Changing of the guard: Mike Cahill talks about new CEO post at OCC, and how things aren’t really changing
Yesterday, Mike Cahill was named as the next CEO of the OCC, (formerly Options Clearing Corporation. The move marks a historical changing of the guard at OCC. Cahill, currently president and COO at OCC, will take the post on January 1, 2014 and succeeds Wayne Luthringshausen, who has held the chairman and CEO posts for 40 years and is retiring at year end. The executive chairman’s position will be separated from the CEO post, and a search is still ongoing for that person.
JLN editor-in-chief Jim Kharouf spoke with Cahill about the new post and what is next for the OCC.
Q: This announcement has been a long time coming. Now that you’re officially named as the next CEO, what are your thoughts?
A: I’ve worked here at OCC for more than 30 years and have been president for the last 11 years, so in a lot of ways it’s part of the evolution. I’ve been in a position to be involved in all the major decisions here for many years. So this is part of the ongoing process we have here.
The biggest change we have with this transition is, we’ve been working for the founder. Wayne designed and built the clearing house and very successfully managed it. So one issue we’ll be dealing with is the fact that we are so closely aligned or connected to Wayne. It’s an interesting position to be in as the person who succeeds the person who directly created and managed it all these years.
Q: What are your thought on splitting the CEO and chairman’s role on OCC?
A: The board has taken its time to consider best practices. And OCC has taken best practices very seriously. We have a process to identify talent in every role and have identified successors. It’s the type of thing that is fundamental to what we do on a daily basis – we clear options and futures and want everyone to be absolutely comfortable with the expectation that OCC is going to perform regardless of what happens.
The topic of the CEO and chairman position is routinely on the front pages of financial publications. The board decided that the appropriate decision was to split Wayne’s job. I feel very humbled and in some ways gratified that the board named me at CEO elect. We’ll continue to do business here business as usual, clearing the 17 markets we clear with another coming soon with ISE’s Gemini.
At some point, when appropriate, the executive chairman will be announced when the board has completed its work there.
Q: What is the impact on OCC?
A: Today, as president and COO, I have direct oversight of the operations side of OCC. Wayne currently has oversight of everything, and has direct visibility into our control functions such as head of internal audits and head of compliance. They report directly to Wayne and that is a model found at most financial services and banking organizations today.
So Wayne spends a lot of time dealing with board issues and strategic issues, but also the control functions. I’m focused on the business functions, which to a large extent as president and COO, I’ll continue to do as CEO. But I’ll also look at the business from a more strategic angle as well.
Q: Have you determined what will happen with your positions as president and COO?
A: No, we haven’t. This is something we’ll review as we go. We have a very solid pipeline of talent here.
Q: With Gina McFadden retiring as head of the Options Industry Council, what changes do you see happening there?
At OCC, we’ve had several recent retirements. Bill Navin retired in January last year and was replaced by Jim Brown. We made that transition seamlessly. Frank Larocca, our CFO retired earlier this year after nearly 40 years here and we made that transition. Gina is retiring. I’m absolutely thrilled for all of them. They are wonderful friends and colleagues. But we worked on succession and believe we have a deep pipeline there. For right now with Gina, it will be status quo.
Most organizations go through these transitions year after year. But OCC had a very stable management group for a very long time. We have qualified people in the cue ready to step up. And every once in a while, we bring on somebody new.
Q: It sounds like the ship is sailing well and is on course. You have personnel changes but it sounds pretty much, steady as she goes for OCC.
A: It may seem like nothing changes but we are evolving, yet I would say there is nothing dramatic coming. Part of the message the board is sending is that the OCC is a successful organization, it’s on the right track and they want to ensure that continues.
The exchanges, key broker-dealers and FCMs are our major constituencies that drive what they want OCC to be. We clear the securities options business in the US. We are also looking to do OTC clearing in the S&P products. But we’re not out looking to expand into other asset classes unless it’s appropriate and consistent with the desires of our constituencies.
We get a lot of questions about expanding beyond the US. But the listed options product in the US has a global reach. And those constituencies, exchanges and clearing members, are almost all multinational organizations. Our shareholder exchanges all have international reach: NYSE Euronext, ISE, Nasdaq-OMX are multinational companies and operate across the world. If they have an initiative they would like us to support, we’ll be there. But as an organization, OCC will not be getting out in front of its constituents.