Dec. 26 (Bloomberg) -- Thomas Joyce, the chief executive officer of Knight Capital Group Inc., is poised to collect a $7.5 million retention payment tied to Getco LLC’s acquisition of the market-making firm, according to a government filing.
The bonus would be due when Getco, the Chicago-based high-frequency trading firm, completes its purchase of Knight, based on the Dec. 19 filing. The new company will be called KCG, for Knight Capital Getco, and if the merger is terminated, Knight or Getco may be required to pay the other party a $53 million fee, the companies said.
Knight, which almost went bankrupt in August after a trading error cost the Jersey City, New Jersey-based company more than $450 million, agreed to be taken over by Getco last week. Joyce will be executive chairman of the combined company’s board, while Getco CEO Daniel Coleman will be president and chief executive of the new firm, based on a statement last week.
The new employment contract with Joyce will end when the acquisition is finalized or the last day of 2014, whichever is sooner, the filing said. The cash payment to Joyce is in lieu of severance and benefits outlined in a previous agreement that was due to expire at the end of this month.
The software that caused Knight’s trading malfunction was called Power Peg and has been removed from its systems, the company said in the filing. There is currently no pending or “threatened investigation” by a government entity as a result of the Aug. 1 trading mistake, the filing said.
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