (ii) 3,568 unvested restricted stock units or (iii) 8,953 performance shares and performance stock units.

(10)

Consists of (i) 4,892 shares of Common Stock owned individually; and (ii) 300 unvested restricted stock awards that vest within 60 days. Does not include 972 deferred restricted stock units.

(11)

Consists of (i) 209 shares of Common Stock owned individually; and (ii) 300 unvested restricted stock awards that vest within 60 days.

(12)

Consists of (i) 208 shares of Common Stock owned individually; and (ii) 300 unvested restricted stock units that vest within 60 days. Does not include (i) 238 deferred restricted stock units.

(13)

Consists of (i) 1,760 shares of Common Stock owned individually; and (ii) 300 unvested restricted stock awards that vest within 60 days.

(14)

Consists of 271 unvested restricted stock units that vest within 60 days.

(15)

Consists of (i) 1,497 shares of Common Stock owned individually; and (ii) 300 unvested restricted stock awards that vest within 60 days.

(16)

Consists of (i) 849 shares of Common Stock owned individually; (ii) 677 shares of Common Stock beneficially owned by Mr. Prager by trust; and (iii) 300 unvested restricted stock awards that vest within 60 days.

(17)

Consists of (i) 8,482 shares of Common Stock owned individually. Does not include (i) 2,251 unvested restricted stock units; (ii) 16,260 deferred restricted stock units or (iii) 3,125 performance shares and performance stock units.

(18)

Consists of (i) 722 shares of Common Stock owned individually; and (ii) 80 shares of unvested restricted stock. Does not include (i) 2,455 shares of Common Stock issuable pursuant to stock options that are not exercisable within 60 days; (ii) 1,073 unvested restricted stock units or (ii) 1,381 performance stock units.

(19)

Consists of (i) 69,232 shares of Common Stock owned individually. Does not include (i) 3,032 unvested restricted stock units or (ii) 4,014 performance shares and performance stock units.

(20)

Does not include (i) 5,821 unvested restricted stock units; or (ii) 3,986 performance shares and performance stock units.

(21)

Consists of (i) 4,661 shares of Common Stock owned individually. Does not include (i) 1,658 unvested restricted stock units or (ii) 2,316 performance shares and performance stock units.

(22)

Consists of (i) 5,374 shares of Common Stock owned individually; and (ii) 441 shares of unvested restricted stock. Does not include (i) 1,243 unvested restricted stock units or (ii) 2,128 performance shares and performance stock units.

(23)

Consists of (i) 5,355 shares of Common Stock owned individually. Does not include (i) 3,189 unvested restricted stock units or (ii) 4,355 performance shares and performance stock units.

(24)

Consists of (i) 615,265 shares of Common Stock owned individually; (ii) 57,177 shares of unvested restricted stock; (iii) 3,324 shares of restricted stock units that vest or deliver within 60 days; and (iv) 50,395 shares of Common Stock issuable pursuant to stock options that are or become exercisable within 60 days.  Does not include (i) 252,136 shares of Common Stock issuable pursuant to stock options that are not exercisable within 60 days; (ii) 20,545 restricted stock units that are unvested; (iii) 225,270 deferred restricted stock units or (iv) 35,309 performance shares and performance stock units.

 

 

 

 

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2022 Proxy Statement

 

 


 

EXECUTIVE OFFICERS

Set forth below is information concerning our executive officers as of the date hereof.

 

Name

 

Age

 

Position

Richard M. McVey

 

62

 

Chief Executive Officer and Chairman of the Board of Directors

Christopher R. Concannon

 

54

 

President, Chief Operating Officer and Director

Christopher N. Gerosa

 

46

 

Chief Financial Officer

Kevin McPherson

 

51

 

Global Head of Sales

Naineshkumar Shantilal Panchal

 

50

 

Chief Information Officer

Scott Pintoff

 

51

 

General Counsel and Corporate Secretary

Christophe Roupie

 

56

 

Head of EMEA and APAC

 

Richard M. McVey has been CEO and Chairman since our inception. See “Proposal 1 – Election of Directors — Director information” for a discussion of Mr. McVey’s business experience.

Christopher R. Concannon has been President & COO, and a member of the Board of Directors, since January 2019. See “Proposal 1 – Election of Directors — Director information” for a discussion of Mr. Concannon’s business experience.

Christopher N. Gerosa has been CFO since August 2021. Prior to his current role, Mr. Gerosa was Head of Accounting and Finance of the Company from April 2015 to August 2021, with global responsibility for accounting, tax, treasury management and financial planning and analysis functions. Prior to joining the Company, Mr. Gerosa was Chief Financial Officer of Primus Guaranty, Ltd. (“Primus”) from 2010 to 2014 and Corporate Treasurer from April 2007 to 2014. Prior to these roles, Mr. Gerosa held the position of Corporate Controller and served as the Director of Investor Relations of Primus. Mr. Gerosa joined Primus in 2003 and was an integral part of taking Primus public in 2004. Before joining Primus, he worked in the product controller areas of Deutsche Bank and Goldman Sachs. Mr. Gerosa began his professional career at Arthur Andersen. He served as a U.S. Army National Guard Infantry Officer after receiving his B.B.A. from the University of Notre Dame.

Kevin McPherson has been Global Head of Sales since June 2014.  From January 2008 to June 2014, Mr. McPherson was the Company’s U.S. Sales Manager.  From March 1999 to December 2007, Mr. McPherson was a Sales Representative for the Company, running the Company’s West Coast sales and distribution effort.  From June 1996 to March 1999, Mr. McPherson worked within the Emerging Markets Fixed Income Group of Scudder Stevens & Clark, where he traded emerging market fixed income securities and supported portfolio administration.  Mr. McPherson began his career at State Street Bank & Trust, where he worked from June 1994 to June 1996 as an accountant and auditor for fixed income and equities portfolios.  Mr. McPherson received a B.A. in business administration from the University of Maine.

Naineshkumar Shantilal Panchal has been Chief Information Officer since March 2022. Prior to his current role, Mr. Panchal served as a Managing Director of Goldman Sachs Asset Management Technology from November 2014 to February 2022. In that role, he served in various capacities, including a Global Co-Head of Technology, Asset Management Division from 2020 to 2021, Global Head of Goldman Sachs Asset Management Portfolio Management and Trading Technology from 2019 to 2020, Global Co-Head of Goldman Sachs Asset Management Portfolio Management and Trading Technology from 2018 to 2019 and Global Head of Fixed Income and Sales Technology, Asset Management Division from 2014 to 2018. Prior to this role, he was a Managing Director, Technology of Goldman Sachs Securities Division, serving in various capacities from 1996 to 2014. Mr. Panchal began his career as a Consultant, Financial Services at Andersen Consulting prior to his tenure at Goldman Sachs. He holds a B.A. and an M.A., each in Computer Science, from Cambridge University.

 

 

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EXECUTIVE OFFICERS

 

Scott Pintoff has been General Counsel and Corporate Secretary since February 2014.  Prior to joining us, Mr. Pintoff was General Counsel and Corporate Secretary at GFI Group, a position he held since 2003.  At GFI, Mr. Pintoff was responsible for all legal, regulatory and compliance matters, including their IPO, all acquisitions and implementation of the Dodd-Frank Act. Mr. Pintoff joined GFI Group in 2000 as Associate General Counsel. Prior to GFI, Mr. Pintoff was at Dewey Ballantine LLP from 1996 to 2000 within the mergers and acquisitions group. Mr. Pintoff received a B.A. (Honors) from Wesleyan University and a J.D. from the New York University School of Law.

 

Christophe Roupie has been Head of EMEA and APAC since May 2020. From March 2017 through May 2020, Mr. Roupie was the Company’s Head of Europe and Asia.  Prior to joining us, from October 2015 until October 2016, Mr. Roupie was the CEO of HiRock AG, a family office in Switzerland.  From May 2005 to October 2015, Mr. Roupie was Global Head of Trading and Securities Financing at AXA Investment Managers. While at AXA Investment Managers, he managed trading teams in Paris, London, Hong Kong and Greenwich, Connecticut across equities, fixed income, FX, derivatives, repo and stock lending.  Prior to this, Mr. Roupie was the Global Head of Fixed Income Trading at IXIS AM (now Natixis Asset Management) from October 2000 to March 2005.

 

 

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2022 Proxy Statement

 

 


 

A LETTER FROM OUR COMPENSATION AND TALENT COMMITTEE

Dear Fellow Stockholders,

 

As members of MarketAxess’ Compensation and Talent Committee (the “Compensation Committee”), we endeavor to create an executive compensation program that is performance-based, directly correlated with business and financial results, and designed to attract, reward and retain high caliber executives.

As detailed in the Compensation Discussion and Analysis, in 2021, the Company made significant strides in executing against its long-term growth strategy against a challenging market backdrop.  Credit spreads and credit spread volatility were at historically low levels throughout most of 2021, adversely impacting the Company’s financial results relative to record levels achieved in 2020. Because of difficult market conditions for credit trading, our 2021 results were below our budget and the compensation of our employees, including the NEOs, fell as a result.

In 2021, we received strong positive feedback from stockholders on our compensation program. The 2021 say-on-pay proposal received 96.2% support, and subsequent stockholder engagement in late 2021 and early 2022, has generally been positive. The Compensation Committee seeks to include the input of our stockholders in the regular evaluation of our programs and welcomes continued stockholder feedback regarding our executive compensation practices. The Company’s management reached out to stockholders who collectively represented over 65% of our outstanding common stock and had conversations with 6 stockholders who requested engagement representing approximately 25% percent of our outstanding common stock. The feedback from our stockholders, including the welcomed evolution of our executive compensation programs over the last few years, was conveyed to our Compensation Committee. We remain determined to understand your perspectives and committed to considering constructive changes in response to your feedback.

Our compensation program is designed to reward the short-term and long-term success of the Company. 2021 NEO cash incentives were tied to both 2021 Adjusted Operating Income and the executive’s individual performance, including contributions to the Company’s growth strategy. 2021 equity incentives, granted in January 2022, were comprised 50% of performance stock units, which measure a combination of market share, revenue growth, and operating margin, over a subsequent three-year performance period.  

Our Compensation Committee is and will remain committed to the ongoing evaluation and improvement of our executive compensation program. We look forward to continuing the dialogue and encourage you to reach out with any questions or concerns related to our program before making your voting decision. Thank you for your investment in MarketAxess.

Submitted by the Compensation and Talent Committee of the Board of Directors:

Richard L. Prager – Chair

Nancy Altobello

Kourtney Gibson

 

 

 

 

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) describes the Company’s executive compensation program and provides an overview of the Company’s pay for performance methodology and compensation decisions for the following NEOs:

 

Name

Title

Richard M. McVey

Chief Executive Officer and Chairman of the Board of Directors

Christopher R. Concannon

President and Chief Operating Officer

Christopher N. Gerosa

Chief Financial Officer

Kevin McPherson

Global Head of Sales

Antonio L. DeLise

Former Global Head of Corporate Development and Former Chief Financial Officer

Nicholas Themelis

Former Chief Information Officer

 

Effective August 1, 2021, Mr. Gerosa succeeded Mr. DeLise as the Company’s CFO. Mr. DeLise is a NEO for 2021 because he was the CFO of the Company for a portion of the year. Effective March 1, 2022, Mr. Panchal succeeded Mr. Themelis as Chief Information Officer. Mr. Themelis is a NEO for 2021 because Mr. Themelis was one of the Company’s three most highly compensated executive officers as of December 31, 2021. Both Mr. DeLise and Mr. Themelis have retired from their respective positions as of the date of this Proxy Statement. See “Executive compensation — Employment agreements and severance arrangements with our Named Executive Officers.”

We have not made any changes or adjustments to our executive compensation program as a result of the Pandemic. Any consideration given to the impact of the Pandemic by the Compensation Committee in their evaluation of a NEO’s performance during 2021 is described below in “2021 compensation detail – Annual Cash Incentives – 2021 Individual Performance.”  

Responding to stockholders; evolving pay practices

 

Say-on-Pay support & 2021 stockholder engagement

Our annual say-on-pay vote (“Say-on-Pay”) is one of our opportunities to receive feedback from stockholders regarding our executive compensation program. At the 2021 Annual Meeting, approximately 96.2% of the votes cast approved the Say-on-Pay proposal, an increase from 93.7% and 73% in 2020 and 2019, respectively.  Since 2019, management and the Board have conducted annual outreach with our stockholders to better understand investors’ perspectives on our compensation program and incorporate their feedback. Following the 2021 Annual Meeting, we continued this dialogue by reaching out to stockholders who collectively represented over 65% of our outstanding common stock and had conversations with six stockholders who requested engagement representing more than 25% percent of our outstanding common stock.  During our outreach, we discussed a range of relevant topics with stockholders, including the evolution of our executive compensation programs, for which we received consistently positive feedback.  

With regard to non-compensation matters, the stockholders with whom we spoke welcomed the continued refreshment of the Board, the publication of our second ESG Report, our decision to begin measuring the Company’s carbon emissions in 2022 and the success of our Trading-for-Trees and Diversity Dealer initiatives.   

Stockholder feedback was relayed directly to the Board of Directors, including to relevant Board committees that oversee various ESG Topics. See “Environmental, social and governance strategy and initiatives — Board and management oversight of ESG matters” for more information.

 

Compensation highlights

Below are key elements of our executive compensation program for performance year 2021:

 

 

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2022 Proxy Statement

 

 


COMPENSATION DISCUSSION AND ANALYSIS

 

NEO’s Annual Cash Incentive Compensation Program – 50% of the NEOs annual cash incentive was tied to the Company’s adjusted operating income performance for the fiscal year based on the 2021 budget, and 50% was tied to the executive’s delivery against individual goals and strategic corporate objectives.

 

Annual Equity Award Performance Share Metrics the performance stock units granted in January 2022, representing 50% of our NEOs’ annual equity award in relation to prior year performance, were awarded with a three-year performance period based on a combination of market share, revenue growth and operating margin metrics.  Performance targets for years two and three are based off of the previous year’s actual results.

 

Continued Committee Refreshment – In July 2021, the Chair of the Compensation Committee was rotated to Mr. Prager and Ms. Gibson joined the Compensation Committee. Following the 2021 compensation process, Mr. Begleiter was rotated off the Compensation Committee.

Executive summary

 

MarketAxess 2021 performance overview

In 2021, the Company made significant strides in executing against its long-term growth strategy. In terms of our core business, we maintained our strong leadership position in the U.S. credit institutional client e-trading space, and we registered very strong growth in our international credit businesses, including Eurobonds and emerging markets, reflecting the benefit of our global product diversification efforts. Open Trading continues to be a key differentiator in terms of our liquidity offering, with approximately 1,700 counterparties driving significant transaction cost savings for our clients. Beyond our core business, we made significant progress expanding our growth cylinders. Our U.S. Treasury bond platform recorded a record $4.1 trillion of volume in 2021 and we made key technology enhancements to enable investor clients to leverage our all-to-all Live Markets order book. In municipal bonds, we integrated our acquisition of MuniBrokers, a central electronic trading venue serving municipal bond inter-dealer brokers and dealers, in order to expand our existing municipal bond trading solution. And on the data and post-trade side, we significantly enhanced our service offering, with the addition of Regulatory Reporting Hub increasing combined post-trade and data revenue by 43% in 2021. We continued to grow our total active client base to nearly 1,900 active clients, with approximately 1,000 clients trading three or more products on our platform. These number of clients records enhance the network effect on our platforms.

We believe that the Company improved its strategic positioning in 2021 against a challenging market backdrop.  Credit spreads and credit spread volatility were at historically low levels throughout most of 2021, adversely impacting our financial results relative to record levels achieved in 2020. Because of difficult market conditions for credit trading, our 2021 results were below our budget and the compensation of our employees, including the NEOs, fell as a result.  

For reference, we have included compound annual growth rates (“CAGR”), where appropriate, for the key performance metrics discussed below.


 

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Key performance metrics

Our key performance metrics include:

 

 

Total Revenues:  

 

A 32% increase in revenue in 2020, driven by a significant increase in volatility during the year, made for tough year-over-year comparisons in 2021, as credit spreads and credit spread volatility decreased significantly, and estimated U.S. credit market TRACE volumes declined 7%. While market conditions were more challenging in 2021, the Company reported a record $699 million in revenue, the 13th consecutive year of record revenue. Partially offsetting the weaker U.S. credit environment was a strong performance in our international growth cylinders, Eurobond trading and emerging markets trading as well as higher post-trade revenue with the acquisition of Regulatory Reporting Hub, which closed at the end of 2020. Furthermore, revenue growth over the combined 2020-2021 period grew at a CAGR of 17%, above our 5-year revenue growth rate, and in line with the long-term revenue growth trajectory for the Company.

 

 

 

Operating Income:

 

To capture the long-term growth opportunity for stockholders in the global fixed-income market, the Company is continuing to invest in new markets, trading protocols and data and content. Given challenging market conditions in 2021 and our continued investments to drive future growth, operating income declined 10% in 2021. Total expenses in 2021 increased 15%, and included $24.0 million in costs related to the acquisition of Regulatory Reporting Hub and MuniBrokers. Excluding these strategic investments, total operating expenses would have increased 7% year-over-year. Furthermore, operating income growth over the combined 2020-2021 period grew at a CAGR of 16%, above our 5-year operating income growth rate, and in line with long-term operating income growth trajectory for the Company.

 

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2022 Proxy Statement

 

 


COMPENSATION DISCUSSION AND ANALYSIS

 

 

Estimated U.S. Credit Market Share:  

 

 

In 2021, the Company maintained its strong leadership position in the U.S. credit institutional e-trading space. The institutional client segment is the largest in the global credit markets and represents the highest-quality order flow for banks and other market makers. In 2021, approximately 92% of credit volume on the platform was executed by institutional clients and our estimated market share of the U.S. credit market was 19.3%, in line with the prior year, while estimated U.S. credit market TRACE volumes decreased 7%. Since November of 2021, credit spreads and credit spread volatility have continued to increase off the lows of 2021.

 

 

 

Closing Stock Prices as of December 31:  

 

 

Market conditions were more challenging in 2021, dampening earnings relative to elevated 2020 levels, resulting in a decline in the 2021 closing stock price. Despite challenging market conditions, the Company continued to invest and innovate in new platforms, new trading protocols, new functionality and international expansion, expanding and creating new avenues of growth for the future. For example, in U.S. Treasuries, the company recently introduced a live, all-to-all order book, leveraging the acquisition of LiquidityEdge to curate a new and innovative trading liquidity pool for rates trading. In municipal bonds, we are enhancing the content we offer in this space with the integration of MuniBrokers. And, on the international front, we are focusing on adding new local markets to expand our leading global emerging markets product offering. We believe these growth initiatives will only enhance our already strong growth profile in 2022 and beyond.

 

Relative Stock Performance

 

All of the major product areas trading on the Company’s platforms are in early stages of electronification. Given this, the Company’s focus is on investing and innovating to capture the long-term opportunity over the next decade. We believe that the differentiated liquidity pool on our platforms and the trading efficiency and transaction cost savings that we provide to investors and dealers globally, will lead to greater electronification in the global fixed income market. Despite our one-year underperformance relative to the S&P 500 and our Peer Group Median, our long-term track record is reflected in the superior returns for stockholders generated over the five-to-ten-year periods noted below.

 

 

 

10-Year Return

5-Year Return

3-Year Return

1-Year Return

MKTX

1,448.0

189.5

98.2

-27.5

S&P 500

362.6

133.4

100.4

28.7

Peer Group Median

524.4

178.3

85.2

17.9

 

 

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Elements of executive compensation

The compensation structure for our NEOs is comprised of base salaries, annual cash incentive compensation and various forms of equity granted under our 2020 Equity Incentive Plan.  The combination of these elements enables us to offer a competitive, cost-effective compensation program that balances variable, or at-risk, compensation with prudent risk-taking and the interests of our stockholders. Equity awards may be granted on an annual basis or as one-time awards, including multi-year awards that are attributed over multiple years of compensation.  We believe that equity awards serve as an important part of an NEO’s compensation in that they further ensure alignment of the NEO’s interests with those of our stockholders.  

Annual variable cash and equity compensation gives the Compensation Committee the flexibility to tie NEO compensation to individual and corporate performance, which is an important element of our pay philosophy and each NEO’s compensation.  

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

The table below summarizes the elements of our compensation program as in effect for fiscal year 2021, and how each element supports the Company’s compensation objectives:

Component

Performance Link

Description

Base Salary

Cash

N/A

  Provides a consistent minimum level of compensation that is paid throughout the year at a cost-effective level for the Company

Annual Cash Incentive

Cash

Adjusted operating income (50%)

  Performance-based cash incentive opportunity

  Rewards short-term performance in a framework that discourages excessive risk-taking

Individual performance and contributions to strategic corporate objectives (50%)

Long-Term Annual Equity Incentive 1

50% Performance stock units (PSUs)

Granted in 2021 for 2020

Granted in

2022 for 2021

  Financial performance targets are pre-determined by the Compensation Committee and reflect our financial and strategic long-term goals

  Three-year performance periods with one- year calculation periods

  Targets for years two and three are tied to prior year’s results

  Cliff-vest after three years

Market share (50%)

US credit market share (33.3%)

Revenue growth excluding US credit (33.3%)

Operating margin (50%)

Operating margin (33.3%)

50% Time vested equity

(RSUs and

stock options)

Stock price performance

  Share-based awards establish direct alignment with our stock price performance and stockholder interests

  Messrs. McVey and Concannon receive the portion of their annual long-term equity award that is time-based half in restricted stock units (“RSUs”) and half in stock options

  Under our “Flex Share” program, the other NEOs may choose to receive this portion of their award in all RSUs or a combination of RSUs and stock options, allowing the Company to deliver more individualized awards without incurring additional expense

  Vest ratably over three years

 

(1)

In connection with his appointment as CFO, Mr. Gerosa also received a one-time multi-year equity grant.  See “— 2021 compensation detail —Multi-year awards” below.

 

 

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

The NEOs also receive standard employee benefits, including healthcare, life insurance, disability and retirement savings plans. The NEOs do not receive any perquisites.

2021 compensation decisions

A significant portion of each NEO’s compensation is dependent on our financial performance, with firm-wide annual cash incentives impacted by adjusted operating income. The Company generated $379.6 million of adjusted operating income in 2021, which was below our 2021 internal target goal of $474.7 million.  See Appendix A for a reconciliation of adjusted operating income to operating income. Accordingly, the cash incentive plan pool funding was lower than budgeted, resulting in lower cash incentive compensation for our NEOs.  Further details about how the adjusted operating income affected the NEO’s cash incentive can be found under “— 2021 compensation detailAnnual cash incentives” below.

The remainder of each NEO’s annual cash incentive awards for 2021 was determined by the Compensation Committee’s assessment of the performance of each NEO and his contribution to our corporate objectives for 2021.

The Compensation Committee considered the Company’s relative underperformance in 2021 when determining to decrease the annual cash incentives and reduce the size of the equity awards granted in January 2022 for 2021 performance.

As compared to 2020, annual cash incentives, annual long-term equity incentives and total direct compensation (“TDC”), which includes cash payments, annual equity awards made in relation to prior year performance (e.g., January 2022 awards for 2021 performance) and the annualized value of multi-year equity awards, decreased for each NEO.

 

2021 Total Compensation Summary (000's)

 

 

 

 

 

 

 

 

 

 

 

2021 Base

 

2021 Incentive

 

Total Compensation 2

 

Salary

 

Cash

Equity 1

Total

 

2021

vs. 2020 ($)

vs. 2020 (%)

Richard M. McVey

$500

 

$1,800

$5,450

$7,250

 

$7,750

-$750

-9%

Christopher R. Concannon

$500

 

$1,200

$3,550

$4,750

 

$5,250

-$250

-5%

Christopher N. Gerosa 3

$277

 

$370

$553

$923

 

$1,200

-

-

Kevin McPherson

$300

 

$1,000

$1,350

$2,350

 

$2,650

-$250

-9%

Antonio L. DeLise

$300

 

$700

$900

$1,600

 

$1,900

-$500

-21%

Nicholas Themelis

$300

 

$1,000

$1,300

$2,300

 

$2,600

-$600

-19%

 

(1)

Represents equity awards attributable to 2021 performance. Messrs. McVey’s, Concannon’s and Gerosa’s equity incentive column include $2,200,000, $1,000,000 and $333,333 in attributed multi-year compensation from previously granted multi-year equity awards. See “—Multi-Year Awards” below.

(2)

“2021 Total Compensation” differs from the figures shown in the total column of the table under “Executive compensation —Summary compensation table.” The Summary Compensation Table reflects the full grant date value of any multi-year performance equity award received by the NEOs in the year actually granted, in accordance with FASB ASC Topic 718. In addition, the 2021 figures in the Summary Compensation Table include equity awards granted in January 2021 for 2020 performance.  

(3)

Mr. Gerosa’s base salary column shows the amount he received, reflecting a salary change from $260,000 per year to $300,000 per year effective as of August 1, 2021, in connection to his promotion to CFO.

Executive compensation practices and governance

 

Principles and strategy

Our executive compensation program is designed to promote the following core principles that are aligned with our Company’s business strategy:

 

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2022 Proxy Statement

 

 


COMPENSATION DISCUSSION AND ANALYSIS

 

Alignment: we align Company and individual performance and decision-making with long-term stockholder value creation;

Retention: attract, reward and retain high caliber executives;

Motivation: motivate high performance from our NEOs by offering greater incentives for superior performance and reduced awards for underperformance;

Prudence: discourage imprudent risk-taking by avoiding undue emphasis on any one metric or short-term goals; and

Fairness: be transparent and fair to both our NEOs and our stockholders.

We believe these principles have served us well for many years, and we are continuing to refine them in response to input from our stockholders.

Our compensation principles place a majority of our executive officers’ compensation at risk and emphasize incentives tied to individual and Company performance, as well as continued service. As a result, the only fixed compensation paid is base salary, which represented 6% of our CEO’s total compensation and no more than 23% of the other NEO’s total compensation in 2021.  We also seek to promote long-term commitments from our NEOs because we believe that continuity of the Company’s leadership team benefits both the Company and our stockholders. As such, we utilize long-term (three- to five-year) equity incentives in conjunction with short-term incentives (performance-based annual cash awards). Ultimately, the value realized by our NEOs from our equity incentive awards will depend on our financial performance, changes in our Common Stock price, and satisfaction of an award’s vesting schedule. Taken together, we believe these factors help create a comprehensive scheme that both reinforces our long-term performance-based orientation and is aligned with the interests of our stockholders.

Best practices

Our pay practices align with our compensation principles and facilitate our implementation of those principles.  They also demonstrate our commitment to sound compensation and governance policies.

 

Compensation Policies and Practices

What We Do

What We Avoid

  Emphasis on performance-based compensation

  Use of clawbacks

  Stock ownership guidelines

  Use of long-term equity awards that align with stockholder interests

  Automatic reduction of severance payments subject to §280G excise tax

  Engage with investors

  Dividends and dividend equivalents on restricted stock and RSUs are paid only when the awards vest

  Engage independent compensation consultants

X  No guaranteed bonuses except for new hires

X  No pension / SERP plans

X  No single-trigger change in control benefits

X  No §280G excise tax “gross-up” benefits

X  No recycling of options or stock appreciation rights

X  No "repricing" underwater options without

stockholder approval

X  No hedging or pledging of MarketAxess stock

X  No perquisites for NEOs

Role of the Compensation Committee

The Compensation Committee administers the compensation program for our NEOs.  The Compensation Committee reviews all components of remuneration (both cash and equity) and decides which elements of compensation, if any, should be adjusted or paid based on corporate and individual performance results and competitive benchmark data. The Compensation Committee also determines performance award payouts for the prior fiscal year based on actual results against performance goals.

 

 

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In performing its duties, the Compensation Committee:

annually reviews competitive compensation data, recent compensation trends and any other relevant market data obtained by its compensation consultants and considers the impact on our compensation architecture, policies and strategies;

reviews all compensation earned by each NEO, including each NEO’s past wealth realization and future equity incentive opportunities;

consults with the compensation consultants and full Board regarding market and performance data when considering decisions concerning the structure and amount of our CEO’s compensation;

considers the recommendations of our CEO relating to the performance of our NEOs (other than himself) and the recommendations of its compensation consultants relating to market data and compensation trends when considering decisions concerning the structure and amount of compensation of our NEOs.

The Compensation Committee’s function is fully described in its charter, which is available on our corporate website at www.marketaxess.com under “Investor Relations – Corporate Governance.”  In performing its duties, the Compensation Committee receives assistance from management and our independent compensation consultants. The Compensation Committee’s decisions relating to compensation for our NEOs are reviewed by our full Board of Directors.

Role of independent compensation consultants

Pursuant to its charter, the Compensation Committee may retain and terminate any consultant or other advisor, as well as approve the advisor’s fees and other engagement terms. For fiscal year 2021, the Compensation Committee retained FW Cook (“FW Cook”) as its independent compensation consultant for purposes of advising on executive compensation.  Representatives from FW Cook attended Compensation Committee meetings, participated in executive sessions and communicated directly with the Compensation Committee.  During 2021, FW Cook provided the following services to the Compensation Committee:

Executive Compensation Design – Provided the Compensation Committee with executive compensation design suggestions and alternatives;

Pay Analysis Reviewed and benchmarked competitive market pay levels with respect to 2021 compensation for our global management team, including the NEOs;

Peer Group Construction – Reviewed and recommended changes to the Company’s peer group composition (as discussed below in Peer Group); and

General Advice/Compliance – Provided general compensation-related recommendations to the Compensation Committee and performed other services, including providing advice regarding regulatory and advisory compliance issues, and other governance issues.

Grahall advised the Compensation Committee with regard to the compensation for our Board of Directors. See “Corporate governance and board matters — Director compensation" for more information.

Each compensation consultant reported directly, and is directly accountable, to the Compensation Committee. The Compensation Committee assessed the independence of Grahall and FW Cook pursuant to SEC rules and determined that their work did not raise any conflicts of interest. The Compensation Committee will continue to monitor the independence of its compensation consultants on an annual basis.

Role of senior management

Senior management, including the CEO, President and Chief Human Resources Officer, make recommendations for the meeting agendas and prepare the materials for Compensation Committee meetings and attend those meetings, other than during executive session.  Other senior managers, such as the CFO and General Counsel, may also assist in the preparation or presentation of relevant material.  The CEO recommends annual

 

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compensation for the NEOs, other than himself, to the Compensation Committee for consideration, but the Compensation Committee is responsible for the final recommendations.  No member of management is present in the Compensation Committee meetings when matters related to their individual compensation are under discussion.  

Compensation risk assessment

The Compensation Committee is responsible for reviewing and assessing potential risk arising from the Company’s compensation policies and practices.  The Compensation Committee regularly reviews the Company’s compensation policies and practices to ascertain any potential material risks that may be created by the Company’s compensation programs. FW Cook provided the Compensation Committee an assessment of the effectiveness of all major components of the Company’s compensation programs, including the mix between annual and long-term compensation; short and long-term incentive program design; incentive plan performance criteria and corresponding objectives; the Company’s severance and change-in-control policies; its clawback policy; and its stock ownership guidelines. The Compensation Committee’s review includes the compensation practices for our entire employee base to ensure that our pay practices, compensation programs and business strategies do not motivate imprudent risk-taking by any employee.  

The Compensation Committee considered these items in determining the appropriate compensation programs for the Company.  The Company utilizes many design features that mitigate the likelihood of encouraging excessive risk-taking behavior. Among these design features are the use of:

Equity compensation with long-term vesting (three to five years);

Holding periods or cliff-vesting for certain long-term equity awards;

Compensation recoupment policies;

Stock ownership and retention guidelines that meet market standards;

The Compensation Committee’s ability to exercise downward discretion in determining payouts, including after consideration of regulatory, compliance and legal issues; and

Training on our Code of Conduct and other policies that educate our employees on appropriate behaviors and the consequences of taking inappropriate actions.

Based on the foregoing, the Compensation Committee and management agree that our compensation policies and practices do not encourage excessive risk-taking or create risks that are reasonably likely to have a material adverse effect on the Company. We believe that our compensation programs do not provide incentives that encourage risk-taking beyond the Company’s ability to effectively identify and manage significant risks and is compatible with the internal controls and the risk management practices of the Company.

 

 

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How we determine pay levels

 

Peer group

The Compensation Committee assesses the Company’s financial performance and executive compensation competitiveness against a group of peer companies that it selects based on input from FW Cook.  A key objective of our executive compensation program is to ensure that the total compensation package and structure that we provide to our NEOs is competitive with the companies with whom we compete for executive talent. The 2021 peer group consisted of companies that are similar to the Company in terms of competitive positioning, financial size, operating characteristics, market sector or industry classification. FW Cook engages with the Compensation Committee to review the peer group annually and periodically make changes.

In 2021, FW Cook completed an annual review of the composition of our peer group. Factors considered in determining the peer group (“Peer Group”) included:

financial size – market cap and revenues, generally +/- 2.5 times the Company’s most recent annual revenues and +/- 5 times the Company’s most recent market capitalization;

whether companies compete with us for clients, executives or other employee talent;

market sector, asset class or product offering;

peers of peers, as well as peers designated by shareholder advisory firms in their annual reviews; and

reviewing the broader market for additional firms in financial services, IT services and software industries, based on relative revenue, market capitalization and operating income similarity.

For the 2021, our Peer Group was comprised of the following firms:

 

2021 Peer Group

ACI Worldwide, Inc.

Envestnet, Inc.

Nasdaq Inc.

Aspen Technologies, Inc.

Factset Research Systems, Inc.

SEI Investments Company

BGC Partners, Inc.

Fair Isaac Corporation

Tradeweb Markets Inc.

Black Knight, Inc.

Guidewire Software, Inc.

TransUnion

Cboe Global Markets, Inc.

Morningstar, Inc.

Verisk Analytics, Inc.

Cohen & Steers, Inc.

MSCI Inc.

Virtu Financial, Inc.

In 2021, we added TransUnion to, and removed Alliance Bernstein Holding L.P. from, our Peer Group. We made these changes because they result in a Peer Group that is more representative of the Company’s performance, size and business operations and improves the Company’s market capitalization positioning.  

Benchmarking — importance and process

In addition to the peer group, FW Cook also used leading industry compensation surveys for the financial services and financial technology sectors for benchmarking purposes.  The surveys provide a broader view of compensation levels and trends, which is useful in combination with the Peer Group data. The Compensation Committee considered this data, in conjunction with the Company’s performance and each NEO’s individual performance, contribution and expertise in determining how each NEO is paid vis-à-vis the recommended market data. The Compensation Committee is presented summary statistics and does not review the list of individual companies that participate in the surveys.

 

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2021 compensation detail

 

Elements of executive compensation

The compensation structure for our NEOs is comprised of base salaries, annual cash incentive compensation and various forms of equity granted under our 2020 Equity Incentive Plan.  The combination of these elements enables us to offer a competitive, cost-effective compensation program that balances variable, or at-risk, compensation with prudent risk-taking and stockholder interests. Equity awards may be granted on an annual basis or as one-time awards, including multi-year awards, that are attributed over multiple years of compensation.  We believe that equity awards serve as an important part of an NEO’s compensation in that they further ensure alignment of the NEO’s interests with those of our stockholders.  

Annual variable cash and equity compensation gives the Compensation Committee the flexibility to tie NEO compensation to individual and corporate performance, which is an important element of our pay philosophy and each NEO’s compensation.  

 

The NEOs also receive standard employee benefits including healthcare, life insurance, disability and retirement savings plans. The NEOs do not receive any perquisites.

Pay mix

We believe that lower base salaries and higher levels of variable incentive awards motivate our NEOs, facilitate the achievement of our growth objectives and promote decision-making that is aligned with our stockholders’ interests. A lower base of fixed costs (including base salary) also allows us to better manage expenses, which helps improve profitability. We also believe that the balance among pay components in our compensation program design mitigates against a focus on short-term results and decreases the potential for excessive or inappropriate risk-taking (see “Executive compensation practices and governance — Compensation risk assessment” above). An overview of the elements of pay provided to Mr. McVey and, on average, to the other NEOs for fiscal year 2021 is as follows: