NEW YORK Dec 26 Thomas Joyce, whose position as chairman and chief executive of Knight Capital Group was on the line as the company negotiated a takeover earlier this month, will be paid $7.5 million to ensure he remains with the stock-trading company, according to a regulatory filing.
The payment will be made to Joyce when Knight is acquired by Getco Holding Co, a high-frequency trading firm that beat out a competitor to acquire Knight for about $1.4 billion.
The payment is aimed at ensuring that Joyce remains "through at least the consummation of the proposed transactions" with Getco, it said.
The merger, which was announced on Dec. 19, is expected to close in late April or early May.
Knight's board is making the payment to ensure Joyce's "continued and dedicated service to the company," Knight's chief financial officer, Steven Bisgay, wrote on behalf of the board in a letter filed with the Securities and Exchange Commission on Christmas Eve.
Joyce's contract with Knight had been scheduled to terminate at year-end. He initially had been scheduled to become nonexecutive chairman by Getco. Instead, he is to survive under the merger agreement as executive chairman of the combined firm.
Getco leader Daniel Coleman will be chief executive of the as-yet unnamed new company.
Knight's principal business is making markets in hundreds of large- and small-cap stocks for other brokerage firms.
In a separate filing on Wednesday, TD Ameritrade Holding Corp said it has agreed to support the Getco acquisition. The discount brokerage was one of six firms that helped rescue Knight in August following a nearly fatal software glitch.
TD Ameritrade owns about 26 million Knight shares, or about 7.3 percent of the firm's outstanding common stock assuming full conversion of the convertible shares issued to the rescuing firms. TD Ameritrade's chief executive, Fred Tomczyk, sits on the Knight board that approved the Getco takeover.
Other firms that received convertible shares and are expected to approve the deal are Getco itself, Jefferies Group Inc, which is financing the takeover, Blackstone Group LP, Stifel Financial and Stephens Inc.