11.12.2025
Following a three-and-a-half-week trial, the High Court has ruled in favour of Mr. Gagliardi in a comprehensive 154-page judgment in Robert Gagliardi v Evolution Capital Management LLC [2025] EWHC 3214 (Comm). Mr. Justice Calver found that Mr. Gagliardi was contractually entitled to a $5.385 million discretionary bonus for his hugely profitable trading in 2021, which Evolution Capital Management LLC (“ECM”) had unlawfully failed to pay. The Court dismissed ECM’s counterclaim in its entirety.
Key findings
Construction of the employment contract
The Court’s decision ultimately turned on the construction of Mr. Gagliardi’s contract with ECM. Mr. Justice Calver considered the text and circumstances of the contract in detail and found that the contract was unambiguous: the only factor ECM was contractually entitled to take into account in deciding the amount of Mr. Gagliardi’s discretionary bonus was the trading revenue he had generated. If profit was generated, then Mr. Gagliardi was entitled to a Discretionary Bonus in the range of 10-15% of that profit.
The Judge rejected ECM’s argument that it was entitled to pay Mr. Gagliardi nothing in the exercise of its contractual discretion, and found that no reasonable employer in ECM’s position, when assessing Mr. Gagliardi’s trading performance, would have awarded him no bonus. In doing so ECM breached its obligation not to act irrationally, arbitrarily, or capriciously.
Moreover, although the contractual wording only entitled Mr. Gagliardi to a bonus for his trading for what was known as the “EARMF” fund, which commenced trading only from August 2021, ECM was nevertheless estopped from contending the profit he generated for ECM before then could not be taken into account. The Judge found “it would be unconscionable to allow ECM to benefit from that trading, and yet, inconsistently, deprive Mr. Gagliardi of the concomitant discretionary bonus due in respect of the PL generated by his trading.”
Mr. Gagliardi’s bonus should have been US$5.385 million
Mr. Justice Calver found that, between May and December 2021, Mr. Gagliardi in fact contributed 97% of the trading revenue and US$35.9 million in net profits for the relevant funds. He therefore should have been awarded a bonus at the very top end of the contractual range.
On that basis, Mr. Gagliardi should have been paid a discretionary bonus of US$5.385 million. The Court awarded Mr. Gagliardi that sum in damages for ECM’s breach of contract, along with a substantial award of interest.
ECM’s after-the-fact justifications had no merit
ECM in its defence had raised a raft of complaints against Mr. Gagliardi as reasons not to pay the discretionary bonus which were dismissed by the Court as “meritless, post hoc justifications.” The Court found that, on the evidence, these factors had not been considered as serious issues at the time, nor were they material to ECM’s decision not to pay Mr Gagliardi’s discretionary bonus.
To the contrary, the Court found that, at the time, ECM saw Mr. Gagliardi as a highly skilled “money making machine” and a “prize asset.” They continued to encourage and benefit from his hugely profitable trading throughout 2021. The judgment was clear that if any of the factors ECM now raised as justifications for not paying the bonus had genuinely been considered by ECM when it made that decision, it had been obliged to raise them with Mr Gagliardi as a matter of fairness. It had not done so.
ECM’s counterclaim dismissed
The Court dismissed ECM’s counterclaim which sought to recover the salary and IPO bonus paid to Mr. Gagliardi. ECM had made serious but unparticularised allegations of wrongdoing against Mr. Gagliardi, which Calver J rejected as being objectionable, abusive, hopelessly vague, and inadequately pleaded. ECM had failed to advance any viable cause of action against Mr. Gagliardi, nor was there any evidence of any wrongdoing by him. Indeed, ECM itself had found no wrongdoing after its own internal investigation. Those allegations were, in any event, wholly irrelevant to the issues in this case, which turned on the proper construction of the contract and whether ECM had properly exercised its contractual discretion at the time it decided to award him no bonus.
Takeaways
The judgment demonstrates the application of the obligations of good faith to employment contracts in respect of the determination of bonus entitlements post the Supreme Court’s ruling in Braganza v BP Shipping Ltd [2015] UKSC 17. It provides useful instruction to both firms and employees as to the appropriate process and requirement for careful adherence to the contractual framework when ascertaining and applying bonus entitlements.
Matthew Wescott, Partner, says:
“Mr Gagliardi is gratified that, after over 3 years of litigation in two different jurisdictions, he has finally been vindicated by the judgment of Mr Justice Calver this morning. Mr Gagliardi has been shown by the judgment to be a highly effective capital markets expert who was wrongly deprived by ECM of a bonus that he earned fairly and through his own hard work and expertise. The Court duly awarded him over USD 5 million in damages plus substantial interest. Moreover, the allegations of impropriety made by ECM against Mr Gagliardi have been proved to be unfounded and abusive. ECM repeatedly impugned Mr Gagliardi’s honesty, but after 4 days of rigorous cross examination those allegations were found to be without foundation. Mr Gagliardi looks forward now to putting this matter behind him and continuing his career.”
Representation
Mr. Gagliardi was represented by PCB Byrne LLP. The team was led by Matthew Wescott and Simon Colledge, supported by Ben Brocklehurst, Chloe Fleming, Ella Maiden, Yana Ahlden, Georgina Chambers and Mona Marouf.
At trial, Mr. Gagliardi was represented by Andrew Legg and Gretta Schumacher of Essex Court Chambers as counsel.
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