Well, good morning, everyone. Welcome to Cboe Global Markets annual meeting of stockholders. I'm Ed Tilly, Chairman of the Board, President, and Chief Executive Officer. A copy of the agenda and rules of procedure should be on each chair. The procedure is as follows. First, I'll introduce our board of directors and some of our key executives who are present at this annual meeting. Second, we will vote on the proposals listed in the proxy statement. Third, I will update you on the progress made at Cboe. Fourth, we will take questions from stockholders. Finally, we will report on the preliminary voting results. It's my privilege to introduce my fellow directors. Please stand when I call your name. Frank English, Bill Farrow, Ed Fitzpatrick, Janet Froetscher, Jill Goodman, Rick Palmore, Jamie Parisi, Joe Ratterman, Michael Richter, Jill Sommers, Carole Stone, and Gene Sunshine, our Lead Director. Thank you.
I'll introduce other Cboe senior executives seated at the dais. Please stand as I call your name. Chris Isaacson, Executive Vice President and Chief Operating Officer. Pat Sexton, Executive Vice President, General Counsel, and Corporate Secretary. I'd also like to introduce our independent auditor from Deloitte, represented here by Rich Cafarelli and Liz Gilman. Thank you all. In addition, Susan Hogan, a representative from Computershare, is serving as our independent inspector of elections. I thank you all for being here today. Let us proceed with the formal business of our meeting. Pat Sexton and I have been appointed as proxies for this meeting. Will the corporate secretary now present the required formal documents and affirm that the meeting is duly convened for the transaction of business?
Good morning. Thank you, Ed. I am presenting to the meeting copies of the notice of meeting, the proxy statement, the company's 2018 annual report on Form 10-K, which includes the audited financial statements for the year ended December 31, 2018, and the forms of proxy, together with affidavits of mailing. In addition, the board of directors adopted resolutions providing for the meeting to be held at this time and place, and directing that notice be given. The board fixed March 19, 2019, as the record date for determining persons entitled to notice of and to vote at this meeting. The alphabetical list of stockholders of record as of the record date is available at this meeting for inspection by stockholders.
The Inspector of Elections reported that immediately prior to the commencement of this meeting, more than 90% of the outstanding shares of the company's common stock as of the close of business on the record date were presented in person or represented by proxy. Therefore, a quorum is present. The meeting is duly convened for purposes of transacting such business as may properly come before it. Ed?
All right. Thanks, Pat. I'm presenting to the meeting copies of the notice of the meeting, the proxy statement. Oh, sorry. Wait. Sorry, Pat. We have 3 proposals on which stockholders are voting at this meeting. There will be time for discussion of the proposals after they have been introduced. Each of the matters being brought before this meeting is described in the proxy statement that was mailed to stockholders entitled to vote at this meeting. On each matter, stockholders have 1 vote per share of common stock held at the close of business on March 19, 2019. The first item of business for consideration by stockholders, the election of directors as described in the proxy statement. There are 13 director nominees to be voted at this annual meeting.
The directors elected today will hold office until 2020 annual meeting of stockholders and until their successors are duly elected and qualified. Our bylaws require advance notice to the company of stockholders' intent to nominate persons as directors. No such notice was received. Accordingly, I declare the nominations for directors closed. The second item of business is a non-binding resolution to approve the compensation paid to our executive officers. The final item of business before this meeting is the ratification of the appointment of Deloitte & Touche as our independent registered public accounting firm for 2019 fiscal year. This concludes the introduction of the proposals to be presented at this meeting. At this time, we will be opening the floor for comments on the proposals. You will have the opportunity to vote after any discussion.
Comments on matters other than the proposals shall be held for later in the meeting. For now, we will only respond to questions germane to the proposals being put to a vote. If you would like to speak, please raise your hand, wait to be recognized, and we will come to you with a microphone. Once you are recognized, please state your name and state whether you are an individual stockholder or a representative of a stockholder. We will not address questions from the press or analysts. You may also refer to the rules of procedure for this meeting regarding questions. Please limit any comments to 2 minutes so that other stockholders may have the opportunity to speak if they wish. Let me open up for any questions on the proposals. Okay. Being there are no further discussion, it is 9:05 A.M., and the polls are now open for voting.
The voting is by proxy and written ballot. Ballots are available for each stockholder or proxy holder present and entitled to vote at this meeting. Any stockholder who has previously given his or her proxy need not vote unless he or she desires to revoke the prior proxy and vote by written ballot at this meeting. For those stockholders desiring a ballot, please raise their hands, and we will bring a ballot to you. Okay. No other ballots, no proxies. Since all stockholders have had adequate time to vote, it's 9:06 A.M., and the polls are now closed. While the preliminary ballots and proxies are being tabulated by the Inspector of Elections, I will report on Cboe's accomplishments in 2018 and provide an overview of the company's progress to date in 2019, as well as strategic initiatives going forward.
Following my presentation, we will take questions. Then there will be preliminary findings on the results of the elections. 2018 was another record year at Cboe Global Markets, setting new highs in both revenue and earnings, fueled by increased trading across all our business lines and segments and record volume in our proprietary products. Our strong performance demonstrated our ability to effectively leverage our increased global reach and expanded product line as a result of our acquisition of Bats Global Markets in 2017. Looking to the start of 2019, our first quarter financial results reflected challenging market conditions and difficult comparisons versus 2018's first quarter results. As we have in the past, we used this less volatile period to seed potential future growth in our proprietary index products through increased customer outreach and education efforts.
We are confident we are even better positioned to grow our business. We began to see a resurgence in trading volume last week as market conditions changed and investors turned to Cboe's proprietary products to manage their risk. Regardless of market conditions, we continue to create value for our shareholders. Our 2018 record results, combined with our disciplined expense management and synergy execution, resulted in strong cash flows from operations, allowing Cboe to invest in future growth while returning over $270 million to shareholders in 2018 through share repurchases and dividends. Additionally, in keeping with our goal of consistent and sustainable dividend growth, we raised our quarterly dividend in 2018, as we have each year since our IPO in 2010, bringing our annualized dividend growth rate to 15% over the last eight years. I'll take a few moments here to provide an update on our strategic initiatives.
Cboe's company-wide vision is to lead the industry in defining the markets of today and tomorrow. We execute on this commitment through relentless innovation, leading-edge technology, and seamless trading solutions. For Cboe, innovation is a rigorous, ongoing process. We continually evolve our unique product suite, working closely with customers to create new products and services that meet their changing needs. In 2018, we leveraged our product innovation expertise to tap into the growing corporate bond marketplace, launching the only exchange-listed corporate bond index futures for high-yield corporate bond index IBHY and investment-grade bond index IBIG. We are enthusiastic about our prospects to steadily increase use of these products and look forward to further expanding our presence in this space with additional products going forward.
For investors with longer duration positions, such as insurance companies and pension funds, we expanded our volatility suite with the creation of the Cboe One-Year Volatility Index. We also expanded our suite of products tied to S&P Dow Jones Indices earlier this year with the rollout of options on 11 select sector indices, providing investors across the globe new ways to incorporate U.S. sector investing strategies into their portfolios. This product launch was in response to client feedback coming out of our European Risk Management Conference. We expect these options to have particular utility for investors seeking an alternative to options on ETFs. That is including European customers seeking an alternative due to certain European regulations. Turning now to our progress on the migration of Cboe exchanges onto Bats proprietary technology, which we believe will maximize our value proposition for customers and shareholders and power our company's ongoing growth.
We're redefining exchange technology with systems and tools that power investors to trade with greater efficiency and precision. Last year, we completed the critical integrations of both the CFE, our futures exchange, and C2 options exchange onto Bats' leading-edge technology. In addition, we completed two significant technology enhancements in 2018 in advance of migrating our Cboe Options Exchange, targeted for October seventh. The migration of S&P 500 index options to hybrid trading, which we successfully completed in April of 2018, and the introduction of new trading floor terminals, which we completed in December of 2018. We are now well into our final migration of the Cboe Exchange C1, moving us closer to our ultimate goal of providing customers with a unified world-class trading experience across all our equities, options, and futures markets.
We remain keenly focused on the significant opportunity we see to further grow the customer base for our proprietary products. The demand for education around our proprietary products has never been greater, and we have revamped our sales and marketing teams to better respond to this need in key market segments and geographies. In the interest of better serving our customers, we have aligned our sales and coverage teams across regions and products to promote greater collaboration and cross-selling. Additionally, we developed a buy-side sales team focused on growing usage of our proprietary products in the insurance, asset manager, and pension fund communities. While we believe our greatest opportunity for growth remains in the domestic market, we recognize that investors around the globe have U.S. exposure. We continue to make inroads into new markets and to enhance the customer experience in regions where we already have a greater foothold.
We are exploring new markets such as the Middle East, Scandinavia, and Asia, while also pursuing jurisdictional approval in more established markets, including Switzerland and Israel. Our European equities business entered 2018 well-prepared to address customer needs under MiFID II, adding new products and services intended to help our customers and grow our European business in the midst of changing regulatory landscape. We've seen rapid adoption of two such offerings, our Periodic Auctions book and our Large in Scale block trading platform. Our market share remained strong in first quarter 2019, and we retained our number one position in the European equities market. Our primary focus this year has been finalizing our plans to operate in a post-Brexit environment. In March, we received authorization from the Dutch Ministry of Finance to operate a new venue in the Netherlands.
Given the recent political developments and the extension of the Brexit deadline until the end of October 2019, we now plan to launch the new venue later this year. We continue to work with our regulators and customers on launch timing. Looking forward, our cash and capital positions remain strong, and we are confident that the actions we are taking to implement our strategic initiatives will drive free cash flow and create long-term sustainable value to our shareholders as we continue to focus on defining markets globally, growing our proprietary index products, growing our recurring revenue streams, disciplined expense management to leverage the scale of our business, completing our technology integration, and delivering on our synergy targets, maintaining balance sheet flexibility, investing in growth of our business, and returning capital to shareholders through quarterly dividends and share repurchases.
This is an exciting time for Cboe Global Markets, and we could not be where we are without the guidance of our board of directors, our associates' unwavering commitment to our vision, and our customers' dedication and support, and most of all, the continued trust of you, our valued shareholders. I am grateful for your ongoing confidence in Cboe and look forward to all we can accomplish in the future as we continue to define markets globally to deliver value for our customers and shareholders. Well, this concludes my formal presentation. Any stockholder who would like to ask a question, please raise your hand, wait to be recognized, and we will come to you with a microphone. Once you're recognized, please state your name and state whether you're an individual stockholder or representative of a stockholder. We will not address questions from the press or analysts.
You may also refer to the rules of procedure for this meeting regarding questions. In the interest of time, please limit your question to two minutes. Any questions? Hi. One second. This is supposed to be the fun part, think about your questions, Norm.
Chuck Swarby, I'm a stockholder. Could you comment on potential acquisitions that you've probably looked to in the past recently and maybe-
Sure
where we stand there?
Absolutely. The reference, for those of you who've been following along on the quarterly calls, first quarter's earnings call, we did have a reference to a rumor and an article written that had us acquiring one of our partners. Currently, it was a reference to Bats. We have made no formal comments regarding that company, but in broader sense of M&A, the comments we've made public is we find ourselves today at a near completion of the migration that we set out on an agenda that Chris Isaacson and his team had put forth, even in diligence.
We find ourselves in a position looking at the end of that migration, fully integrated from our business and senior management team, ready now with a flexible balance sheet, able to look at the world completely differently than we would have a year ago, with so much migration and integration still left ahead of us. While there's nothing imminent, no announcement today, or one in the next days, weeks, we are now looking at opportunity as we had prior to the Bats acquisition, which is clear eyes and a global look at how we can expand through M&A. Without having to do so, I want to be really clear, we don't need to engage in M&A, but we're in a different position now than we would've been a year ago. Other questions?
I'm Marty O'Connell, I'm an individual shareholder, and I'm the chairman of the Cboe. It's my understanding that last week the officer, Bill Specht, our vice president, took a retirement supplement, and I think it's worked out here. Bill, who's been here for the past 25 years, done consistently wonderful work and done it with dignity, while also occasionally some humor.
Love the recognition. I wish Bill were here. I don't think we've spent more time saying goodbye to any senior leader here at Cboe. He's been recognized at least six different occasions. I think all of them due. He has really made an impact here, and we're going to miss him. The team is ready. What he's left behind and prepared his team for the future, we're ready to go. Thank you for your continued service as well. State your name and whether or not you're a shareholder, sir.
My name is Bill.
It's working on the
Go ahead.
Hello? No.
It's working.
Over there.
Oh, yeah? My name is Bill Brodsky. I own at least 100 shares. I have a question for Gene Sunshine.
Oh, I love that.
As the new lead director, because I'm personally thrilled that Gene is the new lead director. Been lead director about a year. Corporate governance is very important, and we as stockholders look to the board to maintain oversight on what I know is a very good management team, but nevertheless important to have that kind of oversight. I'm just interested, Gene, in your reflections of being lead director for the past year, and how you feel the board has integrated itself with new directors coming from the outside.
This is the first time I've ever been asked a question. I've got to figure out how to get the microphone on.
I have another one coming.
No. Well, judge how I do with the first one. Bill is absolutely right. There are a host of corporate governance issues before us as a board, I would argue more and more, and maybe certainly more than when you were in the top spot. It's just adding to, every year, what our responsibilities are. One of the chief roles of the lead director is to make sure that with respect to all of the requirements in governance, whether it's from the SEC or from other places, that we dutifully comply, and not just to the letter of the law, so to speak, but in the spirit that these requirements have been put in place. There's an increasing number of issues out there with respect to governance and ideas of governance coming from shareholders, from large shareholders, from individual shareholders.
The press is very much interested in all of these issues, the board has a responsibility and wants to do it really well of evaluating those things that make sense, those things that don't, those things that require activity and study earlier on rather than later on, and so forth. They kind of cut across a number of our committees, whether it's nominations and governance or whether it's compensation or whether it's audit and so forth. We spend time within our committee structure, which Bill, you're very familiar with, talking about these issues and learning about them and so forth. I think we can expect more of this, not only as a board, but you as shareholders.
As I say, some of these things about governance and constitution of who's on the boards and that sort of thing emanates from shareholders, this is kind of a two-way street. More than when you were here, and we intend to continue to spend whatever time is necessary on these important kinds of things.
That's it.
Sure.
Other questions? Jeff. Oh, never mind, Jeff. Well, Jeff's, I guess.
Good morning, Ed. My name is Jeffrey Gershon. Could you add some color as to the VIX legal matter? Number one. Also, your presentation about how it was going to be expanding more globally. Could you also explain how you could derive some synergies from our vast acquisition and process moving forward expense-wise on this large endeavor?
Sure. Let me take the second question first. As far as the synergies, we are executing, and each quarter Brian brings the shareholders up to date on that very execution of the synergies. As far as the global reach, and us being able to hit new opportunities, environments, I think our investment in Andy Lowenthal, who you're sitting next to, and Bryan Harkins, who co-head that effort, are very much looking for an even larger presence in Europe, really leveraging the team that Mark Hemsley has there. Globally, that is part of the growth plan. In my prepared remarks, you'll recall I mentioned the domestic opportunity's still the greatest. We still have an under-penetrated proprietary product set. Each time the market is tested, we're reinforced with that opinion that the globe looks here to hedge, both in our U.S. trading hours or our global trading hours.
Plenty of opportunity to take advantage of the broader team, realize the synergies that we had set out in the early days in identifying those, and continuing to execute on them. As for the second part of your question on the VIX litigation specifically, we still believe these allegations are without merit. We're waiting for a ruling on the opinion from the court on Cboe's motion to dismiss. That could be any day, but we are eagerly awaiting a ruling on that motion to dismiss. Nothing new, then, other than we maintain our position. Jeff.
Jeff Kaufman. Curious as to what the board's commitment is to open outcry long term. That's one question. Number two, is this building for sale? I don't mean every building's for sale, but is this building for sale?
We'll entertain your bid, Jeff. Publicly, we have said that we're interested in other locations, primarily that is in the city of Chicago, in close proximity to our existing footprint. That is mindful of the disruption of the Chicago team, and first and foremost, the continuation of the operations, and the incredible pool of liquidity on our trading floor. The board isn't making a commitment to open outcry. The management team recognizes that our customers are still demanding that we maintain open outcry. It is with that information that we are going to go forward in a new location, potentially in Chicago, and go forward with the trading floor at this point. As that demand continues, we are reinforced each and every spike in volatility that the utility of that floor is still held very high from our customers' perspective.
The team is recommending that we continue with open outcry. We will update the board on our progress on the building and include your bid this afternoon after this meeting. Thank you, Jeff. Good question. Other questions? Mr. Sexton.
Thank you, Ed. The preliminary results from the inspector of elections indicate that more than 96% of the shares of the company's common stock cast on this matter have been voted for the election of each of the nominees named in the proxy statement that are standing for election at this annual meeting. Accordingly, each of the nominees has been elected to serve as a director. Congratulations. More than 95% of the shares of the company's common stock cast on this matter have been voted in favor of the non-binding resolution to approve the compensation paid to our executive officers. Therefore, stockholders have approved this resolution. More than 96% of the shares of the company's common stock represented at this meeting have been voted in favor of the ratification of the appointment of Deloitte & Touche as the company's independent registered accounting firm for the 2019 fiscal year.
Accordingly, Deloitte is so ratified.
Thank you, Pat. This concludes our meeting, and the annual meeting is adjourned.