DEF 14A 1 tm2113222-1_def14a.htm DEF 14A tm2113222-1_def14a - none - 6.6094038s
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 ☐
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Preliminary Proxy Statement

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

Definitive Proxy Statement

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Soliciting Material under §240.14a-12
Virtu Financial, Inc.
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Notice of Annual Meeting of Stockholders
Notice is hereby given that the 2021 annual meeting of stockholders (the “Annual Meeting”) of Virtu Financial, Inc., a Delaware corporation (the “Company”, “Virtu” or “we”), will be held on Thursday, June 3, 2021 at 9:00 a.m. (Eastern Time). Due to the ongoing public health impact of the coronavirus outbreak (COVID-19) and to support the health and well-being of our employees and stockholders, the Annual Meeting will be held in a virtual meeting format only. You can attend the Annual Meeting online, vote your shares electronically and submit your questions during the Annual Meeting, by visiting www.virtualshareholdermeeting.com/VIRT2021. You will need to have your 16 Digit Control Number included on your Notice or your proxy card (if you received a printed copy of the proxy materials) to join the Annual Meeting.
We are holding the meeting for the following purposes:
1.
To elect four directors to our board of directors, each to serve as a Class III director for a term of three years expiring at the annual meeting of stockholders to be held in 2024 and until such director’s successor has been duly elected and qualified;
2.
To approve, on an advisory basis, the compensation of our named executive officers as disclosed in the accompanying proxy statement;
3.
To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021; and
4.
To transact any other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
Only stockholders of record as of the close of business on April 7, 2021 (the “Record Date”) will be entitled to attend or vote at the Annual Meeting or any adjournment or postponement thereof.
To make it easy to vote, Internet and telephone voting are available. The instructions for voting are on the proxy card.
If you hold your shares through a bank, broker or other holder of record, please follow the voting instructions you received from the holder of record.
Your vote is important. Whether or not you plan to attend the Annual Meeting, we hope you will vote your shares as soon as possible. Please mark, sign, date and return the accompanying proxy card or voting instruction form in the postage-paid envelope or instruct us by telephone or via the Internet as to how you would like your shares voted. Instructions are included on the proxy card and voting instruction form.
By Order of the Board of Directors
/s/ Robert Greifeld
Robert Greifeld
Chairman
New York, New York
April 23, 2021
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON JUNE 3, 2021: Virtu’s Proxy Statement and Annual Report on Form 10-K for the fiscal year ended December 31, 2020 are also available at https://materials.proxyvote.com/.

Table of Contents
PROXY STATEMENT SUMMARY 1
PROPOSAL 1: ELECTION OF DIRECTORS 4
CORPORATE GOVERNANCE 12
PROPOSAL 2: ADVISORY VOTE TO APPROVE COMPENSATION OF NAMED EXECUTIVE OFFICERS 19
EXECUTIVE COMPENSATION 20
20
20
39
40
41
INFORMATION REGARDING INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 42
AUDIT COMMITTEE REPORT 44
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 45
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS 48
DELINQUENT SECTION 16(a) REPORTS 56
ADDITIONAL INFORMATION 57
GENERAL INFORMATION 59
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i

Proxy Statement Summary
Virtu Financial, Inc.
One Liberty Plaza
165 Broadway
New York, New York 10006
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting. For more complete information regarding the Company’s 2020 fiscal year performance, please review the Company’s 2020 Annual Report on Form 10-K (the “2020 Annual Report”).
DATE:
Thursday, June 3, 2021
LOCATION
OF ANNUAL
MEETING:
Virtual Annual Meeting accessible at
www.virtualshareholdermeeting.com/VIRT2021
TIME:
9:00 a.m. (Eastern Time)
Voting Matters
Items of Business
Board
Recommendation
1
To elect four directors to our board of directors, each to serve as a Class III director for a term of three years expiring at the annual meeting of stockholders to be held in 2024 and until such director’s successor has been duly elected and qualified.
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each Nominee
2
To approve, on an advisory basis, the compensation of our named executive officers as disclosed in the accompanying proxy statement.
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3
To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021.
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How to Vote
You may vote using any of the following methods:
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INTERNET
TELEPHONE
MAIL
VIRTUAL ANNUAL MEETING
Visit www.proxyvote.com to vote via the Internet.
Call toll-free 1-800-690-6903 in the United States or from foreign countries from any touch-tone telephone and follow the instructions.
Follow the instructions in your proxy materials.
All stockholders as of the close of business on the Record Date can vote electronically at the virtual Annual Meeting.
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1

Proxy Statement Summary
Directors and Executive Officers
The following table sets forth certain information about our directors and executive officers as of the date of this proxy statement.
Committee Membership
Name and Primary Occupation
Director or
Officer
Since
Age
Independent
Audit
Compensation
Nominating
and Corporate
Governance
Risk
Vincent Viola
Founder and Chairman Emeritus
2015
65
Douglas A. Cifu
Chief Executive Officer and Director
2013
55
Robert Greifeld
Chairman of the Board of Directors
2017
63
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William F. Cruger, Jr.
Director
2015
62
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Virginia Gambale
Director
2020
61
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Joseph J. Grano, Jr.
Director
2017
73
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Glenn Hutchins
Director
2017
65
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John D. Nixon
Director
2015
65
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Christopher C. Quick
Director
2016
63
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David J. Urban
Director
2018
57
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Michael T. Viola
Director
2016
34
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Stephen Cavoli
Executive Vice President, Markets
2017
52
Brett Fairclough
Co-President and
Co-Chief Operating Officer
2019
38
Sean P. Galvin
Executive Vice President and
Chief Financial Officer
2020
56
Joseph Molluso
Co-President and
Co-Chief Operating Officer
2020
52
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Proxy Statement Summary
In Memoriam
John F. Sandner
John F. (Jack) Sandner served as an independent board member of Virtu Financial, Inc. since Virtu’s IPO in April 2015 and had been a member of Virtu Financial’s board of directors since November 2011. He was a prominent member of the industry, serving a number of board and advisory roles including CME Group Inc., E*Trade Futures, LLC, National Futures Association, Ryan Specialty Group, Echo Global Logistics, Inc. and Click Commerce Inc. He was also President and CEO of RB&H Financial Services, L.P., a futures commission merchant and clearing firm and clearing firm of CME Group. Jack passed away in March 2021. Our press release remembering Jack is accessible at https://ir.virtu.com/press-releases/press-release-details/2021/Virtu-Mourns-the-Passing-of-Longtime-Board-Member-Jack-Sandner/default.aspx.
Board Composition
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Governance Highlights
WHAT WE DO
WHAT WE DON’T DO
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Pay-for-performance: A portion of the compensation program for named executive officers is designed to encourage the executives to remain focused on both our short-term and long-term operational success and to reward outstanding individual performance.
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No IRC Section 280G or 409A tax gross-ups: We do not provide tax gross-ups under our change in control provisions or deferred compensation programs.
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Align Incentives with Stockholders: Our executive compensation program is designed to focus our named executive officers on our key strategic, financial and operational goals that will translate into long-term value-creation for our stockholders.
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Limited perquisites: We provide limited, reasonable perquisites that we believe are consistent with our overall compensation philosophy.
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3

Proposal 1 Election of Directors
At the Annual Meeting, stockholders will vote to elect the four nominees named in this proxy statement as Class III directors. Each of the Class III directors elected at the Annual Meeting will hold office until the 2024 annual meeting of stockholders and until his or her successor has been duly elected and qualified. Our board of directors has nominated Virginia Gambale, John D. Nixon, David J. Urban and Michael T. Viola to serve as Class III directors for terms expiring at the 2024 annual meeting of stockholders and until each of their successors has been duly elected and qualified. The persons named as proxies will vote to elect Messrs. Nixon, Urban, Viola and Ms. Gambale unless a stockholder indicates that his or her shares should be withheld with respect to one or more of such nominees.
In the event that any nominee for Class III director becomes unavailable or declines to serve as a director at the time of the Annual Meeting, the persons named as proxies will vote the proxies in their discretion for any nominee who is designated by the current board of directors to fill the vacancy. All the nominees are currently serving as directors and we do not expect that the nominees will be unavailable or will decline to serve.
Our board of directors recommends that you vote FOR each of the
nominees for our board of directors in this proposal 1.
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Proposal 1 Election of Directors
Directors
Set forth below is a brief biography of each of our directors and executive officers.
On May 4, 2020, the Company announced the appointments of Brett Fairclough and Joseph Molluso to serve as the Company’s Co-Presidents and Co-Chief Operating Officers. For additional information, please see the Current Report on Form 8-K filed by the Company with the SEC on May 5, 2020.
On August 10, 2020, the Company announced the appointment of Sean P. Galvin to serve as the Company’s Chief Financial Officer, effective as of the same date, succeeding Alexander M. Ioffe, who agreed to depart the Company in connection with the transition. For additional information, please see the Current Report on Form 8-K filed by the Company with the SEC on August 13, 2020.
Class I Directors
The term of the following four Class I directors will expire at the 2022 Annual Meeting.
William F.
Cruger, Jr.
Independent Director
Age: 62
Board Committees:

Audit
Director Since:
2015
BACKGROUND:
Mr. Cruger became a member of our board of directors in April 2015 and was previously a member of the board of directors of Virtu Financial LLC (“Virtu Financial”), which is a subsidiary of the Company and was the entity through which we conducted our business prior to our initial public offering. He was most recently Vice Chairman of Investment Banking at J.P. Morgan and Co., where he was responsible for key client relationships on a global basis. 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 also oversaw the rationalization of the firm’s private equity investments in trading platforms and related ventures at Lab Morgan 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. Mr. Cruger currently serves on the board of MarketAxess Holdings Inc. and People’s United Financial, Inc., and has previously served on the boards of Archipelago Holdings, Inc., CreditTrade, Inc. and Capital IQ, Inc. He has an M.B.A. from Columbia University and a B.A. from Clark University.
QUALIFICATIONS:
Mr. Cruger’s diverse experience in investment banking at a global financial services firm and his extensive experience in financial markets and financial leadership adds significant value to our board of directors.
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Proposal 1 Election of Directors
Glenn
Hutchins
Independent Director
Age: 65
Board Committees:

Risk
Director Since:
2017
BACKGROUND:
Glenn Hutchins is Chairman of North Island and North Island Ventures and a co-founder of Silver Lake. He is a director of AT&T, Virtu Financial and Digital Currency Group; Co-Chair of the Brookings Institution and CARE; Vice Chair of the Obama Foundation; on the Executive Committee of the Boston Celtics Basketball Team; and a board member of the New York Presbyterian Hospital. He is also a member of the International Advisory Board of GIC Private Limited, the sovereign wealth fund of Singapore. He was a Director and Chair of Audit and Risk Committee of the Federal Reserve Bank of New York from 2011-2020. Mr. Hutchins also served President Clinton in both the transition and the White House as a special advisor on economic and health-care policy. He was previously chairman of the board of SunGard Data Systems, Inc. and Instinet, Inc. and a long-time director of Nasdaq, Inc. He was also a director of the Harvard Management Company for a decade and co-chairman of Harvard University’s capital campaign.Mr. Hutchins and his wife, Debbie, founded the Hutchins Family Foundation which, among other projects, is supporting the construction of the Obama Presidential Center and has created the Hutchins Center for African & African American Research at Harvard University; the Hutchins Center on Fiscal and Monetary Policy at The Brookings Institution; and the Chronic Fatigue Initiative, which conducted basic research into the cause of chronic fatigue syndrome. Mr. Hutchins has published essays on economic and public policy in the Wall Street Journal, New York Times, Washington Post, Financial Times, Fortune and Foreign Affairs. He is also a Fellow of the American Academy of Arts and Sciences. Mr. Hutchins holds an A.B. from Harvard College, an M.B.A. from Harvard Business School, and a J.D. from Harvard Law School.
QUALIFICATIONS:
Mr. Hutchins’ qualifications to serve on our board of directors include his extensive experience and expertise in the technology and financial sectors, his public policy experience and his strong strategic focus.
Christopher C.
Quick
Independent Director
Age: 63
Board Committees:

Audit

Risk
Director Since:
2016
BACKGROUND:
Mr. Quick became a member of our board of directors in April 2016. Mr. Quick has more than 30 years of experience in the securities and financial services industries. He is the former CEO of Banc of America Specialist, Inc., a wholly owned subsidiary of Bank of America Corporation and member firm of the New York Stock Exchange (“NYSE”). He is also a past Vice Chairman of Global Wealth and Investment Management with Bank of America. From 1982 to 2004, he served as Chairman and Chief Executive Officer of Q&R Specialist, JJC Specialist and Fleet Specialists where he remained following the firm’s acquisition by Bank of America Corporation. He is a member of the board of directors of Mutual of America and a Trustee of Fairfield University. He is also a former member of the NYSE Board of Directors, the board of directors of KCG Holdings, Inc. (“KCG”), the board of directors of The Alfred E. Smith Memorial Foundation Inc., and the Board of Trustees for the Boys Club of New York. Mr. Quick received a B.S. in Finance from Fairfield University in 1979.
QUALIFICATIONS:
Mr. Quick’s qualifications to serve on our board of directors include his significant experience in the financial services and securities industries, including in the specialist business, and in senior leadership roles and his substantial experience with post-merger and acquisition integration matters.
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Proposal 1 Election of Directors
Vincent
Viola
Director
Age: 65
Board Committees:

None
Director Since:
2017
BACKGROUND:
Mr. Viola is our founder and has served as a member and Chairman Emeritus of our board of directors since July 2017. From November 2013 until July 2017, Mr. Viola served as our Executive Chairman and Chairman of our board of directors. He previously served as Chief Executive Officer and Chairman of the board of directors of Virtu and its predecessors since April 2008. Mr. Viola is one of the nation’s foremost leaders in electronic trading. He was the founder of Virtu Financial Operating LLC (“Virtu East”) in 2008, a founder of Madison Tyler Holdings, LLC (“Madison Tyler Holdings”) in 2002 and is the former Chairman of the New York Mercantile Exchange (“NYMEX”). Mr. Viola started his career in the financial services industry on the floor of the NYMEX and became Vice Chairman from 1993 to 1996 and Chairman from 2001 to 2004. Mr. Viola has launched a number of successful businesses during his career, including Virtu and Independent Bank Group Inc., a regional banking group in Texas that is now listed on NASDAQ (IBTX). Shortly after September 11, 2001, Mr. Viola was instrumental in founding the Combating Terrorism Center at West Point. Mr. Viola is currently the principal owner and serves as the Chairman and Governor for the Florida Panthers Hockey Club and its parent company, Sunrise Sports & Entertainment LLC. Mr. Viola graduated from the U.S. Military Academy at West Point in 1977. He later graduated from the U.S. Army Airborne, Infantry and Ranger Schools and served in the 101st Airborne Division. In 1983, he graduated from New York Law School.
QUALIFICATIONS:
Mr. Viola’s extensive business experience in the financial services industry provides our board of directors with valuable knowledge and experience in the electronic trading and market making business. In addition, as our founder, Mr. Viola has successfully led Virtu since its inception and provides our board of directors with valuable insight regarding strategic decisions and the future direction of our Company.
Class II Directors
The term of the following four Class II directors will expire at the 2023 Annual Meeting of Stockholders.
Douglas A.
Cifu
Director
Age: 55
Board Committees:
None
Director Since:
2013
BACKGROUND:
Mr. Cifu has been our Chief Executive Officer and a member of our board of directors since November 2013. He previously served as Virtu’s President and Chief Operating Officer and has served on its board of directors or the boards of its predecessors since co-founding the firm in April 2008. Prior to co-founding Virtu, Mr. Cifu was a partner at the international law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP, where he practiced corporate law from 1990 to 2008 and served as a member of the Management Committee and Deputy Chairman of the firm’s corporate department. Mr. Cifu also previously served on the board of directors of Independent Bank Group, Inc., a regional bank holding company. Mr. Cifu currently serves as a member of the board of directors of the U.S. Chamber of Commerce, as well as the Board of Visitors of Columbia College at Columbia University. Mr. Cifu also serves as Vice Chairman, Partner and Alternate Governor for the Florida Panthers Hockey Club and its parent company, Sunrise Sports & Entertainment LLC. Mr. Cifu completed his J.D. at Columbia Law School in 1990 and received his B.A. from Columbia University in 1987, from which he graduated magna cum laude.
QUALIFICATIONS:
Mr. Cifu’s extensive experience in global financial markets and market structure, his leadership acumen and his background as a corporate attorney add significant value to our Company and our Board of Directors. As a co-founder, Mr. Cifu has successfully led Virtu since its inception and provides our board of directors with valuable insight regarding strategic decisions and the future direction of our Company.
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Proposal 1 Election of Directors
Joseph J.
Grano, Jr.
Independent Director
Age: 73
Board Committees:

Audit
Director Since:
2017
BACKGROUND:
Mr. Grano, Jr. became a member of our board of directors in October 2017. Mr. Grano has more than 30 years of experience in the securities and financial services industries. Mr. Grano currently serves as the Principal Partner of the JJG Family Office, which primarily engages in advisory services. From 2001 to 2004, he was Chairman and CEO of UBS Financial Services Inc. (formerly UBS PaineWebber), where he was instrumental in helping to bring about the merger of PaineWebber with UBS in 2000. Prior to joining PaineWebber, he held various senior management positions with Merrill Lynch & Co., including Director of National Sales. Mr. Grano previously served as Chairman of the Board of Governors of the National Association of Securities Dealers (NASD) (predecessor to the Financial Industry Regulatory Authority (FINRA)), and was formerly a member of the NASD’s Executive Committee.
In addition to his industry experience, Mr. Grano serves as a member of the City University of New York’s Business Leadership Council and President of the Advisory Board of Law Enforcement Against Drugs, and from 2002 until 2005 served as the Chairman of the Homeland Security Advisory Council. He has also previously served as the Vice Chairman of the Queens College Foundation Board of Trustees, and has previously sat on the board of directors of the YMCA of Greater New York and on the board of Lenox Hill Hospital, among his other civic and philanthropic endeavors.
Mr. Grano holds honorary Doctor of Laws degrees from Pepperdine University and Babson College as well as an honorary Doctor of Humane Letters degree from Queens College. In addition to being one of the financial service industry’s leading executives, Mr. Grano is involved in a wide range of educational and philanthropic endeavors. Mr. Grano also served in the U.S. Special Forces (Green Berets). He also won a Tony Award as a producer of the record-setting musical Jersey Boys. Mr. Grano is the author of the book “You Can’t Predict A Hero” which was on Businessweek’s best seller list in 2009.
QUALIFICATIONS:
Mr. Grano’s previous senior leadership roles in the financial securities industry and public company experience provide a valuable insight regarding strategic decisions and add value to our board of directors.
Robert
Greifeld
Independent Director
Age: 63
Board Committees:

Compensation

N&CG
Director Since:
2017
BACKGROUND:
Mr. Greifeld became a member and the Chairman of our board of directors in July 2017. Mr. Greifeld is a co-founder of Ordinal Ventures, LLC (f/k/a North Island Ventures, LLC), currently the CEO and Chairman of Cornerstone Investment Capital Holdings Co., Managing Partner and Co-Founder at Cornerstone Investment Capital, a financial technology investment firm, a position he has held since September 2018, and a Board Member at Capital Rock, Financeware LLC, and Hudson Executive Investment Capital. He previously served as Chairman of the board of directors of The Nasdaq Stock Market LLC (“NASDAQ”) from January 2017 until May 2017 and as Chief Executive Officer of NASDAQ from 2003 to 2016. During his tenure, Mr. Greifeld led Nasdaq through a series of complex, innovative acquisitions that extended the company’s footprint from a single U.S. equity exchange to a global exchange and technology solutions provider and grew market capitalization over 20 times. Prior to joining NASDAQ, Mr. Greifeld was an Executive Vice President with SunGard Data Systems and, prior to joining SunGard, was President at Automated Securities Clearance. Mr. Greifeld founded and chairs the USA Track & Field Foundation, which supports emerging athletes and inner-city youth athletics. Mr. Greifeld is a member of the NYU Stern Board of Overseers and a CNBC Contributor. Mr. Greifeld holds a Master’s in Business from New York University, Stern School of Business, and a B.A. in English from Iona College.
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Proposal 1 Election of Directors
QUALIFICATIONS:
Mr. Greifeld’s previous industry leadership service adds significant value to our board of directors.
Class III Directors
The term of the following four Class III directors will expire at the Annual Meeting. Messrs. Nixon, Urban, Viola and Ms. Gambale are the only nominees for election at the Annual Meeting, for a term that will expire at the 2024 annual meeting of stockholders and until each of their successors has been duly elected and qualified.
Virginia Gambale
Independent Director
Age: 61
Board Committees:

Audit

Risk
Director Since:
2020
BACKGROUND:
Ms. Gambale became a member of our board of directors in January 2020. Ms. Gambale is Managing Partner of Azimuth Partners LLC, a technology advisory firm facilitating the growth and adoption of emerging technologies for financial services, consumer and technology companies. Prior to starting Azimuth Partners in 2003, Ms. Gambale was an Investment Partner at Deutsche Bank Capital and ABS Ventures from 1999 to 2003. Prior to that,
Ms. Gambale held the position of Chief Information Officer at Bankers Trust Alex Brown and Merrill Lynch. Ms. Gambale currently serves as a Director for JetBlue Airways Corp. (NASDAQ:JBLU), First Derivatives plc (LSE:FDP.L), Regis Corp. (NYSE:RGS), Nutanix, Inc. (NASDAQ:NTNX) and serves on the NACD Risk Oversight Advisory Council. She has also served on numerous international public and private boards including Piper Jaffray Companies, Synchronoss Technologies, Motive, Inc., Workbrain and IQ Financial, among others. Ms. Gambale holds a B.S. from New York Institute of Technology-Old Westbury.
QUALIFICATIONS:
Ms. Gambale’s previous experience in senior leadership positions in finance and technology and previous services on the boards of other public companies adds significant value to our board of directors.
John D.
Nixon
Independent Director
Age: 65
Board Committees:

Compensation

N&CG
Director Since:
2015
BACKGROUND:
Mr. Nixon became a member of our board of directors in May 2015. Mr. Nixon has more than 30 years of international experience in the interdealer broker industry with ICAP plc (“ICAP”) and, previously, with Tullett Prebon. He served as a non-executive director of ICAP from 1998 to 2002 and served as executive director from May 2008 until his retirement in March 2015. Mr. Nixon was a member of ICAP’s Global Executive Management Group from 2003 to 2015 with responsibility during that period for business divisions and strategic acquisitions. He represented the ICAP Americas businesses to the ICAP board, was chairman of the i-Swap business and had been responsible for the implementation of the ICAP Swap Execution Facility. In addition to serving on our board, Mr. Nixon serves as our representative on the board of Eris Exchange Holdings, LLC, as a senior financial services advisor to Temasek USA and as a member of the board of directors of Eastdil Secured on behalf of Temasek. Mr. Nixon holds a degree in Commerce from Queen’s University, Ontario.
QUALIFICATIONS:
Mr. Nixon’s extensive business experience in the interdealer broker industry as well as his operational and strategic expertise in the financial services industry adds significant value to our board of directors.
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Proposal 1 Election of Directors
David J.
Urban
Independent Director
Age: 57
Board Committees:

Risk
Director Since:
2018
BACKGROUND:
Mr. Urban became a member of our board of directors in December 2018. Mr. Urban is Executive Vice President, North American Corporate Affairs at ByteDance Ltd a global internet technology company. Previously, Mr. Urban served as President of the American Continental Group, a leading bi partisan government affairs and strategic consulting firm which provides strategic consulting services across the financial services and technology sectors, among others. Mr. Urban currently serves as a Director for several other private technology-focused companies. Mr. Urban previously served as the Chief of Staff for a United States Senator from 1997 to 2002, and from 1994 to 1997 was an attorney in private practice. From 1986 through 1991, Mr. Urban served as an artillery officer in the United States Army’s 101 Airborne Division. Mr. Urban holds a Bachelor of Science degree from the United States Military Academy at West Point, a Master of Government Administration degree from the University of Pennsylvania and a Juris Doctor from the Temple University School of Law.
QUALIFICATIONS:
Mr. Urban’s governmental relations experience and his previous industry leadership service adds significant value to our board of directors.
Michael T.
Viola
Director
Age: 34
Board Committees:

N&CG

Risk
Director Since:
2016
BACKGROUND:
Mr. Viola became a member of our board of directors in April 2016. Mr. Viola previously served the Company in a variety of roles since 2011, most recently as a senior trader focused on foreign exchange products and global commodities. Since 2016, Mr. Viola has served as the President of the Viola family’s private investment office, located in New York City. In addition, Mr. Viola is a member of the board of directors of Independent Bank Group, Inc., which he joined in February 2013, as well as iAero Group, Cornerstone Investment Capital Holdings, Crowheart Energy LLC, Madava Financial LLC, the Viola Foundation, and the USA Track & Field Foundation. Mr. Viola holds a B.S. in Finance from Pepperdine University.
QUALIFICATIONS:
Mr. Viola’s significant experience in electronic market making and his experience as the director of another public company adds significant value to our board of directors.
Executive Officers
Stephen
Cavoli
EVP
Age: 52
Officer Since:
2017
BACKGROUND:
Mr. Cavoli has been our Executive Vice President, Markets since December 2017, and previously served as our Senior Vice President, Strategy and Market Development since September 2015. Prior to joining Virtu, Mr. Cavoli was a Managing Director at Morgan Stanley in the electronic trading group, where he served in various roles from April 2004 to September 2015. Mr. Cavoli previously held positions at Instinet where he focused on U.S. equities trading and execution. Mr. Cavoli graduated from the U.S. Military Academy at West Point in 1992 and has served as an Infantry Officer in the United States Army.
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Proposal 1 Election of Directors
Brett Fairclough
Co-President and Co-COO
Age: 38
Officer Since:
2019
BACKGROUND:
Mr. Fairclough was appointed our Co-President and Co-Chief Operating Officer in May 2020. Mr. Fairclough has been an employee of the Company and its predecessors since 2007, previously serving as the Company’s Executive Vice President, Chief Operating Officer and Global Head of Business Development in 2019, as well as Managing Director of Asia Pacific and Chief Executive Officer of Virtu Singapore Pte. Ltd., the Company’s Singapore-based subsidiary, since 2014. Prior to that, he served as Chief Compliance Officer of the Company’s broker-dealer subsidiaries. He has also worked closely with exchanges and other industry participants to foster the growth and development of securities markets globally. Mr. Fairclough received a B.A. from the University of California at Los Angeles.
Joseph Molluso
Co-President and Co-COO
Age: 52
Officer Since:
2020
BACKGROUND:
Mr. Molluso was appointed our Co-President and Co-Chief Operating Officer in May 2020. Mr. Molluso joined Virtu in November 2013 as Chief Financial Officer. After a brief departure in 2019 to serve as Chief Financial Officer of Capitolis, Mr. Molluso rejoined Virtu in 2020. Prior to joining Virtu, Mr. Molluso was a Managing Director in Investment Banking at J.P. Morgan from March 2006 to November 2013, where he provided strategic advice to financial institutions with a focus on market structure related companies. Mr. Molluso started his career as an investment banker specializing in financial services companies in 1997 at Donaldson, Lufkin & Jenrette and its successor, Credit Suisse, where he helped establish the global financial technology group. Mr. Molluso received his M.B.A. from New York University in 1997 and his B.B.A. from Pace University in 1991.
Sean P.
Galvin
CFO
Age: 56
Officer Since:
2020
BACKGROUND:
Mr. Galvin was appointed our Executive Vice President and Chief Financial Officer in August 2020. Mr. Galvin has more than 30 years of experience in the accounting and financial services fields and previously served as the interim Chief Financial Officer of KCG Holdings, Inc., the Chief Accounting Officer of BGC Partners, Inc., and in various other senior finance roles with Virtu, KCG Holdings Inc. and Knight Capital Group, Inc. Prior to joining Knight in 2000, Mr. Galvin was a Vice President at Donaldson, Lufkin & Jenrette and a Senior Tax Manager at PricewaterhouseCoopers LLP. Mr. Galvin earned a M.S. in Taxation from Fordham University as well as a B.S. in Accounting and Information Systems with a minor in Economics from Queens College, CUNY. Mr. Galvin is a Certified Public Accountant.
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Corporate Governance
Board Composition
Our board of directors consists of 11 directors. In accordance with our amended and restated certificate of incorporation and bylaws, the number of directors on our board of directors will be determined from time to time by the board of directors but shall not be less than three persons nor more than 20 persons.
Each director is to hold office until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal. Vacancies and newly created directorships on the board of directors may be filled at any time by the remaining directors. In addition, at any point prior to the occurrence of the time at which TJMT Holdings LLC (the “Founder Member”), an affiliate of Mr. Vincent Viola, our founder and Chairman Emeritus, or any of its affiliates or permitted transferees, no longer beneficially own shares representing 25% of our issued and outstanding common stock (the “Triggering Event”), vacancies on the board of directors may also be filled by the affirmative vote of a majority of our outstanding shares of common stock.
Until the Triggering Event occurs, any director may be removed with or without cause by the affirmative vote of a majority of our outstanding shares of common stock. Thereafter, directors may be removed only for cause by the affirmative vote of at least 75% of our outstanding shares of common stock. At any meeting of the board of directors, except as otherwise required by law, a majority of the total number of directors then in office will constitute a quorum for all purposes.
Our amended and restated certificate of incorporation provides that the board of directors is divided into three classes of directors, with staggered three-year terms, with the classes to be as nearly equal in number as possible. As a result, approximately one-third of the board of directors will be elected each year.
Controlled Company Status
The Founder Member currently controls more than 50% of our combined voting power, and as a result, we are considered a “controlled company” for the purposes of NASDAQ rules and corporate governance standards. As a “controlled company,” we are permitted and may from time to time elect (and have elected) not to comply with certain NASDAQ corporate governance requirements, including those that would otherwise require our board of directors to have a majority of independent directors and require that we either establish Compensation and Nominating and Corporate Governance Committees each composed entirely of independent directors, or otherwise ensure that the compensation of our executive officers and nominees for directors is determined or recommended to the board of directors by the independent members of the board of directors.
Director Independence
Our board of directors has determined that Messrs. Cruger, Grano, Greifeld, Hutchins, Nixon, Quick and Urban and Ms. Gambale are each “independent directors”, as such term is defined by the applicable rules and regulations of NASDAQ.
Family Relationships of Directors and Executive Officers
Other than Michael T. Viola, who is the son of Vincent Viola, our founder and Chairman Emeritus, none of the current directors or officers, or nominees for director, is related to any other officer or director of the Company or to any nominee for director.
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Corporate Governance
Board of Directors Leadership Structure
We currently separate the roles of chairman of the board of directors and chief executive officer. Mr. Greifeld serves as Chairman of our board of directors. This structure enables the board of directors to effectively exercise its role in oversight of Virtu while allowing our Chief Executive Officer to focus on the management of the day-to-day conduct of our business. The board may review and change its leadership structure in the future.
Board of Directors Role in Risk Oversight
It is the duty of our board of directors to serve as a prudent fiduciary for stockholders and to oversee the management of our Company.
Our Risk Committee, under powers delegated to it by our board of directors, is responsible for overseeing areas of risk that are not the primary responsibility of another committee of our board of directors or retained for oversight of the full board, including (i) cybersecurity, information security and information technology risk, (ii) trading, capital and liquidity risk and (iii) enterprise risk.
Our Audit Committee, under powers delegated to it by our board of directors, is also responsible for discussing with management the major financial, legal, compliance and other significant risks. Our Audit Committee works directly with members of senior management and our internal audit team to review and assess (i) the adequacy of the Company’s internal controls, including significant deficiencies in the design or operation of internal controls that could adversely affect the Company’s ability to record, process, summarize and report financial data, and management’s response and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. In addition, the Audit Committee meets as appropriate (i) as a committee to discuss our risk management policies and exposures and (ii) with our independent auditors to review our internal control environment and potential significant risk exposures.
Our Compensation Committee oversees the management of risks relating to our executive compensation programs and employee benefit plans. In fulfilling its duties, the Compensation Committee reviews at least annually our executive compensation programs, meets regularly with management to understand the financial, human resources and stockholder implications of compensation decisions and reports as appropriate to our board of directors.
The Nominating and Corporate Governance Committee oversees the management of risks relating to our corporate governance structure and director selection process.
Our board of directors as a whole also engages in the oversight of risk in various ways. It sets goals and standards for our employees, officers and directors. During the course of each year, our board of directors reviews the structure and operation of various of our departments and functions. In these reviews, our board of directors discusses with management material risks affecting those departments and functions and management’s approach to mitigating those risks. Our board of directors also reviews and approves management’s operating plans and any risks that could affect the results of those operating plans. In its review and approval of Annual Reports on Form 10-K (including any amendments thereto), our board of directors reviews our business and related risks, including as described in the “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the reports. The Audit Committee reviews these risks quarterly in connection with the preparation of Quarterly Reports on Form 10-Q.
When our board of directors reviews particular transactions and initiatives that require its approval, or that otherwise merit its involvement, it generally includes related analysis and risk mitigation plans among the matters addressed with senior management. The day-to-day identification and management of risk is the responsibility of our management. As the market environment, industry practices, regulatory requirements and our business evolve, we expect that senior management and our board of directors will respond with appropriate risk mitigation strategies and oversight.
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Corporate Governance
Board and Committee Meetings; Annual Meeting Attendance
During the year ended December 31, 2020:

the board of directors held six meetings and acted by written consent six times;

the Audit Committee held nine meetings and did not act by written consent;

the Risk Committee held five meetings and did not act by written consent;

the Nominating and Corporate Governance Committee held one meeting and did not act by written consent; and

the Compensation Committee held two meetings and acted by written consent four times.
In the year ended December 31, 2020, no member of our board of directors attended fewer than 75% of the aggregate of: (i) the total number of meetings of the board of directors (held during the period for which he or she has been a director) and (ii) the number of meetings held by all committees of the board of directors (during the periods that he or she served on such committees).
According to our Corporate Governance Guidelines, our directors are expected to attend the annual meeting of stockholders, meetings of the board of directors and meetings of committees on which they serve and to spend the time needed, and meet as frequently as necessary, to properly discharge their responsibilities. Four of our directors attended our 2020 annual meeting of stockholders. Directors are expected to review meeting materials prior to board of director and committee meetings and, when possible, should communicate in advance of meetings any questions or concerns that they wish to discuss so that management will be prepared to address the same. Each director’s attendance at, and preparation for, board of director meetings and meetings of committees on which they serve shall be considered by the Nominating and Corporate Governance Committee when recommending director nominees.
Board Committees
Our board of directors has four standing committees: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee and the Risk Committee. Under the rules of NASDAQ, the membership of the Audit Committee is required to consist entirely of independent directors. As a controlled company (see “Controlled Company Status” on page 24 of this proxy statement), we are not required to have fully independent Compensation and Nominating and Corporate Governance Committees. The following is a brief description of our committees.
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Corporate Governance
AUDIT
COMMITTEE
Members
William F. Cruger, Jr.
Christopher C. Quick
Joseph J. Grano, Jr.
Virginia Gambale
Number of Meetings
Held in 2020: 9
The Audit Committee’s responsibilities include:
We have a separately designated standing Audit Committee established in accordance with section 3(a)(58)(A) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our Audit Committee assists the board of directors in monitoring the audit of our financial statements, our independent auditors’ qualifications and independence, the performance of our audit function and independent auditors and our compliance with legal and regulatory requirements. Our Audit Committee has direct responsibility for the appointment, compensation, retention (including termination) and oversight of our independent auditors, and our independent auditors report directly to the Audit Committee. Our Audit Committee also reviews and approves related party transactions as required by the rules of NASDAQ. Our board of directors has adopted a written charter for the Audit Committee, which is available on our corporate website at ir.virtu.com/corporate-governance/default.aspx. The information on our website is not part of this proxy statement.
Messrs. Cruger, Quick, Grano and Ms. Gambale are the members of our Audit Committee. The board of directors has determined that Mr. Cruger qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5)(ii) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities Act”) and that each of Messrs. Cruger, Quick and Grano and Ms. Gambale is “independent” for purposes of Rule 10A-3 of the Exchange Act and under the listing standards of NASDAQ. The designation of “audit committee financial expert” does not impose on Mr. Cruger any duties, obligations or liabilities that are greater than are generally imposed on members of our Audit Committee and our board of directors.
There were five regular meetings and four special meetings of the Audit Committee held during 2020.
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Corporate Governance
COMPENSATION
COMMITTEE
Members
Robert Greifeld
John D. Nixon
Number of Meetings
Held in 2020: 2
The Compensation Committee’s responsibilities include:
Our Compensation Committee reviews and recommends policies relating to compensation and benefits of our directors and employees and is responsible for approving the compensation of our Chief Executive Officer and other executive officers. Our Chief Executive Officer annually reviews the performance of each of the other executive officers relative to individual and corporate annual performance goals established for the year. The Chief Executive Officer then presents his compensation recommendations based on these reviews to the Compensation Committee. Once the Compensation Committee has reviewed and evaluated executive performance, recommendations are made to the board of directors for approval. The board of directors subsequently approved 2020 director and executive compensation arrangements based on the Compensation Committee’s recommendations, the recommendations of the Compensation Committee’s compensation consultant (described below) and the collective judgment of the board’s members. Our board of directors has adopted a written charter for the Compensation Committee, which is available on our corporate website at ir.virtu.com/corporate-governance/default.aspx. The information on our website is not part of this proxy statement.
Pursuant to the written charter of the Compensation Committee, the Compensation Committee may form and delegate authority to subcommittees when appropriate, provided that the subcommittees are composed entirely of directors who satisfy the applicable independence requirements of the Company’s corporate governance guidelines and the rules and regulations of NASDAQ, including any applicable “controlled company” exemption. Additionally, pursuant to its written charter, the Compensation Committee has the sole authority to retain and terminate a compensation consultant and to approve the consultant’s fees and all other terms of the engagement.
Our Compensation Committee also administers the issuance of awards under the Virtu Financial, Inc. Amended and Restated 2015 Management Incentive Plan (as amended from time to time, the “2015 Plan”).
Messrs. Nixon and Greifeld are the members of our Compensation Committee. Because we are a “controlled company” under the rules of NASDAQ (see “Controlled Company Status” on page 24 of this proxy statement), our Compensation Committee is not required to be fully independent, although if such rules change in the future or we no longer meet the definition of a controlled company under the current rules, we will adjust the composition of the Compensation Committee to the extent necessary in order to comply with such rules.
There were two regular meetings of the Compensation Committee held during 2020.
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Corporate Governance
NOMINATING AND
CORPORATE
GOVERNANCE
COMMITTEE
Members
Robert Greifeld
John Nixon
Michael T. Viola
Number of Meetings
Held in 2020: 1
The Nominating and Corporate Governance Committee’s responsibilities include:
Our Nominating and Corporate Governance Committee selects or recommends that the board of directors select candidates for election to our board of directors, develops and recommends to the board of directors corporate governance guidelines that are applicable to us and oversees board of director and management evaluations. In addition, our Nominating and Corporate Governance Committee recommends to our board of directors for approval director nominees, consistent with our director qualifications criteria and any obligations under certain contractual arrangements. Our board of directors has adopted a written charter for the Nominating and Corporate Governance Committee, which is available on our corporate website at ir.virtu.com/corporate-governance/default.aspx. The information on our website is not part of this proxy statement.
Messrs. Greifeld, Nixon and Michael Viola are the members of our Nominating and Corporate Governance Committee. Because we are a “controlled company” under the rules of NASDAQ (see “Controlled Company Status” on page 24 of this proxy statement), our Nominating and Corporate Governance Committee is not required to be fully independent, although if such rules change in the future or we no longer meet the definition of a controlled company under the current rules, we will adjust the composition of the Nominating and Corporate Governance Committee accordingly in order to comply with such rules. Mr. Michael Viola is not independent.
There was one regular meeting of the Nominating and Corporate Governance Committee held during 2020.
Policy Regarding Director Nominations
Our Nominating and Corporate Governance Committee utilizes a broad approach for identification of director nominees and may seek recommendations from our directors, officers or stockholders and/or engage a search firm. In evaluating and determining whether to ultimately recommend a person as a candidate for election as a director, the Nominating and Corporate Governance Committee evaluates all factors that it deems appropriate, including the number of current directors, as well as the qualifications set forth in our Corporate Governance Guidelines, including the highest personal and professional ethics, integrity, high performance standards and history of achievements, and ability to provide wise and thoughtful counsel on a broad range of issues. It also takes into account specific characteristics and expertise that it believes will enhance the diversity of knowledge, expertise, background and personal characteristics of our board of directors. Specifically, the Nominating and Corporate Governance Committee charter provides that, in performing its responsibilities for identifying, recruiting and recommending candidates to the board of directors, the Nominating and Corporate Governance Committee shall actively seek to include in each candidate search qualified candidates who reflect diverse backgrounds, including diversity of gender, race and ethnicity.
The Nominating and Corporate Governance Committee may engage a third party to conduct or assist with this evaluation. Ultimately, the Nominating and Corporate Governance Committee seeks to recommend to the board of directors those nominees whose specific qualities, experience and expertise will augment the current board of directors’ composition and whose past experience evidences that they will: (1) dedicate sufficient time, energy and attention to ensure the diligent performance of board duties; (2) comply with the duties and responsibilities set forth in our Corporate Governance Guidelines and in our bylaws; (3) comply with all duties of care, loyalty and confidentiality applicable to them as directors of publicly traded corporations organized in Delaware; and (4) adhere to our Code of Conduct and Ethics.
In its discretion, the Nominating and Corporate Governance Committee will also consider recommendations of qualified nominees by stockholders by evaluating the same factors as described above.
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Corporate Governance
In addition to the board process described above, our bylaws permit stockholders to nominate directors for election at an annual meeting of stockholders. To nominate a director, the stockholder must meet certain deadlines established by our by-laws and provide certain information required by our bylaws. For a description of the process for nominating directors in accordance with our bylaws, see “Additional Information” on page 84 of this proxy statement.
RISK
COMMITTEE
Members
Christopher C. Quick
Glenn Hutchins
David Urban
Michael T. Viola
Virginia Gambale
Number of Meetings
Held in 2020: 5
The Risk Committee’s responsibilities include:
Our Risk Committee was established in 2017 and assists our board of directors in its oversight of the Company’s risk management activities, with particular focus on (i) cybersecurity, information security and information technology risk, (ii) trading, capital and liquidity risk, and (iii) enterprise risk. Our Risk Committee also oversees and receives reports from the Company’s Chief Risk Officer on the Company’s risk assessment and risk management activities and may conduct or oversee stress testing or scenario testing. Our board of directors has adopted a written charter for the Risk Committee, which is available on our corporate website at ir.virtu.com/corporate-governance/default.aspx. The information on our website is not part of this proxy statement.
Messrs. Hutchins, Quick, Urban, Michael Viola and Ms. Gambale are the members of our Risk Committee. Our Risk Committee is not required to be fully independent, although if our Risk Committee becomes subject to any such independence requirement in the future, we will adjust the composition of the Risk Committee accordingly in order to comply with such requirement.
There were five meetings of the Risk Committee held during 2020.
Communication with the Board of Directors
Any stockholder or other interested parties who would like to communicate with our board of directors, the independent directors as a group or any specific member or members of our board of directors should send such communications to the attention of our Secretary, at Virtu Financial, Inc., One Liberty Plaza, 165 Broadway, New York, New York 10006. Communications should contain instructions on which member or members of the board of directors the communication is intended for, if applicable. In general, such communication will be forwarded to the intended recipients. However, the Secretary may, in his discretion, decline to forward any communications that are abusive, threatening or otherwise inappropriate.
Compensation Committee Interlocks and Insider Participation
During the year ended December 31, 2020, no member of the Compensation Committee was one of our officers or employees. None of our executive officers serves on the Compensation Committee or board of directors of any other company of which any of the members of our Compensation Committee or any of ours directors is an executive officer.
Code of Conduct and Ethics
We have adopted a code of conduct and ethics applicable to our employees, officers and directors. A copy of that code is available on our corporate website at ir.virtu.com/corporate-governance/default.aspx. We expect that any amendments to the code, or any waivers of its requirements, will be disclosed on our website. The information on our website is not part of this proxy statement.
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Proposal 2 Advisory Vote to Approve Compensation of Named Executive Officers
In accordance with the requirements of Section 14A of the Exchange Act and Exchange Act Rule 14a-21(a), we are including in this proxy statement a separate resolution to approve, in a non-binding, stockholder advisory vote, the compensation paid to our named executive officers as disclosed in “Executive Compensation” below (the “say-on-pay” vote).
While the results of the say-on-pay vote are non-binding and advisory in nature, our board of directors and Compensation Committee intend to consider the results of this vote in making future compensation decisions.
Our board of directors currently intends to conduct advisory votes on executive compensation every year. As a result, our next advisory say-on-pay vote will take place at our annual meeting of stockholders in 2021.
The language of the resolution is as follows:
“RESOLVED, that the compensation paid to the Company’s named executive officers for the fiscal year ended December 31, 2020, as discussed pursuant to the compensation disclosure rules of the SEC, including the compensation discussion and analysis, the summary compensation table and the related compensation tables and narrative in this proxy statement, is hereby APPROVED, on an advisory basis.”
In considering their vote, stockholders are encouraged to read the compensation discussion and analysis, the accompanying compensation tables, and the related narrative disclosure included in this proxy statement.
Our board of directors recommends that you vote “FOR” the approval, on an advisory basis, of the compensation of our named executive officers.
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Executive Compensation
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed with management the disclosures contained in the following “Compensation Discussion and Analysis.” Based on this review and discussion, the Compensation Committee recommended to the Board that the section entitled “Compensation Discussion and Analysis” be included in this proxy statement for the Annual Meeting.
Members of the Compensation Committee:
John D. Nixon (Chair)
Robert Greifeld
Compensation Disclosure and Analysis
This compensation discussion and analysis discusses our executive compensation programs for our named executive officers in respect of our fiscal year ended December 31, 2020, which we refer to herein as “fiscal year 2020,” and includes a discussion of our compensation objectives and philosophy and the material elements of compensation earned by, awarded, or paid, to our named executive officers in fiscal year 2020. This section also describes processes we use in reaching compensation decisions and is intended to amplify and provide context for understanding the amounts in the tabular disclosure that follows. In addition, we highlight certain attributes of our program, provide a summary of certain key compensation decisions during fiscal year 2020 and describe our intended compensation approach.
Our named executive officers for fiscal year 2020 were as follows:
Douglas A. Cifu Chief Executive Officer
Brett Fairclough Co-President and Co-Chief Operating Officer(1)
Joseph Molluso Co-President and Co-Chief Operating Officer(2)
Sean P. Galvin Executive President and Chief Financial Officer(3)
Stephen Cavoli Executive Vice President, Markets
Alexander M. Ioffe
Former Executive Vice President and Chief Financial Officer(4)
(1)
Mr. Fairclough was appointed Co-President and Co-Chief Operating Officer on May 4, 2020, to be effective upon Joseph Molluso’s start date with the Company and previously served as Chief Operating Officer.
(2)
Mr. Molluso was appointed Co-President and Co-Chief Operating Officer on May 4, 2020, to be effective upon his start date with the Company on June 22, 2020.
(3)
Mr. Galvin was appointed Executive Vice President and Chief Financial Officer effective upon his start date with the Company, August 10, 2020.
(4)
Mr. Ioffe’s employment with the Company terminated on August 7, 2020.
Compensation Program Objectives
Our primary objective with respect to executive compensation is to provide competitive compensation and benefits to attract, retain, motivate and reward the highest quality executive officers. Accordingly, we attempt to ensure that compensation provided to executive officers remains competitive relative to the compensation paid to similarly situated executives. A further objective of our compensation program is to provide variable pay opportunities through cash bonuses and restricted stock awards that reward our officers based on achievement of both individual and Company financial results. In addition, we aim to establish compensation plans that align the performance of our executive officers with the Company’s objectives and the creation of long-term stockholder value, such as the reward of equity compensation which ties a portion of our executive compensation to the performance of our common stock. We believe an appropriate mix of an executive officer’s pay should be variable and performance-based in order to promote achievement of our short-term and long-term strategic objectives.
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Executive Compensation
The overall level of total compensation for our named executive officers is intended to be reasonable in relation to, and competitive with, the compensation paid to executives in the industries in which we compete for talent, subject to variation for factors such as the individual’s experience, performance, duties and scope of responsibilities, prior contributions and future potential contributions to our business. Our compensation plans are designed to align with business strategies, taking into account external market conditions and internal equity issues. With these principles in mind, we structure our compensation program as competitive total pay packages that we believe enable us to attract, retain and motivate executives with the skill and knowledge that we require, and to ensure the stability of our management team, which is vital to the success of our business.
Key features of our compensation policies and practices that aim to drive performance and align our named executive officers with stockholder interests are highlighted below:

Pay-for-performance: A portion of the compensation program for named executive officers is designed to encourage our executives to remain focused on both our short-term and long-term operational success and to reward outstanding individual performance.

Align incentives with stockholders: Our executive compensation program is designed to focus our named executive officers on our key strategic, financial and operational goals that will translate into long-term value creation for our stockholders.

Limited perquisites: We provide limited, reasonable perquisites that we believe are consistent with our overall compensation philosophy.

No IRC Section 280G or 409A tax gross-ups: We do not provide tax gross-ups under our change in control provisions or deferred compensation programs.
The Process of Setting Executive Compensation
The Compensation Committee participates in an annual evaluation of the performance of our CEO and subsequently determines and approves the CEO’s compensation level based on this evaluation. In determining the long-term incentive component of CEO compensation, the Compensation Committee will also consider, among such other factors, the Company’s performance, stockholder returns, the value of similar incentive awards to chief executive officers at comparable companies and the awards given to the CEO in past years. Our CEO reviews each named executive officer’s compensation package, other than his own, annually in light of the performance of each named executive officer. The conclusions reached and recommendations made based on these reviews, including those with respect to salary adjustments and annual award amounts, are then presented to the Compensation Committee and/or our board of directors for review and approval.
Specifically, the Compensation Committee determines and approves the compensation packages of the CEO and approves the compensation packages of each other named executive officer, giving significant deference to the views and recommendations of the CEO. The CEO is not present during voting or deliberations relating to his own compensation.
Committee’s Compensation Consultant
The Compensation Committee has previously engaged an independent compensation consultant, F.W. Cook (the “Committee’s consultant”), to assist it in carrying out its responsibilities. The Committee’s consultant has previously provided the Compensation Committee with guidance to consider when making the compensation decisions for the CEO and when considering the recommendations made with respect to the other named executive officers. The Compensation Committee has the sole authority to retain or terminate consultants to assist it in the evaluation of director, chief executive officer and other executive compensation. The Compensation Committee has the sole authority to determine the terms of engagement and the extent of funding necessary for payment of compensation to any consultant retained to advise the Compensation Committee. The Committee’s consultant did not provide any services to the Compensation Committee or management in fiscal year 2020.
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Executive Compensation
Elements of Compensation for 2020 and Why We Chose to Pay Each Element
The primary elements of our executive compensation program are base salary, annual cash bonuses, equity-based compensation and certain employee benefits and perquisites. Brief descriptions of each principal element of our executive compensation program are summarized in the following table and described in more detail below.
Compensation Element
Brief Description
Objectives
Base Salary
Fixed compensation Provide a competitive, fixed level of cash compensation to attract and retain talented and skilled executives
Annual Cash Bonus
Variable, performance-based cash compensation earned based on financial and individual performance Retain and motivate executives to achieve or exceed financial goals and company objectives
Annual Equity Awards
Equity and equity-based compensation that is subject to vesting based on (i) continued employment and (ii) for certain named executive officers, achievement of pre-established financial and operational goals The mix of equity and equity-based awards with time-based vesting assists in retention of key talent while also rewarding executives for exceptional performance
Employee Benefits and    Perquisites
Participation in all broad-based employee health and welfare programs and retirement plans Aid in retention of key executives in a highly competitive market for talent by providing an overall competitive benefits package
Consistent with and in promotion of the compensation program objectives detailed above, a significant percentage of total compensation is allocated to performance incentives in order to motivate the named executive officers to achieve the business goals set by the Company and reward the officers for achieving such goals. There is no pre-established policy or target for allocating compensation between long- or short-term compensation, between cash and non-cash compensation, among different forms of non-cash compensation, or among named executive officers. Rather, we look at an executive officer’s goals and responsibilities to determine the appropriate level and mix of incentive compensation.
Base Salary.   We provide executive officers with a base salary to compensate them for services rendered during the fiscal year. This process also enables us to attract and retain an appropriate caliber of talent for the position and to provide a base level of monthly income that is not subject to any performance risk. We conduct a review of base salaries annually, and during such review we generally consider each named executive officer’s past performance, the scope of the role and responsibilities of the executive officer within our organization and the performance of the organization as a whole. We also review the executive officer’s compensation relative to that of our other executive officers and to the market for executive officers of similar expertise and experience. Base salaries for each of Messrs. Cavoli and Fairclough were increased in fiscal year 2020 to $500,000 from $400,000 and $160,452, respectively. Base salaries for our other named executive officers were not increased during fiscal year 2020.
Variable Incentive Compensation.   We award variable incentive compensation to reward performance achievements with a time horizon of one year or less. We provide this opportunity to attract and retain an appropriate caliber of talent for the position and to motivate executives to achieve our annual business goals. We review variable incentive compensation awards annually to determine award payments for the last completed fiscal year, as well as to establish award opportunities for the current fiscal year.
To determine the actual amount of variable incentive compensation for each named executive officer, the Compensation Committee reviews quantitative and qualitative criteria. With respect to both types of criteria, attainment of any specific level of performance or specific qualitative goal does not determine the amount of the bonus, except as discussed below regarding Messrs. Cifu’s, Cavoli’s and Fairclough’s annual bonus. Other than as set forth below with respect to Messrs. Cifu’s, Cavoli’s and Fairclough’s annual bonus, no pre-determined single performance metric is disproportionately weighted in making the determination of a named executive officer’s
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variable incentive compensation payout, which provides discretion to our Compensation Committee to adjust the actual amount paid in respect of variable incentive compensation to reward financial performance and individual performance in the context of our growing and dynamic business.
The amount of the variable incentive compensation award can be paid in a mixture of cash and/or equity, as determined by the Compensation Committee each year. This provides the Compensation Committee with more flexibility, under differing market and financial conditions and depending upon the strategic direction of the firm, to easily vary the mix of compensation without the need to focus on the form (cash or stock) but rather the value being delivered coupled with the proper incentives for our named executive officers to create short- and long-term stockholder value. Generally, the mixture of cash and equity-based compensation is determined by the aggregate variable incentive compensation payable for the applicable year. For each of Messrs. Cifu, Fairclough, Molluso and Cavoli, the mixture of cash and equity for 2020 variable incentive compensation was approximately 50% paid in cash, 20% paid in fully vested common stock and the 30% paid in the form of restricted stock units that vest ratably over a three-year period. For Mr. Galvin, 100% of his 2020 variable incentive compensation was paid in cash. We use awards of fully vested common stock and restricted stock units as a long-term incentive vehicle because it aligns the interests of executives with those of stockholders, supports a pay-for-performance culture, fosters employee stock ownership, and focuses the management team on increasing value for the stockholders and on the organization’s long-term performance.
In fiscal year 2020, in accordance with the terms of his employment agreement, Mr. Cifu was eligible to earn an annual bonus with a target bonus opportunity equal to $2,500,000 and a maximum bonus opportunity equal to $5,000,000. Eighty percent (80%) of the annual bonus was based on the achievement of select quantitative goals as determined by the board of directors and the Compensation Committee and 20% of the annual bonus was based on the achievement of qualitative goals and metrics, including leadership through the COVID-19 pandemic and successful deployment of a business continuity plan. For fiscal year 2020, the threshold to earn the target performance-based portion of the annual bonus was achievement of budgeted adjusted net trading income of $1,110 million and budgeted adjusted EBITDA of $574 million. Based on the Company’s actual performance of $2,271 million of adjusted net trading income and $1,684 million of adjusted EBITDA, Mr. Cifu earned 100% (i.e., $4,000,000) of the performance-based portion of his annual bonus, and the Compensation Committee determined that Mr. Cifu earned 100% (i.e., $1,000,000) of the qualitative portion of his annual bonus.
The amounts paid to Messrs. Cavoli and Fairclough were also determined in accordance with the terms of their respective employment agreements, which provide for a target bonus opportunity equal to $1,500,000 and a maximum bonus opportunity equal to $2,500,000. Eighty percent (80%) of the annual bonus was based on the achievement of select quantitative goals based on the Company’s adjusted net trading income and adjusted EBITDA as compared to budgeted amounts in fiscal year 2020 and 20% of the annual bonus was based on the achievement of qualitative goals and metrics determined with the CEO. For fiscal year 2020, the threshold to earn the target performance-based portion of the annual bonus was achievement of budgeted adjusted net trading income of $1,110 million and adjusted EBITDA of $574 million. Based on the Company’s actual performance of $2,271 million of adjusted net trading income and $1,684 million of adjusted EBITDA, Messrs. Cavoli and Fairclough earned 100% (i.e., $2,000,000) of the performance-based portion of his annual bonus, and the CEO together with the Compensation Committee, determined that each executive earned 100% (i.e., $500,000) of the qualitative portion of his annual bonus. Mr. Galvin’s variable incentive compensation was determined by the CEO and the Compensation Committee based on the Company’s financial performance as well as various other objectives and metrics. Mr. Molluso’s incentive compensation for 2020 was contractually guaranteed. Accordingly, for fiscal year 2020, the amount of variable incentive compensation form of payments to our named executive officers is described in the table below:
Name
Cash
Restricted
Stock Units
Common Stock
Total 2020
Variable
Incentive
Compensation
Douglas A. Cifu $ 2,500,000 $ 1,500,000 $ 1,000,000 $ 5,000,000
Joseph Molluso(1) $ $ $ $
Brett Fairclough $ 1,325,000 $ 705,000 $ 470,000 $ 2,500,000
Stephen Cavoli $ 1,325,000 $ 705,000 $ 470,000 $ 2,500,000
Sean Galvin $ 450,000 $ $ $ 450,000
Alexander M. Ioffe $ $ $ $
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Executive Compensation
(1)
For fiscal year 2020, pursuant to the terms of his employment agreement, Mr. Molluso received a guaranteed annual bonus in the amount of $2,500,000, 50% of which was paid in cash, 30% of which was paid in restricted stock units that vest in three equal annual installments and 20% of which was paid in fully vested common stock.
Annual Equity Awards
Cifu Equity Award
In fiscal year 2020, in accordance with the terms of his employment agreement, Mr. Cifu received a grant of 150,000 restricted shares of Class A common stock that are earned based on the percentage of budgeted adjusted EBITDA achieved in fiscal year 2020: 50% of the shares are earned if 70% of budgeted adjusted EBITDA is achieved and 100% of the shares are earned if 75% of budgeted adjusted EBITDA is achieved. For fiscal year 2020, our budgeted adjusted EBITDA goal was $574 million and we achieved over 100% of such amount. Accordingly, all of the restricted shares granted to Mr. Cifu in fiscal year 2020 were earned, with half of the shares vesting as of December 31, 2020 and the remainder to vest as of December 31, 2021. Also in connection with fiscal year 2020, Mr. Cifu received a special grant of 125,000 shares of Class A common stock in recognition of the Company’s exceptional performance during fiscal year 2020 in a uniquely challenging global environment.
The Compensation Committee believes these awards incentivize Mr. Cifu to achieve key financial goals of the Company and aligns his long-term interests with those of our stockholders.
Molluso Equity Awards
In fiscal year 2020, as a sign-on incentive and to compensate for forfeited equity interests from his prior employer, and in accordance with the terms of his employment agreement, Mr. Molluso received a grant of 200,000 RSUs vesting in three equal annual installments on January 24, 2021, January 24, 2022 and January 24, 2023. The Compensation Committee believes this award incentivized Mr. Molluso’s return to the Company and aligns Mr. Molluso’s long-term interests with those of our stockholders.
In fiscal year 2020, in accordance with the terms of his employment agreement, Mr. Molluso also received a grant of 150,000 restricted shares of Class A common stock that are earned in three installments based on the percentage of budgeted adjusted EBITDA achieved in fiscal years 2020, 2021 and 2022: 50% of the shares are earned if 70% of budgeted adjusted EBITDA is achieved for a given year and 100% of the shares are earned if 75% of budgeted adjusted EBITDA is achieved for such year. For fiscal year 2020, our budgeted adjusted EBITDA was $574 million and we achieved over 100% of such amount. Accordingly, 50,000 of the restricted shares granted to Mr. Molluso in fiscal year 2020 were earned and vested as of December 31, 2020. For each of fiscal years 2021 and 2022, up to 50,000 restricted shares may be earned and vested, subject to the Company’s budgeted adjusted EBITDA achievement as described above. The Compensation Committee believes this award incentivizes Mr. Molluso to achieve key financial goals of the Company and aligns his long-term interests with those of our stockholders.
Fairclough Equity Award
In fiscal year 2020, in accordance with the terms of his employment agreement, Mr. Fairclough received a grant of 150,000 restricted shares of Class A common stock that are earned in three installments based on the percentage of budgeted adjusted EBITDA achieved in fiscal years 2020, 2021 and 2022: 50% of the shares are earned if 70% of budgeted adjusted EBITDA is achieved for a given year and 100% of the shares are earned if 75% of budgeted adjusted EBITDA is achieved for such year. For fiscal year 2020, our budgeted adjusted EBITDA was $574 million and we achieved greater than 100% of such amount. Accordingly, 50,000 of the restricted shares granted to Mr. Fairclough in fiscal year 2020 were earned and vested as of December 31, 2020. For each of fiscal years 2021 and 2022, up to 50,000 restricted shares may be earned and vested, subject to the Company’s budgeted adjusted EBITDA achievement as described above. The Compensation Committee believes this award incentivizes Mr. Fairclough to achieve key financial goals of the Company and aligns his long-term interests with those of our stockholders.
Galvin Equity Award
In fiscal year 2020, as a sign-on incentive and in accordance with the terms of his employment agreement, Mr. Galvin received a grant of 13,236 RSUs vesting in three equal annual installments on August 12, 2021, August 12, 2022, and August 12, 2023. The compensation Committee believes this award aligns Mr. Galvin’s long-term interests with those of our stockholders.
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Cavoli Equity Award
In fiscal year 2020, in accordance with the terms of his employment agreement, Mr. Cavoli received a grant of 150,000 restricted shares of Class A common stock that are earned in three installments based on the percentage of budgeted adjusted EBITDA achieved in fiscal years 2020, 2021 and 2022: 50% of the shares are earned if 70% of budgeted adjusted EBITDA is achieved for a given year and 100% of the shares are earned if 75% of budgeted adjusted EBITDA is achieved for such year. For fiscal year 2020, our budgeted adjusted EBITDA was $574 million and we achieved greater than 100% of such amount. Accordingly, 50,000 of the restricted shares granted to Mr. Cavoli in fiscal year 2020 were earned and vested as of December 31, 2020. For each of fiscal years 2021 and 2022, up to 50,000 restricted shares may be earned and vested, subject to the Company’s budgeted adjusted EBITDA achievement as described above. The Compensation Committee believes this award incentivizes Mr. Cavoli to achieve key financial goals of the Company and aligns his long-term interests with those of our stockholders.
Employee Benefits and Perquisites
We provide a number of benefit plans to all eligible employees, including our named executive officers. These benefits include medical, dental, life insurance, business travel accident insurance, short- and long-term disability coverage and a 401(k) defined contribution plan.
On November 13, 2020, the Company adopted the Virtu Financial, Inc. Deferred Compensation Plan (the “DCP”). The DCP permits eligible executive officers and other employees to defer cash or equity based compensation beginning in the calendar year ending December 31, 2021, subject to certain limitations and restrictions. Deferrals may also be directed to notional investments in certain of the employee investment opportunities. No amounts have been recognized as compensation cost under the DCP as of December 31, 2020.
While perquisites help to provide our named executive officers a benefit with a high perceived value at a relatively low cost, we do not generally view perquisites as a material component of our executive compensation program. In the future, we may provide additional or different perquisites or other personal benefits in limited circumstances, such as where we believe doing so is appropriate to assist an executive in the performance of his or her duties, to make our named executive officers more efficient and effective and for recruitment, motivation and/or retention purposes.
Severance Protection
We have previously entered into employment agreements with Messrs. Cifu, Molluso, Fairclough, Cavoli and Ioffe that provide for certain severance payments and benefits in the event that such named executive officer’s employment is terminated under specified conditions. In addition, the vesting of a portion of each of these named executive officer’s equity award or awards accelerates in connection with qualifying terminations of employment. We believe that these severance benefits are appropriate to remain competitive in our executive retention efforts, recognizing that such benefits are commonly offered by employers competing for similar executive talent. See “Potential Payments upon Termination of Employment or Change in Control” for additional information
Taxation of Executive Compensation
For income tax purposes, public companies may not deduct any portion of compensation that is in excess of $1 million paid in a taxable year to certain “covered employees,” including our named executive officers, under Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”), subject to certain limited exceptions. Following recent changes to Section 162(m) or related rules, deductibility for 2020 compensation may only be permitted in certain limited cases, if at all, and for future periods may not be permitted at all.
Nevertheless, even if Section 162(m) were to apply to compensation paid to our named executive officers, our board of directors believes that it should not be constrained by the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) if those requirements would impair flexibility in compensating our named executive officers in a manner that can best promote our corporate objectives. We intend to continue to compensate our executive officers in a manner consistent with the best interests of our stockholders and reserve the right to award compensation that may not be deductible under Section 162(m) where the Company believes it is appropriate to do so.
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Section 409A of the Code requires that “nonqualified deferred compensation” be deferred and paid under plans or arrangements that satisfy the requirements of the statute with respect to the timing of deferral elections, timing of payments and certain other matters. Failure to satisfy these requirements can expose employees and other service providers to accelerated income tax liabilities, penalty taxes and interest on their vested compensation under such plans. Accordingly, as a general matter, it is our intention to design and administer our compensation and benefits plans and arrangements for all of our employees and other service providers, including our named executive officers, so that they are either exempt from, or satisfy the requirements of, Section 409A.
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation paid by the Company during the years ended December 31, 2018, December 31, 2019 and December 31, 2020 to its named executive officers.
Name and Principal Position
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
All Other
Compensation
($)
Total
($)
Douglas A. Cifu
Chief Executive Officer
2020 $ 1,000,000 $ 500,000(1) $ 8,759,525(2) $ 2,000,000(3) $ 4,270(4) $ 12,263,795
2019 $ 1,000,000 $ 360,000(1) $ 2,100,000(2) $ 1,040,000(3) $ 98,172(4) $ 4,598,172
2018 $ 1,000,000 $ 400,000(1) $ 5,298,240(2) $ 2,000,000(3) $ 71,367(4) $ 8,769,607
Joseph Molluso
Co-President and Co-Chief Operating Officer
2020 273,973(5) $ 3,750,000(1) $ 7,138,500(6) $ 11,162,473
2019 $ 375,342 $ 1,250,000(7) $ 1,625,342
2018 $ 500,000 $ 700,000(1) $ 4,993,812(6) $ 6,193,812
Brett Fairclough
Co-President and Co-Chief Operating Officer
2020 $ 500,000 $ 250,000(1) $ 2,109,500(8) 1,075,000(9) $ 3,934,500
2019 $ 160,452 $ 616,000(1) $ 924,000(8) $ 419,991(10) $ 2,120,443
Sean Galvin
Chief Financial Officer
2020 $ 98,630(11) $ 450,000(1) $ 300,000(12) $ 848,630
Stephen Cavoli
Executive Vice President, Markets
2020 $ 500,000 $ 250,000(1) $ 2,109,500(13) 1,075,000(14) $ 3,934,500
2019 $ 400,000 $ 520,000(1) $ 780,000(13) $ 1,700,000
2018 $ 400,000 $ 480,000(1) $ 320,000(13) $ 1,200,000
Alexander M. Ioffe
Former Chief Financial Officer
2020 $ 301,370(15) 582,192(16) $ 883,562
2019 $ 127,397(15) $ 750,000(1) $ 3,750,000(17) $ 20,000(18) $ 4,647,397
(1)
This amount represents the cash component of the portion of each named executive officer’s annual bonus that was based on the achievement of qualitative goals. For Mr. Cifu, this cash component was 50% for fiscal year 2020, 40% for fiscal year 2019 and 50% for fiscal year 2018, for Mr. Molluso this was 50% for fiscal years 2020 and 2018, for Mr. Fairclough this was 53% for fiscal year 2020 and 40% for fiscal year 2019, for Mr. Galvin this was 100% for fiscal year 2020 and for Mr. Cavoli, this was 53% for fiscal year 2020 and 40% for fiscal years 2019 and 2018. The remainder in each year was paid in the form of restricted stock units and fully vested shares of our Class A common stock which are reflected in the “Stock Awards” column in the table above. In addition, the amounts reported in this column includes (i) the 100% cash component of Mr. Molluso’s 2020 sign on bonus award in the amount of $2,500,000, described further below under “Employment Agreement with Mr. Molluso”. and (ii) the 50% cash component of Mr. Ioffe’s 2019 guaranteed sign on bonus award, described further below under “Employment Agreement with Mr. Ioffe.”
(2)
This amount represents the grant date fair value calculated in accordance with FASB ASC Topic 718 with respect to (i) the grant of restricted stock units, (ii) fully vested shares of our Class A common stock and (iii) restricted shares. Assumptions used in calculating these amounts are described in Note 19 of the Company’s audited financial statements for the fiscal years ended December 31, 2020 and December 31, 2019, included in our Annual Report on Form 10-K for the fiscal years ended December 31, 2020 and December 31, 2019, respectively, and in Note 17 of the Company’s audited financial statements for the fiscal year ended December 31, 2018, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The grant of restricted stock units and fully vested shares of our Class A common stock relate to the settlement of Mr. Cifu’s 2020 annual bonus, 2019 annual bonus and 2018 annual bonus, however, the awards were actually granted in fiscal years 2021, 2020 and 2019, respectively. The restricted shares granted to Mr. Cifu in fiscal year 2019 were not earned.
(3)
This amount represents the cash component of the portion of Mr. Cifu’s annual bonus that was based on achievement of performance goals, which was 50% for fiscal years 2020 and 2018 and 40% for fiscal year 2019. The remainder in each year was paid in the form of restricted stock units and fully vested shares of our Class A common stock which are reflected in the “Stock Awards” column in the table above.
(4)
This amount represents the cost of providing transportation services to Mr. Cifu.
(5)
Mr. Molluso’s employment with the Company commenced on June 22, 2020, and as a result the amount reported is a prorated portion of his $500,000 base salary.
(6)
This amount represents the grant date fair value calculated in accordance with FASB ASC Topic 718 with respect to (i) the grant of
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restricted stock units, (ii) fully vested shares of our Class A common stock and (iii) restricted shares. The amount includes Mr. Molluso’s sign-on equity award of 200,000 RSUs in fiscal year 2020 with a grant date fair value of $4,720,000, which was granted as compensation for the forfeiture of equity interests associated with his resignation from a prior employer. Assumptions used in calculating these amounts are described in Note 19 of the Company’s audited financial statements for the fiscal year ended December 31, 2020, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, in Note 17 of the Company’s audited financial statements for the fiscal year ended December 31, 2018 and are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The grant of restricted stock units and fully vested shares of our Class A common stock relate to the settlement of Mr. Molluso’s 2020 annual bonus and 2018 annual bonus, however, the awards were actually granted in fiscal years 2021 and 2019, respectively.
(7)
This amount reflects the amount paid to Mr. Molluso in connection with his voluntary departure from the Company in 2019, prior to his
rejoining the company in 2020.
(8)
This amount represents the grant date fair value calculated in accordance with FASB ASC Topic 718 with respect to (i) the grant of restricted stock units, (ii) fully vested shares of our Class A common stock and (iii) restricted shares. Assumptions used in calculating these amounts are described in Note 19 of the Company’s audited financial statements for the fiscal years ended December 31, 2020 and December 31, 2019, included in our Annual Report on Form 10-K for the fiscal years ended December 31, 2020 and December 31, 2019, respectively. The grant of restricted stock units and fully vested shares of our Class A common stock relate to the settlement of Mr. Fairclough’s 2020 and 2019 annual bonuses, however, the awards were actually granted in fiscal years 2021 and 2020, respectively.
(9)
This amount represents the cash component of the portion of Mr. Fairclough’s annual bonus that was based on achievement of performance goals, which was 53% for fiscal year 2020. The remainder was paid in the form of restricted stock units and fully vested shares of our Class A common stock which are reflected in the “Stock Awards” column in the table above.
(10)
This amount represents $80,000 paid as a housing allowance to Mr. Fairclough following his repatriation to the United States in 2019, in addition to certain tax benefits to which Mr. Fairclough is entitled for the year ended 2019 based on the difference between the actual foreign taxes due during the period and the hypothetical U.S. taxes that would have been applicable prior to his relocation. The amount shown includes the tax repayment that Mr. Fairclough received in fiscal year 2019, however, the actual amount owed was not calculable as of December 31, 2020, therefore the Company may pay Mr. Fairclough additional amounts or certain amounts may be required to be repaid to the Company.
(11)
Mr. Galvin’s employment with the Company commenced on August 10, 2020, and as a result the amount reported is a prorated portion of his $250,000 base salary.
(12)
This amount represents the grant date fair value calculated in accordance with FASB ASC Topic 718 with respect to the grant of restricted stock units. Assumptions used in calculating these amounts are described in Note 19 of the Company’s audited financial statements for the fiscal year ended December 31, 2020, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
(13)
This amount represents the grant date fair value calculated in accordance with FASB ASC Topic 718 with respect to (i) the grant of restricted stock units, (ii) fully vested shares of our Class A common stock and (iii) restricted shares. Assumptions used in calculating these amounts are described in Note 19 of the Company’s audited financial statements for the fiscal years ended December 31, 2020 and December 31, 2019, included in our Annual Report on Form 10-K for the fiscal years ended December 31, 2020 and December 31, 2019, respectively and in Note 17 of the Company’s audited financial statements for the fiscal year ended December 31, 2018, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The grant of restricted stock units and fully vested shares of our Class A common stock relate to the settlement of Mr. Cavoli’s 2020, 2019 and 2018 annual bonuses, however, the awards were actually granted in fiscal years 2021, 2020 and 2019, respectively.
(14)
This amount represents the cash component of the portion of Mr. Cavoli’s annual bonus that was based on achievement of performance goals, which was 53% for fiscal year 2020. The remainder was paid in the form of restricted stock units and fully vested shares of our Class A common stock which are reflected in the “Stock Awards” column in the table above.
(15)
Mr. Ioffe’s employment with the Company commenced on September 30, 2019 and ended on August 7, 2020, and as a result the amounts reported reflected prorated portions of his $500,000 base salary for the years ended December 31, 2019 and December 31, 2020, respectively.
(16)
This amount reflects the amount paid to Mr. Ioffe as severance pursuant to the terms of his employment agreement in connection with his departure from the Company.
(17)
This amount represents the grant date fair value calculated in accordance with FASB ASC Topic 718 with respect to (i) the grant of restricted stock units and (ii) fully vested shares of our Class A common stock. Assumptions used in calculating these amounts are described in Note 19 of the Company’s audited financial statements for the fiscal year ended December 31, 2019 and are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
(18)
This amount reflects Mr. Ioffe’s legal expenses associated with the completion of his employment agreement that were paid directly by the Company pursuant to the terms of his employment agreement.
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GRANTS OF PLAN-BASED AWARDS IN 2020 FISCAL YEAR
The following table presents information with respect to each award made to our named executive officers in 2020.
Estimated Possible Payouts
Under Non-Equity
Incentive Plan Awards
Estimated Possible Payouts
Under Equity Incentive
Plan Awards
All Other
Stock
Awards:
Number of
Shares of
Stock Units
(#)(9)
Grant Date
Fair Value
of Stock
Awards
($)(10)
Name and Type of Award
Grant
Date
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Douglas A. Cifu
Annual Bonus(1)
2,500,000 5,000,000
Restricted Shares(2)
2/27/2020 75,000 150,000 $ 2,803,500
Special Award(3)
2/1/2020 125,000 $ 3,456,025
Joseph Molluso
Annual Bonus(1)
2,500,000 2,500,000
Restricted Shares(4)
6/22/2020 25,000 50,000 $ 1,168,500
Restricted Stock Units(5)
6/22/2020 200,000 $ 4,720,000
Brett Fairclough
Annual Bonus(1)
1,500,000 2,500,000
Restricted Shares(6)
2/27/2020 25,000 50,000 $ 934,500
Sean Galvin
Restricted Stock Units(7)
8/12/2020 13,236 $ 300,000
Stephen Cavoli
Annual Bonus(1)
1,500,000 2,500,000
Restricted Shares(8)
2/27/2020 25,000 50,000 $ 934,500
(1)
This bonus, to the extent earned, is settled 50% in cash, 30% in restricted shares that vest in three equal annual installments and 20% in fully vested common stock.
(2)
See “Cifu Equity Awards” above for further discussion on the performance and vesting conditions applicable to these shares.
(3)
See “Cifu Equity Awards” above for further discussion regarding these shares.
(4)
See “Molluso Equity Awards” above for further discussion on the performance and vesting conditions applicable to these shares.
(5)
See “Molluso Equity Awards” above for further discussion regarding these shares.
(6)
See “Fairclough Equity Award” above for further discussion on the performance and vesting conditions applicable to these shares.
(7)
See “Galvin Equity Award” above for further discussion regarding these shares.
(8)
See “Cavoli Equity Award” above for further discussion regarding these shares.
(9)
The Company made certain equity grants in 2020 that are not reportable in this table because they were awarded in settlement of the named executive officers’ 2019 annual bonus. Those equity grants are reflected in the Summary Compensation Table above under the heading “Stock Awards” for fiscal year 2019.
(10)
This amount represents the grant date fair value calculated in accordance with FASB ASC Topic 718. For Messrs. Molluso, Fairclough and Cavoli, the amount shown with respect to the restricted shares that vest based on budgeted adjusted EBITDA represent the value of only the 2020 portion of the 2020-2022 grant because the grant is subject to three single-year performance periods (2020, 2021 and 2022). Assumptions used in calculating these amounts are described in Note 19 of the Company's audited financial statements for the fiscal year ended December 31, 2020, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
Employment Agreements and Restrictive Covenant Agreements
Employment Agreement with Mr. Cifu
On November 15, 2017, we entered into a new employment agreement with Mr. Cifu, which amends and supersedes the terms of his prior employment agreement dated April 14, 2015, pursuant to which Mr. Cifu will continue to serve as our Chief Executive Officer and report to our board of directors. Mr. Cifu’s duties, responsibilities and permitted activities are substantially identical to his original employment agreement. Mr. Cifu’s employment agreement further provides that to the extent such activities do not significantly interfere with the performance of his duties, service and responsibilities, Mr. Cifu is permitted to manage his personal, financial and legal affairs, serve on civic or charitable boards and committees and, to the extent approved by our board of directors, serve on corporate boards and committees; provided that Mr. Cifu is permitted to continue to be engaged in, or provide services to, certain
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specified businesses and activities (including, but not necessarily limited to, his role as the Vice Chairman and Alternate Governor of the Florida Panthers, a National Hockey League franchise), and to become engaged in, or provide services to, any other business or activity in which Mr. Vincent Viola, our Founder and Chairman Emeritus, is permitted to become engaged in, to the extent that Mr. Cifu’s level of participation in such businesses or activities is consistent with his participation in the aforementioned specified businesses or activities prior to the effective date of the employment agreement.
The employment agreement has an initial term of five years ending on November 15, 2022, with automatic renewals for successive one-year terms thereafter unless either we or the executive provides notice of non-renewal at least ninety days in advance of the expiration of the then-current term. However, if a change in control of the Company occurs at a time when there are less than two years remaining in the term, the term will automatically be extended so that the expiration date is two years from the effective date of the change in control.
Under the employment agreement, Mr. Cifu’s base salary is $1,000,000 and Mr. Cifu is eligible to earn an annual bonus with a target bonus opportunity equal to $2,500,000 and a maximum bonus opportunity equal to $5,000,000. Eighty percent (80%) of the annual bonus will be based on the achievement of quantitative targets composed of specific components of the Company’s annual budget and 20% of the annual bonus will be based on the achievement of qualitative goals. To the extent earned, a maximum of 50% of the annual bonus will be paid in cash, 30% of the annual bonus will be paid in the form of restricted stock units or restricted shares of Class A common stock of the Company that vest in three equal annual installments and the remaining 20% will be paid in the form of fully vested shares of Class A common stock.
The employment agreement provides that, commencing with calendar year 2018, Mr. Cifu is eligible to receive an equity award at the beginning of each calendar year during the term (each such award to any executive, an “annual equity grant”). It is our board of directors’ current intention that the annual equity grant will be in the form of 150,000 restricted shares of Class A common stock that are subject to performance and service conditions. The number of shares earned under each annual equity grant will be based on the percentage of budgeted EBITDA achieved in the applicable calendar year, with a minimum of 50% of shares earned upon at least 70% achievement and 100% of shares earned upon at least 75% achievement. To the extent any shares of Class A common stock are earned with respect to an applicable annual equity grant, 50% of such shares will vest on the last day of the calendar year to which such award relates and the remaining 50% will vest on the last day of the subsequent calendar year, subject to Mr. Cifu’s continued employment through each applicable vesting date.
The employment agreement further provides that Mr. Cifu is entitled to participate in all of the Company’s benefit plans and programs, and to receive perquisites, commensurate with his position, that are provided by the Company from time to time to senior executives generally, and to receive director and officer indemnification and insurance protection. In addition, during the term, Mr. Cifu will be provided a car and driver consistent with past practice.
The employment agreement includes an acknowledgment that Mr. Cifu continues to be bound by the confidentiality and restrictive covenant provisions set forth in the Amended and Restated Virtu Financial LLC Agreement, which provides for confidentiality and non-disparagement restrictions, as well as non-compete and non-solicitation restrictions until the third anniversary on which Mr. Cifu ceases to be an officer, director or employee of the Company. The employment agreement also provides that the Company will pay as incurred, to the fullest extent permitted by law, all legal fees and expenses that Mr. Cifu incurs as a result of any contest (regardless of the outcome) by the Company, Mr. Cifu or others of the validity or enforceability of, or liability under, any provision of the employment agreement or any guarantee of performance of the employment agreement that arises in connection with or following a change in control, plus interest on any delayed payment at the applicable federal rate under Section 7872 of the Code.
The employment agreement for Mr. Cifu provides for severance upon certain terminations of employment as described below under “Potential Payments Upon Termination of Employment or Change in Control.”
Employment Agreement with Mr. Molluso
Virtu East entered into a new employment agreement with Mr. Molluso on April 30, 2020, pursuant to which Mr. Molluso was appointed as our Co-President and Co-Chief Operating Officer, reporting to our Chief Executive Officer. Mr. Molluso’s employment agreement further provides that to the extent such activities do not significantly interfere with the performance of his duties, service and responsibilities, Mr. Molluso is permitted to manage his personal, financial and legal affairs, serve on civic or charitable boards and committees and, to the extent approved by our board of directors, serve on corporate boards and committees.
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The employment agreement has an initial term of three years ending on April 30, 2023, with automatic renewals for successive one-year terms thereafter unless either we or the executive provides notice of non-renewal at least ninety days in advance of the expiration of the then-current term. However, if a change in control of the Company occurs at a time when there is less than one year remaining in the term, the term will automatically be extended so that the expiration date is one year from the effective date of the change in control.
Under the employment agreement, Mr. Molluso’s base salary is $500,000 and Mr. Molluso is eligible to earn an annual bonus with a minimum amount of $2,500,000 with respect to the fiscal year ended December 31, 2020 and $1,500,000 with respect to the fiscal years ended Decmeber 31, 2021 and December 31, 2022, and a maximum bonus opportunity equal to $2,500,000. Eighty percent (80%) of the annual bonus will be based on the achievement of quantitative targets set by the Company’s Chief Executive Officer together with the Compensation Committee and 20% of the annual bonus will be based on the achievement of qualitative goals set by the Company’s Chief Executive Officer together with the Compensation Committee. To the extent earned, the annual bonus will be paid in a mix of cash, restricted stock units and fully vested shares of Class A common stock in accordance with the Company’s incentive and equity plans as in effect from time to time.
The employment agreement also provided for a special long-term equity award in the form of 150,000 restricted shares of Class A common stock that are subject to performance and service conditions, which was issued on June 22, 2020. The number of shares earned under each annual equity grant will be based on the percentage of budgeted EBITDA achieved in each of the three calendar years during the vesting period, with a minimum of 50% of shares earned upon at least 70% achievement and 100% of shares earned upon at least 75% achievement. To the extent any shares of Class A common stock are earned with respect to an applicable calendar year, such shares will vest on the last day of such calendar year to which such award relates.
The employment agreement also provided for sign-on bonuses as compensation for forfeited equity interests in his former employer in the form of (i) a grant of 200,000 restricted stock units, vesting in three equal installments on each of January 24, 2021, January 24, 2022 and January 24, 2023 and otherwise issued pursuant to and subject to the terms and conditions of the Plan and a separate award agreement and (ii) a cash sign-on bonus of $2,500,000, $1,666,667 of which is subject to a prorated clawback right of the Company based on the proportion of the term elapsed as of the date that Mr. Molluso’s employment is terminated for Cause (as defined therein) or he resigns without Good Reason (as defined therein).
The employment agreement further provides that Mr. Molluso is entitled to participate in all of the Company’s benefit plans and programs, and to receive perquisites, commensurate with his position, that are provided by the Company from time to time to senior executives generally, and to receive director and officer indemnification and insurance protection.
The employment agreement includes an acknowledgment that Mr. Molluso continues to be bound by the confidentiality and restrictive covenant provisions set forth in his original agreement, which provides for confidentiality and non-disparagement restrictions, as well as non-compete and non-solicitation restrictions until the thirty-six month anniversary of the date on which Mr. Molluso ceases to be an officer or employee of the Company.
The employment agreement for Mr. Molluso provides for severance upon certain terminations of employment as described below under “Potential Payments Upon Termination of Employment or Change in Control.”
Employment Agreement with Mr. Fairclough
Virtu East entered into a new employment agreement with Mr. Fairclough on February 26, 2020, which amends and supersedes the terms of his prior employment agreement dated April 17, 2019, pursuant to which Mr. Fairclough was appointed as our Chief Operating Officer, reporting to our Chief Executive Officer. Mr. Fairclough has since been appointed as Co-President and Co-Chief Operating Officer. Mr. Fairclough’s employment agreement further provides that to the extent such activities do not significantly interfere with the performance of his duties, service and responsibilities, Mr. Fairclough is permitted to manage his personal, financial and legal affairs, serve on civic or charitable boards and committees and, to the extent approved by our board of directors, serve on corporate boards and committees.
The employment agreement has an initial term of four years ending on February 26, 2024, with automatic renewals for successive one-year terms thereafter unless either we or the executive provides notice of non-renewal at least ninety days in advance of the expiration of the then-current term. However, if a change in control of the Company
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occurs at a time when there is less than one year remaining in the term, the term will automatically be extended so that the expiration date is one year from the effective date of the change in control.
Under the employment agreement, Mr. Fairclough’s base salary is $500,000 and Mr. Fairclough is eligible to earn an annual bonus with a target bonus opportunity equal to $1,500,000 and a maximum bonus opportunity equal to $2,500,000. Eighty percent (80%) of the annual bonus will be based on the achievement of quantitative targets set by the Company’s Chief Executive Officer together with the Compensation Committee and 20% of the annual bonus will be based on the achievement of qualitative goals set by the Company’s Chief Executive Officer together with the Compensation Committee. To the extent earned, the annual bonus will be paid in a mix of cash, restricted stock units and fully vested shares of Class A common stock in accordance with the Company’s incentive and equity plans as in effect from time to time.
The employment agreement also provided for a special long-term equity award in the form of 150,000 restricted shares of Class A common stock that are subject to performance and service conditions, which was issued on February 27, 2020. The number of shares earned under each annual equity grant will be based on the percentage of budgeted EBITDA achieved in each of the three calendar years during the vesting period, with a minimum of 50% of shares earned upon at least 70% achievement and 100% of shares earned upon at least 75% achievement. To the extent any shares of Class A common stock are earned with respect to an applicable calendar year, such shares will vest on the last day of such calendar year to which such award relates.
The employment agreement further provides that Mr. Fairclough is entitled to participate in all of the Company’s benefit plans and programs, and to receive perquisites, commensurate with his position, that are provided by the Company from time to time to senior executives generally, and to receive director and officer indemnification and insurance protection.
The employment agreement includes an acknowledgment that Mr. Fairclough continues to be bound by the confidentiality and restrictive covenant provisions set forth in his original agreement, which provides for confidentiality and non-disparagement restrictions, as well as non-compete and non-solicitation restrictions until the thirty-six month anniversary of the date on which Mr. Fairclough ceases to be an officer or employee of the Company.
The employment agreement for Mr. Fairclough provides for severance upon certain terminations of employment as described below under “Potential Payments Upon Termination of Employment or Change in Control.”
Employment Agreement with Mr. Galvin
Virtu East entered into an employment agreement with Mr. Galvin on August 7, 2020 on an “at will” employment basis. The employment agreement provides for a salary of $250,000 per year. In addition, the employment agreement provides for eligibility to earn an annual bonus payable in cash and stock, as determined at the sole discretion of Virtu East, which bonus shall be in the amount of $450,000 for the year ended December 31, 2020. The employment agreement also provided for a grant of restricted stock units with the number of restricted stock units to be granted determined by dividing $300,000 by the applicable issue price of the Company’s Class A common stock following Mr. Galvin’s start date. In addition, Mr. Galvin is eligible to participate in all benefit programs of Virtu East available to similarly situated employees.
In connection with his employment agreement, Mr. Galvin entered into a restrictive covenant agreement that provides for confidentiality and non-disparagement restrictions and that he will not engage in any business that competes with Virtu or its affiliates, and he will not solicit or hire employees, consultants or members of Virtu East, its subsidiaries or its affiliates during his employment and for a period of 12 months thereafter.
Employment Agreement with Mr. Cavoli
Virtu East entered into a new employment agreement with Mr. Cavoli on February 26, 2020, which amends and supersedes the terms of his prior employment agreement dated June 24, 2015, pursuant to which Mr. Cavoli will continue to serve as our Executive Vice President, Markets and report to our Chief Executive Officer. Mr. Cavoli’s employment agreement further provides that to the extent such activities do not significantly interfere with the performance of his duties, service and responsibilities, Mr. Cavoli is permitted to manage his personal, financial and legal affairs, serve on civic or charitable boards and committees and, to the extent approved by our board of directors, serve on corporate boards and committees.
The employment agreement has an initial term of three years ending on February 26, 2023, with automatic renewals for successive one-year terms thereafter unless either we or the executive provides notice of non-renewal
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at least ninety days in advance of the expiration of the then-current term. However, if a change in control of the Company occurs at a time when there is less than one year remaining in the term, the term will automatically be extended so that the expiration date is one year from the effective date of the change in control.
Under the employment agreement, Mr. Cavoli’s base salary is $500,000 and Mr. Cavoli is eligible to earn an annual bonus with a target bonus opportunity equal to $1,500,000 and a maximum bonus opportunity equal to $2,500,000. Eighty percent (80%) of the annual bonus will be based on the achievement of quantitative targets set by the Company’s Chief Executive Officer together with the Compensation Committee and 20% of the annual bonus will be based on the achievement of qualitative goals set by the Company’s Chief Executive Officer together with the Compensation Committee. To the extent earned, the annual bonus will be paid in a mix of cash, restricted stock units and fully vested shares of Class A common stock in accordance with the Company’s incentive and equity plans as in effect from time to time.
The employment agreement also provided for a special long-term equity award in the form of 150,000 restricted shares of Class A common stock that are subject to performance and service conditions, which was issued on February 27, 2020. The number of shares earned under each annual equity grant will be based on the percentage of budgeted EBITDA achieved in each of the three calendar years during the vesting period, with a minimum of 50% of shares earned upon at least 70% achievement and 100% of shares earned upon at least 75% achievement. To the extent any shares of Class A common stock are earned with respect to an applicable calendar year, such shares will vest on the last day of such calendar year to which such award relates.
The employment agreement further provides that Mr. Cavoli is entitled to participate in all of the Company’s benefit plans and programs, and to receive perquisites, commensurate with his position, that are provided by the Company from time to time to senior executives generally, and to receive director and officer indemnification and insurance protection.
The employment agreement includes an acknowledgment that Mr. Cavoli continues to be bound by the confidentiality and restrictive covenant provisions set forth in his original agreement, which provides for confidentiality and non-disparagement restrictions, as well as non-compete and non-solicitation restrictions until the eighteen-month anniversary of the date on which Mr. Cavoli ceases to be an officer or employee of the Company.
The employment agreement for Mr. Cavoli provides for severance upon certain terminations of employment as described below under “Potential Payments Upon Termination of Employment or Change in Control.”
Employment Agreement with Mr. Ioffe
Virtu East entered into an employment agreement with Mr. Ioffe on August 28, 2019, pursuant to which Mr. Ioffe served as our Executive Vice President and Chief Financial Officer and reported to our Chief Executive Officer. Mr. Ioffe’s employment agreement further provides that to the extent such activities do not significantly interfere with the performance of his duties, service and responsibilities, Mr. Ioffe is permitted to manage his personal, financial and legal affairs, and serve on civic or charitable boards and committees.
Under the employment agreement, Mr. Ioffe’s base salary was $500,000 and Mr. Ioffe was entitled to receive a guaranteed bonus for the year ended December 31, 2020 in the amount of $1,500,000, paid 50% in cash and 50% in restricted stock units and common shares of Class A common stock. The agreement further provides that Mr. Ioffe was eligible to earn annual bonuses for the years ended December 31, 2020, December 31, 2021 and December 31, 2022, with target bonus opportunities equal to $1,750,000, $1,500,000, and $1,500,000, respectively, and maximum bonus opportunities equal to $2,500,000 in each such year. The amounts actually earned would be based on the achievement of annual performance targets established in the sole and absolute discretion of the Compensation Committee together with the Chief Executive Officer. To the extent earned, the annual bonus would be paid in a mix of cash, restricted stock units and fully vested shares of Class A common stock in accordance with the Company’s incentive and equity plans as in effect from time to time.
The employment agreement also provided for a special long-term equity award in the form of restricted stock units valued in an amount equal to $3,000,000 divided by a per share issue price calculated based on a trailing volume weighted average price of the Company’s Class A common stock. The restricted stock units are subject to service-vesting requirements and vest in equal annual installments on each of the first three anniversaries of the grant date.
The employment agreement also provided that, commencing with calendar year 2020, Mr. Ioffe was eligible to receive an annual equity grant as determined by the Compensation Committee together with the Company’s Chief
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Executive Officer. Fifty percent of such annual equity grant shall vest on the last day of the calendar year to which such award relates and the remaining 50% shall vest on the last day of the subsequent calendar year, subject in all cases to continued employment through the applicable vesting date.
The employment agreement further provides that Mr. Ioffe was entitled to participate in all of the Company’s benefit plans and programs, and to receive perquisites, commensurate with his position, provided by the Company from time to time to senior executives generally, and to receive director and officer indemnification and insurance protection.
The employment agreement for Mr. Ioffe provided for severance upon certain terminations of employment as described below under “Potential Payments Upon Termination of Employment or Change in Control.”
OUTSTANDING EQUITY AWARDS AT 2020 FISCAL YEAR-End
The following table provides information about each of the outstanding awards of options to purchase our common stock and restricted stock units held by each named executive officer as of December 31, 2020.
Option Awards
Stock Awards
Name
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
Option
Exercise
Price
($)
Option
Expiration
Date
Equity
Incentive Plan
Awards:
Number of
Unvested
Stock Awards
(#)
Equity
Incentive Plan
Awards:
Market Value of
Unvested
Stock Awards
($)(1)
Douglas A. Cifu
16,058(2) $ 404,180
36,030(3) $ 906,875
80,523(4) $ 2,026,764
75,000(5) $ 1,887,750
Joseph Molluso
200,000(6) $ 5,034,000
100,000(7) $ 2,517,000
Brett Fairclough
75,000 $ 19.00 4/15/2025
3,033(8) $ 76,341
5,704(9) $ 143,570
35,430(10) $ 891,773
100,000(11) $ 2,517,000
Sean Galvin
13,236(12) $ 333,150
Stephen Cavoli
4,804(13) $ 120,917
29,909(14) $ 752,801
100,000(15) $ 2,517,000
(1)
Market value is based on the closing price of a share of our Class A common stock on 12/31/2020 (the last trading day of Fiscal 2020) equal to $25.17.
(2)
These restricted stock units will vest on January 23, 2021.
(3)
These restricted stock units will vest ratably on each of January 23, 2021 and January 23, 2022.
(4)
These restricted stock units will vest ratably on each of January 24, 2021, January 24, 2022 and January 24, 2023.
(5)
This amount represents the number of earned but unvested restricted shares under Mr. Cifu’s Annual Equity Award that will vest on December 31, 2021.
(6)
These restricted stock units will vest ratably on each of January 24, 2021, January 24, 2022 and January 24, 2023.
(7)
These restricted shares are subject to performance conditions as further described above under “Molluso Equity Awards”.
(8)
These restricted stock units will vest on January 23, 2021.
(9)
These restricted stock units will vest ratably on each of January 23, 2021 and January 23, 2022.
(10)
These restricted stock units will vest ratably on each of January 24, 2021, January 24, 2022 and January 24, 2023.
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(11)
These restricted shares are subject to performance conditions as further described above under “Fairclough Equity Award”.
(12)
These restricted stock units will vest ratably on each of August 12, 2021, August 12, 2022 and August 12, 2023.
(13)
These restricted stock units will vest ratably on each of January 23, 2021 and January 23, 2022.
(14)
These restricted stock units will vest ratably on each of January 24, 2021, January 24, 2022 and January 24, 2022.
(15)
These restricted shares are subject to performance conditions as further described above under “Cavoli Equity Award”.
Option Exercises and Stock Vested
DURING 2020 FISCAL YEAR
The following table sets forth as to each of the named executive officers information on exercises of options to purchase our common stock, the vesting of restricted shares of our common stock, and the vesting of restricted stock units during 2020.
Option Awards
Stock Awards
Name
Number of Shares
Acquired on
Exercise
(#)
Value Realized on
Exercise
($)
Number of Shares
Acquired on
Vesting
(#)(6)
Value Realized on
Vesting
($)
Douglas A. Cifu(1)
100,000 411,000 162,755 3,229,338
Joseph Molluso(2)
50,000 1,258,500
Brett Fairclough(3)
79,506 1,710,475
Sean Galvin
Stephen Cavoli(4)
72,341 1,601,050
Alexander M. Ioffe(5)
114,927 2,622,634
(1)
For Mr. Cifu, this includes the vesting of 34,073 RSUs on January 23, 2020, at a closing price of $15.19, 53,682 class A shares on January 24, 2020 at a closing price of $15.35 and 75,000 shares of restricted stock vested on December 31, 2020, at a closing price of $25.17.
(2)
For Mr. Molluso, this includes the vesting of 50,000 shares of restricted stock vested on December 31, 2020, at a closing price of $25.17.
(3)
For Mr. Fairclough, this includes the vesting of 5,886 RSUs on January 23, 2020, at a closing price of $15.19, 23,620 class A shares on January 24, 2020 at a closing price of $15.35 and 50,000 shares of restricted stock vested on December 31, 2020, at a closing price of $25.17.
(4)
For Mr. Cavoli, this includes the vesting of 2,402 RSUs on January 23, 2020, at a closing price of $15.19, 19,939 class A shares on January 24, 2020 at a closing price of $15.35 and 50,000 shares of restricted stock vested on December 31, 2020, at a closing price of $25.17.
(5)
For Mr. Ioffe, this includes the vesting of 114,927 RSUs on August 7, 2020, at a closing price of $22.82 in connection with his separation from the Company and in accordance with the terms of his employment agreement.
(6)
The number of shares delivered upon vesting of the executive’s stock awards were reduced by a number of shares with a market value equal to the applicable tax withholding amounts on their awards. As a result, the actual shares acquired by Messrs. Molluso, Fairclough Cavoli and Ioffe upon the vesting and settlement of their stock awards was 23,390, 40,908. 40,266 and 59,387, respectively.
Potential Payments Upon Termination of Employment or Change in Control
Severance Benefits
Under Mr. Cifu’s employment agreement, if Mr. Cifu’s employment is terminated by us without cause (as defined in the employment agreement), due to death or disability (as defined in the employment agreement), by the executive for good reason (as defined in the employment agreement), or due to the expiration of the term on the expiration date as a result of the Company’s delivery of a notice of non-renewal of the term, then in addition to receiving his accrued amounts, Mr. Cifu will receive, subject to the execution of a release of claims: (A) severance pay in an aggregate amount equal to the greater of (x) one times his base salary and (y) an amount equal to the total amount of base salary that would otherwise have been payable through the remainder of the term (the “Cifu Severance Amount”); (B) continued health, dental, vision and life insurance benefits under the terms of our benefit plans for (x) twelve months or (y) the period from termination of employment through the remainder of the term, whichever is longer (the “Benefits Continuation Period”); and following the Benefits Continuation Period, continued participation in the Company’s health, dental, vision and life insurance until the earlier of (i) Mr. Cifu’s independents reaching the
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age of 26, (ii) Mr. Cifu or his spouse becoming eligible for Medicare, or (iii) Mr. Cifu becoming eligible for comparable coverage under another employer’s benefit plans, subject to Mr. Cifu’s payment of the full cost of such benefits; (C) continued eligibility to earn shares of Class A common stock under his then-current annual equity grant, and to the extent earned, a pro rata portion of such shares shall be deemed vested on the last day of the calendar year to which such award relates (the “Cifu Equity Acceleration”); (D) accelerated vesting of any earned but unvested shares of Class A common stock under the annual equity grant granted in the year prior to the year of termination; and (E) 150,000 shares of fully vested Class A common stock.
Under Mr. Molluso’s employment agreement, if Mr. Molluso’s employment is terminated by us without cause (as defined in the employment agreement), due to death or disability (as defined in the employment agreement), by the executive for good reason (as defined in the employment agreement), or due to the expiration of the term on the expiration date as a result of the Company’s delivery of a notice of non-renewal of the term, then in addition to receiving his accrued amounts, subject to the execution of a release of claims: (A) Mr. Molluso will receive severance pay in an aggregate amount equal to the greater of (x) one times his base salary and (y) an amount equal to the total amount of base salary that would otherwise have been payable through the remainder of the term (the “Molluso Severance Amount”); (B) Mr. Molluso will receive continued health, dental, vision and life insurance benefits under the terms of our benefit plans for twelve months; and (C) the next scheduled vesting installments under each of Mr. Molluso’s special equity award and sign-on equity award prorated for the elapsed portion of the calendar year, together with the full next installment of such awards (if any) shall be deemed accelerated and vested.
Under Mr. Fairclough’s employment agreement, if Mr. Fairclough’s employment is terminated by us without cause (as defined in the employment agreement), due to death or disability (as defined in the employment agreement), by the executive for good reason (as defined in the employment agreement), or due to the expiration of the term on the expiration date as a result of the Company’s delivery of a notice of non-renewal of the term, then in addition to receiving his accrued amounts, subject to the execution of a release of claims: (A) Mr. Fairclough will receive severance pay in an aggregate amount equal to the greater of (x) one times his base salary and (y) an amount equal to the total amount of base salary that would otherwise have been payable through the remainder of the term (the “Fairclough Severance Amount”); (B) Mr. Fairclough will receive continued health, dental, vision and life insurance benefits under the terms of our benefit plans for twelve months; and (C) the next scheduled vesting installment under Mr. Fairclough’s special equity award prorated for the elapsed portion of the calendar year, together with the full next installment of such award (if any) shall be deemed accelerated and vested.
Under Mr. Cavoli’s current employment agreement, if Mr. Cavoli’s employment is terminated by us without cause (as defined in the employment agreement), due to death or disability (as defined in the employment agreement), by the executive for good reason (as defined in the employment agreement), or due to the expiration of the term on the expiration date as a result of the Company’s delivery of a notice of non-renewal of the term, then in addition to receiving his accrued amounts, subject to the execution of a release of claims: (A) Mr. Cavoli will receive severance pay in an aggregate amount equal to the greater of (x) one times his base salary and (y) an amount equal to the total amount of base salary that would otherwise have been payable through the remainder of the term (the “Cavoli Severance Amount”); (B) Mr. Cavoli will receive continued health, dental, vision and life insurance benefits under the terms of our benefit plans for twelve months; and (C) the next scheduled vesting installment under Mr. Cavoli’s special equity award prorated for the elapsed portion of the calendar year, together with the full next installment of such award (if any) shall be deemed accelerated and vested.
Under Mr. Ioffe’s employment agreement, upon the termination of Mr. Ioffe’s employment by us without cause (as defined in the employment agreement), due to death or disability (as defined in the employment agreement) or by the executive for good reason (as defined in the employment agreement), then in addition to receiving his accrued amounts, subject to the execution of a release of claims: (A) Mr. Ioffe received severance pay in an aggregate amount equal to twelve months’ of base salary and any unpaid guaranteed bonuses (the “Ioffe Severance Amount”); (B) Mr. Ioffe received continued health, dental, vision and life insurance benefits under the terms of our benefit plans for twelve months; and (C) the next scheduled vesting installment under Mr. Ioffe’s sign-on equity award, prorated for the elapsed portion of the calendar year, together with the full next installment of such award (if any) was deemed accelerated and vested. Mr. Ioffe’s employment terminated on August 7, 2020.
Mr. Galvin is not entitled to any payments or benefits in connection with the termination of his employment.
Severance Benefits Upon a Change in Control Termination
If Mr. Cifu is terminated at any time within sixty days before, or 24 months following, a change in control, then Mr. Cifu is entitled to the payments and benefits described above, however (1) in lieu of the Cifu Severance Amount,
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Executive Compensation
Mr. Cifu will be entitled to receive two and a half times the sum of (x) his base salary and (y) the annual bonus (including any amounts deferred or satisfied through the grant of equity awards) most recently awarded to Mr. Cifu for a completed fiscal year of the Company; (2) the Benefits Continuation Period will be extended to (x) 24 months or (y) the period from termination of employment through the remainder of the term, whichever is longer; and (3) in lieu of the Cifu Equity Acceleration, Mr. Cifu will be entitled to a pro rata portion of all of the shares underlying his then-current annual equity grant, which shall be deemed vested on the last day of the calendar year to which such award relates.
If Mr. Molluso is terminated at any time in anticipation of, or within 12 months following, a change in control, then Mr. Molluso is entitled to the payments and benefits described above, however, in lieu of the Molluso Severance Amount, Mr. Molluso will be entitled to an amount equal to two times the sum of (x) his base salary then in effect plus (y) the prior year’s actual discretionary bonus paid to him.
If Mr. Fairclough is terminated at any time in anticipation of, or within 12 months following, a change in control, then Mr. Fairclough is entitled to the payments and benefits described above, however, in lieu of the Fairclough Severance Amount, Mr. Fairclough will be entitled to an amount equal to two times the sum of (x) his base salary then in effect plus (y) the prior year’s actual discretionary bonus paid to him.
If Mr. Cavoli is terminated at any time in anticipation of, or within 12 months following, a change in control, then Mr. Cavoli is entitled to the payments and benefits described above, however in lieu of the Cavoli Severance Amount, Mr. Cavoli will be entitled to an amount equal to two times the sum of (x) his base salary then in effect plus (y) the prior year’s actual discretionary bonus paid to him.
If Mr. Ioffe had been terminated in anticipation of, or within 12 months following, a change in control, then Mr. Ioffe would have been entitled to the payments and benefits described above, however in addition to the Ioffe Severance Amount, Mr. Ioffe would have been entitled to the sum of (x) his target bonus amount for such year prorated based on the elapsed portion of the year plus (y) an amount equal to the highest of (i) the target bonus for the year of termination, or if no such target has been set, the most recent target amount, (ii) the prior year’s actual discretionary bonus paid and (iii) the average of the two preceding years’ actual discretionary bonus paid.
Mr. Galvin is not entitled to any payments or benefits in connection with the termination of his employment in anticipation of, or within 12 months following, a change in control.
For purposes of the employment agreements with Messrs. Cifu, Molluso, Fairclough and Cavoli and Ioffe, “change in control” generally means (i) the acquisition by any person of beneficial ownership of 30% or more (on a fully diluted basis) of either (A) the then outstanding shares of common stock of the Company or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote in the election of directors, but excluding acquisitions by the Company, Vincent Viola and his permitted transferees and their respective affiliates or any employee benefit plan sponsored by the Company or any of its affiliates, (ii) a change in the composition of the board of directors such that members of the board of directors during any consecutive 12-month period cease to constitute a majority of the board of directors, (iii) the approval by the stockholders of the Company of a plan of complete dissolution or liquidation of the Company, or (iv) the consummation of a reorganization, recapitalization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company or sale, transfer or other disposition of all or substantially all of the business or assets of the Company to an entity that is not an affiliate of the Company.
If any payments to Messrs. Cifu, Molluso, Fairclough, Galvin and Cavoli are determined to be so-called “golden parachute” payments subject to the excise tax under Section 4999 of the Code, then such payments will be reduced to the extent such reduction would result in the executive retaining a greater net after-tax amount than he would have retained had he received the full amount of the payments and paid the applicable excise tax.
Estimated Payments Upon Termination of Employment or Change in Control
Assuming each named executive officer’s (other than Mr. Ioffe) termination of employment occurred on December 31, 2020 or a change in control occurred on December 31, 2020, the dollar value of the payments and other benefits to be provided to each of the named executive officers are estimated in the table below.
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Executive Compensation
Mr. Ioffe’s employment terminated on August 7, 2020 and the amounts shown in the table below reflect the actual payments he received in connection with such termination.
Name
Death,
Disability,
Termination
Without Cause
or for Good
Reason ($)
Death,
Disability,
Termination
Without Cause
or for Good
Reason 60 Days
Prior to or
24 Months
Following a
Change in
Control ($)
Non-Renewal by
the Company ($)
Non-Renewal
by the
Company
60 Days Prior
to or 24 Months
Following a
Change in
Control ($)
Resignation
without Good
Reason
Douglas A. Cifu
Severance
2,155,068(1) 11,781,096(2) 2,155,068(1) 11,781,096(2)
Restricted Stock
7,551,000(3) 7,551,000(3) 7,551,000(3) 7,551,000(3)
Stock Options
Joseph Molluso
Severance
1,339,041(4) 5,799,658(5) 1,339,041(4) 5,799,658(5)
Restricted Stock & RSUs
5,686,524(6) 5,686,524(6) 5,686,524(6) 5,686,524(6)
Stock Options
Brett Fairclough
Severance
1,814,795(7) 5,336,712(8) 1,814,795(7) 5,336,712(8)
Restricted Stock
2,517,000(9) 2,517,000(9) 2,517,000(9) 2,517,000(9)
Stock Options
Sean Galvin
Severance
Restricted Stock
Stock Options
Stephen Cavoli
Severance
1,239,795(10) 4,661,712(11) 1,239,795(10) 4,661,712(11)
Restricted Stock & RSUs
2,517,000(12) 2,517,000(12) 2,517,000(12) 2,517,000(12)
Stock Options
Alexander M. Ioffe
Severance
575,000(13)
RSUs
3,119,184(14)
Stock Options
(1)
Represents a cash severance payment of an amount equal to (i) base salary continuation and (ii) continued health, dental, vision and life insurance benefits through the remainder of the employment term (i.e., November 15, 2022).
(2)
Represents a cash severance payment of an amount equal to (i) 2.5 times the sum of (a) executive’s base salary and (b) the most recently awarded annual bonus (which was $3,600,000) and (ii) continued health, dental, vision and life insurance benefits through the remainder of the employment term (i.e., November 15, 2022).
(3)
Represents the value of (i) accelerated vesting of a pro rata portion of all of the shares underlying his then-current annual equity grant based on shares earned, which was 150,000, and (ii) a grant of 150,000 shares of Class A common stock.
(4)
Represents a cash severance payment of an amount equal to base salary continuation and continued health, dental, vision and life insurance benefits through the remainder of the employment term (i.e., April 30, 2023).
(5)
Represents a cash severance payment of an amount equal to (i) 2 times the sum of (a) executive’s base salary and (b) the most recently awarded annual bonus (which was $1,750,000) and (ii) continued health, dental, vision and life insurance benefits through the remainder of the employment term (i.e., April 30, 2023).
(6)
Represents the value of (i) accelerated vesting of a pro rata portion of all of the shares underlying his then-current sign-on and special equity awards, which is 109,259 and (ii) the next installments of each of such awards, which total 116,666 shares of Class A common stock.
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Executive Compensation
(7)
Represents a cash severance payment of an amount equal to base salary continuation and continued health, dental, vision and life insurance benefits through the remainder of the employment term (i.e., February 26, 2024).
(8)
Represents a cash severance payment of an amount equal to (i) 2 times the sum of (a) executive’s base salary and (b) the most recently awarded annual bonus (which was $1,540,000) and (ii) continued health, dental, vision and life insurance benefits through the remainder of the employment term (i.e., February 26, 2024).
(9)
Represents the value of (i) accelerated vesting of a pro rata portion of all of the shares underlying his special equity award, which is 50,000 and (ii) the next installment of such award, which totals 50,000 shares of Class A common stock.
(10)
Represents a cash severance payment of an amount equal to base salary continuation and continued health, dental, vision and life insurance benefits through the remainder of the employment term (i.e., February 26, 2023).
(11)
Represents a cash severance payment of an amount equal to (i) 2 times the sum of (a) executive’s base salary and (b) the most recently awarded annual bonus (which was $1,300,000) and (ii) continued health, dental, vision and life insurance benefits through the remainder of the employment term (i.e., February 26, 2023).
(12)
Represents the value of (i) accelerated vesting of a pro rata portion of all of the shares underlying his special equity award, which is 50,000 and (ii) the next installment of such award, which totals 50,000 shares of Class A common stock.
(13)
Represents a cash severance payment of an amount equal to base salary continuation, payment of any unpaid guaranteed bonuses for the year, which was none, and continued health, dental, vision and life insurance benefits for twelve months.
(14)
Represents the value of (i) accelerated vesting of a pro rata portion of the current installment of his sign-on equity grant and (ii) accelerated vesting of the subsequent installment of his sign-on equity grant.
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CEO Pay Ratio Disclosure
As required by Section 953(b) of the Dodd-Frank Act, we are providing the following information about the relationship of the annual total compensation of our Chief Executive Officer, Mr. Douglas A. Cifu, and the annual total compensation of our median employee. For the year ended December 31, 2020:

The median of the annual total compensation of all employees of our Company (other than our Chief Executive Officer) was $ $224,686;

The annual total compensation of our Chief Executive Officer was $12,263,795 (as disclosed in the Summary Compensation Table herein); and

Based on this information, the ratio of the annual total compensation of our Chief Executive Officer to the median employee was 55 to 1.
To determine the median of the annual total compensation of all employees of the Company (other than our Chief Executive Officer), we identified our total employee population as of December 31, 2020, which consisted of approximately 970 individuals, 8 of which were temporary employees.
We determined the median based on each employee’s annual base pay as of December 31, 2020, plus the variable incentive compensation award they received in 2021 for the 2020 performance year. Variable incentive compensation consisted of cash bonuses and/or the fair value of stock awards granted under the Virtu Financial, Inc. Amended and Restated Management Incentive Plan and the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (which was assumed in connection with the ITG Acquisition) at the grant date. The annual total compensation of the median employee presented above is a reasonable estimate calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Hedging Policy
The Company’s Securities Trading Policy discourages speculative hedging transactions, but permits directors, officers and employees of the Company to enter into long-term (six-month or longer) hedging transactions relating to shares of common stock or stock options of the Company, subject to pre-clearance pursuant to the Securities Trading Policy.
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Compensation of Directors
The compensation payable to our non-employee directors consists of the following:

an award of restricted stock units valued at $135,000 at the time of grant upon re-election at each subsequent annual meeting of stockholders. The restricted stock units vest on the one-year anniversary of the date of grant;

an annual cash retainer of $75,000, with no additional fees paid for board and committee meetings attended;s

an annual cash retainer of $150,000 for the non-executive chairman of the board of directors, $25,000 for the chair of the Audit Committee, $20,000 for the chair of the Compensation Committee, $20,000 for the chair of the Nominating and Corporate Governance Committee and $20,000 for the chair of the Risk Committee; and

an annual cash retainer of $10,000 for members of the Audit Committee, $7,500 for members of the Compensation Committee, $7,500 for members of the Nominating and Corporate Governance Committee, and $7,500 for members of the Risk Committee.
After four years of service, non-employee directors must maintain a minimum stock ownership equal to $225,000.
The following table sets forth compensation earned by our directors during the year ended December 31, 2020.
Name
Fees Earned or
Paid in Cash ($)(1)
Equity
Award(s)(2)(3)
All Other
Compensation ($)
Total ($)
Douglas A. Cifu
William F. Cruger, Jr 100,000 135,000 235,000
Virginia Gambale(4) 70,521 58,000 128,521
Joseph J. Grano, Jr. 85,000 135,000 220,000
Robert Greifeld 240,000 135,000 375,000
Glenn Hutchins 95,000 135,000 230,000
John D. Nixon 102,500 135,000 237,500
Christopher C. Quick 92,500 135,000 227,500
John F. (Jack) Sandner 92,500 135,000 227,500
David Urban 82,500 135,000 217,500
Michael T. Viola 90,000 135,000 225,000
Vincent Viola
(1)
The amounts reported in this column represent the fees allocable to Fiscal 2020.
(2)
The amounts reported in this column represents the grant date fair value calculated in accordance with FASB ASC Topic 718 with respect to the grant of restricted stock units. Assumptions used in calculating these amounts are described in Note 19 of the Company’s audited financial statements for the fiscal year ended December 31, 2020 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
(3)
As of December 31, 2020, Messrs. Cruger, Grano, Greifeld, Hutchins, Nixon, Quick, Sandner, Urban, and Michael Viola each held 5,811 unvested restricted stock units of the Company. In addition, as of December 31, 2020, Vincent Viola held 693,750 stock options of the Company, all of which were vested and exercisable. For outstanding equity awards held by Mr. Cifu, please see “Outstanding Equity Awards at 2020 Fiscal Year-End” above.
(4)
Ms. Gambale was appointed to our Board of Directors on January 29, 2020 and received a prorated partial year grant of 3,706 restricted stock units for the board year 2019-2020 on January 29, 2020 which vested July 1, 2020.
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Proposal 3 Ratification of Appointment of Independent Registered Public Accounting Firm
Our Audit Committee has appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021. Stockholder ratification of the appointment of PricewaterhouseCoopers LLP is not required by law. The ratification of the appointment of PricewaterhouseCoopers LLP requires the affirmative vote of a majority in voting power of shares of stock present or represented by proxy and entitled to vote thereon at the Annual Meeting. If the stockholders do not ratify the appointment of PricewaterhouseCoopers LLP, the Audit Committee will reconsider the appointment. Even if the stockholders ratify the appointment of PricewaterhouseCoopers LLP, the Audit Committee retains the discretion to appoint a different independent registered public accounting firm at any time if it determines that such a change would be in the best interests of Virtu and its stockholders.
Representatives of PricewaterhouseCoopers LLP are expected to attend the Annual Meeting, will have an opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.
The board of directors recommends that you vote FOR the ratification of PricewaterhouseCoopers LLP as our independent auditor for the fiscal year ending December 31, 2021.
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Information Regarding Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP has served as the Company’s independent registered public accounting firm since 2018.
The Audit Committee has the discretion to appoint a different independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in the best interest of the Company and our stockholders.
A representative of PricewaterhouseCoopers LLP is expected to be present at the Annual Meeting, will have an opportunity to make a statement if he or she so desires and will be available to respond to appropriate questions.
Pre-Approval Policy
The policy of our Audit Committee is to review in advance, and pre-approve all audit or non-audit services to be provided by the Company’s independent or other registered public accounting firm and to approve all related fees and other terms of engagement.
All of the audit-related, tax and all other services provided by PricewaterhouseCoopers LLP to us since their appointment in 2018, and by Deloitte & Touche LLP to us subsequent to our initial public offering in 2016 and until their dismissal in 2018, were approved by our Audit Committee, and none of such services were approved pursuant to the exception provided by Rule 2-01(c)(7)(i)(C) under Regulation S-X. All non-audit services provided subsequent to our initial public offering in 2016 were reviewed with the Audit Committee, which in each case concluded that the provision of such services by the relevant independent registered public accounting firm was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions.
Audit Fees
The following table presents aggregate fees billed to us for services rendered by our current independent registered public accounting firm, PricewaterhouseCoopers LLP, for the fiscal years ended December 31, 2020 and December 31, 2019.
2020
2019
Audit fees $ 6,482,647 $ 6,798,303
Audit-related fees $ 693,833 $ 410,970
Tax fees $ 1,644,556 $ 1,468,232
All other fees
Total $ 8,821,037 $ 8,677,505
Audit Fees
This category includes the aggregate fees during 2020 and 2019 for audit services provided by our independent registered public accounting firm for the fiscal years ending December 31, 2020 and December 31, 2019, including for the audits of our annual consolidated financial statements, and reviews of each of the quarterly financial statements included in our Quarterly Reports on Form 10-Q, as well as audits of the consolidated financial statements of various of our regulated and foreign operating subsidiaries. In 2020 and 2019, these amounts include fees associated with the audit of various regulated and foreign operating subsidiaries acquired in the ITG Acquisition.
Audit-Related Fees
This category includes the aggregate fees during 2020 and 2019 for services related to the performance of the audits and reviews described in the preceding paragraph that are not included in the Audit Fees category. In 2020
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Information Regarding Independent Registered Public Accounting Firm
and 2019, these amounts include fees associated with assurance services provided in respect of certain businesses acquired in the ITG Acquisition. This category can also include fees associated with (i) accounting consultation and due diligence related to certain transactions, (ii) services rendered in connection with our registration statements and (iii) the preparation and review of documents related to our securities offerings.
Tax Fees
This category includes the aggregate fees during 2020 and 2019 for professional tax services provided by the independent registered public accounting firm or its affiliates, including for tax compliance and tax advice. In 2020 and 2019, these amounts include fees associated with tax services provided in respect of various regulated and foreign operating subsidiaries acquired in the ITG Acquisition.
All Other Fees
There were no other fees during 2020 and 2019.
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Audit Committee Report
The following is the report of the Audit Committee of Virtu Financial, Inc. (the “Company”) with respect to our audited financial statements for the year ended December 31, 2020. The information contained in this report shall not be deemed “soliciting material” or otherwise considered “filed” with the SEC, and such information shall not be incorporated by reference into any future filing under the Exchange Act, except to the extent that we specifically incorporate such information by reference in such filing.
The Audit Committee hereby reports as follows:
1.Management has the primary responsibility for the financial statements and the reporting process, including the system of internal accounting controls. The Audit Committee, in its oversight role, has reviewed and discussed the audited financial statements with the Company’s management.
2.The Audit Committee has discussed with the Company’s independent registered public accounting firm the overall scope of, and plans for, their audit. The Audit Committee has met with the independent registered public accounting firm to discuss the matters required to be discussed by the applicable requirements of the PCAOB and the SEC.
3.The Audit Committee has received the written disclosures and the letter from PricewaterhouseCoopers LLP required by applicable requirements of the PCAOB regarding PricewaterhouseCoopers LLP’s communications with the Audit Committee concerning independence, and has discussed with PricewaterhouseCoopers LLP its independence. The Audit Committee has concluded that PricewaterhouseCoopers LLP’s provision of audit and non-audit services to the Company and its affiliates is compatible with PricewaterhouseCoopers LLP’s independence.
4.The Audit Committee has an established charter outlining the practices it follows. The charter is available on the Company’s website at: ir.virtu.com/corporate-governance/default.aspx.
5.Based on the review and discussions referred to in paragraphs (1) through (4) above, the Audit Committee recommended to the Company’s board of directors, and the board has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, for filing with the Securities and Exchange Commission.
AUDIT COMMITTEE
William F. Cruger, Jr.
Christopher C. Quick
Joseph J. Grano, Jr.
Virginia Gambale
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Stock Ownership of Certain Beneficial Owners and Management
The tables below set forth information with respect to the beneficial ownership of our Class A common stock and Class B common stock by:

each of our directors and executive officers;

each person who is known to be the beneficial owner of more than 5% of the outstanding shares of our Class A common stock and Class B common stock; and

all of our directors and executive officers as a group.
We have four classes of authorized common stock. The Class A common stock and the Class C common stock have one vote per share. The Class B common stock and the Class D common stock have 10 votes per share. Shares of our common stock generally vote together as a single class on all matters submitted to a vote of our stockholders.
Prior to our initial public offering, our business was conducted through Virtu Financial and its subsidiaries. In a series of transactions that occurred in connection with our initial public offering, (i) we became the sole managing member of Virtu Financial and acquired non-voting common interest units of Virtu Financial Units, (ii) certain direct or indirect equity holders of Virtu Financial acquired shares of our Class A common stock and (iii) certain direct or indirect equity holders of Virtu Financial had their interests reclassif