Cboe Global Markets Appoints Craig Donohue as New CEO
Cboe Global Markets has appointed Craig Donohue as its new chief executive officer, marking a strategic shift towards a more Chicago-centered leadership. This decision aligns with the company’s roots, as the “C” in Cboe stands for Chicago. Acting CEO Frederic Tomcyzk emphasized earlier this year the importance of having a strong presence in the city, stating that the next leader must be a fixture along LaSalle Street.
Donohue, who previously served as chairman of the Chicago-based Options Clearing Corp. and as CEO of the Chicago Mercantile Exchange (CME), was confirmed for the role in May. His extensive background in the financial markets has led Tomcyzk to express confidence in Donohue’s ability to elevate Cboe to new heights. Yet, the company faces challenges, particularly with its relatively small size compared to competitors like CME and the Intercontinental Exchange (ICE).
During a conference call with investors on October 31, 2023, Donohue outlined a bold vision for Cboe’s future. He announced plans to streamline the company’s global operations by putting its Australian and Canadian divisions up for sale, despite having invested significant resources in those markets. Instead, Donohue aims to pursue opportunities in event and prediction markets, as well as in trading digital assets, including cryptocurrency. He highlighted the potential for extraordinary growth in these areas, indicating that they can be accessed electronically from Chicago without needing a local presence.
In contrast to the long-term operations in Sydney and Toronto, this pivot signifies a strategic focus on “organic” growth rather than mergers and acquisitions, which characterized his previous tenure at CME. This marks a significant change for Cboe, which has historically been an emblematic Chicago company, originating in the 1970s as an offshoot of the Chicago Board of Trade.
Historically, Cboe has had a tumultuous journey, including surviving the 1987 stock market crash that nearly shuttered its operations. Over the years, it has evolved from trading options primarily over-the-counter in New York to becoming a leader in the options market, with innovations such as the launch of the VIX volatility contract, a crucial market benchmark.
In recent years, Cboe has also made strides to reinforce its Chicago roots. In 2019, the company announced plans to move its headquarters to the Old Post Office in Chicago and even reintroduced an open-outcry trading floor, a nostalgic nod to its past. This move revitalized a once-quiet business district, demonstrating a commitment to remaining in the city despite challenges like rising crime and proposed corporate taxes from local government.
As Cboe navigates these waters, the leadership of Donohue will be critical in determining the company’s trajectory. Chicago’s business community is watching closely, hoping that Cboe can successfully sidestep potential pitfalls and continue to prosper in an evolving financial landscape. The stakes are high, not just for Cboe, but for the broader Chicago economy that benefits from its presence.
