--CEO Thomas Joyce awarded no cash bonus for 2012
--Other Knight executives collected some "discretionary"
awards
--August trading error, deal factored into compensation
Senior executives of Knight Capital Group Inc. (KCG) took pay
cuts for 2012 after the firm suffered a $461 million trading loss
that led to its sale to a rival.
Chief Executive Thomas Joyce received no cash bonus last year
and other executives saw their own awards reduced, though some
payments were made for helping the firm navigate the August trading
debacle, according to a regulatory filing.
Knight's trading error on Aug. 1 forced the firm to seek rescue
funding from a group of investors, including Getco LLC, which in
December struck a deal to acquire Knight for $1.4 billion. The deal
is expected to close by July.
Mr. Joyce's overall 2012 pay fell by about 41% to $3.7 million,
according to the filing. His total compensation for 2011 was $6.4
million and included $3.7 million in pay under Knight's nonequity
incentive plan.
The August trading loss, driven by faulty software, resulted in
Knight losing money for 2012. Therefore, executives received no
payout under Knight's standing incentive plan, the filing said.
However, some "discretionary bonuses' were paid in January to
executives outside the firm's regular incentive plan to reward
Knight's retention of customers and employees after the August
debacle.
Chief Financial Officer Steven Bisgay and market-making head
George Sohos received such discretionary awards, which included
cash awards of $1.7 million and $2.9 million, respectively.
In addition to those payments, Mr. Bisgay made $1.5 million in
overall compensation last year, while Mr. Sohos collected $3.4
million. In 2011, Mr. Bisgay was paid $2.9 million overall and Mr.
Sohos was paid $9 million.
Under terms of the Getco acquisition, Mr. Joyce will remain with
the firm as executive chairman and Mr. Bisgay will continue as
financial chief. Mr. Sohos under the new entity will be global head
of client market-making.
Knight shareholders last year voted against the firm's
compensation structure, prompting Knight to hire consulting firm
Pay Governance LLC to advise on pay matters, according to Knight's
filing. While the cash infusion last August would have triggered
some awards related to a change in control of Knight, Messrs.
Joyce, Bisgay and Sohos waived these payments, according to Knight.
A spokesman for Knight declined comment.
Write to Jacob Bunge at jacob.bunge@dowjones.com
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