Knight Capital Group CEO Thomas Joyce to Get Retention Bonus worth $7.5 Million as Getco Takes Over Knight

According to the Government filing on the takeover deal, the Chief Executive Officer of Knight Capital Group, Thomas Joyce, is set to receive a retention payment worth $7.5 million which is a part of the acquisition deal of the company by Getco LLC. Knight Capital Group, incidentally, is one of the biggest market-making firms in US. The bonus will be paid out after the completion of the acquisition process. The Government filing was made on 19th December and the new company is all slated to be called Knight Capital Getco or KCG, as mentioned in the same. The filing also states that if the merger is terminated at any point of time, Getco or Knight needs to pay the other party a whopping sum of $53 million as fee. Getco, incidentally, is a high-frequency trading firm in US.

The Knight Group almost got bankrupt in last August due to one of the most fatal trading errors. The error resulted into a loss of $450 million for the company. Knight agreed to the takeover deal from Getco only on last week. Thomas Joyce is all set to become the executive chairman of the joint company’s board. On the other hand, Daniel Coleman, the Chief Executive Officer of Getco will become both the CEO and President of the joint firm. These small particulars were released through an official statement last week.

According to the filing, the new contract signed with Thomas Joyce will finish on the last day of 2014 or the day when the acquisition is finalized – whichever happens at an earlier time. The cash payment to be given to Joyce is in accordance with the benefits and severance being outlined in a prior signed agreement. This earlier agreement was expected to expire by end of this year.

In the Government filing, Knight mentioned that the particular software which caused the trading malfunction has been removed completely from the currently run trading systems. The software is named as Power Peg, as mentioned in the filing. It is also mentioned in the filing that currently the US Government does not have any pending investigation on the entire trading malfunction issue. According to the regulatory filing, there are almost no chances of an investigation being run on this issue in future either.