At The Motley Fool, and particularly in Stock Advisor, we spend quite a bit of time evaluating management. That's why Jim Mueller and I traveled north to tony Greenwich, Conn., to interview Thomas Peterffy, CEO and founder of Interactive Brokers (NYSEMKT:IBKR).
The full audio recording and transcript of the interview is available only to Stock Advisor members. However, I can share my impressions and a few key tidbits. In short, I was quite impressed by Peterffy. Here are four reasons why.
1. Actively engaged in the business
When we arrived, Peterffy wasn't ensconced in a corner office or huddling in a back room with other top managers. He was out on the open floor, talking to one of his programmers. During the interview, he quoted the average client commission charge from last month down to the penny. He's 69 years old and already worth billions, so it would be understandable if he wanted to disengage a bit. But I got the distinct impression that he is still heavily involved in the details of the business.
2. Sticking to the strategy
The success of Interactive Brokers has been driven by its technological prowess and ability to automate trading to drive down costs. In the interview, Peterffy explained that he still considers himself a programmer at heart. And while Interactive Brokers is part of the financial industry, he considers it a technology business. When I asked about potentially simplifying the Interactive Brokers trading platform to appeal to a wider market, he smiled and shook his head. No -- Interactive Brokers will remain focused on catering to sophisticated investors. As he said, "You have to focus on a few things and do them very well." In other words, he's sticking to the strategy that has worked.
3. Thinking long-term
When I asked Peterffy about the key operational metrics that he tracks, the first thing he mentioned was customer profitability. He wants to make his customers more profitable by driving down costs and offering excellent trade execution. And I don't think he's doing that for altruistic reasons. He understands that, over the long term, Interactive Brokers will benefit by helping its customers succeed. And it's natural for Peterffy to be thinking long-term. He's by far the largest investor in the overall company.
4. Being a straight-shooter
Before the interview, Peterffy's assistant showed us to his office, which is right off the open office floor, and he joined us a few minutes later. He was not accompanied by any flunkies from public relations or investor relations. After a few minutes of small talk, he asked us to sit down and begin the interview. He politely volunteered to answer any and all questions with no script. We just gave him a microphone, I asked questions, and he answered them all with no hesitation. Unfortunately, many CEOs have a tendency to answer investor questions with rambling bits of corporate doublespeak. So I appreciated Peterffy's directness and candor.
Foolish bottom line
I came away from the meeting impressed by Peterffy. Admittedly, these are just my impressions from a short meeting. Judging management is a notoriously difficult task. But this meeting provided me with another useful data point, which, along with my analysis of Peterffy's track record and incentives, gives me confidence in the leadership at Interactive Brokers.
Brendan Mathews has no position in any stocks mentioned. The Motley Fool recommends Interactive Brokers. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.