CME CME Group Inc

   By Allison Prang 
 

CME Group Inc. is asking stockholders to vote on whether to terminate the rights of Class B shareholders' to elect six of CME's 20 directors.

Currently, CME's Class B shareholders are allowed to elect between one and three directors depending on what type of Class B shares they own. There are three types of Class B shares. B-1 gets to elect three directors, B-2 gets to elect two directors and B-3 gets to elect one director.

The vote will take place during a special meeting scheduled for Nov. 5. Investors will have to have owned their shares by Sept. 6 to be able to vote at the meeting.

CME said the structure was put in place to ensure its board included representation of its market participants as the exchange shifted from a member organization to a public company and one that relied on floor trading to electronic trading.

It said in a regulatory filing that maintaining the complex structure is no longer necessary and that having "a single class of directors would improve our corporate governance."

If shareholders approve CME's proposal, Class B shareholders will receive a per-share consideration. The specific amount will be determined by what type of Class B shares they own. The CME said the total payout could be as much $10 million.

It is also possible that the proposal is only partially approved in which case the overall payout to shareholders would be smaller.

CME also said in its filing that it will downsize its board to 15 directors by its 2021 annual meeting if the proposal to end Class B shareholders' voting rights is approved. The company said a smaller board would cut $1 million in costs each year.

The company is planning to add Michael Spencer -- the current CEO of NEX Group Inc., which CME announced back in May it was buying -- to its board.

Shares of the company fell 0.5% Tuesday.

Write to Allison Prang at allison.prang@wsj.com

(END) Dow Jones Newswires

September 11, 2018 14:49 ET (18:49 GMT)

CME (NASDAQ:CME)
Historical Stock Chart
From Jun 2024 to Jul 2024

CME (NASDAQ:CME)
Historical Stock Chart
From Jul 2023 to Jul 2024