Exchange Invest Weekend: 11th June

Exchange Invest was founded by former exchange CEO and author of the first bestselling book of fintech (“Capital Market Revolution!” FT 1999) Patrick L Young. Monday through Friday our daily paid subscriber email discusses the business of bourses of all kinds across the world.

This weekly edition is a magazine of broader macro topics as well as including our free weekly podcast which reviews the highlights of the week in the world’s market structure.

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In BigWorld

From Exchange Invest 2369: 6th, June 2022: Monday

For those keen to disparage the UK (and let’s face it the current government is a shambles of spendthrift nanny statist control freakery), the weekend proved the soft power of a nation which still has a fair bit of harder power too. Princess Elizabeth became Queen Elizabeth II in 1952 when the world population was around 2 billion — the same as the size of her Commonwealth today.

An incredible weekend of British celebrations reminded the world of just how Great, Britain can be. A fitting tribute to a fantastic Monarch.

Oh and everybody got in on the act, lest you missed it, the Westin London City Hotel did a fabulous Royal tribute in delicious sweet treats.

Parish Notes

This week alas we lost another great parish figure with the demise of Otto Naegeli, former Deputy CEO of EUREX and one of the architects of that entity along with Jorg Franke.

You can read out tribute here: Linkedin Medium

2021 Exchange CEO Salaries

Various data points made a virtual ‘thwunk’ in our in-boxes the other day which struck us as a base for some discussion on exchange CEO pay.

Let’s start with a base statistic: The S&P 500 median CEO salary (according to AP/Equilar) rose 17% to $14.5 million last year.

So let’s look at what I nickname “the magnificent 7” in the parish of exchanges for their 2021 income:

The graph makes for interesting and thought provoking reading.

CME Chairman & CEO Terry Duffy tops the list with that $22.89 million package which recently drew shareholder ire at the CME AGM. In second place comes Adena Friedman with a package just shy of $20 million while in third place is ICE’s Jeff Sprecher ($14.79 million) fractionally ahead of Tradeweb’s Lee Olesky on $14.77m — on his valedictory swansong as CEO ahead of his impending move to Chairman).

A little behind is Nicolas Aguzin on $13.67 million then the magnificent 7 of top exchange earners concludes with Ed Tilly of CBOE comes 7th on $10.65 million behind Howard Lutnick on $12 million.

Thus you can see the “Magnificent 7” were chosen because all of their salaries comfortably broke the $10 million mark.

At the same time, there are some fascinating thoughts to be had on the overall level of remuneration. By far the most extravagant appears to be in the realm of the IDB world with Howard Lutnick scoring more than Ed Tilly and not that far off the bulk of the group, yet his firm is remunerating the equivalent of 1% of the entire firm’s market capitalisation! Only Lee Olesky even makes it to 0.1% of his firm’s market cap while the others are all in single figures (admittedly Ed was 0.09% when we ran the figures the other week).

Note, I am not remotely concerned about precise equivalence in our market cap / salary marker, it’s just a useful indicator of salary to size of company and this would (as I am sure some PR person will insist on pointing out) differ quite significantly depending on the date we took the market cap (QV at the market peak all the numbers were a fair bit less).

Having pointed out the bit that hopefully keeps some PRs off my back, the key factor to view here is that realistically by the market cap comparison we can safely say the longstanding BGC CEO is a very healthy OTC margin above the pure exchanges.

The most interesting point — doubtless already in the Terry Duffy armoury to help shareholders understand why he reckons they were wrong to vote against his pay package… is that the CEOs of the three leading Young’s Pyramid Tier 1 exchanges, CME, ICE and HKEX, all paid essentially 0.03% of their market cap to the boss last year…

On the absolute money front, I leave it to you to draw your own individual conclusions although I would suggest Jeff Sprecher’s shareholders ought to have a serious thought about whether their CEO is not underpaid as he seems to have been consistently banded around the same salary for some years now while consistently building an incredible company. Nasdaq can justify the Adena Friedman package given her voluble championing of the exchange sector during Covid while simultaneously reworking her business… After all, not that long ago, Nasdaq and CBOE were equivalent market caps and now after several Adena-years, Nasdaq is almost 2.5 times the value of CBOE.

I’ll continue this thread with an examination of the “Ocean’s 11” group of leading CEOs in due course…

…If you want to stay abreast of the world of exchanges then please Subscribe to our Daily Newsletter — free 30day trial.

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You can also check out the “Reflections From Young’s Pyramid”, it illustrates the relative value of exchanges around the world.

Or the “ICE Cost of Borrowing 2020–2022” An Interest Rate Comparison, which illustrates the end of the funny money era of QE and how interest rates have already had a major lurch up from their previous region of zero to, even negative, levels.

At the least can you like this article, or leave us a comment, we welcome your feedback.




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Season 12: Episode 03, IPO-VID Livestream 069

IPO-VID Guest: Max Butti

Tuesday, June 14th: 800 UK, 1900 CET, 1300 EST

“Max Butti Developing Digital Asset”

Max has worked for investment banks, prop trading firms, market makers and exchanges in trading product and market development, cooperating closely with buy-side and sell-side traders, analysts and portfolio managers and helping creating markets and strategies to support them.

At SDX he leads the equity team, dedicated to enhancing the funding process for private companies and improving the issuance, custody, and transfer of digital securities in SDX’s regulated CSD.

Prior to SDX, Max spent 7 years at LSE as head of equity derivatives markets and global account director developing key strategic group accounts.

Watch the Stream on:





Season 12: Episode 02, IPO-VID Livestream 068

IPO-VID Guest: Ivan Steriev

Tuesday, June 07th: 800 UK, 1900 CET, 1300 EST

“Meet An SEE Market Builder?”

Ivan Steriev has been the CEO of the Macedonian Stock Exchange Inc. Skopje since 2005 having been a member of the team which set the sechange up in 1996 and has been working at the MSE since its foundation, first as a Floor manager and then as a Director of Trading Department until 2005.

Ivan has been a member of the Board of the Macedonian Central Securities Depository and Commissioner at Macedonian Security & Exchange Commission. He is a member of the Supervisory Board of SEE Link (an EBRD supported project started by Bulgaria, Macedonia and Zagreb stock exchanges to create a regional infrastructure for linking securities trading across these three markets.

Watch the Stream on:





Episode 51: “ICE: On The Road To A Global Carbon Price”

IPO-VID Episode 051: I was joined by Managing Director of ICE Utility Markets Gordon Bennett.

Listen to our interesting discussion about “ICE: On The Road To A Global Carbon Price” with co-host Steve Zwick via the usual podcast sources:

Anchor Spotify Google Podcasts Apple Podcast

EI Weekly Podcast 147

ASX pick their first female CEO.

NASDAQ acquires the ESG platform Metrio.

Elliott amongst a wave of people suing the LME.

CBOE launch a new floor.

Yes, the CBOE launch a new floor, it’s not 1987 it’s 2022.

And Eurex displays CCP pragmatism.

Victory Or Death

20 years on from the first fintech bestseller “Capital Market Revolution!”… “Victory Or Death” is a must read book for anyone interested in the intersection of Blockchain, Cryptocurrency and FinTech as part of the whole future of finance.

Available worldwide.

Macro Thoughts

Bridging The ‘Great Finance Divide’ In Developing Countries

Brookings Institution

PLY: FWIW, might I suggest: shoot the corrupt, deregulate the ludicrous regulations that keep the poor unable to move up the scale and stifle entrepreneurship and then unleash human potential with government being made digital and relatively friction free?

Of Interest

As always, a review of interesting reading to provoke thoughts and consideration… Not sure we agree with much of it….but it’s thought-provoking!

Stock Trading And Travelling The World: How A Kolkata Girl Is Living Her Dream


Former Bond Manager Shares Investing Strategy That He Calls Strategic Mediocrity


Chinese Blockchain Platform Says It Has New Tech To Resist Quantum Attacks

South China Morning Post

Last Word

Catch up Monday for Exchange Invest 2375…

The future continues in the water cooler for the bourse business…




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