FXCM (Global Brokerage) amends report: Drew Niv still Interim CEO, to pocket $3.2m in case of contract termination

Maria Nikolova

Certain CEO duties are now fulfilled by David Sakhai, Chief Operating Officer, and Kenneth Grossman, a Managing Director, as well as by other members of senior management.

Global Brokerage Inc (NASDAQ:GLBR), formerly known as FXCM Inc, has filed an amendment to its Annual Report 2016, concerning corporate governance and executive compensation.

The new document sheds some light on how the governance structure of the publicly listed company has been reshaped following the February 2017 events.

Whereas the previous report did not say much about Drew Niv’s current role at the company, following his resignation as Chairman and CEO, the amended report states explicitly that Mr. Niv currently serves as Interim Chief Executive Officer. While he is in this role, certain duties of the CEO are fulfilled by David Sakhai, Chief Operating Officer, and Kenneth Grossman, a Managing Director, and other members of senior management.

Mr Niv has abandoned his role as a director at Forex Capital Markets Limited (FXCM UK), as well as his director role at FXCM UK Merger Limited. Also, effective March 9, 2017, Drew Niv is no longer a listed principal of Forex Capital Markets LLC (FXCM US), according to data from the United States National Futures Association (NFA).

So, what will happen if Mr Niv abandons his role at Global Brokerage Inc too?

According to the amended report, the answer to the question hinges on the causes for the possible move. Termination for cause or resignation without good reason will leave him with nothing. However, termination without cause or resignation for good reason will result in cash severance payments of $3.2 million.

For that matter, let’s mention that Drew Niv pocketed about $1.62 million as a CEO of FXCM Inc in 2016 – this includes a guaranteed cash payment in lieu of base salary, non-equity incentive plan compensation and other forms of compensation.

Family matters

The amended report shows that relatives of FXCM Inc (Global Brokerage Inc) directors and executives received a total of approximately $1,439,555 of compensations in the year to December 31, 2016.

Below are the details:

  • Ornit Niv (ex-CEO of Forex Capital Markets LLC, sister of Drew Niv): $620,000.08;
  • Matthew Navie (institutional sales representative, brother-in-law of David Sakhai): $148,784.94;
  • Leya Yusupov (senior dealer, sister of Eduard Yusupov): $178,499.92;
  • Shirin Yusupov (reconciliation department, sister of Eduard Yusupov): $146,625.08;
  • Debra Blajchman (payroll department, sister of Kenneth Grossman): $215,600.88;
  • Elisheva Rutenberg (programming department, sister-in-law of Kenneth Grossman): $130,044.

This list is, of course, not about naming and shaming. However, we’d be curious to see whether the planned restructuring at FXCM, following the February 2017 events, which includes the layoffs of 150 employees, will affect anyone of the people mentioned above.

Meanwhile, the legal actions against Global Brokerage Inc (FXCM Inc) are gathering pace in US courts. The U.S. District Court for the Southern District of New York will on May 5, 2017, review motions to consolidate five related actions: Khoury v. FXCM Inc. (No. 17-cv-916), Zhao v. FXCM Inc. (No. 17-cv-955), Blinn v. FXCM Inc. (No. 17-cv-1028), Raul v. Sakhai (No. 17-cv-2035), and 683 Capital Partners, LP v. Global Brokerage, Inc. (No. 17-cv-2506) against the broker. This may lead to the creation of a “mega lawsuit” against FXCM.

In its annual report for 2016, FXCM stated it was aware of three similar lawsuits against it with regards to February 2017 events. The company stressed it would vigorously defend itself against these actions.

Security Ownership

A number of FinanceFeeds readers have approached us, asking for information with regards to Drew Niv’s shareholding in FXCM Inc (now Global Brokerage Inc). The amended 2016 annual report shows that as of April 12, 2017, Mr Niv’s security ownership in Global Brokerage Inc comprises:

  • 40,000 shares of Class A common stock held individually by Mr. Niv;
  • 768,047 Holdings Units and one share of Class B common stock owned individually by Mr. Niv;
  • 37,221 shares of Class A common stock held by a trust for the benefit of Mr. Niv’s family, for which Mr. Niv’s wife serves as trustee;
  • 37,221 shares of Class A common stock held by trusts over which Mr. Niv is an investment advisor.

His combined voting power is 10.70%.

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