On the other expenses, where it’s just kind of keeping the lights on type of expenses, again, we were fortunate last year 2022. We had some favorable foreign exchange adjustments. So, the year-over-year increase there is a lot less than it looks on a constant dollar basis. And again, more of the same, I would anticipate a couple of percent. And again, we monitor those very closely, whether it’s space or whether it’s professional fees. Professional fees are up slightly this year in addition to the foreign exchange adjustments. And then on comp, look, I think – we have emerged in the past year or 2 years from multiyear integrations of large acquisitions. Our headcount has remained relatively steady and what that masks is we have really restocked the talent pool over the past 2 years.
We really, I think upgraded our employee base in terms of talent, in terms of capabilities. And we have always held ourselves out as not a payout shop, and that’s the way it’s going to remain. So, I would say our comp ratio coming in, in the mid-20s this year from a cash standpoint, we are very comfortable with that, right. We think it’s what we need to do to adequately pay people. I think we did hire quite a lot of people in the past couple of years. I think we were – we did it in a disciplined way. So, I think we are in a fortunate position to continue recruiting. And again, I have no issue with our comp ratio where it is. If you look back a couple of years, it was in the mid-teens, right. So, I think we are going to be – if you want to look at that as kind of the pendulum from boom times to more less subdued markets, then I think that’s kind of – we are very happy with that.
Dan Fannon: Thank you.
Douglas Cifu: Thank you, Dan.
Operator: The next question comes from Alex Blostein of Goldman Sachs. Please go ahead. Your line is open.
Alex Blostein: Hi guys. Good morning. A quick financial question for you, so the leverage ratio is back at around 3x debt-to-EBITDA, so obviously, it’s been not the best trading environment for the business so that will bounce around. But how are you feeling about this creeping back up here with respect to your ability to continue share repurchases at this kind of pace if the environment kind of continues to be what it’s been.
Joseph Molluso: I think we provided a pretty detailed analysis of our ability to repurchase shares at different levels of trading income. So, I think there is really two separate questions there, right, is we are going to use our excess cash to repurchase our shares, absent any other alternative for them, right. And people ask us all the time, are we looking at other acquisitions, the answer is we look at everything, but we haven’t come across anything that represents close to the value of repurchasing our shares at this level. So, I think to the extent we have the dollar of excess cash, that’s how it’s going to be deployed. And that’s after, as I have said, after we pay our expenses, pay our people, invest in our growth initiatives, etcetera.
So, I think that’s kind of one part of the question. On the leverage ratio, I don’t really feel like we are worried about whether it’s 3x, 3.25x, 2.5x. We reset our debt. We were very fortunate and very happy that we did this in early 2022 when we had – we are in a different interest rate environment, obviously. We have got swaps on our debt. And we always look at it and try to keep that quantum as cheap as possible. We want to optimize that from a cost standpoint. But the question that we ask ourselves is, does the rate environment change the quantum of debt that we are comfortable with. And the answer is not really. I mean we will always look to make it as cheap as possible. But we are pretty comfortable with that total level.
Alex Blostein: Got it. Great. That makes sense.
Joseph Molluso: Yes.
Douglas Cifu: Thank you.
Operator: Thank you. The next question comes from Michael Cyprys of Morgan Stanley. Please go ahead. Your line is open.
Michael Cyprys: Good morning and thank you for taking the question. Wanted to drill down on index options to some of your earlier commentary. Just curious how you see the evolution of the index option marketplace here, the evolution of the different customer types that are emerging use cases? And to what extent do you view this as sustainable just in terms of this level of activity and then also related to that, to what extent are you seeing these index options like SPX being used as a replacement for, say, many features, many options on the future? Just curious how you are seeing that all evolve.
Douglas Cifu: Yes, it’s a great question. It’s been sort of fascinating to watch. And I think you kind of nailed it, which is – and again, I don’t – we get a long way with all exchanges and people are creating products, I am not trying to disparage any of the product or whatnot, because we are sort of the Switzerland of liquidity provisioning. So, we encourage innovation and whatnot. But I think people have looked at that product and said, look, it’s a really good way to manage volatility in a good way, if you want to be speculative on volatility, it provides you the innate leverage, if you will, of the options market, and it’s affordable and it’s very acceptable. So, just it is a complementary product, if you will, to what you see in futures and equities world by-products, etcetera.
And I think it complements them very well. So, it has really resonated with the marketplace. I think it adds flexibility to all strikes of traders, investors. So clearly, institutional investors are now using it as a product. There is a huge debate going on between JPMorgan and Goldman Sachs as to whether it’s retail or not, I am not going to get involved in that, let the big guys fight that out. At the end of the day, again, we don’t care because we service both sides of the continuum of the spectrum of traders and users of that product. So, we like the product a lot. We think it expands the market and provides access to investors that want to engage and express an interest in either volatility or use it to hedge the rest of the portfolio.
So, I think it’s been a really healthy development for the marketplace. And obviously, the options market is incredibly competitive from a venue perspective. At last count, I believe we have 17 options exchanges. I could be wrong. Maybe I missed the 18th. So, there is a need for market makers to provide interconnectivity, if you will, between those various venues. That’s not the easiest circus trick in the world to pull off because of the difference in technology, but that’s fantastic for Virtu. That’s kind of like Virtu 101, which is understanding products, understanding how they interact and relates to related products, understanding the DNA, if you will, we call that market structure 101 of how all these venues work making that work within our technology plan and then providing a service in the form of an attractive price that we can distribute through these various venues.
So, we continue to be very excited about how that has evolved in the United States. And as I mentioned earlier, there are similar like global index products in other countries that we have found attractive as well that we can approach and provide value to with our scope and scale, namely India – right now, namely India and Japan, but good observation. Thank you for the question, Michael.
Michael Cyprys: Great. Thank you.
Operator: Thank you. We currently have no further questions. So, this concludes today’s conference call. Thank you all for joining. You may now disconnect your lines.
Douglas Cifu: Thank you everyone.
