CBOE's longtime CEO Brodsky to step down in May

Dec 12 2012, 22:31 IST
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SummaryBrodsky has run the operator of the oldest and largest U.S. options exchange since 1997

CBOE Holdings Inc Chief Executive William Brodsky, who transformed the member-owned exchange into a publicly-traded company best known as the home of Wall Street's favorite fear index, will step down in May.

Brodsky, 68, will be succeeded by President and Chief Operating Officer Edward Tilly, 49, CBOE said on Wednesday. Brodsky will assume the role of executive chairman.

Brodsky has run the operator of the oldest and largest U.S. options exchange since 1997.

During his tenure, what was once a cottage industry dominated by just four brick-and-mortar exchanges exploded into a hyper-competitive part of the securities-trading world, with no less than 11 exchanges now vying for a cut of 16 million or so contracts that change hands on an average day.

Brodsky carved out a dominant place for CBOE by relentlessly defending from would-be imitators its exclusive - and lucrative - options on benchmarks like the Standard & Poor's 500 Index and the CBOE Volatility Index, the well-known gauge of Wall Street anxiety known as the VIX.

He moved most of CBOE's trading to the computer screen, built an all-electronic trading venue in New York, and transformed the company from member-owned club to publicly traded company over several years, culminating in an initial public offering in June 2010. Wednesday's announcement was unexpected, as Brodsky's contract runs through the end of 2013. Asked about his future as CBOE chief in a Reuters interview in October, he said his father had been on Wall Street for 60 years and he had done 45 and wasn't quitting yet.

The transition is unlikely to cause disruption, as Brodsky will likely continue to wield significant power, said Thomas Caldwell, chairman of Toronto-based Caldwell Securities and a longtime Brodsky booster.

"He's not actually out the door and down the street. He'll still be there and will be a guiding influence," said Caldwell, who manages more than 1.5 million CBOE shares. "CBOE is still the most profitable of the options exchanges. Every other options exchange is a wannabe."

Brodsky keeps up a brutal schedule. When traveling, which is often, he can start at 6:30 in the morning and go until 10 at night, said former CBOE board member William Power.

"When I joined the board of directors in 2003, we had $20 million in revenues and we hardly had any profits to speak of," Power said. "Today in 2012 we have a half a billion dollars in revenues and the transition is completed

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