Virtu Financial enters into new employment agreement with CEO Douglas Cifu
Virtu Financial, Inc (NASDAQ:VIRT) has entered into a new employment agreement with Douglas A. Cifu.
Pursuant to the agreement, Mr. Cifu will continue to serve as Virtu’s Chief Executive Officer and report to the company’s board of directors. Mr Cifu’s duties, responsibilities and permitted activities are substantially identical to his original employment agreement.
The Employment Agreement has an initial term ending on February 28, 2028, with automatic renewals for successive one-year terms thereafter unless either the Company or Mr. Cifu 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 was increased by $200,000 to $1,200,000 and Mr. Cifu is eligible to earn an annual bonus with a target bonus opportunity equal to $3,000,000 (increased from $2,500,000) and a maximum bonus opportunity equal to 200% of the target bonus opportunity. Fifty percent (50%) of the annual bonus will be based on the achievement of quantitative targets comprised of specific components of the Company’s annual budget and 50% of the annual bonus will be based on the achievement of qualitative goals.
To the extent earned, 50% of the annual bonus will be paid in cash, 30% of the annual bonus will be paid in the form of restricted shares or restricted share units (“RSUs”) of Class A common stock of the Company (“Stock”) that vest in three equal annual installments and the remaining 20% will be paid in the form of fully-vested Stock or fully-vested deferred share units (“DSUs”) in respect of Stock (in each case, in accordance with any applicable timely deferral election).
Mr. Cifu’s annual bonus for the 2022 fiscal year, if any, will be determined on a weighted average basis, based on the elapsed time that the Employment Agreement and Mr. Cifu’s previous employment agreement were each in effect during the 2022 fiscal year.
The Employment Agreement provides that Mr. Cifu will remain eligible to receive an equity award at the beginning of each calendar year during the term. It is the Board’s current intention that the Annual Equity Award will be in the form of 150,000 restricted shares or RSUs in respect of 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 100% of shares earned upon at least 65% achievement. In the event of achievement below 65%, the Compensation Committee of the Board will determine the number of earned shares, if any, in its sole discretion.
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.
Under the Employment Agreement, if Mr. Cifu’s employment is terminated by the Company without cause, due to death or disability, by Mr. Cifu for good reason, 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 be entitled to, subject to the execution of a release of claims:
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;
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 Benefits Continuation Period, continued participation in the Company’s health, dental, vision and life insurance until the earlier of (i) Mr. Cifu’s dependents reaching the 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;
remain eligible to earn restricted shares of Stock or RSUs under his then-current Annual Equity Award, 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;
accelerated vesting of any earned but unvested restricted shares of Stock or RSUs under the Annual Equity Award granted in the year prior to the year of termination; and
150,000 shares of fully-vested Stock or, if Mr. Cifu has made an applicable and timely deferral election, DSUs.