| | 6. | Fees Earned or Paid in Cash to Mr. Kloet include fees of $155,000$160,000 for his service as ChairmanChair of the Boards of our U.S. exchange subsidiaries and their Regulatory Oversight Committees. Fees earned for Board and Committee service to our exchange subsidiaries are paid only in cash. Mr. Kloet directed all of the cash fees to a 501(c)(3) charity for this reporting year. All Other Compensation 7. Mr. Rainey resigned from the Board effective as of February 28, 2023. 8. Mr. Splinter was compensated as the Board Chair for June 2022 through June 2023. 9. Mr. Kloet represents feesWallenberg did not stand for tax advisory services in connection withre-election at the 2022 Annual Meeting and did not receive any director compensation for service to our exchange subsidiaries.during 2022. |
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| | | | | Nasdaq 2023 Proxy Statement | GOVERNANCE | | | |
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| | Governance Highlights | | | | | | | | | | | We are committed to good corporate governance, which is a critical factor to help promote the long-term interests of our shareholders, strengthen our Board and management accountability, and build trust in the Company. Our governance highlights are summarized below, followed by more in-depth descriptions of the key aspects of our governance structure. The Board believes that its governance practices provide a structure that allows it to set objectives and monitor performance, ensure the efficient use of corporate resources, and enhance shareholder value. | | 
As of April 28, 2023 | | | | | Board Composition and Processes | | • Continuous Board refreshment emphasizing diverse thought and experience • 10 of 11 director nominees are independent | | | | | | | • Lead Independent Director with robust duties and oversight responsibilities | | | | | | | | | | | • Independent Audit & Risk, Management Compensation, and Nominating & ESG Committees | | | | | | | | | | | • Opportunity for Executive Session (without management present) at every Board and Committee meeting | | | | | | | | | | | • Annual evaluations of the Board and each Committee, along with individual director self-assessments | | | | | | | | | | | • Rigorous stock ownership guidelines, including at least 2x the annual equity award for each director | | | | | | | | | | | • No director may serve on more than four public company boards (including the Nasdaq Board), without specific approval from the Audit & Risk Committee and Nominating & ESG Committee | | | | | | | | | | | • Ongoing review of strategic planning and capital allocation for long-term value creation for shareholders | | | | | | | | | | | • Comprehensive risk oversight by the full Board under Audit & Risk Committee leadership | | | | | | | | | | | • Commitment to continuous learning and director education | | | | | | | | | | | • Board oversight of human capital management, including culture and DEI | | | | | | | | | | | | | | | | | | | | | | | | | | | Shareholder Rights | | • Robust, year-round shareholder engagement program | | | | | | | • 15% threshold for shareholders to call a special meeting • Proxy access allowing holders of 3% of our stock for three years to include up to two nominees (or nominees representing 25% of the Board) in our proxy • Annual election of directors, with majority voting in uncontested elections • No “poison pill” • Annual advisory vote on executive compensation • Shareholder communication process for communicating with our Board | | | | | | | | | | | |
| | | | | Nasdaq 2023 Proxy Statement | GOVERNANCE | | | |
| | | | | | | Corporate Governance Framework | | | | | | | | Our governance framework focuses on the interests of our shareholders. It is designed to promote governance transparency and ensure our Board has the necessary tools to review and evaluate our business operations and make decisions that are independent of management and in the best interests of our shareholders. Our goal is to align the interests of shareholders, directors, management and shareholdersmanagement while complying with, or exceeding, the requirements of The Nasdaq Stock Market and applicable law. This governance framework establishes the practices our Board follows with respect to oversight of: ·• our corporate strategy for long-term value creation;
·• capital allocation;
·• risk management, including risks relating to information security and the protection of our market systems;
·• our human capital management program, corporate culture initiatives, and ethics program;
·• our corporate governance structures, principles, and practices;
·• Board refreshment and executive succession planning;
·• executive compensation;
·• corporate sustainability, including our ESG program and environmental and social initiatives; and
·• compliance with local regulations and laws across our business lines and geographic regions.
| | | | | Key Corporate Governance Documents | | | | | | | | Nasdaq’s commitment to governance transparency is foundational to our business. This commitment is reflected in our governance documents listed below, which are all available online at ir.nasdaq.com. · Corporate Governance Guidelines• Amended and Restated Certificate of Incorporation
·• Board of Directors Duties & Obligations
·• By-Laws
• Code of Conduct for the Board of Directors · Amended and Restated Certificate of Incorporation• Committee Charters
· By-Laws• Corporate Governance Guidelines
· Committee Charters
·• Procedures for Communicating with the Board of Directors
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| | | | | | | | | Board Leadership Structure Nasdaq’s governance framework provides the Board with the flexibility to select the appropriate leadership structure for the Board. In making determinations regarding the leadership structure, the Board considers the facts and circumstances at the time, including the specific needs of the business and a structure in the best interests of the Company and our shareholders. The Board is led by a Chair, elected annually by the Board. The general duty of the Chair is to provide leadership on the Board, including setting Board and corporate culture, building consensus around Nasdaq’s strategy, and providing direction as to how the Board operates. The current leadership structure is comprised of a combined Chair and CEO, a Lead Independent Director, Board Committees led by independent directors, and active engagement by all directors. Ten of 11 of our directors will be independent, assuming that all of the director nominees are elected at the 2023 Annual Meeting. In December 2022, the independent members of the Board unanimously elected our current CEO, Adena T. Friedman, as the Chair of the Board, and appointed Michael R. Splinter, the former Chair, as Lead Independent Director, each effective as of January 1, 2023. The Board believes that having Ms. Friedman as the Chair and CEO allows the Company to convey our short-term and long-term strategy with a single voice to our shareholders, customers, regulators, and other stakeholders. Following our corporate realignment in September 2022, Ms. Friedman’s leadership, deep understanding of our business gained by more than 25 years in the securities industry, knowledge of our operations, and broad role in the international financial ecosystem were all contributing factors to the Board’s decision to unify the Chair and CEO roles at this time. The Board recognizes that when the positions of Chair and CEO are combined, or when the Chair is not an independent director, it is imperative that the Board elect a strong Lead Independent Director with a clearly defined role and robust set of responsibilities. Simultaneously with the appointment of the Lead Independent Director, the Board amended the Company’s Corporate Governance Guidelines to provide additional, clearly defined duties for the Lead Independent Director, which are based on best practices. These duties are outlined in the following section. Mr. Splinter has complex, global technology business leadership experience, public company governance expertise, and an extensive background in management development, compensation, and succession planning that the Board believes amplifies his role as Lead Independent Director. Each term of service in the Lead Independent Director position is one year. Our Board believes that our current structure, led by Ms. Friedman and Mr. Splinter, allows the Board to focus on significant strategic, governance, and operational issues, provides critical and effective leadership, and fosters a Board environment in which our independent directors can work together, provide oversight of our performance, and hold our management and senior leadership accountable, all of which we believe will benefit the long-term interests of our shareholders. | |  |
| | | | | Corporate Governance Practice HighlightsNasdaq 2023 Proxy Statement | GOVERNANCE
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| | | | | Duties and Responsibilities | | | | | The duties and responsibilities of the Chair, CEO, and Lead Independent Director include, but are not limited to, the items described in the accompanying table below. |
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Board CompositionAdena T. Friedman
| | Chair AllüPresides at all meetings of the Board and shareholders
üTogether with the Lead Independent Director, reviews and approves the meeting agendas and schedules to assure content and sufficient time for discussion of all agenda items üFacilitates and encourages communication between management and the Board | | CEO üSupervises the business and affairs of the Company under the oversight of the Board üDevelops and executes our strategy against our short- and long-term objectives üBuilds and oversees the Management Committee | | | | | | | | | | 
Michael R. Splinter | | Lead Independent Director üPresides at all meetings of the Board at which the Chair is not present üPresides during Executive Sessions of the Board üCalls meetings of the independent directors or the Board, as appropriate üFacilitates discussion and open dialogue among the independent directors during Board meetings, Executive Sessions, and outside of Board meetings üBriefs the Chair and CEO on issues discussed during Executive Sessions üServes as a liaison among the Chair and CEO and the other directors üTogether with the Chair and CEO, approves Board meeting agendas and schedules to assure content and sufficient time for discussion of all agenda items | | ü Authorizes the retention of advisors and consultants who report directly to the Board, when appropriate (Board Committees retain their own authority to engage advisors and consultants) ü Reviews and reports on the results of the Board and Committee assessments ü Discusses Board and Committee performance, effectiveness, and composition (including feedback from individual directors) with the Chair and CEO and meets individually with independent directors as needed ü Is available for consultation and direct communication with major investors and other stakeholders upon request | | |
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| | | | | | | | | Board Independence | | | | | | | | Nasdaq’s common stock is currently listed on The Nasdaq Stock Market and Nasdaq Dubai. In order to qualify as independent under the listing rules of The Nasdaq Stock Market, a director must satisfy a two-part test. First, the director must not fall into any of several categories that would automatically disqualify the director from being deemed independent. Second, no director qualifies as independent unless the Board affirmatively determines that the director has no direct or indirect relationship with the Company that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Under the Nasdaq Dubai listing rules and the Markets Rules of the Dubai Financial Services Authority, a director is considered independent if the Board determines the director to be independent in character and judgment and to have no commercial or other relationships or circumstances that are likely to affect, or could appear to impair, the director’s judgment in a manner other than in the best interests of the Company. Ten of our 11 director nominees are independent except for our CEOunder the listing rules of The Nasdaq Stock Market and Nasdaq Dubai. Ms. Friedman is deemed not to be independent because she is Nasdaq’s CEO. NoNone of the director may serve on morenominees are party to any arrangement with any person or entity other than four public company boards (including the Nasdaq Board), without specific approval fromCompany relating to compensation or other payments in connection with the Audit & Risk Committee and Nominating & ESG Committeedirector’s or nominee’s candidacy or service as a director, other than arrangements that existed prior to the director’s or nominee’s candidacy.
Philosophy of continuousThe Board refreshmentbelieves that a key element to ensureeffective, independent oversight is that the independent directors meet in Executive Session on a mix of skills, experience, tenure and diversity
regular basis without Company management present. As such, at each Board Structure and Processes Separation of the roles of Chairman of the Board and President and CEO of Nasdaq
Directorsmeeting, independent directors have the opportunity to meet in Executive Session without management present at everySession. The Lead Independent Director of the Board is responsible for chairing the Executive Sessions of the Board and reporting to the Chair and CEO and Corporate Secretary on any actions taken during Executive Sessions. In 2022, the Board met in Executive Session at all nine Board Meetings. Additionally, the Board and each Committee have the authority and budget to retain independent advisors, if needed.
| | | | | | | | | | Committee Independence and Expertise | | | | | | | | All Board Committees, except for the Finance Committee, are comprised exclusively of independent directors, as required by the listing rules of The Nasdaq Stock Market. At each Committee meeting, members of each Board Committee have the opportunity to meet in Executive Session. Three-tiered annual Board assessment, consistingEach member of full Board evaluation,the Audit & Risk Committee evaluationsis independent as defined in Exchange Act Rule 10A-3, and individual director assessmentsin the listing rules of The Nasdaq Stock Market. Two members of the Audit & Risk Committee are “audit committee financial experts” within the meaning of SEC regulations and also meet the “financial sophistication” standard of The Nasdaq Stock Market.
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| | | | | Nasdaq 2023 Proxy Statement | GOVERNANCE | | | Ongoing
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| | | | | | | | | Strategic Oversight | | | | | | | | | | | The Board takes an active role with management to formulate and review of strategic planningour long-term corporate strategy and capital allocation plan for long-term value creationcreation. The Board and management routinely confer on our execution of our long-term strategic plans, the status of key strategic initiatives, and the principal strategic opportunities and risks facing us. In addition, the Board periodically devotes meetings to conduct an in-depth long-term strategic review with our senior management team. During these reviews, the Board and management discuss emerging technological and macroeconomic trends and short and long-term plans and priorities for each of our divisions. Additionally, the Board annually discusses and approves our budget and capital allocation plan, which are linked to our long-term strategic plans and priorities. Through these processes, the Board brings its collective, independent judgment to bear on the most critical long-term strategic issues facing Nasdaq. In 2022, the Board received updates on Nasdaq’s corporate strategy at least quarterly, and often more frequently. The Board also held a multi-day strategy session during which it considered the next steps in our strategic pivot, assessed the realignment of our corporate structure, discussed our strategic ambitions, and evaluated certain near-term strategic focus areas. For further information on our corporate strategy, see “Item 1. Business—Growth Strategy” in our Form 10-K. | | | | | | | | | | ESG Oversight | | | | | | | | | | Our Board is committed to overseeing Nasdaq’s integration of ESG principles and practices throughout the enterprise. Thirty-six percent of our Board nominees have experience with environmental and social matters (including human capital management), which strengthens our Board’s review and oversight of our sustainability initiatives. The Nominating & ESG Committee has formal responsibility and oversight for ESG policies and programs and receives regular reporting on related key matters. Our internal Corporate ESG Steering Committee is co-chaired by executive leaders and is comprised of environmental, socialgeographically diverse representatives from multiple business units. The Corporate ESG Steering Committee serves as the central coordinating body for our ESG strategy, and human capital management policies, practices, initiativesregularly reports that strategy to the Nominating & ESG Committee. The Corporate ESG Strategy and reportingReporting team, which ultimately reports to the CFO, is responsible for execution of the sustainability strategy, communicating our performance, metrics and ambitions through our annual Sustainability Report, TCFD Report and related ESG filings and surveys, and collaborating with various stakeholders across the organization to ensure a timely and accurate data gathering process. | | Comprehensive36%
of our Board nominees have experience with environmental and social matters (including human capital management) | | | | | |
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| | | | | | | | | Cybersecurity and Information Security Oversight | | | | | | | | Cybersecurity is an integral part of risk oversightmanagement at Nasdaq. The Board appreciates the rapidly evolving nature of threats presented by cybersecurity incidents and is committed to the full Board underprevention, timely detection, and mitigation of the effect any such incidents may have on the Company. We utilize a cross-departmental approach to addressing cybersecurity risk, with our Information Security, Legal, Risk and Regulatory, and Internal Audit functions presenting on key topics to the Audit & Risk Committee. Our Audit & Risk Committee leadershipreceives quarterly reports, as well as additional reports as needed, on cybersecurity and information security matters from our Chief Information Security Officer. This regular reporting includes a cybersecurity dashboard that contains information on cybersecurity governance processes, the status of projects to strengthen internal cybersecurity, ongoing prevention and mitigation efforts, security features of the products and services we provide our customers, and the results of security breach simulations. The Audit & Risk Committee also discusses recent incidents throughout the industry and the emerging threat landscape. Director stock ownership guidelines require equity ownership ofCybersecurity is a shared responsibility, and our aim is for all employees to be vigilant in helping to protect our organization and themselves, at least 2xall times. We routinely perform simulations and tabletop exercises, and incorporate external resources and advisors as needed, to help strengthen our cybersecurity protection and information security procedures and safeguards. All employees are required to complete annual cybersecurity awareness training and have access to continuous cybersecurity educational opportunities throughout the annual equity award (for the Chairman, 6x)year. Nasdaq also maintains a cybersecurity and information security risk insurance policy, and our Nasdaq Information Security Management System conforms to ISO 27001 requirements and is ISO 27001 certified.
Shareholder RightsOn an annual basis, the Information Security team reviews and updates its governance documents, including the Information Security Charter, the Information Security Policy, and the Information Security Program Plan, and then presents the revised documents to the Audit & Risk Committee for review and/or approval. Additionally, the Information Security team maintains a formal cybersecurity strategic plan which outlines the strategic vision and associated goals for the cybersecurity of Nasdaq’s global operations. The plan is continually updated with new initiatives that are aligned with technology innovations and any changes in the threat landscape.
15% thresholdFinally, in 2022, an external consultant performed an analysis of Nasdaq’s information security procedures, which included a review of program documentation and an overall maturity assessment of Nasdaq’s information security programs. The findings were presented to the Audit & Risk Committee.
| | | | | | | | Data Privacy | | | | | | | | Data privacy is vital to our business and Nasdaq is committed to the protection of the personal data that it processes as part of its business and on behalf of customers. We understand the trust our customers, employees, and members of the public place in us when they share their personal information and to that end, we have established a robust global privacy program with oversight by executive management, an independent Data Protection Officer for shareholdersour European regulated entities, and, at the Board level, our Audit & Risk Committee. Our governance and accountability measures promote core principles of data privacy, while the collaborative effort between our Information Security Team and Legal, Risk and Regulatory Group enables us to call a special meetingmeet our regulatory requirements and demonstrate compliance. | | |
| | | | | Nasdaq 2023 Proxy Statement | GOVERNANCE Proxy access allowing holders of 3% of our stock for three years to include up to two nominees (or nominees representing 25% of the Board) in our proxy
| | | Annual election of directors, with majority voting in uncontested elections
No “poison pill”
Annual advisory vote on executive compensation
Robust shareholder engagement program throughout the year
As of April 28, 2022
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Leadership Structure
In accordance with our Corporate Governance Guidelines, we separate the role of Chairman of the Board from the role of President and CEO. Our Board Chairman is an independent director. We believe that this separation of roles and allocation of distinct responsibilities to each role facilitates communication between senior management and the full Board about issues such as corporate governance, management development, succession planning, executive compensation, and the Company’s performance.
Nasdaq’s President and CEO, Adena T. Friedman, has over 25 years’ experience in the securities industry. She is responsible for the strategic direction, day-to-day leadership, and performance of Nasdaq. The Chairman of Nasdaq’s Board, Michael R. Splinter, brings to the Board leadership experience as a former public company CEO. The Chairman provides guidance to the President and CEO, presides over Board meetings, including Executive Sessions, and serves as a primary liaison between the President and CEO and other directors.
Board Independence
Nasdaq’s common stock is currently listed on The Nasdaq Stock Market and Nasdaq Dubai. In order to qualify as independent under the listing rules of The Nasdaq Stock Market, a director must satisfy a two-part test. First, the director must not fall into any of several categories that would automatically disqualify the director from being deemed independent. Second, no director qualifies as independent unless the Board affirmatively determines that the director has no direct or indirect relationship with the Company that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Under the Nasdaq Dubai listing rules and the Markets Rules of the Dubai Financial Services Authority, a director is considered independent if the Board determines the director to be independent in character and judgment and to have no commercial or other relationships or circumstances that are likely to affect, or could appear to impair, the director’s judgment in a manner other than in the best interests of the Company.
Nine of our ten director nominees are independent under the listing rules of The Nasdaq Stock Market and Nasdaq Dubai. Ms. Friedman is deemed not to be independent because she is Nasdaq’s President and CEO.
None of the director nominees are party to any arrangement with any person or entity other than the Company relating to compensation or other payments in connection with the director’s or nominee’s candidacy or service as a director, other than arrangements that existed prior to the director’s or nominee’s candidacy.
The Board believes that a key element to effective, independent oversight is that the independent directors meet in Executive Session on a regular basis without Company management present. As such, at each Board meeting, independent directors have the opportunity to meet in Executive Session. The independent Chairman of the Board is responsible for chairing the Executive Sessions of the Board and reporting to the President and CEO and Corporate Secretary on any actions taken during Executive Sessions. In 2021, the Board met ten times in Executive Session. Additionally, each Committee has the authority and budget to retain independent advisors, if needed.
Committee Independence and Expertise
All Board Committees, except for the Finance Committee, are comprised exclusively of independent directors, as required by the listing rules of The Nasdaq Stock Market. At each Committee meeting, members of each Board Committee have the opportunity to meet in Executive Session.
Each member of the Audit & Risk Committee is independent as defined in Rule 10A-3, adopted pursuant to the Sarbanes-Oxley Act of 2002, and in the listing rules of The Nasdaq Stock Market. Two members of the Audit & Risk Committee are “audit committee financial experts” within the meaning of SEC regulations and also meet the “financial sophistication” standard of The Nasdaq Stock Market.
Strategic Oversight
The Board takes an active role with management to formulate and review our long-term corporate strategy and capital allocation plan for long-term value creation.
The Board and management routinely confer on our execution of our long-term strategic plans, the status of key strategic initiatives and the principal strategic opportunities and risks facing us. In addition, the Board periodically devotes meetings to conduct an in-depth long-term strategic review with our senior management team. During these reviews, the Board and management discuss emerging technological and macroeconomic trends and short and long-term plans and priorities for each of our business units.
Additionally, the Board annually discusses and approves our budget and capital allocation plan, which are linked to our long-term strategic plans and priorities. Through these processes, the Board brings its collective, independent judgment to bear on the most critical long-term strategic issues facing Nasdaq.
In 2021, the Board received updates on Nasdaq’s corporate strategy at least quarterly, and often more frequently. The Board also held a multi-day strategy session during which it considered the next steps in our strategic pivot, discussed our strategic ambitions and evaluated certain near-term strategic focus areas. The Board also reviewed and approved our acquisitions and divestitures in 2021, including Verafin and the sale of the U.S. portion of our Nasdaq Fixed Income business. For further information on our corporate strategy, see “Item 1. Business—Growth Strategy” in our Form 10-K.
ESG Oversight
Our Board is committed to overseeing Nasdaq’s integration of ESG principles and practices throughout the entire enterprise. Forty percent of our Board members have experience with environmental and social matters (including human capital management), which strengthens our Board’s review and oversight of our sustainability initiatives. The Nominating & ESG Committee has formal responsibility and oversight for ESG policies and programs and receives regular reporting on related key matters.
Our internal Corporate ESG Steering Committee is co-chaired by executive leaders and is comprised of geographically diverse representatives from multiple business units. The Corporate ESG Steering Committee serves as the central oversight body for our environmental and social strategy, and regularly reports that strategy to the Nominating & ESG Committee.
The Corporate ESG Strategy and Reporting Team, which ultimately reports to the CFO, is responsible for execution of the sustainability strategy, communicating our performance, metrics and ambitions through our annual Corporate Sustainability Report and related ESG filings and surveys, and collaborating with various stakeholders across the organization to ensure a timely and accurate data gathering process.
Cybersecurity and Information Security Oversight
Our Audit & Risk Committee receives quarterly reports, as well as additional reports as needed, on cybersecurity and information security matters from our Chief Information Security Officer. A Cybersecurity Dashboard is presented each quarter which contains information on cybersecurity controls, incidents and threats to the Company’s information security, as well as ongoing prevention and mitigation efforts.
We routinely perform simulations and tabletop exercises, and incorporate external resources as needed, to help strengthen our cybersecurity protection and information security procedures and safeguards. All employees are required to complete an annual cybersecurity awareness training.
On an annual basis, the Information Security team reviews and updates its governance documents, including the Information Security Charter, the Information Security Policy and the Information Security Program Plan, and then presents the revised documents to the Audit & Risk Committee for review and/or approval. Additionally, during 2021, the Information Security team continued to execute on the Cybersecurity Strategic Plan, which outlines the strategic vision and associated goals for the cybersecurity of Nasdaq’s global operations for the three-year period from 2020 through the end of 2022.
Finally, the Information Security team engaged Ernst & Young LLP in 2020 to perform an analysis of Nasdaq’s information security procedures. During 2022, Ernst & Young LLP will again review program documentation and conduct an assessment of Nasdaq’s information security programs, and the findings will be presented to the Audit & Risk Committee.
Data Privacy
Privacy is integral to our business and Nasdaq is committed to the protection of the personal data which it processes as part of its business and on behalf of customers. We understand the trust our customers, employees and members of the public place in us when they share their personal information and to that end, we have established a robust global privacy program with oversight by executive management, an independent Data Protection Officer for our European regulated entities, and, at the Board level, our Audit & Risk Committee. Our governance and accountability measures promote core principles of data privacy, while the collaborative effort between our Information Security Team and Legal and Regulatory Group enables us to meet our regulatory requirements and demonstrate compliance.
Risk Oversight
The Board’s role in risk oversight is consistent with our leadership structure, with management having day-to-day responsibility for assessing and managing the Company’s risk exposure and the Board having ultimate responsibility for overseeing risk management with a focus on the most significant risks facing the Company. The Board is assisted in meeting this responsibility by several Board Committees as described under “Our Board — Board Committees.” The Audit & Risk Committee receives regular reports relating to operational compliance with the Company’s risk appetite and reviews any deviations, ultimately reporting on them to the Board.
The Board, through the Audit & Risk Committee, approves the Company’s risk appetite, which is the boundaries within which our management operates while achieving corporate objectives. In addition, the Board reviews and approves the Company’s ERM Policy, which mandates ERM requirements and defines employees’ risk management roles and responsibilities.
Under our ERM Policy, we employ an ERM approach that manages risk through objective and consistent identification, assessment, monitoring and measurement of significant risks across the Company. We classify risks into the following five broad categories.
· | | | | | | | | | Risk Oversight | | | | | | | | The Board’s role in risk oversight is consistent with our leadership structure, with management having day-to-day responsibility for assessing and managing the Company’s risk exposure, and the Board having ultimate responsibility for overseeing risk management with a focus on the most significant risks facing the Company. The Board is assisted in meeting this responsibility by several Board Committees as described under “Our Board — Board Committees.” The Audit & Risk Committee receives regular reports relating to operational compliance with the Company’s risk appetite and reviews any deviations. The Board, through the Audit & Risk Committee, approves the Company’s risk appetite, which is the boundaries within which our management operates while achieving corporate objectives. In addition, the Board reviews and approves the Company’s ERM Policy, which mandates ERM requirements and defines employees’ risk management roles and responsibilities. Under our ERM Policy, we employ an ERM approach that manages risk through objective and consistent identification, assessment, monitoring, and measurement of significant risks across the Company. We classify risks into the following five broad categories. •Strategic and Business Risk:Risk to earnings and capital arising from changes in the business environment and from adverse business decisions, improper implementation of decisions, or lack of responsiveness to changes in the business environment. |
· | | •Financial Risk: Risk to our financial position or ability to operate due to investment decisions and financial risk management practices, in particular as it relates to market, credit, capital, and liquidity risks. |
· | | •Operational Risk: Risks arising from our people, processes, and systems and from external causes, including, among other things, risks related to transaction errors, financial misstatements, technology, information security (including cybersecurity), engagement of third parties, and maintaining business continuity. |
· | | •Legal and Regulatory Risk: Exposure to civil and criminal consequences — including regulatory penalties, fines, forfeiture, and litigation — while conducting our business operations. |
· | | •ESG Risk: Risks arising from perceived or actual shortcomings in the management of ESG matters. Our management has day-to-day responsibility for managing risk arising from our activities, including making decisions within stated Board-delegated authority; ensuring employees understand their responsibilities for managing risk through a “three lines of risk management” model; and establishing internal controls as well as guidance and standards to implement the ERM Policy. In the “three lines of risk management” model, the first line, consisting of the business units and expert teams (i.e., corporate support units), executes core processes and controls. The second line, consisting of the risk, control, and oversight teams, sets policies and establishes frameworks to manage risks. The third line, which is the Internal Audit Department, provides an independent review of the first and second lines. Our Global Risk Management Committee, which includes our Chair and CEO and other senior executives, assists the Board in its risk oversight role, ensuring that the ERM framework is appropriate and functioning as intended and the level of risk assumed by the Company is consistent with Nasdaq’s strategy and risk appetite. We also have other limited-scope risk management committees that address specific risks, geographic areas, and/ or subsidiaries. These risk management committees, which include representatives from business units and expert teams, monitor current and emerging risks within their purview to ensure an appropriate level of | | |
Our management has day-to-day responsibility for: managing risk arising from our activities, including making decisions within stated Board-delegated authority; ensuring employees understand their responsibilities for managing risk through a “three lines of risk management” model; and establishing internal controls as well as guidance and standards to implement the risk management policy. In the “three lines of risk management” model, the first line, consisting of the business units and expert teams (i.e., corporate support units), executes core processes and controls. The second line, consisting of the risk, control and oversight teams, sets policies and establishes frameworks to manage risks. The third line, which is the Internal Audit Department, provides an independent review of the first and second lines.
Our Global Risk Management Committee, which includes our President and CEO and other senior executives, assists the Board in its risk oversight role, ensuring that the ERM framework is appropriate and functioning as intended and the level of risk assumed by the Company is consistent with Nasdaq’s strategy and risk appetite.
We also have other limited-scope risk management committees that address specific risks, geographic areas and/ or subsidiaries. These risk management committees, which include representatives from business units and expert teams, monitor current and emerging risks within their purview to ensure an appropriate level of risk. Together, the various risk management committees facilitate timely escalation of issues to the Global Risk Management Committee, which escalates critical issues to the Board. These risk management committees include the following:
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| | | | | | | risk. Together, the various risk management committees facilitate timely escalation of issues to the Global Risk Management Committee, which escalates critical issues to the Board. These risk management committees include the following: •The Compliance Council identifies, monitors, and addresses regulatory and corporate compliance risks. |
· | | •The Global Technology Risk Committee oversees technology risks within our strategic products and applications. |
· | | •The Business Continuity and& Crisis Management Committee oversees business continuity and resiliency related risks. |
· | | •The Regulatory Capital Committee oversees the global regulatory capital framework for our regulated entities and the level of regulatory capital risk. Nasdaq’s Group Risk Management Department, which is part of the Legal, Risk and Regulatory Group, oversees the ERM framework, supports its implementation, and aggregates and reports risk information. | | |
Nasdaq’s Group Risk Management Department, which is part of the Legal, Risk and Regulatory Group, oversees the ERM framework, supports its implementation and aggregates and reports risk information.
Human Capital Management and Executive Succession Planning
Our Board believes that human capital management and executive succession planning are some of its most critical duties. The Board regularly receives updates on Nasdaq’s culture and people-related initiatives. In 2021, topics discussed included: our Diversity, Equity and Culture initiatives; our employee engagement survey results; Nasdaq’s return-to-office and future-of-work initiatives; employee retention efforts in light of the tight labor market; and Nasdaq’s employer brand messaging and employee value proposition.
Both formally on an annual basis and informally throughout the year in Executive Session, the Nominating & ESG Committee, the Management Compensation Committee, the Board and the President and CEO review the succession planning and leadership development program. This includes a short-term and long-term succession plan for development, retention and replacement of senior officers. These reviews and succession planning discussions take into account desired leadership skills, key capabilities and experience in light of our current and evolving business and strategic direction. Our directors also have exposure to potential internal succession candidates through Board and Committee presentations and discussions, as well as informal events and interactions throughout the year.
In conjunction with the annual report of the succession plan, the President and CEO also reports on Nasdaq’s program for senior management leadership development.
In addition, the President and CEO prepares, and the Board reviews, a short-term succession plan that delineates a temporary delegation of authority to certain officers of the Company, if some or all of the senior officers should unexpectedly become unable to perform their duties. The Board also has implemented its own short-term succession plan in the event any of the Directors became temporarily incapacitated or unable to act.
Finally, following our annual executive succession planning exercise with our Board, we achieved a 32% year-over-year increase in the diversity of our succession candidates (considering gender, race and LGBTQ+ status) in 2021 due to a focus by our senior executives on identifying and cultivating talent deeper in their organizations.
Board Meetings and Attendance
The Board held 11 meetings during the 2021 fiscal year and the Board met in Executive Session without management present during ten of those meetings. At each Board or Committee meeting, a quorum consists of a majority of the Board or Committee members. The Board expects its members will meticulously prepare for, join and participate in all Board and applicable committee meetings and each Annual Meeting.
Each of the incumbent directors who served for the full year of 2021 attended at least 92% of the meetings of the Board and those Committees on which the director served.
Ms. Townes-Whitley joined the Board effective September 29, 2021. Following that date, she attended two of three meetings of the Audit & Risk Committee and three of four meetings of the Board, resulting in 71% attendance. Her absences from these meetings were due solely to the illness and sudden death of a close family member.
In addition to participation at Board and Committee meetings, our directors have frequent individual meetings and other communications with our Chairman, our CEO, and other members of the leadership team.
Directors are also encouraged to attend our annual meeting of shareholders. All of the current members of the Board who were directors at the time of the Annual Meeting held on June 15, 2021 attended the Annual Meeting.
Shareholder Rights
Nasdaq does not have a classified Board. All directors are elected annually. We also have a majority vote standard for uncontested director elections.
We implemented proxy access by amending our By-Laws to allow a shareholder, or group of shareholders, that owns at least 3% of our outstanding common stock for three years and complies with certain customary requirements, to nominate candidates for service on the Board and have those candidates included in Nasdaq’s proxy materials. Candidates nominated pursuant to this provision may constitute up to the greater of two individuals or 25% of the total number of directors then in office for a particular annual meeting of shareholders.
Shareholders representing 15% or more of outstanding shares for one year can convene a special meeting of Nasdaq’s shareholders.
For more on our proactive outreach efforts with our shareholders, see “Shareholder Engagement” on page 8.
Public Policy Advocacy for Investors, Capital Formation and Inclusive Capitalism
As part of our duty to shareholders, employees and the markets, Nasdaq actively participates in public policy debates in Europe, the United States and elsewhere. Nasdaq maintains a vigorous global employee education program with respect to the Foreign Corrupt Practices Act and other jurisdictional prohibitions on pay-for-play. Nasdaq does not support any political campaigns, or so-called “Super PACs,” directly with Nasdaq funds.
In the United States, Nasdaq has the responsibility to use its voice to educate policymakers and advocate for policies affecting the capital markets. Nasdaq concentrates its efforts on education and outreach and utilizes a modest Political Action Committee, or PAC, program, known as the Nasdaq PAC. The Nasdaq PAC is funded entirely through voluntary employee contributions and supports only federal Congressional campaigns. Nasdaq’s PAC is governed by a board of employees who vote on every disbursement.
With respect to our European operations, we focus our advocacy programs on active education and engagement with elected leaders and key policymakers. Our policies in Europe follow prevailing jurisdictional law and preclude any monetary contributions to political parties, candidates or their designees.
Nasdaq maintains memberships in a number of associations around the globe that serve as important partners for our industry, clients, and employees including the World Federation of Exchanges, Federation of European Stock Exchanges, Securities Markets Coalition, Equity Markets Association, Partnership for New York City, Business RoundTable, Silicon Valley Leadership Group, U.S. Chamber of Commerce, TechNet and others.
The actions described above constitute a long-standing practice and risk mitigation policy.
| | |  | | Nasdaq 2023 Proxy Statement | GOVERNANCE | | | |
| | | | | | | Human Capital Management Oversight and Executive Succession Planning | | | | | Our Board believes that human capital management oversight and executive succession planning are some of its most critical duties. The Board regularly receives updates on Nasdaq’s culture and people-related initiatives. In 2022, topics discussed included: our DEI initiatives; our employee engagement survey results; Nasdaq’s return-to-office and future-of-work initiatives; talent considerations in connection with the realignment of our corporate structure; the implementation of Agile ways of working; and Nasdaq’s new Culture Book.
Both formally on an annual basis and informally throughout the year in Executive Session, the Management Compensation Committee, the Board, and the Chair and CEO review the succession planning and leadership development program. This includes a short-term and long-term succession plan for developing, retaining, and replacing senior officers. These reviews and succession planning discussions take into account desired leadership skills, key capabilities, and experience in light of our current and evolving business and strategic direction. Our directors also have exposure to potential internal succession candidates through Board and Committee presentations and discussions, as well as informal events and interactions throughout the year. In addition, the Chair and CEO prepares, and the Board reviews, a short-term succession plan that delineates a temporary delegation of authority to certain officers of the Company, if some or all of the senior officers should unexpectedly become unable to perform their duties. The Board also has implemented its own short-term succession plan in the event any of the Directors became temporarily incapacitated or unable to act. Finally, following our annual executive succession planning exercise with our Board, we achieved a 26% increase in 2022, as compared to 2021, in the diversity of our senior executive succession candidates (considering gender, race, and LGBTQ+ status) due to a focus by our senior executives on identifying and cultivating talent deeper in their organizations. | | | | | Board Meetings and Attendance | | | | | The Board held nine meetings during the 2022 fiscal year, and the Board met in Executive Session without management present during each of those meetings. At each Board or Committee meeting, a quorum consists of a majority of the Board or Committee members. The Board expects its members to meticulously prepare for, join, and participate in all Board and applicable Committee meetings and each Annual Meeting. Each of the incumbent directors who served for the full year of 2022 attended at least 87% of the meetings of the Board and those Committees on which the director served. In addition to participation at Board and Committee meetings, our directors have frequent individual meetings and other communications with our Chair and CEO, Lead Independent Director, and other members of the leadership team. Directors are also encouraged to attend our Annual Meeting of Shareholders. All of the current members of the Board who were directors at the time of the Annual Meeting held on June 22, 2022 attended the Annual Meeting. | | |
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| | | | | Nasdaq 2023 Proxy Statement | GOVERNANCE | | | |
| | | | | | | Shareholder Rights | | | | | | | | Nasdaq does not have a classified Board. All directors are elected annually. We also have a majority vote standard for uncontested director elections. Our proxy access right allows a shareholder, or group of shareholders, that owns at least 3% of our outstanding common stock for three years and complies with certain customary requirements, to nominate candidates for service on the Board and have those candidates included in Nasdaq’s proxy materials. Candidates nominated pursuant to this provision may constitute up to the greater of two individuals or 25% of the total number of directors then in office for a particular Annual Meeting of Shareholders. Shareholders representing 15% or more of outstanding shares for one year can convene a special meeting of Nasdaq’s shareholders. For more on our proactive outreach efforts with our shareholders, see “Shareholder Engagement” on page 7. | | | | | Public Policy Advocacy | | | | | | | | As part of our duty to shareholders, employees, and the markets, Nasdaq actively participates in public policy debates in the United States, Europe, and elsewhere. Nasdaq maintains a vigorous global employee education program with respect to the Foreign Corrupt Practices Act and other jurisdictional prohibitions on pay-for-play. Nasdaq does not support any political campaigns, or so-called “Super PACs,” directly with Nasdaq funds. In the United States, Nasdaq has the responsibility to use its voice to educate policymakers and regulators. Nasdaq’s advocacy focuses on policies affecting the capital markets. Nasdaq concentrates its efforts on education and outreach and utilizes a modest Political Action Committee, or PAC, program, known as the Nasdaq PAC. The Nasdaq PAC is funded entirely through voluntary employee contributions and supports only federal Congressional campaigns. Nasdaq’s PAC is governed by a board of employees who vote on every disbursement. With respect to our European operations, we focus our advocacy programs on active education and engagement with elected leaders and key policymakers. Our policies in Europe follow prevailing jurisdictional law and preclude any monetary contributions to political parties, candidates, or their designees. Nasdaq maintains memberships in a number of associations around the globe that serve as important partners for our industry, clients, and employees including the World Federation of Exchanges, Federation of European Securities Exchanges, U.S. Securities Markets Coalition, Equity Markets Association, Partnership for New York City, Business Roundtable, Silicon Valley Leadership Group, U.S. Chamber of Commerce, TechNet, and others. The actions described above constitute a long-standing practice and risk mitigation policy. | | |
| | | | | Nasdaq 2023 Proxy Statement | GOVERNANCE | | | |
| | | | | | | | | | | Communicating with the Board | | | | | | | Shareholders and other interested parties may contact the Board, the ChairmanChair and CEO, the Lead Independent Director, or other individual Directorsdirectors by writing us at AskBoard@nasdaq.com or c/o Erika Moore, VP, Deputy General Counsel and Corporate Secretary, 805 King Farm Boulevard, Rockville, Maryland 20850. | | | | | | | Complaints or Ethical Concerns? | | | | | | | | | | | We have also established mechanisms for receiving, retaining, and addressing ethics and compliance concerns or allegations of misconduct through our SpeakUp! Program. Employees, contractors, and third parties doing business with Nasdaq have multiple channels for raising ethics concerns in a highly confidential and/or anonymous manner. Nasdaq does not tolerate retaliation against anyone who reports potential misconduct regardless of the reporting channel used. For more on our Code of Ethics, see page 5762 or visit ir.nasdaq.com. | |
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Our ESG Strategy
At the epicenter of capital markets and technology, we are uniquely positioned to lead the acceleration of ESG excellence both in how we operate internally and by empowering our communities with strategic solutions that have measurable and lasting impact.
Environmental Initiatives
Nasdaq is committed to environmentally friendly business practices and will continue to pursue activities that underscore our commitment to the key environmental initiatives described below.
Optimizing Our Real Estate and Facilities Footprint, Improving the Accessibility of Our Offices and the Preservation of Natural Resources
· | | | | 54 | | We aspire to achieve a Green Certification for all new office construction. Our new |
| | | | | Nasdaq headquarters in New York City achieved a Green Building LEED Platinum Certification in 2021 and we are working to add eight new LEED certified locations to our office portfolio in 2022.2023 Proxy Statement | PURPOSE AND PROGRESS | | | |
· | | | | | | | At Nasdaq, our purpose is to advance economic progress for all. We power stronger economies, create more equitable opportunities, and contribute to a more sustainable world to help our communities, clients, employees, and people of all backgrounds reach their full potential. Our commitment to ESG leadership is integrated across our operations, enhancing Nasdaq’s competitiveness, resilience, and relationships with stakeholders. At the epicenter of capital markets and technology, Nasdaq is positioned to lead the acceleration of ESG excellence both in how we operate internally and by empowering our communities with strategic solutions that have measurable and lasting impact. | | | | | Environmental Initiatives | | | | | | | | Nasdaq is committed to environmentally friendly business practices and will continue to pursue activities that underscore our commitment to the key environmental initiatives described below. | | | | | Optimizing Our Footprint | | | | | | | | To ensure the sustainability of our real estate portfolio, we aspire to increase the number of green certifications for our office space design, construction, and operations. In 2021,2022, we achieved eight additional LEED Gold certifications, which increased our portfolio to over 50% green certified. Our Environmental Practices Statement and Environmental Management System Policy emphasize our commitment to act as a responsible corporate citizen, endeavoring to lessen our environmental impact and make our operations environmentally efficient. In 2022, we implemented an Environmental Management System for our real estate and data center portfolios that is based upon the ISO 14001 structure. We also completed our second TCFD report on our global office and data center locations. The report outlines our climate-related risks and opportunities, associated impact on our business, our management strategy to address these risks, and related metrics and targets to further address climate risks. | | | | | Reducing Our Environmental Impact | | | | | In 2022, we continued our net carbon neutral program for the fourthfifth consecutive year. The key focuses of the program are to: |
| ¾ | | •reduce the energy consumption, corresponding greenhouse gasGHG emissions, and waste generation of our global operations through thoughtful sustainable initiatives and strategies. |
strategies; | ¾ | | •engage our value chain to report their relevant material GHG emissions and to set their own science-based targets; •proactively procure renewable energy for our office space and data center portfolio. |
portfolio; | ¾ | | •purchase Renewable Energy Certificatesrenewable energy certificates from projects that are less than five years old and feed power into the same energy distribution network as our operations to replace any fossil fuel electricity power consumed (indirectly neutralizing our electricity-related GHG emissions); •purchase credible carbon offsets from projects that focus on carbon removal or biodiversity to neutralize the associated GHG emissions related to our scope 1 and scope 3 categories (indirectly removing the release of Greenhouse gasesGHGs from the atmosphere).; and | | |
| ¾ | | | 56 | | purchase credible Carbon Offsets from projects that focus entirely on carbon removal to neutralize the associated greenhouse gas emissions related to our Scope 1 and Scope 3 categories (indirectly removing the release of Greenhouse gases from the atmosphere). |
| | | | | Nasdaq 2023 Proxy Statement | PURPOSE AND PROGRESS | | | |
| ¾ | | | | | | •engage a third party to verify and certifyassure our carbon footprint data for accuracycompleteness and industry best practices. |
accuracy. · | | We signedNasdaq’s near- and long-term science-based emissions reduction targets were approved by the Science Based Targets initiative commitment letter in 2021 and this year we will submit(SBTi). The SBTi has verified our net zero short-term and long-term, 2050 net-zero science-based target. Our validated targets for our Scope 1, Scope 2 and material Scope 3 emission categories.are described below. | | |
· | | In 2021, we audited and benchmarked our recycling programs in all global offices and implemented a strategy to raise our minimum standard. |
· | | When possible, our offices are located near public transportation or electric car charging stations. |
· | | In many locations, we have a longstanding practice of offering employees pre-tax public transportation passes, allowances or subsidies. |
· | | Our Environmental Practices Statement and Environmental Management System Policy emphasize our commitment to act as a responsible corporate citizen, endeavoring to lessen our environmental impact and make our operations environmentally efficient. |
· | | In 2022, we are developing our Environmental Management System for our real estate and data center portfolios that is based upon the ISO 14001 structure. |
· | | We completed our first Task Force on Climate Related Financial Disclosures report on our key 15 office locations. In 2022, we will expand this report to cover the entire global office portfolio and outline: |
| ¾ | | our climate related risks and opportunities, |
| ¾ | | associated impact on our business, |
| ¾ | | our management strategy to address these risks, and |
| ¾ | | related metrics and targets to further address climate risks. |
Empowering and Educating Our Employees
· | | | | | | | One of our employee networks, the Global Green Team, brings together Nasdaq employees who are passionate and knowledgeable about the environment and who want to drive change and sustainable initiatives in their office and community. |
Decarbonizing Our Supply Chain · | | Through online educational webinars, coffee breaks, newsletters and employee engagements, we offer employee awareness trainings on environmental topics, such as supply chain, consumption, waste reduction/recycling, travel and how individuals can impact their communities. |
· | | | | | Nasdaq is proactively addressing its business behaviorsIn 2022, we commenced engagement with our top spend vendors, requesting that they disclose their GHG emissions and reduction initiatives. In 2023, we will continue to focus on sustainabilitydevelop this program to gain further insights into our value chain and employee wellness through the creation of a knowledge-based series of “The Global Green Team recommends” articles and documents. |
Decarbonizing Our Supply Chainencourage our suppliers to commit to their own science-based targets.
· | | In 2021, we adopted a new Supplier Code of Ethics. Among other things, in 2022 we will request key vendors and suppliers to join us in reporting environmental data through CDP. |
· | | We encourage suppliers to adopt sustainability and environmental practices in line with our published Environmental Practices Statement and our Supplier Code of Ethics. |
· | | To the extent practical and feasible, we expect suppliers to provide us with information to support our reporting and transparency commitments related to sustainability and environmental impacts. |
Producing ESG-Focused Products for Clients and Listed Companies
· | | We manage | | | | | | Empowering Our Employees | | | | | | | | Nasdaq is proactively addressing its business behaviors to focus on sustainability. Our Global Green Team brings together Nasdaq employees who are passionate about the environment, publishes regular knowledge-based resources, and works to drive sustainable initiatives through our local offices and communities. The Green Team aims to instill a numberculture of indexesenvironmental advocacy and action, through educational sessions that integrate ESG criteria into the index methodology. We achieve this in a variety of ways, with some indexes designed purely as ESGfocus on sustainable practices, informative webinars, and others designed with ESG criteria as an overlay to a broader investment thesis. The index with the largest tracking fund is the ISE Cyber Security UCITS Index. In 2021, we created ESG versions of two of our flagship indexes and now offer the Nasdaq 100 ESG Index and the Nasdaq Next Generation 100 ESG Index. Additionally, our other indexes include the Nasdaq Clean Edge suite and the Nasdaq Future Global Sustainability Leaders Index.community outreach. | | |
· | | | | | In addition, through our IR & ESG business, Nasdaq offers technology, expertise, and insights to help companies navigate the complexities of ESG as a measurement of performance and brand-building opportunity. Our products and services can help our clients analyze, assess and establish ESG programs through all stages of their ESG journey, while also helping to manage the various annual ESG disclosures and reporting obligations and improve governance practices.57 |
· | | | | | Our Data offerings provide investors with performance data on asset managers based on ESG factors and provide information on sustainable bonds for investment due diligence, selection and monitoring.Nasdaq 2023 Proxy Statement | PURPOSE AND PROGRESS | | | |
· | | | | | | | In 2021, we acquired a majority stake in Puro.earth, a leading marketplace that offers industrial carbon removal instruments that are verifiableEmpowering Our Clients | | | | | | | | Our robust portfolio of ESG services and tradable through an open, online platform.solutions for our clients and listed companies helps them support and implement their own ESG strategies and communicate critical sustainability milestones to their key stakeholders. | | |
Serving as an ESG Thought Leader for the Capital Markets and the Public
· | | | | | | | Serving as an ESG Thought Leader for the Capital Markets and the Public | | | | | | | | Nasdaq actively seeks to be an ESG thought leader for the capital markets, investors, our listed company clients, and the public. Our Green Voices Newsletter is released quarterly, and gathers the latest Nasdaq updates, insights, and inspiration related to ESG and sustainable finance. In 2022, Nasdaq co-hosted the second annual ESG Leadership Forum as part of New York City Climate Week. The Nasdaq ESG Reporting Guide (now in its second edition) serves as a baseline template for Nasdaq listed companiesevent convened business leaders and reinforcesinvestors to discuss trends and share insights into how the business case for voluntary disclosure. We voluntarily report many ofcommunity and investors are working together on ESG and climate goals that affect the metrics outlined in the ESG Guide. |
real-world transition to a low-carbon economy. · | | Through our Green Voices of Nasdaq campaign, investors and issuers talk about leveraging the green bond market to support sustainable development. |
· | | Nasdaq has also been at the forefront of numerous ESG-related projects, working groups, and industry initiatives over the last ten years, including:including UN Principles for Responsible Investment (UNPRI), UN Global Compact, the Sustainable Stock Exchanges Initiative, the Task Force on Nature-related Financial Disclosures (TNFD) Forum, and the World Federation of Exchanges’ Sustainability Working Group. | | |
| ¾ | | | 58 | | the UN Sustainable Stock Exchanges Initiative (founding member); |
| | | | | Nasdaq 2023 Proxy Statement | PURPOSE AND PROGRESS | | | |
| ¾ | | | | | | | | | | | | | | | | | | | | | | Human Capital Management | | | | | | | | | | Nasdaq has continued to strengthen our commitment to, and investment in, attracting, retaining, developing, and motivating our employees during 2022. While we are proud of our engagement scores during a challenging year—they affirm that employees enjoyed their experience and that Nasdaq remains a preferred work destination—we are committed to continuous improvement. We remain steadfast in bolstering our efforts to create a diverse and inclusive work environment of equal opportunity, where employees feel respected and valued for their contributions, and where Nasdaq and its employees have opportunities to make positive contributions to our local communities. | | 2022 Engagement Survey Results 92% employee participation | | | Talent Management and Development | | | | | | | | In 2022, we continued to increase our efforts in attracting and retaining our employees. Nasdaq seeks to hire world-class, innovative, and diverse talent across the WFE Sustainability Working Group (founder, chair twice);globe. Our Talent Attraction Team focused on strategic marketing and branding to position Nasdaq as a leading employer of choice for talent in our industry, helping to increase our pool of top candidates, particularly diverse candidates, for open positions. We ran targeted attraction campaigns in our major markets using local employee stories and photos, and partnered with diverse talent organizations, such as the National Society of Black Engineers, AfroTech, the Society of Women Engineers, Women in Technology, Grace Hopper, and the Society of Hispanic Professional Engineers to help improve brand awareness of Nasdaq and attract a higher number of diverse candidates compared to 2021. During 2022, we launched a year-long series called the Manager Forum, facilitated by our Chair and CEO and other senior and mid-career leaders, to engage managers in sustained leadership development, alongside our existing formal leadership development curriculum. We also launched a new artificial intelligence-driven career development platform called the Career Hub that matches employees, based on their career aspirations, to internal training, potential mentors, short-term projects, and full-time internal roles. We have invested in professional development for our employees, including offering access to more than 26,000 professional development programs; providing tuition assistance to employees enrolled in degree-granting academic programs; holding internal career fairs and career development programs; connecting employees to our formal mentoring programs; and providing one-on-one professional coaching opportunities. We welcomed over 150 interns to Nasdaq during 2022. | | 87% believe Nasdaq is advancing diversity, inclusion, and belonging | | | | | | 92% are proud to work for Nasdaq | | | | | | 90% would recommend Nasdaq as a great place to work | | | Diversity, Equity, and Inclusion | | | | | | | | | | | At Nasdaq, three pillars guide our DEI efforts: Workforce, Workplace, and Marketplace. Our actions and initiatives under each of these pillars are described below. | | | | | | | | | Workforce | | | | Workplace | | | | Marketplace | | | | | | |
| ¾ | | | | the UN Global Compact (former U.S. Network Board Member);59 |
| | | | | Nasdaq 2023 Proxy Statement | PURPOSE AND PROGRESS | | | |
| ¾ | | | | | | the Global Sustainability Standards Board (current member); |
| ¾ | | the SASB Advisory Board (former member); |
| ¾ | | the Bloomberg Gender Equality Index (Advisory Group); and |
| ¾ | | the Impact2030 Metrics Council (chair). |
Talent and Culture
Nasdaq’s commitment to—and investment in—attracting, retaining, developing and motivating its employees strengthened throughout 2021.
We believe that we compete for talent from a position of strength, which is our people-centric culture, based on our core values: Act as an Owner, Play as a Team, Fuel Client Success, Lead with Integrity, Expand Your Expertise, and Drive Innovation. These cultural values energize and align employees around our most important priorities, and encourage and reward high levels of performance, innovation and growth.
Nasdaq also continued to focus on creating a diverse and inclusive work environment of equal opportunity, where employees feel respected and valued for their contributions, and where Nasdaq and its employees have opportunities to make positive contributions to our local communities and to social justice initiatives.
Our engagement scores across the challenging year affirmed to us that our employees enjoyed their experience at Nasdaq and that Nasdaq remained a preferred work destination. Out of the 91% of our employees that participated in our most recent 2021 engagement survey:
| | | | | | | | | | | | | 87% | | 85% | | 91% | | 87% | | | | | | believe Nasdaq is advancing diversity, inclusion, and belonging | | believe people from all backgrounds have equal opportunities to succeed at Nasdaq | | are proud to work for Nasdaq | | would recommend Nasdaq as a great place to work |
Investing in Our People
Throughout 2021, we continued to increase our efforts in attracting and retaining our employees. Given the challenges posed by COVID-19 restrictions, we continued our virtual internship program for 157 summer interns and continued our virtual onboarding program to welcome over 1,000 new Nasdaq employees in a remote manner. We conducted annual performance management, succession planning and advancement exercises to ensure we are aligning our employees with the right opportunities across the Company. Additionally, our peer-to-peer employee recognition program rewards employees, and highlights awarded employees on our internal social media channels, further amplifying the recognition.
During 2021, we launched a year-long campaign called “Your Career Journey” to engage employees and managers in sustained professional development. We established a “core curriculum” to customize curated professional development opportunities for employees at each level of seniority, and we expanded our overall learning offerings to more than 18,000 development programs, including both live and self-paced learning modules. We provided tuition assistance to employees enrolled in degree-granting academic programs, held internal career fairs and career development programs to help employees explore their options, and we provided one-on-one professional coaching opportunities. In addition, we launched a new self-service mentoring program that features the ability to search and request mentors based on a wide range of criteria to find the best fit, and lastly introduced the “Talent Marketplace,” which allows employees to create a skills profile and then leverage artificial intelligence to be matched to short-term development “gigs” as well as long-term internal job opportunities.
We continued to conduct employee sentiment surveys frequently during 2021, maintaining high scores in engagement, leadership, management, and culture, compared to scores within the past three years. We attribute these results to the way we quickly and positively responded to COVID-19, taking prompt actions to prioritize our employees’ safety and well-being, as well as continuing to demonstrate inclusive leadership, integrity, and an overall positive culture.
Diversity, Equity, and Culture
In 2021, we renamed our Diversity, Inclusion, and Belonging (DIB) team as the Diversity, Equity, and Culture (DEC) team, a modification we felt allows us to drive resources, energy, and commitments to equity in the workplace and ensure that inclusion and belonging are key elements of Nasdaq’s culture for all our employees. Given this shift, we have also implemented performance-based metrics to measure our executives’ DEC goals as they relate to year-end incentive compensation.
Nasdaq’s diversity, equity and culture philosophy is based on three pillars that guide our efforts. Our actions and initiatives under each of these pillars are described below.
Workforce,to ensure our employee population is representative of the communities in which we operate.
Building on our publication of our workforce composition in the previous year, Nasdaq has continued to disclose updated data, including the progress we have made in diversifying Nasdaq at every career level, from entry-level roles to senior executives and board members. We believe transparency around our workforce composition data is important in order to hold ourselves accountable for the progress that we seek. Statistics on the composition of our global workforce by gender, and the composition of our U.S. workforce by gender, race and ethnicity, are available on our corporate website, along with details about certain of our programs and practices to elevate workforce diversity and inclusion.
Nasdaq is committed to equitable pay for all people in our workforce. That commitment is embedded within our multifaceted compensation program. As part of that program:
Workforce · | | To ensure that our employee population is representative of the communities in which we operate. We believe transparency around our workforce composition data is important in order to hold ourselves accountable for the progress that we seek. Statistics on the composition of our global workforce by gender, and the composition of our U.S. workforce by gender, race, and ethnicity, are available on our corporate website, along with details about some of our programs and practices to elevate workforce diversity and inclusion. We will continue to publish our EEO-1 data and comprehensive diversity statistics in our annual Sustainability Report and make them available on our website. Nasdaq is committed to equitable pay for all people in our workforce. That commitment is embedded within our multifaceted compensation program. As part of that program: •We have systems in place to establish and review pay upon hire, promotion, and role changes within the Company. |
· | | •We have an annual process in place to run a regression analysis on gender (globally) and race/ethnicity (in the United States), assessing employee base pay and total compensation (base + bonus + equity). |
· | | •When appropriate, we take action based on these systems and annual process. |
We continued to strengthen our diversity recruiting efforts to help us attract talent using innovative new techniques and channels, enabling us to successfully launch partnerships with diverse talent organizations, such as the National Society of Black Engineers, the Society of Women Engineers, Women in Technology, Grace Hopper and the Society of Hispanic Professional Engineers, improving brand awareness of Nasdaq and helping us to attract more diverse candidates in our recruiting campaigns.
We continually monitor our diversity efforts, with each business unit tracking its own data via live dashboards. We have enhanced our human capital analytics capability so that we can continue to deliver on our commitment to the Parity Pledge, which seeks to achieve greater gender diversity in our executive ranks. As a signatory to the Parity Pledge, we fulfilled our commitment to interview female candidates for all externally advertised roles at the VP level and above. We also have established a dedicated diversity recruitment function to accelerate our ability to attract diverse talent. These recruitment marketing campaigns helped drive an increase in our female, Black and Hispanic hiring.
Workplace,to ensure a positive workplace experience for all employees of Nasdaq.
More than 1,900 employees (approximately 39% of our global workforce) are members of one or more of our 11 employee-led internal affinity networks. Some groups advance the professional development and support of our Black, Asian American, Hispanic, LGBTQ+, female, disabled, veteran, and parent/caregiver employees, while other networks represent interests of employees around environmental sustainability as well as professional identities, such as administrative professionals and software engineers. Each employee network is sponsored by one or more senior executives at the SVP and/or EVP level. The networks provide both formal and informal development programs and guidance for their members, and benefit our entire workforce through educational events, guest speakers and volunteering opportunities. For a complete list of our employee networks, see page 123.
During 2021, more than 80% of our global managers, and 100% of our executive team, participated in a “conscious inclusion” leadership development program that offered training and increased awareness on inclusion issues. We also added customized developmental programs for underrepresented talent, including executive mentoring and accelerated leadership development programs.
In 2021, we launched a high-potential leadership program for our Black employees to hone their skills and increase advancement opportunities; 50% of program participants were promoted during 2021, while 100% of the participants remain with Nasdaq.
Marketplace,to positively influence our peers in the capital market space and to invest in the local communities in which we operate.
Nasdaq accelerated efforts to raise awareness and generate action on diversity and inclusion in our external marketplace in 2021.
·We continually monitor our diversity efforts, with each business unit tracking its own data via dashboards. We have enhanced our human capital analytics capability so that we can continue to deliver on our commitment to the Parity Pledge, which seeks to achieve greater gender diversity in our executive ranks. As a signatory to the Parity Pledge, we fulfilled our commitment to interview female candidates for all externally advertised roles at the VP level and above. We also have established a dedicated diversity recruitment function to accelerate our ability to attract diverse talent. These recruitment marketing campaigns helped drive an increase in our female, Black, and Hispanic hiring. Workplace To create a positive, equitable workplace experience for all employees of Nasdaq. Nasdaq sponsors 11 employee-led internal affinity networks. These networks include over 2,400 employee members, representing 37% of our employees and contractors. Some groups advance the professional development and support of our Black, Asian American, Hispanic, LGBTQ+, female, disabled, veteran, and parent/caregiver employees. At the same time, networks represent the interests of employees around environmental sustainability as well as professional identities, such as administrative professionals and software engineers. Each employee network is sponsored by one or more senior executives at the SVP and/or EVP level. The networks provide formal and informal development programs and guidance for their members, benefiting our entire workforce through educational events, guest speakers, and volunteering opportunities. For a complete list of our employee networks, see page 133. During 2022, our managers globally completed training in “inclusive leadership” and “conscious inclusion,” and 100% of our executive team participated in “inclusive leadership,” a continued diversity and inclusion leadership training program that focuses on the importance of allyship to the growing culture of inclusive leadership at Nasdaq. We also added “conscious inclusion,” a facilitator-led session, for our non-managers. This training focuses on educating our employees on best practices and tactics to create a more inclusive environment. In 2022, we held a second cohort of our high-potential leadership program for our Black employees to hone their skills and prepare for potential advancement opportunities. We also launched a new women’s leadership | | We attended several professional conferences and career fairs to expand our diverse recruiting outreach, including the Onyx Technation Black Professionals in Tech Career Fair, the Society of Women Engineers conference and the SHPE (Society of Hispanic Professional Engineers) National Convention. |
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| | | | | | | program called Accelerate(Her), providing in-depth exposure to Nasdaq’s businesses, and matching small cohorts of participants to our most senior executive women at Nasdaq for career coaching and sponsorship. Marketplace To positively influence our peers in the ongoing pandemic limitedcapital market ecosystem, and to invest in our in-person events,local communities in which we heldoperate. In 2022, we built on our momentum from 2021 and furthered our efforts to increase diversity and inclusion in the external marketplace. We hosted several virtual conferences in 2022, open to our listed company clients and the public, during 2021 highlighting diversity and inclusion, including a programinclusion. This included the fourth annual LGBTQ Leaders Conference, hosted by our OPEN Employee Network, as well as ¡Adelante! Nasdaq’s programming for Hispanic Heritage Month, which included panels of representatives from Hispanic/Latino-owned businesses. Our GLOBE network celebrated Black History Month by hosting a celebration with the founder ofother external resource groups. Additionally, we hosted Parity.Org for a venture capital firm dedicated to minimizing funding disparitiesconversation on “The “E” in technology by investing in high-potential founders who are people of color, women, and/ or LGBTQ+; a women’s leadership forum on equality during COVID-19; a forum hosted by Nasdaq’s Asian Professional employee network; the annual LGBTQ+ leadership conference hosted by the OPEN employee network;DEI: Solving for Pay Equity,” where Nasdaq and a conference on expanding access to capitalsenior leaders in the DEI space discussed the importance of pay parity. We invested in the next generation of diverse talent by hosting programs for the youth from the TAKE YOUR SEAT program and Queens Community House, which serve youth from underrepresented communities. | | | | | | | | Health, Safety, and Well-Being | | | | | | | | We are committed to ensuring the safety and well-being of our employees and stakeholders, and complying with local government regulations in the areas in which we operate. Our employees may work from our offices or work from home, with most of our employees continuing to utilize a hybrid work schedule of both working in an office and remotely each week. We have continued offering additional benefits, which were first introduced during the COVID-19 pandemic, to support our employees, including caregiver support, back-up child-care, “flex days” (extra time off in addition to vacation), and hybrid work schedules, allowing our employees to focus on mental well-being. | | | | | | | | | | Community Impact | | | | | | | | Contributing positively to our local communities is embedded in our culture. In 2022, through strategic initiatives and thoughtful partnerships, we accelerated our efforts globally and strengthened our philanthropic footprint. Our philanthropic efforts are organized within three pillars: the Nasdaq Foundation, the Nasdaq Entrepreneurial Center, and Corporate Giving. | | | | | | | | Nasdaq Foundation | | | | | | | | Relaunched in 2020, the Nasdaq Foundation has deepened its commitment to advance economic progress for all by making markets work for the benefit of more people across society. The Foundation works to support women and underrepresented minority communities by focusing on two goals: reimagining investor engagement and leveraging our investment in the Nasdaq Entrepreneurial Center alongside new strategic partnerships. In 2022, the Nasdaq Foundation provided 11 grants to organizations through the quarterly grant program. The services offered through these partnerships provide a wide range of support for Black, Latinx, community, hosted by ¡Adelante Nasdaq!.and Indigenous founders and entrepreneurs, with a strong focus on women. | | |
· | | | | | We continued our series, Amplifying Black Voices, which we initiated in 2020. In 2021, the program was a multimedia retrospective featuring works of art and photography documenting Black culture and life. These works were displayed on the Nasdaq MarketSite tower in Times Square throughout the year, enabling the entire community to view and celebrate the exhibits.61 |
Health, Safety, and Well-Being
As the COVID-19 pandemic continued, we remained focused on ensuring the safety and well-being of our employees and stakeholders while complying with local government regulations in each of the areas in which we operate around the world. During 2021, the vast majority of our employees continued to work from home, and for employees conducting critical on-site work and for those who wished to return to the office, we implemented additional safety measures and precautions.
To ensure teams were effectively equipped to operate during these unprecedented times, managers participated in additional training programs to help them lead their teams through the evolving concerns and challenges of COVID-19.
As the effects of the pandemic become more tempered in 2022, we reopened our global offices and are transitioning to a hybrid work environment. In order to do so safely and efficiently, we implemented COVID-related testing protocols and made appropriate modifications to our workspaces.
Our continued commitment to creating a connected, inclusive, engaged, and productive culture has become the centerpiece of our return to office plans—and communication has been a key pillar to our rollout. We created an internal “return to office” hub on our intranet to facilitate the dissemination of critical information to our employees, including with respect to travel and hosting events with clients. Employees receive updates on return to office plans, local protocols and recommended guidance via regular Town Hall meetings, weekly newsletters, and training.
We continue to build on the additional benefits first introduced at the onset of COVID-19 and have added more programs in an effort to help our employees balance their work and personal commitments. Benefits added during the pandemic include:
· | | | | | “flex days” for time away from the office without requiring the usage of vacation or personal leave;Nasdaq 2023 Proxy Statement | PURPOSE AND PROGRESS | | | |
· | | | | | | | The New Investor Initiative is part of the Nasdaq Foundation’s effort to fill in the next piece of its strategic initiatives: a portfolio of programs focused on tackling overlooked barriers for people of color, particularly women of color, to participate in the capital markets. In 2022, the Foundation selected three partnership organizations as part of this New Investor Initiative. These organizations act on different fronts of the challenge by creating a new family care resourcesset of role models and benefits, including back-up childcare, caregiver support,educational activations and subsidized distance-learning enrichment programs; |
conducting community-based research to create a stronger investor identity for underrepresented communities. ·For more information, please see our 2022 Impact Snapshot and our Foundation Report. | | free home workout programs through a variety of wellness and fitness providers; and |
· | | programs to help employees coordinate care for chronically ill family members and to support employees whose family experienced the death of a loved one. |
We are committed to the continued investment in our people’s health, safety, and well-being as we redefine the future of work in a post-pandemic world.
Operating with Integrity
Ethics Program
Our commitment to integrity remains at the center of all we do. The Nasdaq Global Employee Ethics Program provides values-based guidance, heightens compliance risk awareness, strengthens decision-making, and drives sound business performance through its five pillars:
·Nasdaq Entrepreneurial Center | | | | | | | | The Nasdaq Entrepreneurial Center, or the Center, is an independent non-profit building a better path for entrepreneurs worldwide. Established in 2014 with the support of the Nasdaq Foundation, the Center has been improving inclusion, access, and knowledge in entrepreneurship. The Center delivers free education to meet the real time needs of entrepreneurs and then translates those needs to actionable data that is shared with policy makers and academic institutions around the world to build more opportunities for all entrepreneurs. For more information, visit thecenter.nasdaq.org. | | | | | Corporate Giving | | | | | | | | Nasdaq’s signature corporate giving program, GoodWorks, helps connect employees with causes, charities, and communities to support. In 2022, Goodworks empowered our employee volunteers to participate in more than 60 individual and team events. Nasdaq employee donations and Nasdaq corporate matches raised over $1 million for almost 650 charitable and community recipients. | | | | | Operating with Integrity | | | | | | | | Our commitment to integrity remains at the center of all we do. Our ethics and compliance programs, whistleblower program and protections, and Supplier Code of Ethics are described below. | | | | | Ethics and Compliance Programs | | | | | | | | The Nasdaq Global Employee Ethics Program and our corporate compliance programs set standards for conducting business in accordance with our high ethical standards, provide values-based guidance, heighten compliance risk awareness, strengthen decision-making, and drive sound business performance through five pillars. | | | | | Executive & Board Leadership: Leadership Our Executive Leadership TeamManagement Committee maintains oversight of Nasdaq’s Global Employee Ethics Program and compliance programs through committees, including a Compliance Council co-chairedchaired by theour Chief Legal, Risk and Regulatory Officer. Further oversight is provided through the GroupBoard’s Audit & Risk Management Committee, which is responsible for overseeing risks across Nasdaq. |
· | | Policies, Procedures & Controls: Controls Nasdaq’s Code of Ethics and related policies are applicable to all of our directors, employees (including the principal executive officer, the principal financial officer and the controller and principal accounting officer), and other associates. Our Code of Ethics and related policies outline requirements related to our ethical standards, conflicts of interest, employee trading activities, self-regulatory organization responsibilities, regulatoryreg- | | |
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| | | | | | | ulatory transparency, whistleblowing responsibilities and protections, antitrust laws, anti-bribery and corruption controls, privacy, data security, and sanctions and trade control laws. As a condition of employment, our employees are required to annually certify compliance with our Code of Ethics and related policies, as well as attest to the accuracy of required ethics disclosures. We maintain procedures, systems, and controls to support compliance with core policy requirements and detect potential violations. Additionally, the Board is governed by a distinct Code of Conduct containing supplemental provisions applicable to directors. The Code of Ethics and the Code of Conduct for the Board are posted to our website. |
· | | Risk Assessments: Assessments We monitor the primary jurisdictions where we operate for significant changes in law that may impact our business. As part of our annual Code of Ethics and policy review process and through ad hoc reviews, we assess our compliance policies and adjust them as needed to align with regulatory requirements and changes to our business. We undertake regularperiodic assessments of our risk relative to relevant compliance testingrisks and monitor for identified risk areas, conduct periodic auditsuse such assessment to inform program changes and assessments, and respond to situations where potential non-compliance is detected or reported. |
updates. · | | Outreach & Training: Training We perform ongoing training and awareness activities to ensure these policies and requirements are well understood, clear, and practical across the organization. This includes onboarding sessions held with all new hires. |
hires and mandatory annual ethics and compliance training and certifications for all employees. · | | Monitoring, Audit, & Response: Response We undertake regular compliance testing and monitoring, conduct audits to review control design and effectiveness, and respond to situations where potential non-compliance is detected or reported. Corrective action is taken for non-compliance, including disciplinary action (up to and including termination of employment) and disclosure to regulatory bodies when appropriate.appropriate; disciplinary action may include the reduction or elimination of bonuses or other incentive payments. We investigate instances of non-compliance to assess potential patterns of misconduct and incorporate findings into policy enhancements, control improvements, and training and outreach programs. |
Whistleblower Program and Protections
To foster a culture of safety where employees are supported in reporting unethical behavior, Nasdaq provides multiple channels for disclosing misconduct. Our SpeakUp! Line is operated by a third party that is strictly required to protect the anonymity of the reporting individual in accordance with local law. Nasdaq supports employees by allowing the disclosure of trade secrets in confidence to relevant government authorities without fear of retaliation, regardless of the confidentiality or intellectual property agreements the employee has signed with Nasdaq. Employees can contact the appropriate regulator, law enforcement, or other authorities without notifying Nasdaq in advance or first pursuing internal reporting channels. Nasdaq does not tolerate retaliation and provides all legal protections afforded under applicable laws and regulations for individuals reporting alleged misconduct or violations of the law.
Supplier Code of Ethics
Ethical business practices are not only foundational to our own corporate culture, but Nasdaq expects that its suppliers share the same level of commitment to integrity. The Supplier Code of Ethics, or the Supplier Code, sets forth our expectation that all suppliers act ethically and comply with relevant laws and regulations in all Nasdaq-related business dealings.
In 2021, Nasdaq updated its Supplier Code to address certain topics that were not previously covered, including environmental sustainability and supplier diversity. Our Supplier Code addresses the following:
· | | Freedom of Association and Right to Collective Bargaining: Suppliers must respect workers’ rights to freedom of association and collective bargaining in accordance with local legal requirements. |
· | | Environmental Transparency: We ask our suppliers to measure, report,Whistleblower Program and mitigate any potential negative climate change and biodiversity impacts associated with their operations, products and services including energy and water consumption, greenhouse gas emissions, waste, air and water pollution, nature loss and hazardous materials. Suppliers are asked to provide us with information to support our reporting and transparency commitments related to environmental sustainability and supply chain emissions. |
Protections · | | Diversity, Equity, and Inclusion: We expect our suppliers to promote a diverse and inclusive workforce and encourage them to engage diverse-owned businesses in their supply chain. |
· | | | | | Health and Safety: We expect suppliers to provide a safe and healthy work environment to theirTo foster an ethical culture where employees and contractors and to abide by local laws and regulations that address, where applicable and not limited to: occupational safety, emergency preparedness, occupational injury and illness, industrial hygiene, physically demanding work, sanitation, food, and housing. Suppliers must provide a safe work environment that supports and maintains relevant programsare supported in reporting unethical behavior, Nasdaq provides multiple channels for accident prevention and minimizing exposure to health risks. |
· | | Minimum Living Wages and Maximum Working Hours: We expect compliance with all applicable wage and working hour laws, including but not limited to: compliance with maximum work week hours regulations established by local law, including overtime requirements, except,disclosing misconduct under our SpeakUp! Program. One element of this program—our SpeakUp! Line—enables anonymous whistleblowing as allowed by applicable law, in extraordinary business circumstances and with the prior consent of the individual. Employees and contractors must be compensated appropriately in line with prevailing market conditions and at least at the minimum wage required by applicable laws and regulationsregulations. The SpeakUp! Line is operated by a third party that is strictly required to protect the anonymity of the reporting individual when requested by the individual, and the Audit & Risk Committee receives regular reports on activity on the SpeakUp! Line. Nasdaq supports employees by allowing the disclosure of trade secrets in confidence to relevant government authorities without fear of retaliation, regardless of the confidentiality or intellectual property agreements the employee has signed with Nasdaq.Employees can contact the appropriate regulator, law enforcement, other government authorities, or others as authorized by applicable law without notifying Nasdaq in advance or first pursuing internal reporting channels. Nasdaq does not tolerate retaliation and provides all required benefits. They must be compensated in compliance with local laws for overtime hours worked. Suppliers must comply with all laborlegal protections afforded under applicable laws and employ only workers who meet applicable minimum age and other requirements inregulations for individuals reporting alleged misconduct or violations of the jurisdiction for the services being performed.law. | | |
· | | | | | Acceptable Living Conditions: Where the supplier is providing housing for workers, such housing should be clean and safe, and provide reasonable living space.63 |
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· | | | | | | | Corporal Punishment and Disciplinary Practices: Suppliers must provide a non-violent, safe work environment, freeSupplier Code of verbal abuse, sexual or other forms of harassment, threats, intimidation, or physical harm. Suppliers may not use disciplinary procedures to retaliate against individuals or apply disciplinary actions in a discriminatory or otherwise unlawful manner. |
Community ImpactEthics
Every day, Nasdaq is driven by our purpose of advancing inclusive growth and prosperity. In 2021, we deepened this commitment, embedding purpose firmly into our business strategy, reimagining our Foundation, engaging global stakeholders, and establishing strategic partnerships to support a more sustainable and prosperous future for all.
2021 Highlights:
· | | GoodWorks | | | | | | Ethical business practices are not only foundational to our own corporate culture, but also what we expect from our suppliers. Nasdaq expects that its suppliers share our same level of commitment to integrity and high ethical standards. The Supplier Code of Ethics, or the Supplier Code, which is Nasdaq’s signature engagement program, helpingavailable on our website, sets forth our expectation that all suppliers act ethically and comply with relevant laws and regulations in all Nasdaq-related business dealings. In 2022, Nasdaq engaged new suppliers and existing top suppliers to connect employeesattest to our Supplier Code, confirming they have policies and practices consistent with ours or, to the causes, charities,extent they do not, will adhere to the applicable standards in the Supplier Code. Our Supplier Code addresses, among other things: sanctions, money laundering, anti-corruption and communities that they support. The Goodworks program empoweredother financial crimes; collective bargaining; environmental transparency; DEI; health and safety matters; living wages; and human rights, including modern slavery and acceptable living conditions for workers. | | | | | Measuring ESG Progress | | | | | | | | Throughout 2022, Nasdaq continued its commitment to advance our employee volunteers to participatesustainability disclosures through annual ESG reporting. We have made significant progress in 100 individual and team events. Nasdaq employee donors generated more than $650,000 in impact for more than 650 charitable and community recipients.our rankings across multiple ESG rating agencies. | | | | | | | | | | | | |  |
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| | | | | Nasdaq Purpose Week is a week of celebration and service. Over 1,700 employees participated in 2021 by volunteering, directing philanthropy, and submitting ideas for a purpose-driven business innovation challenge.2023 Proxy Statement | PURPOSE AND PROGRESS | | | |
Nasdaq Foundation
The Nasdaq Foundation was relaunched in 2021 with a more focused mission: to advance inclusive growth and prosperity by making markets work for the benefit of more people across society. The Nasdaq Foundation addresses systemic barriers faced by under-represented communities in their efforts to generate and sustain wealth.
In March 2021, the Nasdaq Foundation announced a research collaboration with the Aspen Institute’s Financial Security Program and Commonwealth. The resulting report, A Framework for Inclusive Investing: Driving Stock Market Participation to Close the Wealth Gap for Women of Color, examines the importance of increasing participation in capital markets for all Americans, especially women of color.
The Nasdaq Foundation selected six partnership organizations through the Quarterly Grant Program in 2021, awarding a cumulative $480,000. The services offered through these partnerships provide a wide range of support for Black, Latinx, and Indigenous founders and entrepreneurs, with a strong focus on women, as well as an introduction to financial careers for students of color.
For more information, please see our 2021 Impact Report and our Foundation Report.
| | | | | | | Transparency in ESG Governance | | | | | | | | Nasdaq’s ESG disclosures, policies, and practice statements are available online in our ESG Resource Center and include the following: | | | | | Annual ESG Reporting | | | | | • Nasdaq Sustainability Report •TCFD Report •Global Reporting Initiative (GRI) Index •Sustainability Accounting Standards Board (SASB) Index •World Economic Forum (WEF) Stakeholder Capitalism Index •United Nations Global Compact Communication on Progress (UNGC CoP) | | | | | Policies and Practices | | | | | | | | • Code of Ethics •Corporate Values Statement •Environmental Practices Statement •Human Rights Practices Statement •Information Protection and Privacy Practices Statement •Supplier Code of Ethics •UK Modern Slavery Act Transparency Statement | | |
Nasdaq Entrepreneurial Center
The Nasdaq Entrepreneurial Center, or the Center, is an independent non-profit building a better path for entrepreneurs worldwide. Established in 2014 with the support of the Nasdaq Foundation, the Center has been improving inclusion, access, and knowledge in entrepreneurship. The Center delivers free education to meet the real time needs of entrepreneurs and then translates those needs to actionable data that is shared with policy makers and academic institutions around the world to build more opportunities for all entrepreneurs.
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| | | | | | | | | | | | | Executive Compensation Highlights | | | | | | | | | | | To learn more | 51,600
Entrepreneurs served
| | 49%
Women
| | 61%
Black or Under- represented Minority Entrepreneur
| | 140+
Countries
| | about the Center, please visit
thecenter.nasdaq.org.
|
ESG Reporting and Analytics
Throughout 2021, Nasdaq continued its commitment to advance our sustainability disclosures with key stakeholders in the investment community through annualized ESG reporting. This is reflected in the significant score progress we received across multiple ESG rating agencies.
Additionally, utilizing the Task Force on Climate-Related Financial Disclosures (TCFD), we conducted a climate scenario analysis to evaluate climate-related risks and opportunities and their impact on our business over time (see our 2020 TCFD Report, available on our website). This exercise helps us examine the resiliency of our current ESG strategy towards climate risks, prioritize areas to further develop our mitigation strategies, and enhance our ability to make the most of identified transition opportunities. Our 2021 TCFD Report will broaden our focus beyond direct operations, as we begin to consider our critical suppliers. The 2021 report also will reflect the recently updated TCFD guidance.
Furthermore, we will continue to publish our EEO-1 data and comprehensive diversity statistics regarding gender and ethnicity in our annual Sustainability Report.
| | | | | | | | | | | | | | | |  | |  | |  | |  | Scoring Scale | | 100-0 (Best) | | 10-1 (Best) | | F-A (Best) | | CCC-AAA (Best) | | | | | | | | 11.9 | | 1* | | B | | BBB |
*Quality score for Environmental, Social, and Governance categories
Sustainalytics, ISS, CDP, and MSCI ESG ratings are as of April 28, 2022. The use by Nasdaq of any MSCI ESG Research LLC or its affiliates (“MSCI”) data, and the use of the MSCI logos, trademarks, service marks, or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of Nasdaq by MSCI. MSCI services and data are the property of MSCI or its information providers, and are provided ‘as-is’ and without warranty. MSCI names and logos are trademarks or service marks of MSCI.
ESG Documents
Nasdaq’s environmental and social disclosures, policies, programs and practice statements include the following:
· | | Anti-Discrimination and Anti-Harassment Policy |
· | | The Nasdaq Environment Practices Statement |
· | | The Nasdaq Human Rights Practices Statement |
· | | The Nasdaq Information Protection and Privacy Practices Statement |
· | | Nasdaq Supplier Code of Ethics |
· | | Nasdaq Sustainability Report |
· | | Task Force on Climate-Related Financial Disclosures Report |
· | | Global Reporting Initiative Index |
· | | Sustainability Accounting Standards Board Index |
· | | World Economic Forum Stakeholder Capitalism Index |
| | | | | | | | | | | | | Executive Compensation Highlights
Compensation decisions made for 2021 were aligned with Nasdaq’s strong financial and operational performance and reflected a continued emphasis on variable, at-risk compensation paid over the long-term. Compensation decisions are intended to reinforce our focus on performance and sustained growth. The Compensation Discussion and Analysis section beginning on page 64 describes the compensation of our NEOs, which includes the following highlights.
The majority of our NEOs’ pay is based on performanceand consists largely of equity-basedequity- | | | | | | | based compensation.86% | | | | | | | | | | | In 2022, 88% of our NEOs’ total direct compensation was performance-based, or “at-risk” in 2021. 62%at-risk, and 64% of our NEOs’ total direct compensation was equity-based compensation. Total direct compensation includes base salary, annual cash incentive awards, and equity awards. | | | | | | | | | | | Annual incentives are based on achievement of rigorous performance goals. | | | | | | | | | | | In 2021,2022, payments of annual incentives reflected our achievement of performance goals relating to corporate net revenues and corporate operating income (on a run rate basis), in addition to accomplishment of strategic objectives, and business unit financial results.results, and an ESG objective. The resulting payouts to NEOs ranged from 180%117% to 195%161% of targeted amounts. | | | | | | | | | | | We use long-term incentives to promote retention and reward our NEOs. | | | | | | | | | | | Our main long-term incentive program for NEOs consists primarily of PSUs based on TSR relative to other companies, including the S&P 500 companies and a group of peer companies. Over the three-year period from January 1, 20192020 through December 31, 2021,2022, Nasdaq’s cumulative TSR was 149%85.5%, which was at the 87th90th percentile of S&P 500 companies and the 100th percentile of peer companies. This TSR performance resulted in performance vesting of PSUs at 200% of target shares. | | | | | | | | | | | Our compensation program is grounded in best practices. | | | | | | | | | | | Our best practices include strong stock ownership guidelines for directors and executives, no hedging or pledging of Nasdaq stock, a long-standing “clawback” policy, and no tax gross ups on severance arrangements or perquisites. | | | | | | | | | | | Our executive compensation program does not encourage excessive risk-taking. | | | | | | | | | | | The Audit & Risk and Management Compensation Committees closely monitor the risks associated with our executive compensation program and individual compensation decisions. We annually conduct a comprehensive risk assessment of our compensation program. The Management Compensation Committee and Audit & Risk Committee both concluded, based on the risk assessment report’s findings, that any risks arising from our compensation programs are not reasonably likely to have a material adverse effect on the Company. | | |
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Proposal 2:
Approval of the Company’s Executive Compensation on an Advisory Basis
| | | | | | | | | | | Proposal 2: Approval of the Company’s Executive Compensation on an Advisory Basis | | | | | | | | | |
✓ | | | | | | | | | | |  | | The Board unanimously recommends that shareholders vote FOR the approval of the Company’s executive compensation on an advisory basis. |
| | | | | | | | | | | | | | | We are asking shareholders to approve, on an advisory basis, the Company’s executive compensation as reported in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the executive compensation program and practices described in this Proxy Statement. We recommend that shareholders read the Compensation Discussion and Analysis below as well as the executive compensation tables and narrative beginning on page 100. The Compensation Discussion and Analysis describes our executive compensation program and the executive compensation decisions made by our Management Compensation Committee and Board of Directors in 2022 in more detail. The compensation tables provide detailed information on the compensation of our NEOs. The Board and the Management Compensation Committee believe that the compensation program for our NEOs has been effective in meeting the core principles described in the Compensation Discussion and Analysis in this Proxy Statement. In accordance with Section 14A of the Exchange Act and as a matter of good corporate governance, we are asking shareholders to approve the following advisory resolution at the 2023 Annual Meeting of Shareholders. RESOLVED, that the shareholders of Nasdaq, Inc. approve, on an advisory basis, the compensation of Nasdaq’s NEOs, as disclosed in the Proxy Statement for Nasdaq’s 2023 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the executive compensation tables, and other related tables and narrative disclosure. This advisory vote is not binding on the Board or the Management Compensation Committee. Although non-binding, the Board and the Management Compensation Committee will review and consider the outcome of the vote when making future decisions regarding our executive compensation program. The Board has adopted a policy providing for annual shareholder advisory votes to approve the Company’s executive compensation. Under the current version of the policy, the next advisory vote to approve executive compensation will occur at the 2024 Annual Meeting of Shareholders unless the results of Proposal 3 cause the Board to modify the timing of the next advisory vote on executive compensation. | | |
We are asking shareholders to approve, on an advisory basis, the Company’s executive compensation as reported in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the executive compensation program and practices described in this Proxy Statement.
We recommend that shareholders read the Compensation Discussion and Analysis below as well as the executive compensation tables and narrative beginning on page 93. The Compensation Discussion and Analysis describes our executive compensation program and the decisions made by our Management Compensation Committee in 2021 in more detail. The compensation tables provide detailed information on the compensation of our NEOs. The Board and the Management Compensation Committee believe that the compensation program for our NEOs has been effective in meeting the core principles described in the Compensation Discussion and Analysis in this Proxy Statement.
In accordance with Section 14A of the Exchange Act and as a matter of good corporate governance, we are asking shareholders to approve the following advisory resolution at the 2022 Annual Meeting of Shareholders.
RESOLVED, that the shareholders of Nasdaq, Inc. approve, on an advisory basis, the compensation of Nasdaq’s NEOs, as disclosed in the Proxy Statement for Nasdaq’s 2022 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the executive compensation tables and other related tables and narrative disclosure.
This advisory vote is not binding on the Board or the Management Compensation Committee. Although non-binding, the Board and the Management Compensation Committee will review and consider the outcome of the vote when making future decisions regarding our executive compensation program.
The Board has adopted a policy providing for annual shareholder advisory votes to approve the Company’s executive compensation. Under the current version of the policy, the next advisory vote to approve executive compensation will occur at the 2023 Annual Meeting of Shareholders.
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Compensation Discussion and Analysis
This Compensation Discussion and Analysis provides a summary of our executive compensation philosophy and programs and describes the compensation decisions we have made under these programs and the factors considered in making those decisions. Our executive compensation program supports Nasdaq’s growth strategy and is aligned to create long-term shareholder value. This Compensation Discussion and Analysis and the Executive Compensation Tables focus on the compensation of our NEOs for 2021.
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| | | | | Our NEOs
| | | | Proposal 3: Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation | | | | Adena T. Friedman | | 
| | President and CEO | | | | Ann M. Dennison | | 
| | EVP and CFO1 | | | | Lauren B. Dillard | | 
| | Former EVP, Investment Intelligence2 | | | | P.C. Nelson Griggs | | 
| | EVP, Corporate Platforms | | | | Bradley J. Peterson | | 
| | EVP and CIO/CTO | | | | Michael Ptasznik | | 
| | Former EVP, Corporate Strategy and CFO3 |
1 | Ms. Dennison, who was formerly our SVP, Controller and Principal Accounting Officer, was appointed EVP and CFO effective March 1, 2021.
|
2 | Ms. Dillard resigned from Nasdaq and her position as EVP, Investment Intelligence, effective as of April 8, 2022.
|
3 | Mr. Ptasznik retired from Nasdaq and his position as EVP, Corporate Strategy and CFO, effective as of February 28, 2021. Since Mr. Ptasznik served as CFO for a portion of 2021, he is included as an NEO in accordance with SEC rules.
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| | | | | | | | Business Performance Highlights
| | | | 66The Board unanimously recommends a vote to conduct future advisory votes on executive compensation every ONE YEAR. |
| | | Decision-Making Framework | | Key Governance Features of Executive Compensation Program | | 66 | | | | | | Total Rewards Philosophy | | 67Pursuant to Section 14A of the Exchange Act, we are asking shareholders to vote on whether future advisory votes on executive compensation of the nature reflected in Proposal 2 should occur every year, every two years or every three years. In 2011, shareholders recommended that advisory votes on executive compensation be held on an annual basis. As a result, the Board adopted a policy providing for annual shareholder advisory votes to approve the Company’s executive compensation, and we have submitted such proposals to our shareholders at each Annual Meeting since 2011. In 2017, shareholders reaffirmed their support for annual say on pay votes. An annual advisory vote on executive compensation allows our shareholders to provide us with their direct, timely input on our compensation objectives, policies, and practices as disclosed in the Proxy Statement every year. An annual advisory vote on executive compensation is also consistent with our practice of seeking input and engaging in dialogue with our shareholders on a regular basis. This advisory vote on the frequency of future advisory votes on executive compensation is not binding on the Board of Directors and Management Compensation Committee. Although non-binding, the Board of Directors and the Management Compensation Committee will carefully review the voting results. Notwithstanding the Board’s recommendation and the outcome of the shareholder vote, the Board of Directors may in the future decide that it is in the best interests of the shareholders and the Company to conduct an advisory vote on executive compensation more or less frequently than the frequency preferred by our shareholders and may vary its practice based on factors such as discussions with shareholders and the adoption of material changes to compensation programs. This non-binding advisory vote must be submitted to shareholders at least once every six years and we expect that our next say on pay frequency vote will occur at our 2029 Annual Meeting of Shareholders. After careful consideration of the frequency alternatives, the Board believes that conducting an advisory vote on executive compensation on an annual basis is currently appropriate for Nasdaq and our shareholders. |
| | | | | How We Determine CompensationNasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | 68 |
| | | | | | | | | | | | | Compensation Discussion and Analysis | | | | | | | This Compensation Discussion and Analysis provides a summary of our executive compensation philosophy and programs and describes the compensation decisions we have made under these programs and the factors considered in making those decisions. Our executive compensation programs support Nasdaq’s growth strategy and are aligned to create long-term shareholder value. This Compensation Discussion and Analysis and the Executive Compensation Tables focus on the compensation of our NEOs for 2022. | | | | | | | | | | | Our NEOs | | | | | | | | | | | | | | | | | | | | | | | | | | | | 
| | Adena T. Friedman Chair and CEO | | | | | | | | | | | | | | | | | | | | | | | 
| | Ann M. Dennison EVP and CFO | | | | | | | | | | | | | | | | | | | | | | | 
| | Tal Cohen President1 | | | | | | | | | | | | | | | | | | | | | | |  | | P.C. Nelson Griggs President2 | | | | | | | | | | | | | | | | | | | | | | | 
| | Bradley J. Peterson EVP and CIO/CTO | | | | | | | | | | | | | | | | | | 1. Tal Cohen was appointed President effective April 18, 2023. Mr. Cohen continues to serve as Division President, Market Platforms, a role he assumed January 1, 2023. 2. P.C. Nelson Griggs was appointed President effective April 18, 2023. Mr. Griggs continues to serve as Division President, Capital Access Platforms, a role he assumed January 1, 2023. | | |
| | | | 70 | | |
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | Competitive Positioning | | 6871 | | | | | | Tally Sheets
| | 70 | | | | What We Pay and Why: | | Pay for Performance | | 72 | | | | Elements of Executive | | Compensation Mix | | 72 | | | | Compensation
| | | | | | | | 2021 Compensation Decisions | | Base Salary | | 72 |
| | | | | Annual Cash Incentive Compensation | | 72Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | | | | | | | Business Performance Highlights | | | | | Long-Term Incentive Compensation | | 75 | | | | | | NEO Compensation Summaries
We achieved strong financial and operational performance across our business segments in 2022, while continuing to diversify our business and invest significantly to drive growth. Our 2022 results demonstrated the strength of our diversified business in a challenging economic environment, and our ability to deliver on our longer-term objectives. Following our corporate realignment announced in September 2022, our new corporate structure positions us to deliver greater liquidity, transparency, and integrity solutions to our clients throughout the financial system. | | 78 | | | | Other Aspects of Our Executive | | General Equity Award Grant Practices | | 89 | | | | Compensation Program | | Benefits | | 89 | | | | | | Severance | | 89 | | | | | | Other
| | 90 | | | | Risk Mitigation and Other Pay | | Risk Assessment of Compensation Program | | 90 | | | | Practices | | Stock Ownership Guidelines | | 90 | | | | | | Stock Holding Guidelines | | 91 | | | | | | Trading Controls and Hedging and Pledging Policies | | 91 | | | | | | Incentive Recoupment Policy | | 91 | | | | | | Tax and Accounting Implications of Executive Compensation
| | 91 |
Business Performance Highlights
We achieved strong financial and operational performance across our business segments in 2021, while continuing to diversify our business and invest significantly to drive growth. Our record 2021 results demonstrated our ability to address the needs of our clients in a capital markets environment characterized by elevated trading, strong IPO activity and rising index valuations amidst the COVID-19 pandemic.
· | | •Net revenues in 20212022 were $3.4$3.6 billion, an increase of 18%5% over 2020. |
2021. · | | •ARR increased 8% compared to the fourth quarter of 2021. Annualized SaaS revenues increased 13% and represented 36% of ARR. •This strong revenue performance allowed us to continue to reinvest in our business and our people, increase our quarterly dividend from $0.49by 11% to $0.54$0.20 per share, and further execute our share repurchase plan. |
· | | •We returned $1.3more than $1.0 billion to shareholders in 2022 through our share repurchase program and quarterly dividends, in 2021, in addition toand an aggregate of $2.3$2.9 billion over the last three years. •Additional 2022 business highlights are described on page 1 of this Proxy Statement. | | |
Additional 2021 business highlights are described on page 1 of this Proxy Statement.
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Decision-Making Framework
We design our executive compensation program to reward financial performance and operational excellence, effective strategic leadership and achievement of business unit goals and objectives, which are key elements in driving shareholder value and sustainable growth. The program is also designed to enable us to compete successfully for top talent and to build an effective leadership team. Our compensation program is grounded in best practices and ethical and responsible conduct.
Key Governance Features of Executive Compensation Program
The following table summarizes the key governance and design features of our executive compensation program. We believe our executive compensation practices drive performance and serve our shareholders’ long-term interests. We avoid certain practices that do not serve these goals or further our shareholders’ interests.
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | | | | | | | | | Total Rewards Philosophy | | | | | On an annual basis, the Management Compensation Committee reviews our compensation philosophy, programs, and practices to ensure that they meet the needs of not only the Company, but also the shareholders. Nasdaq’s total rewards program is designed to attract, retain, and empower employees to successfully execute the Company’s growth strategy. Nasdaq’s balanced total rewards program encourages decisions and behaviors that align with the short and long-term interests of our shareholders. Designed to promote and support our strategy, the building blocks of our total rewards program are described below. | | | | | | | | | | | | | | | | Reinforce our cultural values of: Driving Innovation, Leading with Integrity, Playing as a Team, Fueling Client Success, Expanding Your Expertise, and Acting as an Owner | | Energize and align employees with the most important priorities, and encourage and reward high levels of performance, innovation, and growth, while not promoting undue risk | | Retain our most talented employees in a highly dynamic, competitive talent market | | Engage and excite current and future employees who possess the leading skills and competencies needed for us to achieve our strategy and objectives | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Compensation Philosophy Guiding Principles | | |
| | | | | | 1 | | 2 | | 3 | | Pay for Performance | | Retention | | Competitive Pay Levels | | | | | A substantial portion of compensation is variable or at-risk and directly linked to Company, business unit, and individual performance. | | Our long-term incentive award vesting periods overlap, continually ensuring that a portion of previously granted equity remains unvested. | | Total compensation is sufficiently competitive with industry peers to attract and retain executives with similar levels of experience, skills, education, and responsibilities. | | 4 | | 5 | | 6 | | Internal Equity | | Collateral Implications | | Shareholder Alignment | | | | | Compensation takes into account the different levels of responsibilities, scope, risk, performance, and future potential of our executives. | | Our total compensation mix encourages executives to take appropriate, but not excessive, risks to improve our performance and build long-term shareholder value. | | The financial interests of executives are aligned with the long-term interests of our shareholders through stock-based compensation and performance metrics that correlate with long-term shareholder value. |
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| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | | | Say on Pay Results | | | | | Each year, we carefully consider the results of our Say on Pay advisory vote from the prior year. At our 2022 Annual Meeting, 95.9% of the votes cast were in favor of the advisory vote to approve executive compensation. In part based on this feedback, in 2022, we retained the core elements of our executive compensation program, policies, and decisions. We believe our programs continue to appropriately motivate and reward our senior management. In addition to the perspective provided by the Say on Pay results, we also carefully solicit and consider feedback from our shareholders on executive compensation, corporate governance, and other issues throughout the year. For further information on our shareholder engagement, see “Shareholder Engagement.” | | | | | How We Determine Compensation | | | | | | | | We have established a process for evaluating the performance of the Company, the Chair and CEO, and other NEOs for compensation purposes. On an annual basis, the Board, the Management Compensation Committee, and the Nominating & ESG Committee review our Chair and CEO’s performance in Executive Session. As part of their deliberative process, the Management Compensation Committee, and Board establish and approve performance goals, and then evaluate our Chair and CEO’s performance against the pre-established goals and determine appropriate compensation. The factors considered include our Chair and CEO’s performance against annual strategic objectives, the performance of the Company, and an ESG goal. Ms. Friedman, our Chair and CEO, is compensated only for her role as CEO and not as Board Chair. With the support of People@Nasdaq, our Chair and CEO develops compensation recommendations for the NEOs and other executive officers and presents the recommendations to the Management Compensation Committee for review and consideration. However, in accordance with the listing rules of The Nasdaq Stock Market, the Chair and CEO does not vote on executive compensation matters or attend Executive Sessions of the Management Compensation Committee or Board, and the Chair and CEO is not present when her own compensation is being discussed or approved. | | | | | Role of Compensation Consultants | | | | | | | | In 2022, Nasdaq selected a new independent compensation consultant, Exequity, which assisted management in gathering data, reviewing best practices, and making recommendations to the Management Compensation Committee about our executive compensation program. However, Exequity did not determine or recommend the amount or form of executive or director compensation. Exequity did not provide any services to Nasdaq or its Board other than executive compensation consulting. In 2022, we paid Exequity $36,750 in fees for competitive market data for executives and outside directors, and $222,156 in fees for other executive compensation services. Meridian Compensation Partners, an independent compensation consultant, also assisted management for a portion of 2022 in gathering data, reviewing best practices, and making recommendations to the Management Compensation Committee about our executive compensation program. However, Meridian did not determine or recommend the amount or form of executive or director compensation. Meridian did not provide any services to Nasdaq or its Board other than executive compensation consulting. | | |
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | Competitive Positioning | | | To evaluate the external competitiveness of our executive compensation program, we compare certain elements of the program to similar elements used by peer companies. In setting 2022 compensation levels, the Management Compensation Committee used a comprehensive peer group, consisting of an aggregate of 28 companies (comprised of 21 companies in our primary peer group and seven in our additional peer group), as the basis for a competitive market analysis of the compensation program for the Chair and CEO and other NEOs. The 2022 peer group was substantially similar to the 2021 peer group, except E*TRADE Financial Corporation and TD Ameritrade Holding Corporation were removed due to each being acquired. We believe using and disclosing a peer group provides valuable input into compensation levels and program design. When forming the peer group, we considered potential peers among both direct industry competitors and companies in related industries with similar talent needs. After identifying potential peers on this basis, we used the following seven screening criteria to select appropriate peer companies and talent. We believe the current peer group includes an accurate representation of similarly sized industry competitors and/or companies with which we generally compete for executive talent. The screening criteria we used to select peer companies are: • Revenue size • Market capitalization size • Financial performance • Direct exchange competitors • Financial services companies • Technology companies • Companies with global complexity | | | Executive Compensation Peer Groups Organized by Industry Segment1 | | | | | Primary Peer Group (for Benchmarking Chair and CEO and other NEOs’ compensation) |
| | | | | | | | | | Consumer Finance | | Data Processing &
Outsourced Services | | Financial Exchanges & Data | | Investment Banking &
Brokerage | | Research &
Consulting Services | | | | | | Discover Financial Services | | Automatic Data Processing, Inc. | | Cboe Global Markets, Inc. | | BGC Partners, Inc. | | IHS Markit Ltd. | | CME Group Inc. | | The Charles Schwab Corporation | | Verisk Analytics, Inc. | | | Fidelity National Information Services, Inc. Fiserv, Inc. Mastercard Incorporated PayPal Holdings, Inc. Visa Inc. | | Deutsche Börse AG FactSet Research Systems Inc. Intercontinental Exchange, Inc. London Stock Exchange Group plc Moody’s Corporation MSCI Inc. S&P Global Inc. | | | | | | | | | | | | | | | | | TMX Group Limited | | | | |
| | | | 76 | | |
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
Total Rewards Philosophy
On an annual basis, the Management Compensation Committee reviews our compensation philosophy, programs and practices to ensure that they meet the needs of not only the Company, but also the shareholders. Nasdaq’s total rewards program is designed to attract, retain, and empower employees to successfully execute the Company’s growth strategy. Nasdaq’s balanced total rewards program encourages decisions and behaviors that align with the short and long-term interests of our shareholders.
Designed to promote and support our strategy, the building blocks of our total rewards program are described below.
| | | | | Compensation Philosophy Guiding Principles | 1 | | 2 | | 3 | Pay for Performance | | Retention | | Competitive Pay Levels | | | | A substantial portion of compensation
is variable or “at-risk” and directly
linked to individual, Company and
business unit performance. | | Our long-term incentive award vesting
periods overlap, continually ensuring that a
portion of previously granted equity remains
unvested. | | Total compensation is sufficiently
competitive with industry peers to
attract and retain executives with
similar levels of experience, skills,
education and responsibilities. | 4 | | 5 | | 6 | Internal Equity | | Collateral Implications | | Shareholder Alignment | | | | Compensation takes into account
the different levels of responsibilities,
scope, risk, performance and future
potential of our executives. | | Our total compensation mix encourages
executives to take appropriate, but not
excessive, risks to improve our performance
and build long-term shareholder value. | | The financial interests of executives
are aligned with the long-term
interests of our shareholders
through stock-based compensation
and performance metrics
that correlate with long-term
shareholder value. |
Say on Pay Results
Each year, we carefully consider the results of our Say on Pay advisory vote from the prior year. At our 2021 Annual Meeting, 94% of the votes cast were in favor of the advisory vote to approve executive compensation. In 2021, we retained the core elements of our executive compensation program, policies and decisions. We believe our programs continue to appropriately motivate and reward our senior management.
In addition to the perspective provided by the Say on Pay results, we also carefully solicit and consider feedback from our shareholders on executive compensation, corporate governance and other issues throughout the year. For further information on our shareholder engagement, see “Shareholder Engagement.”
How We Determine Compensation
We have established a process for evaluating the performance of the Company, the President and CEO and other NEOs for compensation purposes. On an annual basis, the Board, the Management Compensation Committee and the Nominating & ESG Committee review our President and CEO’s performance in Executive Session. As part of their deliberative process, the Management Compensation Committee and Board establish and approve performance goals, and then evaluate our President and CEO’s performance against the pre-established goals and determine appropriate compensation. The factors considered include our President and CEO’s performance against annual strategic objectives, the performance of the Company and employee engagement.
With the support of People@Nasdaq, our President and CEO develops compensation recommendations for the NEOs and other executive officers. Our President and CEO presents the recommendations to the Management Compensation Committee and/or the Board for review and consideration.
However, in accordance with the listing rules of The Nasdaq Stock Market, the President and CEO does not vote on executive compensation matters or attend Executive Sessions of the Management Compensation Committee or Board, and the President and CEO is not present when her own compensation is being discussed or approved.
Role of Compensation Consultant
In 2021, Meridian Compensation Partners, an independent compensation consultant, assisted management in gathering data, reviewing best practices and making recommendations to the Management Compensation Committee about our executive compensation program. However, Meridian did not determine or recommend the amount or form of executive or director compensation. Meridian did not provide any services to Nasdaq or its Board other than executive compensation consulting. In 2021, we paid Meridian $38,121 in fees for competitive market data for executives and outside directors, and $147,954 in fees for other executive compensation services.
Competitive Positioning
To evaluate the external competitiveness of our executive compensation program, we compare certain elements of the program to similar elements used by peer companies. In setting 2021 compensation levels, the Management Compensation Committee used a comprehensive peer group, consisting of an aggregate of 30 companies (comprised of 23 companies in our primary peer group and seven in our additional peer group), as the basis for a competitive market analysis of the compensation program for the President and CEO and other NEOs. The 2021 peer group is substantially similar to the 2020 peer group, with the following changes: Invesco Ltd. and Thomson Reuters Corporation, two firms that are no longer relevant business peers were removed; and two business relevant peers, Moody’s and Verisk Analytics, were added. For the additional peer group, salesforce.com was removed and replaced with ServiceNow, a business relevant peer. We believe using and disclosing a peer group provides valuable input into compensation levels and program design.
When forming the peer group, we considered potential peers among both direct industry competitors and companies in related industries with similar talent needs. After identifying potential peers on this basis, we used the following seven screening criteria to select appropriate peer companies and talent.
We believe the current peer group includes an accurate representation of similarly sized industry competitors and/or companies with which we generally compete for executive talent.
Screening Criteria Used To Select Peer Companies
· | | Market capitalization size |
· | | Direct exchange competitors |
· | | Financial services companies |
· | | Companies with global complexity |
Executive Compensation Peer Groups Organized by Industry Segment
Primary Peer Group (for Benchmarking President and CEO and other NEOs’ compensation)1
| | | | | | | | | Consumer
Finance | | Data Processing
& Outsourced
Services | | Financial
Exchanges
& DataIntuit Inc. | | Investment
Banking &
Brokerage | | Research &
Consulting
ServicesServiceNow, Inc. | | | | | Discover Financial
Services | | | | | | | | | | | Workday, Inc. | | | | | | | | | | | Automatic Data
Processing, Inc.
Fidelity National
Information
Services, Inc.
Fiserv, Inc.
Mastercard
Incorporated
PayPal Holdings, Inc.
Visa Inc.
| | Cboe Global
Markets, Inc.
CME Group Inc.
Deutsche Börse AG
FactSet Research
Systems Inc.
Intercontinental
Exchange, Inc.
London Stock
Exchange Group plc
MSCI Inc.
Moody’s Corporation
S&P Global Inc.
TMX Group Limited
| | BGC Partners, Inc.
The Charles Schwab
Corporation
E*TRADE Financial
Corporation TD
Ameritrade Holding
Corporation
| | IHS Markit Ltd.
Verisk Analytics, Inc.
|
1 | This1. These peer group differsgroups differ from the peer group used for the performance graph included in Item 5 of our Form 10-K, which is for stock-performance comparisons and includes industry-only competitors.
| | | | | | | | While the peer group represents a broad group of potential competitors for executive talent across various industries, peer group data serves as only one reference point for the Management Compensation Committee in evaluating our executive compensation program. The Management Compensation Committee uses this data to understand how various elements of our executive compensation program compare to other companies. In addition, the Management Compensation Committee uses multiple categorizations of the aggregate peer group data for each particular NEO role to better understand the competitive landscape for that position. For example, depending on the role of our NEO, the Management Compensation Committee may consider the entire peer group and/or certain subsets of the peer group. For the Chair and CEO and other NEO roles, with the exception of the EVP and CIO/CTO role, the primary peer group used for compensation comparisons excludes companies in the Application Software, Internet & Direct Marketing Retail, and Systems Software sectors, as discussed above. We view these companies as talent competitors for executive roles in our Global Technology Organization, so they are included as primary peers for those roles. While the peer group comparison is applied to ensure our executive compensation is competitive, we do not target executive compensation to a specific percentile of the compensation set by our peer group. | | | | | | | | | | |
Additional Peer Group (added to Primary Peer Group for Benchmarking EVP and CIO/CTO’s compensation only; used as a secondary, informational reference for President and CEO and other NEOs’ compensation)1
| | | | | | | | | | | | | Application Software | | Internet & Direct
Marketing Retail
| | Systems Software | | | | Adobe Inc. | | eBay Inc. | | NortonLifeLock Inc. | | | | Citrix Systems, Inc. | | | | ServiceNow, Inc. | | | | Intuit Inc. | | | | | | | | Workday, Inc. | | | |  |
1 | This peer group differs from the peer group used for the performance graph included in Item 5 of our Form 10-K, which is for stock-performance comparisons and includes industry-only competitors.
|
While the peer group represents a broad group of potential competitors for executive talent across various industries, peer group data serves as only one reference point for the Management Compensation Committee in evaluating our executive compensation program. The Management Compensation Committee uses this data to understand how various elements of our executive compensation program compare to other companies. In addition, the Management Compensation Committee uses multiple categorizations of the aggregate peer group data for each particular NEO role to better understand the competitive landscape for that position. For example, depending on the role of our NEO, the Management Compensation Committee may consider the entire peer group and/or certain subsets of the peer group. For the President and CEO and other NEO roles, with the exception of the EVP and CIO/CTO role, the primary peer group used for compensation comparisons excludes companies in the Application Software, Internet & Direct Marketing Retail and Systems Software sectors, as discussed above. We view these companies as talent competitors for executive roles in our Global Technology Organization, so they are included as primary peers for those roles. While the peer group comparison is applied to ensure our executive compensation is competitive, we do not target executive compensation to a specific percentile of the compensation set by our peer group.
Each executive officer is also evaluated individually based on skills, knowledge, performance, growth potential and, in the Management Compensation Committee’s business judgment, the value he or she brings to the organization and Nasdaq’s retention risk.
Tally Sheets
When recommending compensation for the President and CEO and other NEOs, the Management Compensation Committee reviews tally sheets that detail the various elements of compensation for each executive officer. These tally sheets are used to evaluate the appropriateness of the total compensation package, to compare each executive officer’s total compensation opportunity with his or her actual aggregate payment and to ensure that the compensation appropriately reflects the compensation program’s focus on pay for performance.
What We Pay and Why:
Elements of Executive Compensation
| | | | | | | | | | | | | ElementTally Sheets | | Description | | | | | | ObjectivesWhen recommending compensation for the Chair and CEO and other NEOs, the Management Compensation Committee reviews tally sheets that detail the various elements of compensation for each executive officer. These tally sheets are used to evaluate the appropriateness of the total compensation package, to compare each executive officer’s total compensation opportunity with his or her actual aggregate payment, and to ensure that the compensation appropriately reflects the compensation program’s focus on pay for performance. | | Where
Described
in More
Detail |
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | | | | | What We Pay and Why: Elements of Executive Compensation | | | | | |
| | | | | | | | | | | | | | | | Element | | Description | | Objectives | | Where Described in More Detail | | | | | | FIXED | | Base Salary | | Fixed amount of compensation for
service during the year | | Reward scope of responsibility,
experience, and individual performance | | Page 80 | AT-RISK | | Page 72 | | | Annual Incentive
Compensation | | At-risk compensation, dependent on
goal achievement Formula-driven annual incentive linked to corporate financial, business unit financial, and strategic objectives and other organizational priorities | | Promote strong business results by rewarding value drivers, without creating an incentive to take excessive risk Serve as key compensation vehicle for rewarding results and differentiating individual performance each year | | Page 7280 | AT-RISK | | | | | | | Long-Term Incentive
Compensation | | Award values are granted based on market competitive norms and individual performance PSUs are paid in shares of common stock upon vesting based on three-year relative TSR ranking compared to peers and to the broad market, over each cycle.cycle RSUs are paid in shares of common stock, which have time-based vesting over four years from the grant date | | Motivate and reward executives for outperforming peers over several years Ensure that executives have a significant stake in the long-term financial success of the Company, aligned with the shareholder experience Promote longer-term retention | | Page 7582 | | | | | | BENEFITS | | Retirement, Health, and
Welfare | | 401(k) plan with Company match Deferred Compensation Plan Competitive welfare benefits Frozen pension plan and frozen supplemental executive retirement plan | | Provide market-competitive benefits to attract and retain top talent Frozen plans reflect legacy arrangements | | Page 8995 | | | | | | SEVERANCE | | Severance
Arrangements -
Involuntary
Termination Without
Cause or Voluntary
Termination with Good
Reason | | Specified amounts under employment arrangements with some executive officers Discretionary guidelines, for involuntary terminations without cause | | Assist in attracting and retaining top talent Provide transition assistance Promote smooth succession planning upon retirement Allow the Company to obtain release of employment-related claims | | Page 8996, 109 | | | | | | | | Severance
Arrangements -
Termination Due to
Change in Control
(“ (“Double Trigger”) | | Severance and related benefits paid upon termination without cause or resignation for good reason following a change in control Accelerated equity vesting upon qualifying termination post-change in control | | Retention of executives through a change in control Preserve executive objectivity when considering transactions in the best interest of shareholders Assist in attracting and retaining top talent | | Page 8996, 110 | | | | | | OTHER | | Limited Perquisites | | Limited additional benefits provided to certain executives | | Provide nominal additional assistancethatassistance that allows executives to focus on their duties | | Page 96 |
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| | | | | Page 90Pay for Performance | | 
| | | | | Our program’s intention is to align the interests of our executives with the interests of our shareholders and to link executive compensation with the drivers of short-term and long-term value creation. A large percentage of total target compensation is at-risk through long-term equity awards and annual cash incentive awards. These awards are linked to actual performance and include a substantial portion of equity. | | | Compensation Mix | | | | | The mix of total target direct compensation for our NEOs in 2022 is shown below. At-risk pay is comprised of the target annual cash incentive award and the target equity award. The annual cash incentive award and the PSU portion of the equity award are performance-based. | | | | | NEOs – 2022 Total Target Direct Compensation Mix | | | | | |
| | | | | | | | | Target Annual Cash Incentive Award 24% | | | | | |
| | | | | | | | | At-Risk Pay 88% (24% + 64%) |
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | 2022 Compensation Decisions | | | | | The sections below provide an overview as to how the Management Compensation Committee and/or Board of Directors determined each NEO’s compensation for 2022. For specific compensation amounts for each NEO, see the “NEO Compensation Summaries” beginning on page 85. | | | Base Salary | | | | | Base salaries are a fixed component of each NEO’s compensation. In setting each NEO’s base salary, the Management Compensation Committee and/or Board considers competitive market data derived from our peer group, annual market surveys, and the NEO’s individual contributions, performance, time in role, scope of responsibility, leadership skills, and experience. We review base salaries on an annual basis and may adjust base salaries during the year in response to significant changes in an executive’s responsibilities or events that would impact the long-term retention of a key executive. Salaries are established at levels commensurate with each executive’s title, position, and experience, recognizing that each executive is managing a component of a complex global company. | | | Annual Cash Incentive Compensation | | | | | We maintain an annual performance-based cash incentive arrangement under which each NEO can earn cash incentive awards through our ECIP based on achievement of performance against pre-determined performance goals. The Management Compensation Committee and/or Board established each NEO’s target annual cash opportunity based on an assessment of each NEO’s position and responsibilities, the competitive market analysis, and the Company’s retention objectives. | | | | | How We Set Performance Targets | | | | | The annual cash incentive award payments for our NEOs are based on the achievement of pre-established, quantifiable performance goals. The Chair and CEO selects and recommends goals for the other executive officers based on their areas of responsibility and input from each executive. The Management Compensation Committee reviews and considers our Chair and CEO’s recommendations and approves the goals for the coming year after identifying the objectives most critical to our future growth and most likely to hold executives accountable for the operations for which they are responsible. Based on these same factors, the Management Compensation Committee and Board determine and approve the performance goals for the Chair and CEO. | | | | | Targets are set based primarily on the Company’s Board-approved budget for the year. The performance goals are intended to be rigorous and are set at levels where the maximum payout for any NEO would be difficult to achieve and that are in excess of budget assumptions. | | | | | The Management Compensation Committee and/or the Board reviews the Company’s financial goals and the NEOs’ individual goals throughout the year and determines if any adjustments are warranted based on significant transactions or other extraordinary events. | | | | | For 2022, the Management Compensation Committee and Board selected financial and strategic metrics and targets that they believe incentivize our executives to achieve our strategic objectives and drive Nasdaq’s long-term financial performance. |
Pay for Performance
Nasdaq’s executive compensation program is designed to deliver pay in accordance with corporate and business unit financial and strategic objectives as well as individual performance, levels of responsibility, breadth of knowledge and experience.
Our program’s intention is to align the interests of our executives with the interests of our shareholders and to link executive compensation with the drivers of short-term and long-term value creation. A large percentage of total target compensation is “at-risk” through long-term equity awards and annual cash incentive awards. These awards are linked to actual performance and include a substantial portion of equity.
Compensation Mix
The mix of total target direct compensation for our NEOs in 2021 (excluding Mr. Ptasznik) is shown below. “At-risk” pay is comprised of the target annual cash incentive award and the target equity award. The annual cash incentive award and the PSU portion of the equity award are performance-based.
NEOs - 2021 Total Target Direct Compensation Mix
2021 Compensation Decisions
The sections below provide an overview as to how the Management Compensation Committee and/or Board of Directors determined each NEO’s compensation for 2021. For specific compensation amounts for each NEO, see the “NEO Compensation Summaries” beginning on page 78.
Base Salary
Base salaries are a fixed component of each NEO’s compensation. In setting each NEO’s base salary, the Management Compensation Committee and/or Board considers competitive market data derived from our peer group, annual market surveys and the NEO’s individual contributions, performance, time in role, scope of responsibility, leadership skills and experience. We review base salaries on an annual basis and may adjust base salaries during the year in response to significant changes in an executive’s responsibilities or events that would impact the long-term retention of a key executive. Salaries are established at levels commensurate with each executive’s title, position and experience, recognizing that each executive is managing a component of a complex global company.
Annual Cash Incentive Compensation
We maintain an annual performance-based cash incentive arrangement under which each NEO can earn cash incentive awards through our ECIP based on achievement of performance against pre-determined performance goals. The Management Compensation Committee and/or Board established each NEO’s target annual cash opportunity based on an assessment of each NEO’s position and responsibilities, the competitive market analysis and the Company’s retention objectives.
How We Set Performance Targets
The annual cash incentive award payments for our NEOs are based on the achievement of pre-established, quantifiable performance goals. The President and CEO selects and recommends goals for the other executive officers based on their areas of responsibility and input from each executive. The
Management Compensation Committee and/or the Board review and consider our President and CEO’s recommendations and approve the goals for the coming year after identifying the objectives most critical to our future growth and most likely to hold executives accountable for the operations for which they are responsible. Based on these same factors, the Management Compensation Committee and Board determine and approve the performance goals for the President and CEO.
Nasdaq commences its rigorous goal-setting process during its mid-year strategic off-site with the Board. In the fourth quarter, the Management Compensation Committee and Board review initial goals for the following year. At the beginning of the following year, the Management Compensation Committee and Board review and approve Company goals based on business criteria as well as target performance levels for target annual incentive cash awards. Targets are set based primarily on the Company’s Board-approved budget for the year. The performance goals are intended to be rigorous and are set at levels where the maximum payout for any NEO would be difficult to achieve and that are in excess of budget assumptions.
The Management Compensation Committee and/or the Board reviews the Company’s financial goals and the NEOs’ individual goals throughout the year and determines if any adjustments are warranted based on significant transactions or other extraordinary events.
For 2021, the Management Compensation Committee and Board selected financial and strategic metrics and targets that they believe incentivize our executives to achieve our strategic objectives and drive Nasdaq’s long-term financial performance. The 2021 annual cash incentive awards were tied to results in the following areas:
Corporate Financial Objectives
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| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | | | | | The 2022 annual cash incentive awards were tied to results in the following areas: | | | | | Corporate Financial Objectives | | Strategic Objectives | | | | | | | | | •operating income (on a run rate basis), which measures business efficiency and profitability; |
profitability · | | •defined corporate or business unitspecific goals that contribute to the Company’s long-term strategy execution and performance | | | | | | | | | •net revenues, which measure the ability to drive revenue growth; |
Business Unit Financial Objectivesgrowth
· | | | | | | | | | | | | | | | | | | Business Unit Financial Objectives | | ESG | | | | | | | | | •defined business unit-specific goals that contribute to the Company’s revenue growth and profitability; |
Strategic Objectivesprofitability
· | | defined corporate or business unit-specific goals that contribute to the Company’s long-term strategy execution and performance; and |
Engagement and Diversity & Inclusion
· | | •goal that measures the extentefforts to which employees feel passionate about their jobs, are committed to the organizationadvance Diversity and put discretionary effort into their work,Culture, including employee engagement, based on theiremployee responses to employeeengagement surveys. Employee engagementThis goal is one important measure of progress toward our social objectives, as part of our broader ESG focus. In addition, our EVP and CFO had a separate goal relating to our overall Corporate ESG Strategy. | | | | | | | | | | | | | | | | | | | | | Potential Payments | | | | | Annual cash incentive award payments are determined after the end of the year and are based on actual performance against each goal. Each goal that applied to the NEOs for 2022 had a minimum, target, and maximum performance level. | | | | | Scoring of each goal is based on actual goal achievement as compared to the target. In 2022, payments on each goal could vary between 0% and 200% of the target. Although our ECIP is highly formulaic by design, awards are subject to adjustment at the discretion of the Management Compensation Committee, based on a holistic, qualitative assessment of individual performance delivered as well as ethical and responsible conduct. The Management Compensation Committee may adjust the bonus payment to any NEO, including by increasing a payment amount or applying “negative discretion” to decrease the payment amount. | | | | | Award Payouts | | | | | In February 2023, the Management Compensation Committee and/or the Board determined the final levels of achievement for each of the goals and approved the cash payout amounts. The table on the following page shows achieved performance against each 2022 corporate objective and the percentage of target incentive opportunity yielded by such performance. | | | | | In establishing our 2022 corporate objectives for our annual cash incentive awards, the Management Compensation Committee acknowledged that our 2021 results reflected historically high trading revenues and that beta factors make trading revenues difficult to predict. The target for 2022 operating income was set slightly below our 2021 target, reflecting an expectation for lower trading revenues and continued investment in our business to drive long-term growth. Accordingly, the Management Compensation Committee added a further requirement - a Business Unit could not contribute to above 100% attainment of the corporate operating income target unless the 2022 performance exceeded the 2021 performance. This additional performance hurdle was implemented to better align annual incentive payouts with year-over-year revenue and operating income growth. |
| | | | | In 2021, we added a new strategic objective for each NEO of “Diversity, Inclusion, Belonging and Engagement.” The sub-components of this goal for achievement purposes were as follows: (i) Business Unit Employee Engagement Index results, as measured by the average of two employee engagement surveys per year and (ii) advance Diversity, Inclusion, & Belonging.Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION
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Potential Payments
Annual cash incentive award payments are determined after the end of the year and are based on actual performance against each goal. Each goal that applied to the NEOs for 2021 had a minimum, target and maximum performance level.
Scoring of each goal is based on actual goal achievement as compared to the target. In 2021, payments on each goal could vary between 0% and 200% of the target. Although our ECIP is highly formulaic by design,
awards are subject to adjustment at the discretion of the Management Compensation Committee, based on a holistic, qualitative assessment of individual performance delivered as well as ethical and responsible conduct. The Management Compensation Committee did not adjust any bonus payments, or apply discretion, to the compensation of any NEOs in 2021.
Award Payouts
In February 2022, the Management Compensation Committee and/or the Board determined the final levels of achievement for each of the goals and approved the cash payout amounts. The table below shows achieved performance against each 2021 corporate objective and the percentage of target incentive opportunity yielded by such performance.
Corporate Objectives Performance vs. Goals
| | | | | | | | | | | | | | | | |
| | Corporate Objectives Performance vs. Goals | | | | | | | | |
| | | | | | | | | | | | | | | | | Corporate
Objective | | Threshold
(0% payout) | | CorporateTarget
Objective(100% Payout)
| | Threshold
Maximum
(0% payout) 200% Payout) | | Target
(100% Payout) Nasdaq’s Results for 2022 as Measured for Compensation Purposes | | Maximum
(200% Payout) | | Nasdaq’s
Results for 2021
as Measured for
Compensation
Purposes | | Payout
Percentage
of Target
Incentive
Award Amount | | | | | | | Operating Income (Run Rate)1 | | $1,326.0M 1,703.4M | | $1,805.4M - $1,828.4M | | $1,401.0M - 1,916.6M | | $1,458.0M 1,820.0M | | $1,848.6M | | 200% 105% | | | | | | | Income
| | | | $1,421.0M | | | | | | | | | | | | | (Run Rate)1
| | | | | | | | | | | | | | | | | Net Revenues2 | | $2,723.0M3,350.6M | | $3,470.6M - $3,506.6M | | $2,811.0M -3,617.1M | | $2,898.0M3,537.0M | | $3,339.5M | | 200% 137% |
1. | Operating income (run rate) reflects our non-GAAP operating income adjusted to exclude: Nasdaq Next (i.e., our innovation investment program); the impact of changes in foreign exchange rates; certain intra-year acquisitions and divestitures;acquisitions; severance; and benefits from certain initiatives that were not initially included in the 20212022 budget. Non-GAAP operating income differs from U.S. GAAP operating income due to the exclusion of the following items: amortization expense of acquired intangible assets; merger and strategic initiatives expense; restructuring charges; and certain other expenses that are not part of ongoing business expenses. For a discussion of non-GAAP adjustments, see Annex A. |
2. | Corporate net revenues exclude Nasdaq Next, the impact of changes in foreign exchange rates, and certain intra-year acquisitionsacquisitions. | | | | | The Management Compensation Committee and/or the Board assessed each NEO’s achievement of the business unit financial objectives and divestitures.strategic objectives in 2022, as set forth in the NEO Compensation Summaries beginning on page 85. Specific metrics for these goals are not disclosed for competitive reasons. However, 100% of our NEO goals was defined with quantifiable performance metrics that were approved by the Management Compensation Committee and/or the Board. No positive discretion was applied to any goal scoring for our NEOs. |
| | | | | Long-Term Incentive Compensation |
| | | | | | | In 2022, we granted PSUs to each NEO in order to incentivize and reward them for growth in our TSR relative to the TSR of two equally weighted groups over the performance period. One performance group consists of all S&P 500 companies at the start of the performance period and the other performance group consists of the peer companies on the following page. The peer companies include other global exchanges with sizable market capitalizations. We measure our TSR performance relative to two different groups in order to align with the varied interests of our shareholders. The PSUs represented 80% of each NEO’s long-term incentive compensation. | | | | | The PSUs are subject to a three-year cumulative performance period beginning on January 1, 2022 and ending on December 31, 2024. The shares earned, if any, vest at the end of the performance period and upon the certification by the Management Compensation Committee and/or the Board that the performance metrics have been achieved. The TSR results are measured at the beginning and end of the three-year performance period. Our relative performance ranking against each of these groups at the end of the performance period will determine the number of vested PSUs. For each vested PSU, Nasdaq will issue one share of common stock to each NEO. The maximum payout will be 200% of the target number of PSUs granted if Nasdaq ranks at the 85th percentile or above of each of the groups. However, if our TSR is negative for the three-year performance period, regardless of TSR ranking, the payout cannot exceed 100% of the target number of PSUs granted. | | | | | The table on the following page illustrates the percentage of the target number of PSUs granted to each NEO that the NEO may receive based upon different levels of achievement against each of the groups. For each group, the resulting shares earned will be calculated by multiplying the relevant percentage from the table by one-half of the target award amount. Any payouts earned at performance levels below the 50th percentile rank are designed to serve as a retention vehicle. |
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| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
Our goal setting process encompasses a comprehensive review of expectations of both our performance and levels of external market activity. In 2021, our target goals for our Solutions Segments businesses reflected growth in revenue aligned with our medium-term outlook and operating income growth at the respective business margins, which we believed our teams had the ability to effectively influence. However, part of our revenues result from our exchange business, where results are highly influenced by market volumes in the U.S. equities and equities derivatives markets. When setting 2021 goals, our analyses resulted in an expectation that market volumes in our U.S. Cash Equities and Equity Derivatives businesses were unlikely to persist at the record levels set in 2020. An expectation of lower market volumes, as well as the sale of our U.S. Fixed Income business, resulted in lower revenue and operating margin goals for 2021.
Our actual performance exceeded the 2021 goals, reflecting both higher than expected market volume activity and strong performance across all our Solutions Segment businesses, including the recently acquired Verafin business.
The Management Compensation Committee and/or the Board assessed each NEO’s achievement of the business unit financial objectives and strategic objectives in 2021, as set forth in the NEO Compensation Summaries beginning on page 78. Specific metrics for these goals are not disclosed for competitive reasons. However, 100% of our NEO goals were defined with quantifiable performance metrics and were approved by the Management Compensation Committee and/or the Board. No discretion was applied to any goal scoring our NEOs.
Long-Term Incentive Compensation
PSUs
In 2021, we granted PSUs to each NEO in order to incentivize and reward them for growth in our TSR relative to the TSR of two equally weighted groups over the performance period. One performance group consists of all S&P 500 companies at the start of the performance period and the other performance group consists of the peer companies to the right. The peer companies include other global exchanges with sizable market capitalizations. We measure our TSR performance relative to two different groups in order to align with the varied interests of our shareholders. The PSUs represented 80% of the NEO’s long-term incentive compensation.
The PSUs are subject to a three-year cumulative performance period beginning on January 1, 2021 and ending on December 31, 2023. The shares earned, if any, vest at the end of the performance period and upon the certification by the Management Compensation Committee that the performance metrics have been achieved. The TSR results are measured at the beginning and end of the three-year performance period. Our relative performance ranking against each of these groups at the end of the performance period will determine the number of vested PSUs. For each vested PSU, Nasdaq will distribute one share of common stock to each NEO. The maximum payout will be 200% of the target number of PSUs granted if Nasdaq ranks at the 85th percentile or above of each of the groups. However, if our TSR is negative for the three-year performance period, regardless of TSR ranking, the payout cannot exceed 100% of the target number of PSUs granted.
The table to the right illustrates the percentage of the target number of PSUs granted to each NEO that the NEO may receive based upon different levels of achievement against each of the groups. For each group, the resulting shares earned will be calculated by multiplying the relevant percentage from the table below by one-half of the target award amount. Any payouts earned at performance levels below the 50th percentile rank are designed to serve as a retention vehicle.
Global Exchange Peer Companies Used for Three-Year PSUs1
| | | | | Global Exchange Peer Companies Used for Three-Year PSUs1 |
 
1 | | | | | 1. While the peer group used for competitive analysis of compensation includes a broad range of companies that may compete with us for executive talent, the peer group used for the three-year PSUs includes a narrower list of more direct competitors that provide the most relevant comparators for stock price performance. | | | | | Amount of Shares a Grantee May Receive Based Upon Achievement |
| | | | | | | | Percentile Rank of Nasdaq’s Three-Year TSR Versus the Relevant Group | | Resulting Shares Earned | | | | | | | >= 85th Percentile | | 200% | | | | | | | 67.5th Percentile | | 150% | | | | | | | 50th Percentile | | 100% | | | | | | | 25th Percentile | | 50% | | | | | | | 15th Percentile | | 30% | | | | | | | 0 Percentile | | 0% | | | | | | | | | | | | | For levels of achievement between points, the resulting shares earned will be calculated based on straight-line interpolation. | | | RSUs | | | | In 2022, we also granted RSUs to each NEO to promote long-term shareholder alignment and retention. The RSUs represented 20% of the NEO’s long-term incentive compensation. |
Amount of Shares a Grantee May Receive Based Upon Achievement
| | | Percentile Rank of Nasdaq’s Three-Year | | Resulting Shares EarnedNasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | The RSUs are subject to a four-year vesting schedule, vesting 33% on the second anniversary of the grant, 33% on the third anniversary of the grant, and the balance on the fourth anniversary of the grant, in each case subject to continued employment with the Company. | | Award Determination | | | In setting Ms. Friedman’s 2022 equity award target, the Management Compensation Committee and Board focused on motivating performance with significant upside and downside based on relative performance. Historical awards and the retention value of Ms. Friedman’s outstanding equity were considered when determining the target amount of her award. Peer group data also was considered in establishing a market-competitive award level. | | Ms. Friedman recommended the specific equity award targets for each of the other NEOs, which varied among executives depending upon responsibilities and retention considerations. The Management Compensation Committee and Board evaluated these recommendations and determined that the amount of each award reflected the individual’s contributions, was aligned with competitive market levels, and was appropriate for retention purposes. The equity award targets are established for our NEOs based on an assessment of each officer’s position and responsibilities, the competitive market analysis, and the Company’s retention objectives. | | Settlement of 2020 PSU Grants Based on Relative TSR Versus | | In February 2023, the Relevant GroupManagement Compensation Committee and/or the Board evaluated and approved the performance results for the PSUs granted to the NEOs in 2020. These PSUs were subject to a three-year cumulative performance period beginning on January 1, 2020 and ending on December 31, 2022, and performance was determined by comparing Nasdaq’s TSR to two groups of companies, each weighted 50%. One group consisted of all S&P 500 companies and the other group consisted of 14 peer companies. Of the peer group, one company (Bolsas y Mercados Españoles) was acquired during the performance period and therefore removed from the peer group at the time of the performance measurement. We measure our TSR performance relative to two different groups in order to align with the varied interests of our shareholders. | | | The following table sets forth the 2020 PSU performance measure results. | | | PSU Performance Measure Results |
| | | | | | | | | | | | | | | | | | | | | Equity Award | | Cumulative TSR | | Weighting | | Performance
Factors | | Percentile Rank | | Payout | | Blended Payout | | | | | | | | 2020 Three-Year PSU Award | | 85.5% | | 50% | | Based on Relative TSR Against the S&P 500 | | 90th | | 200% | | 200% | | | | | | 50% | | Based on Relative TSR Against Peers | | 100th | | 200% |
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| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | | | | NEO Compensation Summaries | |
| | | | | | |  | | Adena T. Friedman | |
Chair and CEO | | | 2022 Total Target Direct Compensation Mix |
| | | | | | | | | Target Annual Cash Incentive Award 22% | | | | | |
| | | | | 2022 Performance Highlights | | | >= 85th Percentile
| | 200%•Reported record net revenues of $3.6 billion, an increase of 5% over 2021. | | | 67.5th Percentile
| | 150%•Grew ARR by 8% in the fourth quarter of 2022 compared to the fourth quarter of 2021. | | | 50th Percentile
| | 100%•Increased annualized SaaS revenues in the fourth quarter of 2022 by 13% year over year, mostly driven by the strong growth in the fraud detection and anti-money laundering solutions and Workflow and Insights businesses. | | | 25th Percentile
| | 50%•Implemented a new corporate structure that accelerates our strategy and positions Nasdaq to deliver more comprehensive solutions to our clients and scale for the future. | | | 15th Percentile
| | 30%•Led U.S. exchanges for operating company IPOs with a 92% win rate. | | | 0 Percentile
| | 0%•Maintained listings leadership in the U.S. and Nordics during 2022. | | | | | •Led all exchanges in total multiply-listed options traded and set a record for U.S. equities trading during the December expiration. | | | | | •Migrated the Nasdaq MRX options market onto the Amazon Web Services (AWS) cloud platform. The new platform, developed through collaboration with AWS, offers a 10% performance boost while meeting high standards for resiliency, security, and capacity. | | | | | •Launched a comprehensive suite of crypto-specific fraud detection, anti-money laundering, and surveillance capabilities to help fight financial crime within the digital assets ecosystem. | | | | | •Named to the Dow Jones Sustainability North America Index, received approval by the Science Based Targets initiative for net-zero targets, and improved ESG rating scores. | | | | | •Strengthened Nasdaq’s DEI efforts, including expanded hiring and internal development programs. | | | | | 2022 Compensation Elements | | | | | As shown in the table below, for 2022, the Management Compensation Committee and Board maintained Ms. Friedman’s base salary and increased her target annual cash incentive award from $3,000,000 to $3,750,000. In setting Ms. Friedman’s compensation, the Management Compensation Committee and Board considered her performance and a review of the competitive positioning of her overall compensation as compared to the compensation of similar officers at companies in our peer group. The increase in annual incentive target reflects Ms. Friedman’s strong performance as CEO and positions her competitively versus peers as she enters her new employment agreement term. The Management Compensation Committee and Board increased the target grant date value of her equity award for 2022 by $2,000,000. | | | | | | | | | | |
For levels of achievement between points, the resulting shares earned will be calculated based on straight-line interpolation.
RSUs
In 2021, we also granted RSUs to each NEO to promote long-term shareholder alignment and retention. The RSUs represented 20% of the NEO’s long-term incentive compensation. The RSUs are subject to a four-year vesting schedule, vesting 33% on the second anniversary of the grant, 33% on the third anniversary of the grant and the balance on the fourth anniversary of the grant, in each case subject to continued employment with the Company.
Award Determination
In setting Ms. Friedman’s 2021 equity award target, the Management Compensation Committee and Board focused on motivating performance with significant upside and downside based on relative performance. Historical awards and the retention value of Ms. Friedman’s outstanding equity were considered when determining the target amount of her award. Peer group data also was considered in establishing a market-competitive award level.
Ms. Friedman recommended the specific equity award targets for each of the other NEOs, which varied among executives depending upon responsibilities and retention considerations. The Management Compensation Committee and Board evaluated these recommendations and determined that the amount of each award reflected the individual’s contributions, was aligned with competitive market levels and was appropriate for retention purposes.
The equity award targets are established for our NEOs based on an assessment of each officer’s position and responsibilities, the competitive market analysis and the Company’s retention objectives.
Settlement of 2019 PSU Grants Based on Relative TSR
In February 2022, the Management Compensation Committee evaluated and approved the performance results for the PSUs granted to the NEOs in 2019. These PSUs were subject to a three-year cumulative performance period beginning on January 1, 2019 and ending on December 31, 2021, and performance was determined by comparing Nasdaq’s TSR to two groups of companies, each weighted 50%. One group consisted of all S&P 500 companies and the other group consisted of 15 peer companies. Of the peer group, two companies (Bolsas y Mercados Españoles and NEX Group) were acquired during the performance period and were therefore removed from the peer group at the time of the performance measurement. We measure our TSR performance relative to two different groups in order to align with the varied interests of our shareholders.
The following table sets forth the 2019 PSU performance measure results.
PSU Performance Measure Results
| | | | | | | | | | | | | Equity | | Cumulative | | Weighting | | Performance | | Percentile | | Payout | | Blended | Award | | TSR | | | | Factors | | Rank | | | | Payout | | | | | | | | | | | | | | Based on Relative | | | | | | | | | | | | | | | | | | | 50% | | TSR Against the | | 87th | | 200% | | | | | | | | | | | 2019 Three- | | | | | | S&P 500 | | | | | | | | Year PSU | | 149% | | | | | | | | | | 200% | | | | | | | | | | | | | | | | | | Award | | | | | | Based on Relative | | | | | | | | | | | | | | | | | | | 50% | | TSR Against | | 100th | | 200% | | | | | | | | | | | | | | | | | Peers | | | | | | |
NEO Compensation Summaries
2021 Performance Highlights
Reported record 2021 net revenues of $3.4 billion, an increase of 18% over 2020.
ARR in the fourth quarter of 2021 increased 19% compared to 2020, and excluding Verafin, increased 9%.
Delivered 21% year-over-year revenue growth in the Solutions segments.
The Nasdaq Stock Market led U.S. exchanges for IPOs during 2021 and featured nine of the ten largest U.S.-based IPOs by capital raised.
For the second consecutive year, Nasdaq led all exchanges in total traded U.S. options, inclusive of multiply-listed equity options and index options products, while equity value traded on the Nasdaq Nordic markets reached its highest level since 2008.
Completed the acquisition of Verafin, strengthening Nasdaq’s leadership in anti-financial crime management solutions.
Announced a multi-year partnership with AWS with the intent to build the next generation of cloud-enabled infrastructure for the world’s capital markets.
Furthered Nasdaq’s leadership in improving board diversity for listed companies following SEC approval of Nasdaq’s board diversity disclosure listing rule, which will enhance disclosures and encourage the creation of more diverse boards through a market-led solution.
Expanded Nasdaq’s ESG products and services through the acquisitions of a majority position in Puro.earth, a leading marketplace for carbon removal, and QDiligence, a provider of software that facilitates digital director and officer questionnaires and self- evaluations for directors and corporate secretaries.
Led Nasdaq’s external and internal response to the ongoing COVID-19 pandemic, including deepening our commitment to employee health and safety, and expanding benefits to our employees affected by the challenges of the pandemic.
Developed further improvements and enhancements to Nasdaq’s diversity, equity and inclusion programs, including expanded diversity hiring, retention and talent development.
2021 Compensation Elements
As shown in the table below, for 2021, the Management Compensation Committee and Board maintained Ms. Friedman’s base salary and target annual cash incentive award. The Management Compensation Committee and Board increased the target grant date value of her equity award by $1,000,000.
In setting Ms. Friedman’s compensation, the Management Compensation Committee and Board considered her performance and a review of the competitive positioning of her overall compensation as compared to the compensation of similar officers at companies in our peer group.
| | | | | | | | | | | | | | Type of | | 2021 Annualized | | 2020 Annualized | | | | Compensation | | Amounts | | Amounts | | | | | Base Salary | | Fixed | | $1,250,000 | | $1,250,000 | | | | | Target Annual Cash Incentive | | Performance-Based | | $3,000,000 | | $3,000,000 | Award | | | | | | | | | | | Target Equity Award | | Performance-Based (PSUs) | | $8,000,0001 | | $7,200,000 | (Grant Date Face Value) | | At-Risk (RSUs) | | $2,000,0001 | | $1,800,000 | | | | | Total Target Compensation | | | | $14,250,000 | | $13,250,000 |
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | In addition to the compensation shown in the table below, on January 3, 2022, the Management Compensation Committee and Board granted her a one-time, performance-based stock option award with a value of $10 million, which award was associated with the renewal of her employment agreement for an additional five years. The purpose of this one-time award is to provide an additional long-term, shareholder-aligned incentive to motivate growth in shareholder return over the duration of the five year term. The award provides that 50% of the grant will vest after five years of employment tenure, and 50% will vest upon achieving a cumulative five-year EPS target. The entire award will become valuable only to the extent that Nasdaq’s shareholders benefit from future share price appreciation. Under the terms of Ms. Friedman’s employment agreement, she is entitled to an additional 12 months of continued vesting as a result of “Involuntary Termination without Cause” or termination for “Good Reason,” so a separation of service under those conditions occurring in 2026 would qualify for continued vesting, but not sooner. For further information on this option award, see page 107. |
| | | | | | | | | | | | | | Type of Compensation | | 2022 Annualized Amounts
(at Target) | | 2021 Annualized Amounts
(at Target) | | | | | Base Salary | | Fixed | | $1,250,000 | | $1,250,000 | | | | | Target Annual Cash Incentive Award | | Performance-Based | | $3,750,000 | | $3,000,000 | | | | | Target Equity Award | | Performance-Based (PSUs) | | $9,600,0001 | | $8,000,000 | | | | | (Grant Date Face Value) | | At-Risk (RSUs) | | $2,400,0001 | | $2,000,000 | | | | | Total Target Compensation | | | | $17,000,000 | | $14,250,000 |
| 1. | Ms. Friedman was awarded a target amount of 53,032158,310 PSUs, and 13,25839,576 RSUs, on April 1, 20212022 with the terms and conditions described in the “Long-Term Incentive Compensation” section above. |
2021 Performance Goals – Annual Cash Incentive Award
Ms. Friedman earned an annual incentive award payment of $5,799,474, or 193% of target, based on the
final achievement of her pre-established, quantifiable performance goals, as described below.
| 2022 Performance Goals – Annual Cash Incentive Award | | | Ms. Friedman earned an annual incentive award payment of $4,372,748, or 117% of target, based on the final achievement of her pre-established, quantifiable performance goals, as described below. |
| | | | | | | | | Goal Type | | Goal | | Goal | | Actual | | Award Payout | | | | | Weighting | | Performance | | | | | | | | | as a Percent | | | | | | | | | of Target | | | Corporate | | Corporate Operating Income (Run | | | | | | | Financial | | Rate) | | 60% | | 200% | | $3,600,000 | | | | | | | | | | Corporate Net Revenue | | 20% | | 200% | | $1,200,000 | | | | | | Strategic | | Nasdaq NEXT Revenue | | 2% | | 156% | | $93,699 | Initiatives | | | | | | | | Expand Analytics and Workflow to | | | | | | | | | | Service the Investment Community | | 2% | | 131% | | $78,600 | | | | | | | | | Market Technology Initiatives | | 2% | | 150% | | $90,000 | | | | | | | | | IPO Success Rate | | 3% | | 192% | | $172,800 | | | | | | | | Advance Cloud-Based System | | | | | | | | | | Migrations | | 3% | | 200% | | $180,000 | | | | | | | | Complete Key Strategic Acquisitions | | | | | | | | | | and Divestitures | | 3% | | 200% | | $180,000 | | | | | | Employee | | Diversity, Inclusion, Belonging and | | 5% | | 136% | | $204,375 | Engagement | | Engagement | | | | | | | | | | | | Total | | | | 100% | | 193% | | $5,799,474 |
| | | | | | | | | | | | | | | Goal Type | | Goal | | Goal Weighting | | Actual
Performance as a
Percent of Target | | Award Payout | | | | | | Corporate Financial | | Corporate Operating Income (Run Rate) | | 60% | | 105% | | $2,352,272 | | | | | | | | | Corporate Net Revenues | | 20% | | 137% | | $1,025,099 | | | | | | Strategic Initiatives | | Nasdaq NEXT Revenue | | 3% | | 0% | | – | | | | | | | | | Marketplace Technology Initiatives | | 2% | | 175% | | $131,250 | | | | | | | | | Strategic Clearing Projects | | 2% | | 200% | | $150,000 | | | | | | | | | Listings Success | | 2% | | 156% | | $117,000 | | | | | | | | | Market Migrations to the Global Derivatives Platform and the Cloud | | 3% | | 200% | | $225,000 | | | | | | | | | Continue Integration of Key Strategic Acquisition | | 4% | | 114% | | $170,250 | | | | | | ESG | | Diversity and Culture | | 4% | | 135% | | $201,877 | | | | | | Total | | | | 100% | | 117% | | $4,372,748 |
| Settlement of 2020 PSU Award Based on Relative TSR | The table below sets forth the number of PSUs that Ms. Friedman earned as of December 31, 2022 due to the performance results of her 2020 PSU award, which was based on relative TSR. |
Settlement of 2019 PSU Award Based on Relative TSR
The table below sets forth the number of PSUs that Ms. Friedman earned as of December 31, 2021 due to the performance results of her 2019 PSU award, which was based on relative TSR.
| | | | | | | | Target PSUs | | Actual Performance as a | | PSUs | Awarded in 2019 | | Percent of Target | | Earned | | | | 96,153 | | 200% | | 192,306 |
| | | | | | | | | Target PSUs Awarded in 2020 | | Actual Performance as a Percent of Target | | PSUs Earned | | | | | 234,093 | | 200% | | 468,186 |
2021 Performance Highlights
| · | | | 86 | | |
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | | | | | | | |  | | Ann M. Dennison | | EVP and CFO | | 2022 Total Target Direct Compensation Mix |
| | | | | | | | | Target Annual Cash Incentive Award 29% | | | | | |
| | | | | | | 2022 Performance Highlights | | | | | | | | •Drove Nasdaq’s financial stewardship efforts, which resulted in recordstrong performance for 2021,2022, including record net revenues of $3.4$3.6 billion, an increase of 18%5% over 2020.2021. In addition, Solutions SegmentsBusinesses revenues increased 21%9%, mostly due tolargely driven by organic growth. |
| · | | Executed consistent | | | | | | •Successfully executed the Company’s capital planning in a challenging economy, which enabled the Company to return approximately $1.3more than $1.0 billion of cash to shareholders in 2021,2022, including $943$633 million in share repurchases and $350$383 million in dividends. Completed the Company’s first accelerated share repurchase program. |
| · | | | | | | | | •Strengthened the Company’s balance sheet by refinancing and retiring the $500 million of outstanding 1.75%4.25% senior notes due 20232024 and issuing €615$550 million of 0.900%3.950% Senior Notes due 2033. |
2052. | · | | Navigated | | | | | | •Completed the Company’s finances duringamended $1.25 billion revolving credit facility, which also extended the second year of the COVID-19 pandemic and market volatility, and led the successful closing of our acquisition of Verafin and the divestiture of our U.S. Fixed Income business. |
term by an additional two years to 2027. | · | | Enhanced the Company’s | | | | | | •Led ESG practicesreporting and disclosures and expanded reporting to include TCFD and SASB standards, driving materialdisclosure efforts, resulting in significant improvement in scores/ratings from leading ESG research providers including Sustainalytics, ISSsuch as MSCI, EcoVadis and CDP. |
2021 Compensation ElementsS&P, and approval by the Science Based Targets initiative of Nasdaq’s near and long-term emissions reductions targets.
Following Ms. Dennison’s promotion to EVP and CFO in March 2021, the Management Compensation Committee and Board increased her base salary from $450,000 to $550,000, and target annual cash incentive award from $450,000 to $750,000, effective March 1, 2021. Ms. Dennison’s base salary and target annual cash incentive award were both pro-rated for 2021 since the increases became effective after the beginning of the year. The Management Compensation Committee and Board also increased the target grant date value of Ms. Dennison’s equity award from $700,000 to $1,200,000. In determining these compensation changes, the Management Compensation Committee and Board assessed Ms. Dennison’s performance and the change in her role and responsibilities as the new CFO. Her total compensation was determined to be competitive to the market compensation as compared to other CFOs in our peer group.
| | | | | | | | | | Type of2022 Compensation Elements | | 2021 Annualized | | | | | Amounts | | | | Base Salary
| | FixedFor 2022, the Management Compensation Committee and Board increased Ms. Dennison’s base salary from $550,000 to $575,000 and target annual cash incentive award from $750,000 to $862,500, effective in April. The Management Compensation Committee and Board also increased the target grant date value of Ms. Dennison’s equity award from $1,200,000 to $1,500,000. In determining these compensation changes, the Management Compensation Committee and Board assessed Ms. Dennison’s performance and market competitive positioning. | | $550,000 | | | | Target Annual Cash Incentive Award
| | Performance-Based | | $750,000 | | | | Target Equity Award (Grant Date Face Value)
| | Performance-Based (PSUs) | | $960,0001 | | | At-Risk (RSUs) | | $240,0001 | | | | Total Target Compensation
| | | | $2,500,000 |
| | | | | | | | | | | | | | | | | Type of Compensation | | 2022 Annualized Amounts (at Target) | | 2021 Annualized Amounts (at Target) | | | | | | | | Base Salary | | Fixed | | $ 575,000 | | $ 550,000 | | | | | | | | Target Annual Cash Incentive Award | | Performance-Based | | $ 862,500 | | $ 750,000 | | | | | | | | Target Equity Award | | Performance-Based (PSUs) | | $1,200,000 1 | | $ 960,000 | | | | | | | | (Grant Date Face Value) | | At-Risk (RSUs) | | $300,000 1 | | $ 240,000 | | | | | | | | Total Target Compensation | | | | $ 2,937,500 | | $2,500,000 | | |
1 | 1. | Ms. Dennison was awarded a target amount of 6,36319,788 PSUs, and 1,5904,947 RSUs, on April 1, 20212022 with the terms and conditions described in the “Long-Term Incentive Compensation” section above. | |
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
2021 Performance Goals – Annual Cash Incentive Award
Ms. Dennison earned an annual incentive award payment of $1,415,845, or 195% of target, based on the final achievement of her pre-established, quantifiable performance goals, as described below.
| 2022 Performance Goals – Annual Cash Incentive Award | | | Ms. Dennison earned an annual incentive award payment of $1,184,020, or 139% of target, based on the final achievement of her pre-established, quantifiable performance goals, as described below. | | | The Management Compensation Committee may adjust bonus payments, or apply “negative discretion,” to the compensation of any NEO. The Management Compensation Committee reduced Ms. Dennison’s final 2022 award payout by $40,000 to $1,144,020 to incorporate the year-end status of objectives not captured in her 2022 goals. |
| | | | | | | | | | | | | | | Goal Type | | Goal | | Goal Weighting | | Actual
Performance as a
Percent of Target | | Award Payout | | | | | | Corporate Financial | | Corporate Operating Income (Run Rate) | | 50% | | 105% | | $445,911 | | | | | | | | | Corporate Net Revenues | | 20% | | 137% | | $233,189 | | | | | | Business Unit Financial | | Finance Budget | | 5% | | 200% | | $85,305 | | | | | | Strategic Initiatives | | Complete Strategic Acquisitions and Divestitures | | 7% | | 200% | | $119,427 | | | | | | | | | Enhance Nasdaq’s ESG Initiatives | | 7% | | 200% | | $119,427 | | | | | | | | | Finance & Workplace Transformation | | 6% | | 187% | | $95,456 | | | | | | ESG | | Diversity and Culture | | 5% | | 200% | | $85,305 | | | | | | Total | | | | 100% | | 139% | | $1,184,020 | | | | | | Negative Discretion | | | | | | | | $(40,000) | | | | | | Adjusted Total | | | | | | 134% | | $1,144,020 |
| | | | | | | | | Goal Type | | Goal | | Goal | | Actual | | Award Payout | | | | | Weighting | | Performance | | | | | | | | | as a Percent | | | | | | | | | of Target | | | | | | | | Corporate | | Corporate Operating Income | | | | | | | Financial | | (Run Rate) | | 50% | | 200% | | $727,939 | | | | | | | | | Corporate Net Revenue | | 20% | | 200% | | $291,176 | | | | | | Business Unit | | Finance Budget Expense | | 5% | | 200% | | $72,794 | Financial | | | | | | Strategic | | Complete Strategic Acquisitions and | | | | | | | Initiatives | | Divestitures | | 7% | | 179% | | $91,211 | | | | | | | | | Enhance Nasdaq’s ESG Initiatives | | 7% | | 200% | | $101,911 | | | | | | | | | Advance Data and Analytics Strategy | | 6% | | 194% | | $84,623 | | | | | | Employee | | Diversity, Inclusion, Belonging and | | 5% | | 127% | | $46,191 | Engagement | | Engagement | | | | | | | | | | | | Total | | | | 100% | | 195% | | $1,415,845 |
Settlement of 2019 PSU Award Based on Relative TSR
The table below sets forth the number of PSUs that Ms. Dennison earned as of December 31, 2021 due to the performance results of her 2019 PSU award, which was based on relative TSR.
| Settlement of 2020 PSU Award Based on Relative TSR | | | The table below sets forth the number of PSUs that Ms. Dennison earned as of December 31, 2022 due to the performance results of her 2020 PSU award, which was based on relative TSR. |
| | | | | | | | | Target PSUs awarded in 2020 | | Actual Performance as a Percent of Target | | PSUs Earned | | | | 15,930 | | 200% | | 31,860 |
| | | | | Target PSUs | | Actual Performance as a | | PSUs | Awarded in 2019 | | Percent of Target | | Earned | | | | 3,393 | | 200% | | 6,786 |
| | | | 88 | | |
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | | | | | |  | | | | Tal Cohen | | | | President | | | | 2022 Total Target Direct Compensation Mix |
| | | | | | | | | Target Annual Cash Incentive Award 26% | | | | | |
| | | | | | | 2022 Performance Highlights | | | | | | | | • Completed migration of the first U.S. options market, Nasdaq MRX, to the cloud, advancing our position as a best-in-class global capital markets provider. | | | | | | | | • Led all exchanges during the period in total volume traded for multiply-listed equity options. | | | | | | | | • Led the development of Nasdaq Digital Assets, a new business to power the digital asset ecosystem with institutional-grade solutions. | | | | | | | | • Delivered record U.S. Equities revenues for index rebalancing and quarterly expiration events. | | | | | | | | • Delivered record revenues for trade management services, including a 7% increase from 2021 revenues. | | | | | | | | 2022 Compensation Elements | | | | | | | | For 2022, the Management Compensation Committee increased Mr. Cohen’s base salary from $550,000 to $600,000 and target annual cash incentive award from $825,000 to $900,000, effective in April. The Management Compensation Committee also increased the target grant date value of Mr. Cohen’s equity award from $1,500,000 to $2,000,000. In determining these compensation changes, the Management Compensation Committee assessed Mr. Cohen’s performance, the overall performance of our North American Markets organization, and market competitive positioning. | | | | | | | | In recognition of his expanding responsibilities leading our Market Platforms division and planned digital assets business, in addition to the compensation shown in the table below, Mr. Cohen received a one-time equity award of RSUs with a grant date face value of $3,500,000, awarded on April 1, 2022, which vests equally over three years. The Management Compensation Committee believes that the grant provides strong motivation to deliver long-term results in alignment with shareholder interests. | | |
| | | | | | | | | | | | | Type of Compensation | | 2022 Annualized Amounts (at Target) | | | | | | | Base Salary | | Fixed | | $600,000 | | | | | | | Target Annual Cash Incentive Award | | Performance-Based | | $900,0000 | | | | | | | Target Equity Award | | Performance-Based (PSUs) | | $1,600,000 1 | | | | | | | (Grant Date Face Value) | | At-Risk (RSUs) | | $400,000 1 | | | | | | | Total Target Compensation | | | | $3,500,000 | | |
2021 Performance Highlights
| | · | | Investment Intelligence segment achieved a 20% year-over-year revenue increase, which was almost entirely due to organic growth. |
| · | | Delivered a 41% increase in new sales for our Analytics offerings of eVestment and Solovis as compared to 2020, due to strong user adoption across asset owners and asset managers. |
| · | | 61 ETPs were launched tracking Nasdaq indexes, comprised of approximately $3 billion of AUM accumulated during 2021. |
| · | | Introduced Data Fabric, a managed data solution utilizing the Nasdaq Data Link platform, to help investment management firms scale their data infrastructure. |
2021 Compensation Elements
As shown in the table below, for 2021, the Management Compensation Committee and Board increased Ms. Dillard’s base salary from $525,000 to $550,000, which was effective April 5, 2021, along with salary increases for other eligible Nasdaq employees. Since the target annual cash incentive award is based on a percentage of base salary, the salary increase resulted in a corresponding increase to Ms. Dillard’s target annual incentive award from $787,500 to $825,000. Both Ms. Dillard’s base salary and target annual cash incentive award amounts are pro-rated for 2021 since the increases became effective after the beginning of the year. The Management Compensation Committee and Board also increased the target grant date value of Ms. Dillard’s equity award by $100,000. In determining these compensation changes, the Management Compensation Committee and Board assessed Ms. Dillard’s performance and the overall performance of our Investment Intelligence segment. Her total compensation was determined to be market competitive when compared to similar business unit executives in our peer group.
| | | | | | | | | | | | | | Type of | | 2021
Annualized | | 2020
Annualized | | | | Compensation | | Amounts | | Amounts | | | | | Base Salary | | Fixed | | $550,000 | | $525,000 | | | | | Target Annual Cash Incentive Award | | Performance-Based | | $825,000 | | $787,500 | | | | | Target Equity Award | | Performance-Based (PSUs) | | $1,280,0001 | | $1,200,000 | (Grant Date Face Value) | | At-Risk (RSUs) | | $320,0001 | | $300,00 | | | | | Total Target Compensation | | | | $2,975,000 | | $2,812,500 |
11. | Ms. DillardMr. Cohen was awarded a target amount of 8,48526,385 PSUs, and 2,1216,594 RSUs, on April 1, 20212022, with the terms and conditions described in the “Long-Term Incentive Compensation” section above.
| |
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
2021 Performance Goals – Annual Cash Incentive Award
Ms. Dillard earned an annual incentive award payment of $1,470,169, or 180% of target, based on the final achievement of her pre-established, quantifiable performance goals, as described below.
| | | | | | | | | Goal Type | | Goal | | Goal | | Actual | | Award Payout | | | | | Weighting | | Performance | | | | | | | | | as a Percent | | | | | | | | | of Target | | | | | | | | Corporate | | Corporate Operating Income | | | | | | | Financial | | (Run Rate) | | 25% | | 200% | | $407,672 | | | | | | | | | Corporate Net Revenue | | 10% | | 200% | | $163,069 | | | | | | Business Unit | | Investment Intelligence Operating | | | | | | | Financial | | Income | | 20% | | 200% | | $326,137 | | | | | | | | Investment Intelligence Nasdaq NEXT | | | | | | | | | | Revenue | | 5% | | 73% | | $29,896 | | | | | | | | | Investment Intelligence Revenue | | 10% | | 200% | | $163,069 | | | | | | | | | Expand Market Data Growth | | 5% | | 150% | | $61,151 | | | | | | Strategic Initiatives | | Expand Asset Class and Launch New Index Products | | 7% | | 186% | | $105,986 | | | | | | | | | U.S. Public Policy Leadership | | 6% | | 200% | | $97,841 | | | | | | | | Expand Analytics and Workflow to | | | | | | | | | | Service the Investment Community | | 7% | | 131% | | $74,767 | | | | | | Employee | | Diversity, Inclusion, Belonging | | | | | | | Engagement | | and Engagement | | 5% | | 100% | | $40,581 | | | | | | Total | | | | 100% | | 180% | | $1,470,169 |
Settlement of 2019 PSU Award Based on Relative TSR
The table below sets forth the number of PSUs that Ms. Dillard earned as of December 31, 2021 due to the performance results of her 2019 PSU award, which was based on relative TSR.
| | | | | Target PSUs | | Actual Performance as a | | PSUs | Awarded in 2019 | | Percent of Target | | Earned | | | | 26,268 | | 200% | | 52,536 |
2021 Performance Highlights
Corporate Platforms segment achieved an 18% revenue increase year-over-year.
| 2022 Performance Goals – Annual Cash Incentive Award | | | Mr. Cohen earned an annual incentive award payout of $1,420,551 or 161% of target, based on the final achievement of his pre-established, quantifiable performance goals, as described below. |
The Nasdaq Stock Market led U.S. exchanges for IPOs during 2021 and featured nine of the ten largest U.S.-based IPOs by capital raised.
| | | | | | | | | | | | | | | Goal Type | | Goal | | Goal Weighting | | Actual Performance as a Percent of Target | | Award Payout | | | | | | Corporate Financial | | Corporate Operating Income (Run Rate) | | 25% | | 105% | | $230,286 | | | | | | | | | Corporate Net Revenues | | 10% | | 137% | | $120,428 | | | | | | Business Unit Financial | | North American Markets Core Revenue | | 15% | | 200% | | $264,329 | | | | | | | | | North American Markets Core Operating Income | | 20% | | 200% | | $352,438 | | | | | | | | | North American Market Share (of available market for trading) | | 5% | | 62% | | $27,226 | | | | | | Strategic Initiatives | | Market Migration to the Cloud | | 5% | | 200% | | $88,110 | | | | | | | | | Agile Transformation - New Product Teams in North American Markets | | 3% | | 200% | | $52,866 | | | | | | | | | Develop and Deploy Digital Assets Business | | 5% | | 200% | | $88,110 | | | | | | | | | Proprietary Products | | 4% | | 191% | | $67,485 | | | | | | | | | Public Policy Influence - U.S. | | 3% | | 200% | | $52,866 | | | | | | ESG | | Diversity and Culture | | 5% | | 173% | | $76,407 | | | | | | Total | | | | 100% | | 161% | | $1,420,551 |
The Nasdaq Stock Market welcomed 1,000 new company listings in 2021, including 752 IPOs representing $181 billion in capital raised, while Nasdaq’s European exchanges welcomed 207 new listings. The Nasdaq Stock Market added 33 new listings, which together with companies that transferred additional securities to Nasdaq, resulted in more than $360 billon in global equity market capitalization switched to Nasdaq.
| Settlement of 2020 PSU Award Based on Relative TSR | | | The table below sets forth the number of PSUs that Mr. Cohen earned as of December 31, 2022 due to the performance results of his 2020 PSU award, which was based on relative TSR. |
| | | | | | | | | | | | Target PSUs Awarded in 2020 | | Actual Performance as a Percent of Target | | PSUs Earned | | | | | | | | 26,010 | | 200% | | 52,020 | | |
Expanded the Direct Listings business by increasing our offering and value to prospective clients, resulting in the largest direct listing in history listing on Nasdaq.
| | | | 90 | | |
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | | | | | |  | | | | P.C. Nelson Griggs | | | | President | | | | 2022 Total Target Direct Compensation Mix |
Executed on key product initiatives for the ESG product suite, including the launch of OneReport 2.0, and expanded Nasdaq’s suite of ESG products and services.
2021 Compensation Elements
As shown in the table below, for 2021, the Management Compensation Committee maintained Mr. Griggs’ base salary, target annual cash incentive award, and target equity award compared to his 2020 compensation amounts. In determining these amounts, the Management Compensation Committee assessed Mr. Griggs’ individual performance and market competitive positioning to ensure his pay is competitive with the role and peers within his area of expertise.
| | | | | | | | | Target Annual Cash Incentive Award 26% | | | | | |
| | | | | | | | | | | | | | | Type of
Compensation | | 2021 Annualized
Amounts | | 2020 Annualized
Amounts | | | | | | Base Salary | | Fixed | | $575,000 | | $575,000 | | | | | Target Annual Cash Incentive Award | | Performance-Based | | $862,500 | | $862,500 | | | | | | Target Equity Award | | Performance-Based (PSUs) | | $1,280,0001 | | $1,280,000 | | | | | | (Grant Date Face Value) | | At-Risk (RSUs) | | $320,0001 | | $320,000 | | | | | | Total Target Compensation | | | | $3,037,500 | | $3,037,500 |
| | | | | | | 2022 Performance Highlights | | | | | | | | •Led U.S. exchanges for operating company IPOs with a 92% total win rate. | | | | | | | | •The Nasdaq Stock Market featured six of the largest ten U.S. IPOs by capital raised, attracted 74% of all proceeds raised through U.S. IPOs, and welcomed 14 listing switches. | | | | | | | | •The Nasdaq Stock Market welcomed 161 IPOs, including 87 operating companies and 74 SPACs, enabling Nasdaq to maintain its market leadership position for the ninth consecutive year. In the Nordic and Baltic regions, Nasdaq maintained its leadership positioning with 38 IPOs. | | | | | | | | •Bolstered our ability to support corporate clients with ESG disclosure with the acquisition of Metrio, a provider of ESG and analytics reporting services. | | | | | | | | •Increased demand for our analytics and IR and ESG solutions helped drive a 9% year-over-year increase in our Workflow & Insights revenues. | | | | | | | | 2022 Compensation Elements | | | | | | | | As shown in the table below, for 2022, the Management Compensation Committee increased Mr. Griggs’ base salary from $575,000 to $600,000 and target annual cash incentive award from $862,500 to $900,000, effective in April. The Management Compensation Committee also increased the target grant date value of Mr. Griggs’ equity award from $1,600,000 to $2,000,000. In determining these compensation changes, the Management Compensation Committee assessed Mr. Griggs’ performance, the overall performance of our Capital Access Platforms division, and market competitive positioning. | | | | | | | | In recognition of his expanding responsibilities leading our Capital Access Platforms division, in addition to the compensation shown in the table below, on July 1, 2022, Mr. Griggs received a one-time equity award of RSUs with a grant date face value of $3,500,000, which vests equally over three years. The Management Compensation Committee believes that the one-time grant provides strong motivation to deliver long-term results in alignment with shareholder interests. | | |
| | | | | | | | | | | | | | | | | Type of Compensation | | 2022 Annualized Amounts (at Target) | | 2021 Annualized Amounts (at Target) | | | | | | | | Base Salary | | Fixed | | $600,000 | | $575,000 | | | | | | | | Target Annual Cash Incentive Award | | Performance-Based | | $900,000 | | $862,500 | | | | | | | | Target Equity Award | | Performance-Based (PSUs) | | $1,600,0001 | | $1,280,000 | | | | | | | | (Grant Date Face Value) | | At-Risk (RSUs) | | $400,0001
| | $320,000 | | | | | | | | Total Target Compensation | | | | $3,500,000 | | $3,037,500 | | |
| | 11. | Mr. Griggs was awarded a target amount of 8,48526,385 PSUs, and 2,1216,594 RSUs, on April 1, 20212022 with the terms and conditions described in the “Long-Term Incentive Compensation” section above. | |
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
2021 Performance Goals – Annual Cash Incentive Award
Mr. Griggs earned an annual incentive award payment of $1,640,065, or 190% of target, based on the final achievement of his pre-established, quantifiable performance goals, as described below.
| | | | | | | | | | | | | | | Goal Type | | Goal | | Goal
Weighting | | Actual
Performance
as a Percent
of Target | | Award Payout | | | | | | Corporate Financial | | Corporate Operating Income (Run Rate) | | 25% | | 200% | | $431,250 | | | | | | | | | Corporate Net Revenue | | 10% | | 200% | | $172,500 | | | | | | Business Unit Financial | | Corporate Platforms Operating Income | | 15% | | 200% | | $258,750 | | | | | | | | | Corporate Platforms Revenue | | 10% | | 200% | | $172,500 | | | | | | Strategic Initiatives | | IPO Success Rate | | 10% | | 192% | | $165,600 | | | | | | | | | Corporate Platforms Client Retention and Expansion | | 5% | | 159% | | $68,526 | | | | | | | | | Build ESG Business Capability | | 5% | | 180% | | $77,625 | | | | | | | | | Expand Nasdaq Private Markets Products and Services | | 5% | | 200% | | $86,250 | | | | | | | | | Expand Direct Listings | | 5% | | 141% | | $60,806 | | | | | | | | | US Public Policy Leadership | | 5% | | 200% | | $86,250 | | | | | | Employee Engagement | | Diversity, Inclusion, Belonging and Engagement | | 5% | | 139% | | $60,008 | | | | | | Total | | | | 100% | | 190% | | $1,640,065 |
Settlement of 2019 PSU Award Based on Relative TSR
The table below sets forth the number of PSUs that Mr. Griggs earned as of December 31, 2021 due to the performance results of his 2019 PSU award, which was based on relative TSR.
| | | | | | | | | Target PSUs Awarded in 2019 | | Actual Performance as a Percent of Target | | PSUs Earned | 16,968 | | 200% | | 33,936 |
2021 Performance Highlights
Led the negotiation and development of the AWS partnership and development of the technology infrastructure to enable Nasdaq to begin migrating North American exchanges to the cloud, utilizing a new edge computing solution that was co-designed by Nasdaq and AWS for market infrastructure.
| 2022 Performance Goals – Annual Cash Incentive Award | | | Mr. Griggs earned an annual incentive award payment of $1,290,492, or 145% of target, based on the final achievement of his pre-established, quantifiable performance goals, as described below. |
Completed the technical launch of Fusion for the Nordic Equity Derivatives Market, our second market on our new Fusion platform.
| | | | | | | | | | | | | | | Goal Type | | Goal | | Goal Weighting | | Actual
Performance as a
Percent of Target | | Award Payout | | | | | | | Corporate Financial | | Corporate Operating Income (Run Rate) | | 25% | | 105% | | $232,757 | | | | | | | | | Corporate Net Revenues | | 10% | | 137% | | $121,720 | | | | | | Business Unit Financial | | Corporate Platforms Operating Income | | 15% | | 134% | | $179,192 | | | | | | | | | Corporate Platforms Core Revenue | | 10% | | 200% | | $178,110 | | | | | | | Strategic Initiatives | | Listings Success | | 10% | | 156% | | $138,926 | | | | | | | | | Corporate Platforms Client Retention and Expansion | | 10% | | 165% | | $147,030 | | | | | | | | | Build ESG Business Capability | | 10% | | 169% | | $150,057 | | | | | | | | | Agile Transformation - New Product Teams in Corporate Platforms | | 2.5% | | 170% | | $37,848 | | | | | | | | | Boardvantage Technology Enhancements | | 2.5% | | 200% | | $44,527 | | | | | | | ESG | | Diversity and Culture | | 5% | | 135% | | $60,325 | | | | | | Total | | | | 100% | | 145% | | $1,290,492 |
The surrounding systems technology roadmap advanced significantly in the Nordics, including through the deployment of the Nasdaq Data Warehouse and the standardization of market operations tools.
| Settlement of 2020 PSU Award Based on Relative TSR | | | The table below sets forth the number of PSUs that Mr. Griggs earned as of December 31, 2022 due to the performance results of his 2020 PSU award, which was based on relative TSR. |
| | | | | | | | | Target PSUs Awarded in 2020 | | Actual Performance as a Percent of Target | | PSUs Earned | | | | 41,616 | | 200% | | 83,232 |
Developed the trading application services framework for our exchanges and delivered enhanced Nasdaq Financial Framework clearing applications.
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| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | |  | | Bradley J. Peterson | | EVP and CIO/CTO | | 2022 Total Target Direct Compensation Mix |
Continued to lead the Global Technology team, during the second year of COVID-19, in a completely remote environment with record volumes in trading activity and IPOs.
2021 Compensation Elements
For 2021, the Management Compensation Committee maintained Mr. Peterson’s base salary and target annual cash incentive award. The Management Compensation Committee increased the target grant date face value of his equity award by $100,000. In determining this compensation change, the Management Compensation Committee assessed Mr. Peterson’s individual performance and the overall performance of our Global Technology Organization. His total compensation was determined to be competitive as compared to CIOs and CTOs in our peer group.
| | | | | | | | | Target Annual Cash Incentive Award 27% | | | | | |
| | | | | | | | | | | | | | | Type of
Compensation | | 2021 Annualized
Amounts | | 2020 Annualized
Amounts | | | | | | Base Salary | | Fixed | | $600,000 | | $600,000 | | | | | Target Annual Cash Incentive Award | | Performance-Based | | $900,000 | | $900,000 | | | | | | Target Equity Award | | Performance-Based (PSUs) | | $1,520,0001 | | $1,440,000 | | | | | | (Grant Date Face Value) | | At-Risk (RSUs) | | $380,0001 | | $360,000 | | | | | | Total Target Compensation | | | | $3,400,000 | | $3,300,000 |
| | | 2022 Performance Highlights | | | | | •Successfully completed the migration of our first U.S. options exchange, the Nasdaq MRX options market, to the cloud. | | | | | •Migrated our Nordic derivatives market to Fusion, a common technology platform for Nasdaq’s derivatives markets. | | | | | •Led the global technology strategy across operations, infrastructure, corporate systems, information security, and technology innovation. | | | | | •Continued to transform Nasdaq’s technology organization, deepening alignment of product development to Nasdaq’s business strategy. | | | | | •Demonstrated the operational excellence of our exchanges through availability, reliability, and resilience of our core systems. | | | | | 2022 Compensation Elements | | | | | | On June 22, 2022, we entered into a new employment agreement with Mr. Peterson. In connection with his new agreement, the Management Compensation Committee increased his base salary from $600,000 to $650,000 per year and increased his target annual cash incentive award from $900,000 to $975,000 per year, effective July 1, 2022. Prior to entering into the new employment agreement, the Management Compensation Committee had increased the target grant date face value of his equity award by $100,000, effective April 1, 2022. In determining this compensation change, the Management Compensation Committee assessed Mr. Peterson’s individual performance, the overall performance of our Global Technology Organization, and market competitive positioning. | | | | | | In connection with the renewal of his employment agreement, on July 1, 2022, Mr. Peterson received a one-time equity award of RSUs with a grant date face value of $3,500,000, which vests equally over three years. | | |
| | | | | | | | | | | | | | | | | Type of Compensation | | 2022 Annualized Amounts
(at Target) | | 2021 Annualized Amounts
(at Target) | | | | | | | | Base Salary | | Fixed | | $650,000 | | $600,000 | | | | | | | | Target Annual Cash Incentive Award | | Performance-Based | | $975,000 | | $900,000 | | | | | | | | Target Equity Award | | Performance-Based
(PSUs) | | $1,600,000 1 | | $1,520,000 | | | | | | | | (Grant Date Face Value) | | At-Risk (RSUs) | | $400,000 1 | | $380,000 | | | | | | | | Total Target Compensation | | | | $3,625,000 | | $3,400,000 | | |
| | 11. | Mr. Peterson was awarded a target amount of 10,07626,385 PSUs, and 2,5196,594 RSUs, on April 1, 20212022 with the terms and conditions described in the “Long-Term Incentive Compensation” section above. | |
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
2021 Performance Goals – Annual Cash Incentive Award
Mr. Peterson earned an annual incentive award payout of $1,746,459, or 194% of target, based on the final achievement of his pre-established, quantifiable performance goals, as described below.
| | | | | | | | | | | | | | | Goal Type | | Goal | | Goal
Weighting | | Actual
Performance
as a Percent
of Target | | Award Payout | | | | | | Corporate Financial | | Corporate Operating Income (Run Rate) | | 50% | | 200% | | $900,000 | | | | | | | | | Corporate Net Revenue | | 20% | | 200% | | $360,000 | | | | | | Strategic Initiatives | | Launch Fusion for the Nordic Equity Derivatives Market | | 5% | | 200% | | $90,000 | | | | | | | | | Advance Cloud-Based System Migrations | | 5% | | 200% | | $90,000 | | | | | | | | | Market Technology Initiatives | | 5% | | 150% | | $67,500 | | | | | | | | | System Reliability and Operational Excellence | | 5% | | 196% | | $87,978 | | | | | | | | | Maturing Nasdaq Financial Framework | | 5% | | 199% | | $89,757 | | | | | | Employee Engagement | | Diversity, Inclusion, Belonging and Engagement | | 5% | | 136% | | $61,224 | | | | | | Total | | | | 100% | | 194% | | $1,746,459 |
Settlement of 2019 PSU Award Based on Relative TSR
The table below sets forth the number of PSUs that Mr. Peterson earned as of December 31, 2021 due to the performance results of his 2019 PSU award, which was based on relative TSR.
| | | | | | | | | Target PSUs Awarded in 2019 | | Actual Performance as a Percent of Target | | PSUs Earned | 20,361 | | 200% | | 40,722 |
Other Aspects of Our Executive Compensation Program
General Equity Award Grant Practices
The Management Compensation Committee and the Board approve annual equity awards during regular first quarter meetings, which are scheduled well in advance and without regard to any material Company news announcements.
We believe that the current and expected expense and share utilization are reasonable and justified in light of the Management Compensation Committee’s goals of aligning the long-term interests of officers and employees with those of shareholders and rewarding officers for long-term relative TSR growth while retaining a strong management team. We actively monitor the expense and share utilization associated with annual grants and are committed to adjusting grant practices if and when appropriate.
Throughout the performance periods for equity awards, the Management Compensation Committee receives updates on the executives’ progress in achieving applicable performance goals and monitors the compensation expense and share run rate that the Company is incurring for outstanding equity awards.
The reference price for calculating the value of equity awards granted is the closing market price of Nasdaq’s common stock on the date of grant. Existing equity ownership levels are not a factor in award determinations as we do not want to discourage senior executives from holding significant amounts of our common stock.
Benefits
We provide a comprehensive benefits program to our executive officers, including the NEOs, which mirrors the program offered to all employees of the Company. These benefits include, among other components, a 401(k) plan with 6% matching contributions, health and welfare benefits and participation in the Company’s ESPP. Under these plans, our NEOs participate on the same terms as other employees.
Prior to 2007, Nasdaq offered a defined benefit pension program, which was frozen in 2007. The plan does not allow any new participants, and for existing participants, future service and salary do not contribute to the benefit accrual under the plan. Employees hired prior to the freeze date continue to receive credit for service required for vesting of the benefit. None of the NEOs, other than Ms. Friedman, participate in the defined benefit pension program.
Severance
Except in employment agreements and other agreements for certain executive officers as described in this Proxy Statement, we are not obligated to pay general severance or other enhanced benefits to any NEO upon termination of his or her employment. However, the Management Compensation Committee and/or the Board has the discretion to pay severance. Severance decisions do not influence other compensation decisions, which are focused on motivating our executives to remain with Nasdaq and contribute to our future success.
Change in control severance is addressed in employment agreements for certain NEOs, as described in this Proxy Statement, and in a change in control severance policy for NEOs without an employment agreement. We believe that the terms for triggering payment under these arrangements are appropriate. For example, these arrangements use what is known as a “double trigger,” meaning that severance resulting from a change in control is paid only upon the occurrence of both a change in control of the Company and a qualifying loss of employment. In addition, a change in control under these arrangements is limited to situations where the acquiror obtains a majority of Nasdaq’s voting securities or the current members of our Board (or their approved successors) cease to constitute a majority of the Board. We do not provide tax gross-ups in connection with the change in control excise tax.
For further information on Nasdaq’s limited severance arrangements, see “Employment Agreements” and “Termination Due to Change in Control (“Double Trigger”).
Other
Because our executive compensation program emphasizes pay for performance, it includes few perquisites for our executives. Under her employment agreement, for security reasons, we provide Ms. Friedman with a company car and a security-trained driver for use when conducting Nasdaq business. Any use of the car and driver for personal reasons is reported in the Summary Compensation Table included below under “Executive Compensation.” NEOs are eligible to receive basic financial planning services and executive health exams. In addition, like all employees and contractors, our executives are eligible to receive 100% corporate matching funds (and sometimes more for specific initiatives approved by the Company) for donations to an IRS-registered, 501(c)(3)-compliant organization. Participation in each of these programs is voluntary. We do not provide tax gross-up payments on perquisites.
Risk Mitigation and Other Pay Practices
Risk Assessment of Compensation Program
We monitor the risks associated with our compensation program on an ongoing basis. In March 2022, the Management Compensation Committee and Audit & Risk Committee were presented with the results of our annual formal assessment of our employee compensation program in order to evaluate the risks arising from our compensation policies and practices. This risk assessment report reflected a comprehensive review and analysis of the components of our compensation program. The Management Compensation Committee and Audit & Risk Committee both concluded, based on the risk assessment report’s findings, that any risks arising from our compensation program are not reasonably likely to have a material adverse effect on the Company.
The risk assessment was performed by an internal working group consisting of employees in People@ Nasdaq, Group Risk Management and the Internal Audit Department, as well as the Offices of General Counsel and Corporate Secretary. The findings were presented to the Global Risk Management Committee, which concurred with the working group’s report. The risk assessment included the following steps:
collection and review of our compensation policies and pay structures;
| 2022 Performance Goals – Annual Cash Incentive Award | | | Mr. Peterson earned an annual incentive award payout of $1,259,192, or 134% of target, based on the final achievement of his pre-established, quantifiable performance goals, as described below. |
development of a risk assessment scorecard, analysis approach and timeline; and
| | | | | | | | | | | | | | | Goal Type | | Goal | | Goal Weighting | | Actual
Performance as a
Percent of Target | | Award Payout | | | | | | Corporate Financial | | Corporate Operating Income (Run Rate) | | 50% | | 105% | | $490,217 | | | | | | | | | Corporate Net Revenues | | 20% | | 137% | | $256,359 | | | | | | Strategic Initiatives | | Market Migrations to the Global Derivatives Platform and the Cloud | | 5% | | 200% | | $93,781 | | | | | | | | | Advance Cloud-Based System Migrations | | 4% | | 200% | | $75,025 | | | | | | | | | Develop Artificial Intelligence Talent and Technology | | 4% | | 200% | | $75,025 | | | | | | | | | System Reliability and Operational Excellence | | 4% | | 193% | | $72,456 | | | | | | | | | Agile Transformation - New Product Teams in Global Technology | | 2% | | 185% | | $34,699 | | | | | | | | | Strategic Clearing Projects | | 2% | | 200% | | $37,512 | | | | | | | | | Develop and Deploy Digital Assets Business | | 4% | | 200% | | $75,025 | | | | | | ESG | | Diversity and Culture | | 5% | | 105% | | $49,093 | | | | | | Total | | | | 100% | | 134% | | $1,259,192 |
review and evaluation of controls that might mitigate risk-taking (e.g., equity vesting structure, incentive recoupment policy and stock ownership guidelines).
| Settlement of 2020 PSU Award Based on Relative TSR | | | The table below sets forth the number of PSUs that Mr. Peterson earned as of December 31, 2022 due to the performance results of his 2020 PSU award, which was based on relative TSR. |
Stock Ownership Guidelines
| | | | | | | | | Target PSUs Awarded in 2020 | | Actual Performance as a Percent of Target | | PSUs Earned | | | | 46,818 | | 200% | | 93,636 |
We recognize the importance of stock ownership as an essential means of closely aligning the interests of our executives with the interests of our shareholders. In addition to using equity awards as a primary long-term incentive compensation tool, we have stock ownership guidelines in place for our senior executives, including our NEOs. Under its charter, the Management Compensation Committee is responsible for reviewing the stock ownership guidelines annually and verifying compliance.
| | | | 94 | | |
Under the guidelines, the covered executives are expected to own specified dollar amounts of our common stock based on a multiple of their base salary, as set forth in the table below.
| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
| | | | | Other Aspects of Our Executive Compensation Program | | |
| | | General Equity Award Grant Practices | | | | | The Management Compensation Committee and the Board approve annual equity awards during regular first quarter meetings, which are scheduled well in advance and without regard to any material Company news announcements. | | | | | We believe that the current and expected expense and share utilization are reasonable and justified in light of the Management Compensation Committee’s goals of aligning the long-term interests of officers and employees with those of shareholders and rewarding officers for long-term relative TSR growth while retaining a strong management team. We actively monitor the expense and share utilization associated with annual grants and are committed to adjusting grant practices if and when appropriate. | |  | | | | | The reference price for calculating the value of equity awards granted is the closing market price of Nasdaq’s common stock on the date of grant. Existing equity ownership levels are not a factor in award determinations as we do not want to discourage senior executives from holding significant amounts of our common stock. | | | | | | Benefits | | | | | We provide a comprehensive benefits program to our executive officers, including the NEOs, which mirrors the program offered to all employees of the Company. These benefits include, among other components, a 401(k) plan with 6% matching contributions, health and welfare benefits, and participation in the Company’s ESPP. Under these plans, our NEOs participate on the same terms as other employees. | | | | | Prior to 2007, Nasdaq offered a defined benefit pension program, which was frozen in 2007. The plan does not allow any new participants, and for existing participants, future service and salary do not contribute to the benefit accrual under the plan. Employees hired prior to the freeze date continue to receive credit for service required for vesting of the benefit. None of the NEOs, other than Ms. Friedman, participate in the defined benefit pension program. | | | | | Our NEOs, along with all Vice Presidents and above based in the United States, are eligible to participate in a non-qualified deferred compensation plan pursuant to which they can defer up to 80% of base salary and/or 80% of their annual cash incentive award. Participants must make a deferral election each year and may elect to have distributions begin on a specified date or following cessation of service, upon death or in connection with a change of control. Distributions are generally made in a lump sum or in annual installments between two and ten years. Accounts are credited with earnings based on each participant’s selection among investment choices that are similar to those available under our 401(k) savings plan. Investment allocations may be changed at any time by the participant. Under the terms of the plan, Nasdaq may make contributions to the plan but has not made any such contributions to date. |
| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
| | | | | | Title
| | Value of
Shares OwnedSeverance
| | | | | PresidentExcept in employment agreements and other agreements for certain executive officers as described in this Proxy Statement, we are not obligated to pay general severance or other enhanced benefits to any NEO upon termination of his or her employment. However, the Management Compensation Committee and/or the Board has the discretion to pay severance. Severance decisions do not influence other compensation decisions, which are focused on motivating our executives to remain with Nasdaq and contribute to our future success.
| | | | | Change in control severance is addressed in employment agreements for certain NEOs, as described in this Proxy Statement, and in a change in control severance policy for NEOs without an employment agreement. We believe that the terms for triggering payment under these arrangements are appropriate. For example, these arrangements use what is known as a “double trigger,” meaning that severance resulting from a change in control is paid only upon the occurrence of both a change in control of the Company and a qualifying loss of employment. In addition, a change in control under these arrangements is limited to situations where the acquiror obtains a majority of Nasdaq’s voting securities or the current members of our Board (or their approved successors) cease to constitute a majority of the Board. We do not provide tax gross-ups in connection with the change in control excise tax. | | | | | For further information on Nasdaq’s limited severance arrangements, see “Employment Agreements and Potential Payments Upon Termination or Change in Control.” | | | | | | Other | | | | | Because our executive compensation program emphasizes pay for performance, it includes few perquisites for our executives. Under her employment agreement, for security reasons, we provide Ms. Friedman with a company car and a security-trained driver for use when conducting Nasdaq business. Any use of the car and driver for personal reasons is reported in the Summary Compensation Table included below under “Executive Compensation.” NEOs are eligible to receive basic financial planning services and executive health exams. In addition, like all employees and contractors, our executives are eligible to receive 100% corporate matching funds (and sometimes more for specific initiatives approved by the Company) for donations to an IRS-registered, 501(c)(3)-compliant organization, subject to certain limits. Participation in each of these programs is voluntary. We do not provide tax gross-up payments on perquisites. |
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| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
| | | | | | | | | Risk Mitigation and Other Pay Practices | | | | | | Risk Assessment of Compensation Program | | | | | We monitor the risks associated with our compensation program on an ongoing basis. In March 2023, the Management Compensation Committee and Audit & Risk Committee were presented with the results of our annual formal assessment of our employee compensation program in order to evaluate the risks arising from our compensation policies and practices. This risk assessment report reflected a comprehensive review and analysis of the components of our compensation program. The Management Compensation Committee and Audit & Risk Committee both concluded, based on the risk assessment report’s findings, that any risks arising from our compensation program are not reasonably likely to have a material adverse effect on the Company. | | | | | The risk assessment was performed by an internal working group consisting of employees in People@Nasdaq, Group Risk Management, and the Internal Audit Department, as well as the Offices of General Counsel and Corporate Secretary. The findings were presented to the Global Risk Management Committee, which concurred with the working group’s report. The risk assessment included the following steps: • collection and review of our compensation policies and pay structures; •development of a risk assessment scorecard, analysis approach, and timeline; and •review and evaluation of controls that might mitigate risk-taking (e.g., equity vesting structure, incentive recoupment policy, and stock ownership guidelines). | | | | | | Stock Ownership Guidelines | | | | | We recognize the importance of stock ownership as an essential means of closely aligning the interests of our executives with the interests of our shareholders. In addition to using equity awards as a primary long-term incentive compensation tool, we have stock ownership guidelines in place for our senior executives, including our NEOs. Under its charter, the Management Compensation Committee is responsible for reviewing the stock ownership guidelines annually and verifying compliance. | | | | | Under the guidelines, the covered executives are expected to own specified dollar amounts of our common stock based on a multiple of their base salary, as set forth in the table below. |
| | | | | | | | | | | | | | | | Title | | Value of Shares Owned | | | | | | | | | Chair and CEO | | 6x base salary | | | | | | | CFO
| | Presidents | | 4x base salary | | | | | | | | | CFO | | 4x base salary | | | | | | | | | Other EVPs | | 3x base salary | | |
Individual holdings, shares jointly owned with immediate family members or held in trust, shares or units of restricted stock (including vested and unvested), shares underlying PSUs after completion of the performance period and shares purchased or held through our plans, such as the Nasdaq ESPP, count toward satisfying the guidelines. New executives and executives who incur a material change in their responsibilities are expected to meet the applicable level of ownership within five years of their start date or the date of the change in responsibilities. All of the NEOs who were required to comply with the guidelines on December 31, 2021 were in compliance with the guidelines as of that date.
Stock Holding Guidelines
We encourage our senior executives to retain equity grants until the applicable stock ownership level discussed above is reached. Under the stock ownership guidelines, these officers must hold the specified dollar amounts of stock through the end of their employment with Nasdaq. We feel that our guidelines provide proper alignment of the interests of our management and our shareholders and therefore, we do not have additional stock holding requirements beyond the stock ownership guidelines.
Trading Controls and Hedging and Pledging Policies
We prohibit directors and executive officers from engaging in securities transactions that allow them either to insulate themselves, or profit, from a decline in Nasdaq’s stock price (with the exception of selling shares outright in accordance with applicable laws and regulations). Specifically, these individuals may not enter into hedging transactions with respect to Nasdaq’s common stock, including short sales and transactions in derivative securities. Finally, these individuals may not pledge, hypothecate or otherwise encumber their shares of Nasdaq common stock, including by holding such shares in a margin account.
We permit all employees, including the NEOs, to enter into plans established under Rule 10b5-1 of the Exchange Act enabling them to trade in our stock, including stock received through equity grants, during periods in which they might not otherwise be able to trade because material nonpublic information about Nasdaq has not been publicly released. These plans include specific instructions to a broker to trade on behalf of the employee if our stock price reaches a specified level or if certain other events occur and therefore, the employee no longer controls the decision to trade or the timing of the trade.
Incentive Recoupment Policy
The Board and Management Compensation Committee have adopted an incentive recoupment, or “clawback,” policy that is applicable to officers with the rank of EVP and above. The policy provides that the Company may recoup any cash or equity incentive payments predicated upon the achievement of financial results or operating metrics that are subsequently determined to be incorrect on account of material errors, material omissions, fraud or misconduct.
Tax and Accounting Implications of Executive Compensation
The Management Compensation Committee considers income tax and other consequences of individual compensation elements when it is analyzing the overall level of compensation and the mix of compensation among individual elements. Depending upon the relevant circumstances at the time, the Management Compensation Committee may determine to award compensation that is not deductible. In making this determination, the Management Compensation Committee balances the purposes and needs of our executive compensation program against potential tax and other implications.
Generally, under U.S. GAAP, compensation is expensed as earned. We generally recognize compensation expense for equity awards on a straight-line basis over the requisite service period of the award.
Management Compensation Committee Report
The Management Compensation Committee reviewed and discussed the Compensation Discussion and Analysis with management. After such discussions, the Management Compensation Committee recommended to Nasdaq’s Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Form 10-K.
The Management Compensation Committee
Management Compensation Committee Interlocks
and Insider Participation
None of the members of the Management Compensation Committee is an executive officer, employee or former officer of Nasdaq. With the exception of Ms. Friedman, none of Nasdaq’s executive officers serves as a current member of the Nasdaq Board. None of Nasdaq’s executive officers serves as a director or a member of the compensation committee of any entity that has one or more executive officers serving on the Nasdaq Board or Management Compensation Committee.
Executive Compensation Tables
The following tables, narrative and footnotes present the compensation of the NEOs during 2021 in the format mandated by the SEC.
2021 Summary Compensation Table
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | Salary ($) | | Bonus ($)1 | | Stock Awards ($)2 | | Option Awards ($) | | Non-Equity Incentive Plan Compensation ($)3 | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)4 | | All Other Compensation ($)5 | | Total ($) | | | | | | | | | | | Adena T. Friedman President and CEO | | 2021 | | $1,250,000 | | — | | $12,864,768 | | — | | $5,799,474 | | — | | $51,651 | | $19,965,893 | | | 2020 | | $1,176,163 | | — | | $10,397,565 | | — | | $4,081,857 | | $98,334 | | $53,699 | | $15,807,618 | | | 2019 | | $1,000,000 | | — | | $9,251,842 | | — | | $3,437,372 | | $132,281 | | $47,792 | | $13,869,287 | | | | | | | | | | | Ann M. Dennison6 EVP and CFO | | 2021 | | $529,630 | | — | | $1,543,459 | | — | | $1,415,845 | | — | | $31,891 | | $3,520,825 | | | | | | | | | | | Michael Ptasznik7 Former EVP, Corporate Strategy and CFO | | 2021 | | $150,637 | | — | | — | | — | | $151,541 | | — | | $6,944 | | $309,122 | | | 2020 | | $617,596 | | — | | $2,195,005 | | — | | $1,438,673 | | — | | $39,950 | | $4,291,224 | | | 2019 | | $600,000 | | — | | $1,959,135 | | — | | $1,332,971 | | — | | $35,402 | | $3,927,508 | | | | | | | | | | | Lauren B. Dillard Former EVP, Investment Intelligence | | 2021 | | $542,593 | | — | | $2,058,297 | | — | | $1,470,169 | | — | | $35,402 | | $4,106,461 | | | 2020 | | $525,000 | | — | | $1,732,894 | | — | | $1,300,481 | | — | | $45,572 | | $3,603,947 | | | 2019 | | $262,500 | | $1,500,000 | | $5,395,185 | | — | | $1,265,514 | | — | | $21,519 | | $8,444,718 | | | | | | | | | | | P.C. Nelson Griggs EVP, Corporate Platforms | | 2021 | | $575,000 | | — | | $2,058,297 | | — | | $1,640,065 | | — | | $18,778 | | $4,292,140 | | | 2020 | | $567,596 | | — | | $1,848,444 | | — | | $1,478,329 | | — | | $23,047 | | $3,917,416 | | | 2019 | | $535,577 | | — | | $1,632,661 | | — | | $1,151,808 | | — | | $16,800 | | $3,336,846 | | | | | | | | | | | Bradley J. Peterson EVP and CIO/CTO | | 2021 | | $600,000 | | — | | $2,444,286 | | — | | $1,746,459 | | — | | $35,925 | | $4,826,670 | | | 2020 | | $600,000 | | — | | $2,079,456 | | — | | $1,346,172 | | — | | $44,950 | | $4,070,578 | | | 2019 | | $585,577 | | — | | $1,959,135 | | — | | $1,229,270 | | — | | $40,091 | | $3,814,073 |
1. | | | | | | | | | Individual holdings, shares jointly owned with immediate family members or held in trust, RSUs (whether vested or unvested), shares underlying PSUs after completion of the performance period, and shares purchased or held through our plans, such as the Nasdaq ESPP, count toward satisfying the guidelines. New executives and executives who incur a material change in their responsibilities are expected to meet the applicable level of ownership within five years of their start date or the date of the change in responsibilities. All of the NEOs who were required to comply with the guidelines on December 31, 2022 were in compliance at such time. |
| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
| | | | | Stock Holding Guidelines | | | | | We encourage our senior executives to retain equity grants until the applicable stock ownership level discussed above is reached. Under the stock ownership guidelines, these officers must hold the specified dollar amounts of stock through the end of their employment with Nasdaq. We feel that our guidelines provide proper alignment of the interests of our management and our shareholders and therefore, we do not have additional stock holding requirements beyond the stock ownership guidelines. | | | | | | | | Trading Controls and Hedging and Pledging Policies | | | | | We prohibit directors and executive officers from engaging in securities transactions that allow them either to insulate themselves, or profit, from a decline in Nasdaq’s stock price (with the exception of selling shares outright in accordance with applicable laws and regulations). Specifically, these individuals may not enter into hedging transactions with respect to Nasdaq’s common stock, including short sales and transactions in derivative securities. Finally, these individuals may not pledge, hypothecate, or otherwise encumber their shares of Nasdaq common stock, including by holding such shares in a margin account. | | | | | We permit all employees, including the NEOs, to enter into plans established under Rule 10b5-1 of the Exchange Act enabling them to trade in our stock, including stock received through equity grants, during periods in which they might not otherwise be able to trade because material nonpublic information about Nasdaq has not been publicly released. These plans include specific instructions to a broker to trade on behalf of the employee if our stock price reaches a specified level or if certain other events occur and therefore, the employee no longer controls the decision to trade or the timing of the trade. | | | | | | Incentive Recoupment Policy | | | | | The amount reported inBoard and Management Compensation Committee have adopted an incentive recoupment, or “clawback,” policy that is applicable to officers with the rank of SVP and above. The policy provides that the Company may recoup any cash or equity incentive payments predicated upon the achievement of financial results or operating metrics that are subsequently determined to be incorrect on account of material errors, material omissions, fraud or misconduct. | | | | | In October 2022, the SEC adopted final rules directing The Nasdaq Stock Market to establish listing standards requiring, among other things, a policy providing for the clawback of certain incentive compensation from executive officers under certain conditions involving an accounting restatement. We are evaluating the new SEC rules and identifying any necessary or advisable updates to our existing incentive recoupment policy. | | | | | | Tax and Accounting Implications of Executive Compensation | | | | | The Management Compensation Committee considers income tax and other consequences of individual compensation elements when it is analyzing the overall level of compensation and the mix of compensation among individual elements. Depending upon the relevant circumstances at the time, the Management Compensation Committee may determine to award compensation that is not deductible. In making this column reflectsdetermination, the Management Compensation Committee balances the purposes and needs of our executive compensation program against potential tax and other implications. Generally, under U.S. GAAP, compensation is expensed as earned. We generally recognize compensation expense for equity awards on a one-time, cash sign-on bonus for Ms. Dillard, who began employment as EVP, Investment Intelligence on June 17, 2019.straight-line basis over the requisite service period of the award. |
2. | | | | 98 | | |
| The amounts reported in this column reflect the grant date fair value of the stock awards, including PSUs and RSUs computed in accordance with FASB ASC Topic 718. The assumptions used in the calculation of these amounts are included in Note 11 to the Company’s audited financial statements for the fiscal year ended December 31, 2021 included in our Form 10-K. Since the 2021 three-year PSU award payouts are contingent on TSR-related performance-based vesting conditions, the grant date fair values were determined based on a Monte Carlo simulation model.Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION
| |
The Monte Carlo simulation model takes into account expected price movement of Nasdaq stock as compared to peer companies. As a result of the Company’s pre- grant 2021 TSR performance relative to peer companies, the Monte Carlo simulation model assigned a higher value to each 2021 three-year PSU than the closing price of Nasdaq’s stock on the grant date. Therefore, the value reflected in the 2021 Summary Compensation Table does not reflect the target grant date face value shown in the Long-Term Incentive Compensation section of the Compensation Discussion and Analysis in this proxy statement. There is no assurance that the target grant date face values or FASB ASC Topic 718 fair values will ever be realized. The table below summarizes the target grant date face value of PSU grants that the Management Compensation Committee and the Board approved for the NEOs compared to the FASB ASC Topic 718 fair value.
| | | | | | | | | | | | | | | Name | | Year | | Target PSUs (#) | | Target Grant Date Face Value ($) | | FASB ASC Topic 718 Fair Value ($) | | | | | | Adena T. Friedman | | 2021 | | 53,032 | | $8,000,000 | | $10,933,607 | | | | | | Ann M. Dennison | | 2021 | | 6,363 | | $960,000 | | $1,311,860 | | | | | | Michael Ptasznik | | 2021 | | — | | — | | — | | | | | | Lauren B. Dillard | | 2021 | | 8,485 | | $1,280,000 | | $1,749,352 | | | | | | P.C. Nelson Griggs | | 2021 | | 8,485 | | $1,280,000 | | $1,749,352 | | | | | | Bradley J. Peterson | | 2021 | | 10,076 | | $1,520,000 | | $2,077,369 |
3. | | | | | | | | | | | Management Compensation Committee Report | | | | | The amounts reportedManagement Compensation Committee reviewed and discussed the Compensation Discussion and Analysis with management. After such discussions, the Management Compensation Committee recommended to Nasdaq’s Board of Directors that the Compensation Discussion and Analysis be included in this column reflectProxy Statement and incorporated by reference into our Form 10-K. | | | | | The Management Compensation Committee | | | | | | | | 
| | | | 
| | | | | | | | | | Steven D. Black (Chair) | | | | Melissa M. Arnoldi | | | | | | | | | | 
| | | | 
| | | | | | | | | | Michael R. Splinter | | | | Toni Townes-Whitley | | | | | | | Management Compensation Committee Interlocks and Insider Participation | | | | | None of the cash awards made tomembers of the NEOs underManagement Compensation Committee is an executive officer, employee, or former officer of Nasdaq. With the ECIPexception of Ms. Friedman, none of Nasdaq’s executive officers serves as a current member of the Nasdaq Board. None of Nasdaq’s executive officers serves as a director or other performance-based incentivea member of the compensation programs.committee of any entity that has one or more executive officers serving on the Nasdaq Board or Management Compensation Committee. |
| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
| | | | | | | | | | | | | | | | | | | | | | | Executive Compensation Tables | | | | | The amounts reported in this column reflectfollowing tables, narrative, and footnotes present the actuarial increasecompensation of the NEOs during 2022 in the present value offormat mandated by the NEOs’ benefits under all pension plans established by Nasdaq. Ms. Fried- man is the only NEO that participates in the defined benefit pension plan, which was frozen in 2007. No amount is reported in this column for Ms. Friedman for 2021 as the actuarial present value of her benefits under the pension plans decreased by $22,419. Assumptions used in calculating the amounts reported include a 2.80%SEC. | | | | | 2022 Summary Compensation Table |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal
Position | | Year | | Salary ($) | | Bonus ($) | | Stock Awards ($)1 | | Option Awards ($)2 | | Non-Equity Incentive Plan
Compensation ($)3 | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)4 | | All Other Compensation ($)5 | | Total ($) | | | | | | | | | | | Adena T. Friedman Chair and CEO | | 2022 | | $1,250,000 | | – | | $12,378,830 | | $9,999,975 | | $4,372,748 | | – | | $43,752 | | $28,045,305 | | | 2021 | | $1,250,000 | | – | | $12,864,768 | | – | | $5,799,474 | | – | | $51,651 | | $19,965,893 | | | 2020 | | $1,176,163 | | – | | $10,397,565 | | – | | $4,081,857 | | $98,334 | | $53,699 | | $15,807,618 | | | | | | | | | | | Ann M. Dennison | | 2022 | | $568,269 | | – | | $1,547,306 | | – | | $1,144,020 | | – | | $37,560 | | $3,297,155 | | | | | | | | | | | EVP and CFO | | 2021 | | $529,630 | | – | | $1,543,459 | | – | | $1,415,845 | | – | | $31,891 | | $3,520,825 | | | | | | | | | | | Tal Cohen President | | 2022 | | $586,539 | | – | | $5,488,332 | | – | | $1,420,551 | | – | | $18,300 | | $7,513,722 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | P.C. Nelson Griggs President | | 2022 | | $593,269 | | – | | $5,466,064 | | – | | $1,290,492 | | – | | $18,300 | | $7,368,125 | | | 2021 | | $575,000 | | – | | $2,058,297 | | – | | $1,640,065 | | – | | $18,778 | | $4,292,140 | | | 2020 | | $567,596 | | – | | $1,848,444 | | – | | $1,478,329 | | – | | $23,047 | | $3,917,416 | | | | | | | | | | | Bradley J. Peterson EVP and CIO/CTO | | 2022 | | $625,000 | | – | | $5,466,064 | | – | | $1,259,192 | | – | | $37,955 | | $7,388,211 | | | 2021 | | $600,000 | | – | | $2,444,286 | | – | | $1,746,459 | | – | | $35,925 | | $4,826,670 | | | 2020 | | $600,000 | | – | | $2,079,456 | | – | | $1,346,172 | | – | | $44,950 | | $4,070,578 | 1. The amounts reported in this column reflect the grant date fair value of the stock awards, including PSUs and RSUs, computed in accordance with FASB ASC Topic 718. The assumptions used in the calculation of these amounts are included in Note 11 to the Company’s audited financial statements for the fiscal year ended December 31, 2022 included in our Form 10-K. Since the 2022 three-year PSU award payouts are contingent on TSR-related performance-based vesting conditions, the grant date fair values were determined based on a Monte Carlo simulation model. | | The Monte Carlo simulation model takes into account expected price movement of Nasdaq stock as compared to peer companies. As a result of the Company’s pre-grant 2022 TSR performance relative to peer companies, the Monte Carlo simulation model assigned a higher value to each 2022 three-year PSU than the closing price of Nasdaq’s stock on the grant date. Therefore, the value reflected in the 2022 Summary Compensation Table does not reflect the target grant date face value shown in the Long-Term Incentive Compensation section of the Compensation Discussion and Analysis in this Proxy Statement. There is no assurance that the target grant date face values or FASB ASC Topic 718 fair values will ever be realized. The table below summarizes the target grant date face value of PSU grants that the Management Compensation Committee and the Board approved for the NEOs compared to the FASB ASC Topic 718 fair value. |
| | | | | | | | | | | | | | | | | | Name | | Year | | | | Target PSUs (#) | | Target Grant Date Face Value ($) | | FASB ASC Topic 718 Fair Value ($) | | | | | | | Adena T. Friedman | | 2022 | | | | 158,310 | | $9,600,000 | | $10,053,213 | | | | | | | Ann M. Dennison | | 2022 | | | | 19,788 | | $1,200,000 | | $1,256,604 | | | | | | | Tal Cohen | | 2022 | | | | 26,385 | | $1,600,000 | | $1,675,535 | | | | | | | P.C. Nelson Griggs | | 2022 | | | | 26,385 | | $1,600,000 | | $1,675,535 | | | | | | | Bradley J. Peterson | | 2022 | | | | 26,385 | | $1,600,000 | | $1,675,535 | | 2. The amounts reported in this column reflect the grant date fair value of the option award computed in accordance with FASB ASC Topic 718. The assumptions used in the calculation of this amount are included in Note 11 to the Company’s audited financial statements for the fiscal year ended December 31, 2022 included in our Form 10-K. | | 3. The amounts reported in this column reflect the cash awards made to the NEOs under the ECIP or other performance-based incentive compensation programs. | | 4. The amounts reported in this column reflect the actuarial increase in the present value of the NEOs’ benefits under all pension plans established by Nasdaq. Ms. Friedman is the only NEO who participates in the defined benefit pension plan, which was frozen in 2007. No amount is reported in this column for Ms. Friedman for 2022 as the actuarial present value of her benefits under the pension plans decreased by $190,791. Assumptions used in calculating the amounts reported include a 5.15% discount rate as of December 31, 2022, a 2.80% |
| | | | 100 | | |
| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
| discount rate as of December 31, 2021, a 2.50% discount rate as of December 31, 2020, a 3.20% discount rate as of December 31, 2019, a 4.45% discount rate as of De- cember 31, 2018,and retirement at age 62 (which is the earliest age at which a participant may retire and receive unreduced benefits under the plans). Nasdaq adopted its Deferred Compensation Plan in 2022, and other assumptions usedthus there are no changes in compensation earnings this year as described in Note 10 to2022 was the Company’s audited financial statements for the fiscalfirst year ended December 31, 2021 included in our Form 10-K. None of the NEOs received above-market or preferential earnings on deferred compensation in 2021, 2020 or 2019.participation. |
5. | 5. The following table sets forth the 20212022 amounts reported in the “All Other Compensation” column by type. The incremental cost of Ms. Friedman’s personal use of her company car (including commutation) is calculated based on an allocation of the cost of the driver,drivers, lease, tolls, fuel, parking, maintenance, and other related expenses. |
| | | | | Name | | Contribution to the 401(k) Plan ($) | | Cost of Executive Health Exam ($) | | Cost of Financial/ Tax Planning Services ($) | | Incremental Cost of Personal Use of Company Car ($) | | Matching Charitable Donations ($)8 | | Total All Other Compensation ($) | | Contribution to the 401(k) Plan ($) | | Cost of Executive Health Exam ($) | | Cost of Financial/ Tax Planning Services ($) | | Incremental Cost of Personal Use of Company Car ($) | | Matching Charitable Donations ($) | | Total All Other Compensation ($) | | Adena T. Friedman | | $17,400 | | — | | $17,735 | | $14,516 | | $2,000 | | $51,651 | | $18,300 | | – | | $18,260 | | $6,192 | | $1,000 | | $43,752 | | Ann M. Dennison | | $17,400 | | — | | $13,055 | | — | | $1,436 | | $31,891 | | $18,300 | | – | | $18,260 | | – | | $1,000 | | $37,560 | | Michael Ptasznik | | $6,944 | | — | | — | | — | | — | | $6,944 | | | Lauren B. Dillard | | $16,667 | | — | | $17,735 | | — | | $1,000 | | $35,402 | | Tal Cohen | | | $18,300 | | – | | – | | – | | – | | $18,300 | | P.C. Nelson Griggs | | $15,778 | | — | | — | | — | | $3,000 | | $18,778 | | $18,300 | | – | | – | | – | | – | | $18,300 | | Bradley J. Peterson | | $17,400 | | $4,970 | | $13,055 | | — | | $500 | | $35,925 | | $18,300 | | $5,215 | | $13,440 | | – | | $1,000 | | $37,955 |
| Ms. Dennison was appointed EVP and CFO effective as of March 1, 2021.Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION
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7. | Mr. Ptasznik retired as EVP, Corporate Strategy and CFO on February 28, 2021. For further details regarding his Retirement Agremeent, please see “Other Agreements—Michael Ptasznik Retirement Agreement” below.
2022 Grants of Plan-Based Awards Table |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Committee and/or Board Approval Date | | | | Estimated Future Payouts Under Non- Equity Incentive Plan Awards1 | | Estimated Future Payouts Under Equity
Incentive Plan Awards2 | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | All Other Option Awards: Number of Securities Underlying Options (#)3 | | Exercise or Base Price of Option Awards ($/Sh)4 | | Grant Date Fair Value of Stock and Option Awards ($)5 | | Name | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | | Threshold (#) | | Target (#) | | Maximum
(#) | | | | | | | | | | | | | | Adena T. Friedman | | 02/23/2022 | | – | | – | | $3,750,000 | | $7,500,000 | | – | | – | | – | | – | | – | | – | | – | | | 03/23/2022 | | 04/01/2022 | | – | | – | | – | | – | | 158,310 | | 316,620 | | 39,576 | | 613,872 | | $67.48 | | $22,378,805 | | | | | | | | | | | | | | Ann M. Dennison | | 12/08/2021 | | – | | – | | $853,049 | | $1,706,098 | | – | | – | | – | | – | | – | | – | | - | | | 03/23/2022 | | 04/01/2022 | | – | | – | | – | | – | | 19,788 | | 39,576 | | 4,947 | | – | | – | | $1,547,306 | | | | | | | | | | | | | | Tal Cohen | | 12/08/2021 | | – | | – | | $881,096 | | $1,762,192 | | – | | – | | – | | – | | – | | – | | - | | | 03/22/2022 | | 04/01/2022 | | – | | – | | – | | – | | 26,385 | | 52,770 | | 64,311 | | – | | – | | $5,488,332 | | | | | | | | | | | | | | P.C. Nelson Griggs | | 12/08/2021 | | – | | – | | $890,549 | | $1,781,098 | | – | | – | | – | | – | | – | | – | | – | | | 03/22/2022 | | 04/01/2022 | | – | | – | | – | | – | | 26,385 | | 52,770 | | 6,594 | | – | | – | | $2,063,020 | | | 06/21/2022 | | 07/01/2022 | | – | | – | | – | | – | | – | | – | | 67,485 | | – | | – | | $3,403,046 | | | | | | | | | | | | | | Bradley J. Peterson | | 06/21/2022 | | – | | – | | $937,808 | | $1,875,616 | | – | | – | | – | | – | | – | | – | | – | | | 03/22/2022 | | 04/01/2022 | | – | | – | | – | | – | | 26,385 | | 52,770 | | 6,594 | | – | | – | | $2,063,020 | | | 06/21/2022 | | 07/01/2022 | | – | | – | | – | | – | | – | | – | | 67,485 | | – | | – | | $3,403,046 |
8. | Amounts in this column reflect matching charitable donations for Ms. Friedman, Ms. Dennison and Mr. Griggs, and matching charitable donations for contributions to the Nasdaq PAC for Ms. Dillard and Mr. Peterson.
|
2021 Grants of Plan-Based Awards Table
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Commit- tee
and/ or Board
Approval Date | | Grant Date | | | | | | | | | | | | | | All Other
Stock Awards:
Num—
ber of
Shares
of
Stock or Units (#) | | All Other
Option Awards:
Number of
Securities
Underlying
Options (#) | | Exercise
or Base Price of
Option
Awards
($/Sh) | | Grant Date
Fair Value of Stock and
Option
Awards ($)3 | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards1 | | Estimated Future Payouts Under
Equity Incentive Plan Awards2 | | | | | | | | Threshold
($) | | Target ($) | | Maximum ($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | Adena T. Friedman | | — | | — | | — | | $3,000,000 | | $6,000,000 | | — | | — | | — | | — | | — | | — | | — | | | 03/24/2021 | | 04/01/2021 | | — | | — | | — | | — | | 53,032 | | 106,064 | | 13,258 | | — | | — | | $12,864,768 | Ann M. Dennison | | — | | — | | — | | $727,939 | | $1,455,878 | | — | | — | | — | | — | | — | | — | | — | | | 03/24/2021 | | 04/01/2021 | | — | | — | | — | | — | | 6,363 | | 12,726 | | 1,590 | | — | | — | | $1,543,459 | Michael Ptasznik4 | | — | | — | | — | | $151,541 | | — | | — | | — | | — | | — | | — | | — | | — | | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | Lauren B. Dillard | | — | | — | | — | | $815,343 | | $1,630,686 | | — | | — | | — | | — | | — | | — | | — | | | 03/24/2021 | | 04/01/2021 | | — | | — | | — | | — | | 8,485 | | 16,970 | | 2,121 | | — | | — | | $2,058,297 | P.C. Nelson Griggs | | — | | — | | — | | $862,500 | | $1,725,000 | | — | | — | | — | | — | | — | | — | | — | | | 03/24/2021 | | 04/01/2021 | | — | | — | | — | | — | | 8,485 | | 16,970 | | 2,121 | | — | | — | | $2,058,297 | Bradley J. Peterson | | — | | — | | — | | $900,000 | | $1,800,000 | | — | | — | | — | | — | | — | | — | | — | | | 03/24/2021 | | 04/01/2021 | | — | | — | | — | | — | | 10,076 | | 20,152 | | 2,519 | | — | | — | | $2,444,286 |
| 1. | The amounts reported in these columns represent the possible range of payments under the ECIP or other performance-based incentive compensation programs. Amounts are considered earned in fiscal year 20212022 although they were not paid until 2022.2023. For information about the amounts actually earned by each NEO under the ECIP or other performance-based incentive compensation programs, see “Executive Compensation Tables – 20212022 Summary Compensation Table.” |
2. | 2. The amounts reported in these columns represent the possible range of PSUs that each NEO may earn under the Equity Plan, depending on the achievement of performance goals established by the Management Compensation Committee and/or Board. For further information, see “Compensation Discussion & Analysis – 20212022 Compensation Decisions – Long-Term Incentive Compensation.” |
3. | 3. The amount reported in this column represents shares underlying options granted under the Equity Plan that vest five years from the grant date, in which 50% of the award will vest contingent upon the achievement of certain performance conditions, subject to continued employment through such date. For further information regarding this option grant to Ms. Friedman, see “Employment Agreements and Potential Payments Upon Termination or Change in Control - Adena T. Friedman - Option Award.” | | 4. The amount reported in this column represents the exercise price of the stock options reported in the previous column and is equal to the closing market price of our common stock on the date of grant. | | 5. The amounts reported in this column represent the grant date fair value of the total equity awards reported in the previous columns calculated pursuant to FASB ASC Topic 718 based upon the assumptions discussed in Note 11 to the Company’s audited financial statements for the fiscal year ended December 31, 20212022 included in our Form 10-K. For further information about the calculation of these amounts, see “Executive Compensation Tables – 20212022 Summary Compensation Table.” |
4. | | | | 102 | | |
| Mr. Ptasznik was paid a pro-rata bonus at target of $151,541 for 2021 in accordance with the terms of his retirement agreement. Mr. Ptasznik retired as EVP, Corporate Strategy and CFO on February 28, 2021. He was not awarded any equity in 2021 as a result of his retirement.Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION
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| | 2022 Outstanding Equity Awards at Fiscal Year-End Table |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | | | Stock Awards | | | | | | | | | | | | | Name | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price ($) | | Option Expiration Date | | | | Number of Shares or Units of Stock that Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($)7 | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)7 | | | | | | | | | | | | Adena T. Friedman | | 806,451 | | – | | – | | $22.22 | | 01/03/2027 | | | | – | | – | | – | | – | | | – | | 613,872 | | – | | $67.48 | | 01/03/2032 | | | | 39,0121 | | $2,393,386 | | – | | – | | | – | | – | | – | | – | | – | | | | 39,7742 | | $2,440,135 | | 159,0965 | | $9,760,540 | | | – | | – | | – | | – | | – | | | | 39,5763 | | $2,427,988 | | 158,3106 | | $9,712,319 | | | | | | | | | | | | Ann M. Dennison | | – | | – | | – | | – | | – | | | | 4,5481 | | $279,020 | | – | | – | | | – | | – | | – | | – | | – | | | | 4,7702 | | $292,640 | | 19,0895 | | $1,171,110 | | | – | | – | | – | | – | | – | | | | 4,9473 | | $303,498 | | 19,7886 | | $1,213,994 | | | | | | | | | | | | Tal Cohen | | – | | – | | – | | – | | – | | | | 4,3321 | | $265,768 | | – | | – | | | – | | – | | – | | – | | – | | | | 5,9642 | | $365,891 | | – | | – | | | – | | – | | – | | – | | – | | | | 6,5943 | | $404,542 | | 23,8625 | | $1,463,934 | | | – | | – | | – | | – | | – | | | | 57,7172 | | $3,540,938 | | 26,3856 | | $1,618,720 | | | | | | | | | | | | P.C. Nelson Griggs | | – | | – | | – | | – | | – | | | | 6,9361 | | $425,524 | | – | | – | | | – | | – | | – | | – | | – | | | | 6,3632 | | $390,370 | | – | | – | | | – | | – | | – | | – | | – | | | | 6,5943 | | $404,542 | | 25,4555 | | $1,561,664 | | | – | | – | | – | | – | | – | | | | 67,4854 | | $4,140,205 | | 26,3856 | | $1,618,720 | | | | | | | | | | | | Bradley J. Peterson | | – | | – | | – | | – | | – | | | | 7,8001 | | $478,530 | | – | | – | | | – | | – | | – | | – | | – | | | | 7,5572 | | $463,622 | | – | | – | | | – | | – | | – | | – | | – | | | | 6,5943 | | $404,542 | | 30,2285 | | $1,854,488 | | | – | | – | | – | | – | | – | | | | 67,4854 | | $4,140,205 | | 26,3856 | | $1,618,720 | | 1. The RSUs remaining from the grant date will vest as to 33% of the initial award on 4/1/23 and the remaining shares on 4/1/24. | | 2. These RSUs will vest as to 33% on 4/1/2023, 33% on 4/1/2024 and the remaining shares on 4/1/2025. | | 3. These RSUs will vest as to 33% on 4/1/2024, 33% on 4/1/2025 and the remaining shares on 4/1/2026. | | 4. These RSUs vest as to 33% on 7/1/2023, 33% on 7/1/2024 and 34% on 7/1/2025. | | 5. This PSU award is subject to a three-year performance period ending on December 31, 2023. The amount reported is the target award amount, although the actual number of shares awarded could range from 0% to 200% of the target award amount, depending on the level of achievement of certain specified performance goals established by the Management Compensation Committee and/or Board. | | 6. This PSU award is subject to a three-year performance period ending on December 31, 2024. The amount reported is the target award amount, although the actual number of shares awarded could range from 0% to 200% of the target award amount, depending on the level of achievement of certain specified performance goals established by the Management Compensation Committee and/or Board. | | 7. Amounts in this column based on a closing price of $61.35 on December 30, 2022. |
2021 Outstanding Equity Awards at Fiscal Year-End Table
| | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | | | | | | Name | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercis-
able | | Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#) | | Option
Exercise
Price ($) | | Option
Expiration
Date | | Number of
Shares or
Units of Stock
That Have
Not Vested
(#) | | Market Value
of Shares or
Units of Stock
That Have
Not Vested
($)6 | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights that
Have Not
Vested (#) | | Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights that
Have Not
Vested ($)6 | | | | | | | | | | | Adena T. Friedman | | 268,817 | | — | | — | | $66.68 | | 01/03/2027 | | — | | — | | — | | — | | | — | | — | | — | | — | | — | | 19,507 1 | | $4,096,665 | | 78,031 3 | | $16,387,290 | | | — | | — | | — | | — | | — | | 13,258 2 | | $2,784,313 | | 53,032 4 | | $11,137,250 | | | | | | | | | | | Ann M. Dennison | | — | | — | | — | | — | | — | | 2,275 1 | | $477,773 | | 5,310 3 | | $1,115,153 | | | — | | — | | — | | — | | — | | 1,590 2 | | $333,916 | | 6,363 4 | | $1,336,294 | | | — | | — | | — | | — | | — | | 1,381 5 | | $290,024 | | — | | — | | | | | | | | | | | Michael Ptasznik | | — | | — | | — | | — | | — | | — | | — | | 16,473 3 | | $3,459,495 | | | | | | | | | | | Lauren B. Dillard | | — | | — | | — | | — | | — | | 3,251 1 | | $682,743 | | 13,005 3 | | $2,731,180 | | | — | | — | | — | | — | | — | | 2,121 2 | | $445,431 | | 8,485 4 | | $1,781,935 | | | | | | | | | | | P.C. Nelson Griggs | | — | | — | | — | | — | | — | | 3,468 1 | | $725,315 | | 13,872 3 | | $2,913,259 | | | — | | — | | — | | — | | — | | 2,121 2 | | $445,431 | | 8,485 4 | | $1,781,935 | | | | | | | | | | | Bradley J. Peterson | | — | | — | | — | | — | | — | | 3,901 1 | | $819,249 | | 15,606 3 | | $3,277,416 | | | — | | — | | — | | — | | — | | 2,519 2 | | $529,015 | | 10,076 4 | | $2,116,061 |
| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION 1. | These RSUs will vest as to 33% on 4/1/2022, 33% on 4/1/2023 and the remaining shares on 4/1/2024.
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2. | These RSUs will vest as to 33% on 4/1/2023, 33% on 4/1/20242022 Option Exercises and the remaining shares on 4/1/2025.
Stock Vested Table |
| | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | | | | Name | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($)1 | | | | | | Adena T. Friedman | | – | | – | | 487,6952 | | $27,963,265 | | | | | | Ann M. Dennison | | – | | – | | 38,2803 | | $2,213,155 | | | | | | Tal Cohen | | – | | – | | 57,2974 | | $3,293,820 | | | | | | P.C. Nelson Griggs | | – | | – | | 86,7005 | | $4,962,847 | | | | | | Bradley J. Peterson | | – | | – | | 97,5396 | | $5,583,294 |
3. | This PSU award is subject to a three-year performance period ending on December 31, 2022. The amount reported is the target award amount, although the actual number of shares awarded could range from 0% to 200% of the target award amount, depending on the level of achievement of certain specified performance goals established by the Management Compensation Committee and/or Board.
|
4. | This PSU award is subject to a three-year performance period ending on December 31, 2023. The amount reported is the target award amount, although the actual number of shares awarded could range from 0% to 200% of the target award amount, depending on the level of achievement of certain specified performance goals established by the Management Compensation Committee and/or Board.
|
5. | These PSUs will vest as to 100% on 12/31/2022. Represents the remaining one-third of unvested shares from a one-year PSU award that was deemed earned in 2019 and vested in equal amounts in 2020, 2021 and 2022.
|
6. | Amounts in this column based on a closing price of $210.01 on December 31, 2021.
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2021 Option Exercises and Stock Vested Table
| | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | Name | | Number of Shares
Acquired on Exercise
(#) | | Value Realized on
Exercise ($) | | Number of Shares
Acquired on Vesting
(#) | | Value Realized
on Vesting ($)1 | | | | | | Adena T. Friedman2 | | — | | — | | 192,306 | | $32,343,946 | | | | | | Ann M. Dennison3 | | — | | — | | 9,567 | | $1,725,375 | | | | | | Michael Ptasznik4 | | — | | — | | 44,840 | | $7,470,233 | | | | | | Lauren B. Dillard5 | | — | | — | | 60,416 | | $10,252,775 | | | | | | P.C. Nelson Griggs6 | | — | | — | | 33,936 | | $5,707,696 | | | | | | Bradley J. Peterson7 | | — | | — | | 40,722 | | $6,849,033 |
| 1. | The amounts reported in this column are calculated by multiplying the number of shares of stock that vested by the closing market price of our common stock on the vesting date. |
2. | The amount reported includes 95,502244,463 shares that were withheld to pay taxes in connection with the vesting(s). |
3. | The amount reported includes 4,07619,545 shares that were withheld to pay taxes in connection with the vesting(s). |
4. | The amount reported includes 9,47429,255 shares that were withheld to pay taxes in connection with the vesting(s). The amount reported also includes 4,118 RSUs that were accelerated in accordance with the terms of his retirement agreement. |
5. | The amount reported includes 23,95144,263 shares that were withheld to pay taxes in connection with the vesting(s). |
6. | The amount reported includes 16,45643,547 shares that were withheld to pay taxes in connection with the vesting(s). |
7. | The amount reported includes 17,190 shares that were withheld to pay taxes in connection with the vesting(s).
| | | | Retirement Plans |
| | | We maintain non-contributory, defined-benefit pension plans, which have been frozen. Future service and salary for all participants do not count toward an accrual of benefits under these plans. However, participants continue to receive credit for future service for vesting of the benefits. None of the NEOs participate in these plans other than Ms. Friedman, as discussed below. | | | 2022 Pension Benefits Table |
| | | | | | | | | | | | | | | Name | | Plan Name | | Number of Years Credited Service (#)1 | | Present Value of Accumulated Benefit ($)2 | | Payments During Last Fiscal Year ($) | | | | | | | Adena T. Friedman | | Pension Plan | | 13.92 | | $381,476 | | – |
Retirement Plans
We maintain non-contributory, defined-benefit pension plans, which have been frozen. Future service and salary for all participants do not count toward an accrual of benefits under these plans. However, participants continue to receive credit for future service for vesting of the benefits. None of the NEOs participate in these plans other than Ms. Friedman, as discussed below.
2021 Pension Benefits Table
| | | | | | | | | | | | | | | Name | | Plan Name | | Number of Years Credited Service (#)1 | | Present Value of Accumulated Benefit ($)2 | | Payments During Last Fiscal Year ($) | | | | | | Adena T. Friedman | | Pension Plan | | 13.92 | | $572,267 | | — |
1. | | | | | | | | | 1. Since the pension plan was frozen in 2007, the number of years of credited service for each participant under the plan differs from such participant’s number of years of actual service with Nasdaq. As of December 31, 2021,2022, Ms. Friedman had 25.4226.42 years of actual service with Nasdaq. Generally, participants in the pension plan became vested in retirement benefits under the plan after five years of service from the participant’s date of hire. As of December 31, 2021,2022, Ms. Friedman was vested in benefits payable under the pension plan. |
2. | 2. The amounts reported comprise the actuarial present value of the participant’s accumulated benefit under the pension plan as of DeceberDecember 31, 2021.2022. Assumptions used in calculating the amounts include a 2.8%5.15% discount rate as of December 31, 2021,2022, and retirement at age 62 (which is the earliest age at which a participant may retire and receive unreduced benefits under the plan) and other assumptions used as described in Note 10 to our audited financial statements for the fiscal year ended December 31, 2021 included in our Form 10-K.. |
Employment Agreements and Potential Payments Upon Termination or Change in Control
We currently have employment agreements with two of our NEOs: Ms. Friedman and Mr. Peterson. In addition to the employment agreements, we have entered into continuing obligations agreements with all of the NEOs related to confidentiality and intellectual property protection.
Ms. Friedman’s and Mr. Peterson’s employment agreements prohibit them from rendering services to a competing entity for a period of two years following the last date of employment. To receive certain termination payments and benefits, Ms. Friedman and Mr. Peterson must execute a general release of claims against Nasdaq. In addition, termination payments and benefits may be discontinued if the NEO breaches the restrictive covenants in either the employment agreement or the continuing obligations agreement.
Each employment agreement sets forth the payments and benefits the applicable NEO will receive under various termination scenarios. For further information about these payments and benefits, see “Executive Compensation Tables – Estimated Termination or Change in Control Payments and Benefits.”
We currently have employment agreements with two of our NEOs: Ms. Friedman and Mr. Peterson.
Adena T. Friedman
Prior Employment Agreement
In connection with her promotion to the role of President and CEO in 2017, Ms. Friedman entered into an employment agreement on November 14, 2016. The term of the agreement was January 1, 2017 to January 1, 2022.
The agreement provided for:
· | | | | 104 | | |
| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
| | | | | Non-Qualified Deferred Compensation Table | | | | | The following table shows the executive contributions, earnings, withdrawals, and account balances for the NEOs for our deferred compensation program. This program is an annual base salary ofunfunded, unsecured deferred compensation program. Our Deferred Compensation Plan was adopted in 2022, and there were no less than $1,000,000;Company contributions, earnings, or withdrawals for the period ending December 31, 2022. |
| | | | | | | | | | | | | | | | | | Name | | Executive Contributions in Last FY ($) | | Registrant Contributions in Last FY ($) | | Aggregate Earnings in Last FY ($) | | Average Withdrawals / Distributions ($) | | Aggregate Balance at Last FYE ($) | | | | | | | Adena T. Friedman | | $437,275 | | – | | – | | – | | $437,275 | | | | | | | Ann M. Dennison | | $57,201 | | – | | – | | – | | $57,201 | | | | | | | Tal Cohen | | $710,275 | | – | | – | | – | | $710,275 | | | | | | | P.C. Nelson Griggs | | – | | – | | – | | – | | – | | | | | | | Bradley J. Peterson | | $125,919 | | – | | – | | – | | $125,919 |
· | | | | | annual incentive compensation that is targeted at no less than $2,000,000, based onEmployment Agreements and Potential Payments Upon Termination or Change in Control | | | | | We currently have employment agreements with two of our NEOs: Ms. Friedman and Mr. Peterson. In addition to the achievementemployment agreements, we have entered into continuing obligations agreements with all of onethe NEOs related to confidentiality and intellectual property protection. | | | | | Ms. Friedman’s and Mr. Peterson’s employment agreements prohibit them from rendering services to a competing entity for a period of two years following the last date of employment. To receive certain termination payments and benefits, Ms. Friedman and Mr. Peterson must execute a general release of claims against Nasdaq. In addition, termination payments and benefits may be discontinued if the NEO breaches the restrictive covenants in either the employment agreement or more performance goals established by the Management Compensation Committee;continuing obligations agreement. | | | | | Each employment agreement sets forth the payments and benefits the applicable NEO will receive under various termination scenarios. For further information about these payments and benefits, see “Estimated Termination or Change in Control Payments and Benefits.” |
· | | a 2017 equity grant with a target value of no less than $6,000,000 in the form of PSUs.105 |
Under the agreement, no equity award grants were guaranteed after 2017. However, Ms. Friedman was eligible to receive grants of equity awards, based on the Management Compensation Committee’s evaluation of the performance of Nasdaq and Ms. Friedman, peer group market data and internal equity, in a manner consistent with past practices.
Under her agreement, if Ms. Friedman’s employment had been terminated by the Company without cause, or by the executive for good reason, she would have been entitled to the following severance payments and benefits from the Company:
| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
· | | |  | | | | | a cash payment equal to the sum of (i) two times the prior year’s annual base salary, (ii) the target bonus amount for the year prior to the year of termination and (iii) any pro rata target bonus for the year of termination if performance goals were satisfied;Adena T. Friedman |
· | | | | Employment Agreement | | | | | On November 18, 2021, Ms. Friedman entered into a taxable monthly cash payment equal to the employer’s sharenew employment agreement, effective as of January 1, 2022. The term of the COBRA premium for the highest level of coverage available under the Company’s group health plans, until the earlier of the second anniversary of termination or the date she became eligible for coverage under another employer’s health care plan; andagreement is January 1, 2022 to January 1, 2027. The agreement provides that Ms. Friedman will receive: |
· | | | | Ms. Friedman also would have received continued vesting for 12 months of outstanding PSUs, based on actual performance during the respective periods. |
Additionally, Ms. Friedman was subject to certain customary post-termination restrictive covenants relating to non-competition, non-solicitation, non-disparagement and confidentiality.
Current Employment Agreement
On November 18, 2021, Ms. Friedman entered into a new employment agreement, effective as of January 1, 2022. The term of the agreement is January 1, 2022 to January 1, 2027. The agreement provides that Ms. Friedman will receive:
· | | •an annual base salary of no less than $1,250,000; |
· | | | | •annual incentive compensation that is targeted at not less than $3,000,000 based on the achievement of one or more performance goals established for the year by the Management Compensation Committee; and |
· | | | | •based on the Management Compensation Committee’s evaluation of Nasdaq and Ms. Friedman’s performance, peer group market data, and internal equity, and consistent with past practices with respect to the combined aggregate value of grants, equity awards in the form of options, RSUs, and/or PSUs. |
Under her agreement, if Ms. Friedman’s employment is terminated by the Company without cause, or by Ms. Friedman for good reason, she will be entitled to the following severance payments and benefits from the Company:
· | | | | Under her agreement, if Ms. Friedman’s employment is terminated by the Company without cause, or by Ms. Friedman for good reason, she will be entitled to the following severance payments and benefits from the Company: | | | | | •a cash payment equal to the sum of: (i) two times the prior year’s annual base salary, (ii) two times the target bonus, and (iii) any pro rata target bonus with respect to the calendar year in which the termination occurs to the extent that performance goals are satisfied; |
· | | | | •continued vesting for 12 months of outstanding PSUs, restricted stock unitsRSUs, and options, with any performance- basedperformance-based vesting based on actual performance goals during the respective performance periods; and |
· | | | | •a taxable monthly cash payment equal to the COBRA premium until the earlier of the second anniversary of termination andor the date Ms. Friedman is eligible for coverage under the health care plans of a subsequent employer. | | | | | Additionally, Ms. Friedman is subject to certain customary post-termination restrictive covenants relating to non-competition, non-solicitation, non-disparagement, and confidentiality. |
If Ms. Friedman’s employment is terminated due to permanent disability or death, she, or her estate, will be entitled to the following payments and benefits:
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| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
| | | | | Option Award | | | | | On January 3, 2022, the Management Compensation Committee and the Board granted Ms. Friedman a cash payment equalone-time, performance-based stock option award with a value of $10 million associated with the renewal of her employment agreement for another five years. The grant provides strong motivation to deliver long-term stock price appreciation in alignment with shareholder interests over her future tenure as Chair and CEO. The entire award will become valuable only to the extent that Nasdaq’s shareholders benefit from future increases in Nasdaq’s share price. Additionally, 50% of the grant vesting is contingent upon achieving a cumulative 5-year EPS target; the remaining 50% will vest after 5 years of additional tenure as Chair and CEO. | | | | | EPS was determined to be the most appropriate financial metric, since it will reflect Nasdaq’s organic and inorganic earnings growth over time and will be a key driver of longer-term TSR. | | | | | The performance condition for the vesting of the performance-based component of the award will be satisfied if Nasdaq’s fully diluted compounded annual EPS growth for the period of January 1, 2022 through December 31, 2026 is at least 3.0%. For purposes of the award, “fully diluted EPS” means EPS on a fully diluted basis and shall be determined by the Management Compensation Committee in accordance with the same non-GAAP EPS methodology used by Nasdaq for its external financial reporting. (For a discussion of non-GAAP adjustments, see Annex A.) In making this determination, the Management Compensation Committee or Board may include or exclude the effect of any pro rataone or more of the applicable extraordinary events described in our Equity Plan that may occur during the performance period. The Management Compensation Committee may also decide to include or exclude share buybacks or share issuances in making this determination. |
| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
| | | | | | | Bradley J. Peterson | | | | | Employment Agreement | | | | | On June 22, 2022, we entered into a new employment agreement with Mr. Peterson. The term of the employment agreement is June 22, 2022 through December 31, 2025, and the agreement replaces Mr. Peterson’s prior employment agreement, which was due to expire on December 31, 2023. Mr. Peterson’s compensation terms include: | | | | | •an annual base salary of no less than $650,000; | | | | | •annual incentive compensation that is targeted at no less than $975,000, based on the achievement of performance goals established for such year by the CEO and the Management Compensation Committee; and | | | | | •an annual equity award with a target value of no less than $2,500,000, in accordance with the terms of the Equity Plan. | | | | | Under his agreement, if Mr. Peterson’s employment is terminated by the Company without cause, or by the executive for good reason, or upon Mr. Peterson’s retirement at the end of the agreement term, he will be entitled to the following severance payments and benefits from the Company: | | | | | •a pro-rata target bonus payment with respect to the calendar year in which the date of termination occurs; | | | | | •continued vesting of all outstanding equity compensation issued prior to the date of termination as though Mr. Peterson was employed through all applicable periods; | | | | | •$40,000 to offset the COBRA premiums for Mr. Peterson’s health benefits, payable in a lump sum within sixty (60) days of the date of termination; and | | | | | •24 months of financial and tax services and executive physical exams. | | | | | Additionally, Mr. Peterson is subject to certain customary post-termination restrictive covenants relating to non-competition, non-solicitation, non-disparagement, and confidentiality. | |  |
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| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
| | | | | | | | | | | Involuntary Termination Not for Cause or Voluntary | | | | | | | Termination with Good Reason | | | | | | | | | | | Other Severance for NEOs | | | | | | | | | | | Severance payments and benefits payable to NEOs not subject to an employment agreement or other severance arrangement would be made at the sole discretion of the Company and the Management Compensation Committee. These payments are based on historical practices and predetermined guidelines. | | | | | | | | | | | ECIP | | | | | | | | | | | In the event an NEO’s employment is terminated for any reason other than death, disability, or retirement, the executive’s right to a cash incentive compensation award under the ECIP for the year of termination is forfeited. The Management Compensation Committee, in its sole discretion, may pay a pro rata cash incentive compensation award to the executive for the year of termination. | | | | | | | Death or Disability | | | | | | | | | | | Employment Agreements | | | | | | | | | | | Under the employment agreements with Ms. Friedman and Mr. Peterson, in the event of death or disability, each executive is entitled to a pro rata target bonus for the year of termination. Additionally, Ms. Friedman (or her estate) is entitled to accelerated vesting of all unvested equity awarded as of December 31st of the year of termination, with any performance-based vesting based on actual performance goals during any complete performance periods, and vesting at target performance for grants vesting prior to the completion of a performance cycle. |
If Ms. Friedman’s employment Mr. Peterson (or his estate) is terminated within two years after a change in control, without cause by Nasdaq or for good reason by Ms. Friedman, she will be entitled to the following payments and benefits:
· | | a cash payment equal to the sum of: (i) two times the prior year’s annual base salary, (ii) two times the target bonus and (iii) any pro rata target bonus with respect to the calendar year in which the termination occurs, to the extent that performance goals are satisfied; |
· | | accelerated vesting of all outstanding unvested equity awards, subjectthat was awarded as of the effective date of his agreement. | | | | | | | | | | | ECIP | | | | | | | | | | | Under the ECIP, an NEO may, at the discretion of the Management Compensation Committee, receive a pro rata portion of his or her incentive compensation award in the event of death or disability. | | | | | | | | | | | Equity Plan | | | | | | | | | | | With respect to the other NEOs, under the relevant terms and in accordance with the termsconditions of the Equity Plan; |
· | | COBRA premiums,Plan and the individual equity award agreements, all stock options or RSUs that would have vested within one year from the date of death or disability will immediately vest and all vested options may be exercised until the earlier of the second anniversary of termination and the date Ms. Friedman is eligible for coverage under the health care plans of a subsequent employer; and |
· | | continued life insurance and accidental death and dismemberment insurance benefits for the same period as the continued health coverage payments. |
Additionally, Ms. Friedman is subject to certain customary post-termination restrictive covenants relating to non-competition, non-solicitation, non-disparagement and confidentiality.
Option Award
In addition to the annual equity grant awarded to Ms. Friedman, the Management Compensation Committee and Board of Directors granted her a one-time, performance-based stock option award with a value of $10,000,000 associated with the renewal of her employment agreement for another five years. The grant provides strong motivation to deliver long-term stock price appreciation in alignment with shareholder interests over her future tenure as President and CEO. The entire award will become valuable only to the extent that Nasdaq’s shareholders benefitone year from future increases in Nasdaq’s share price. Additionally, 50% of the grant vesting is contingent upon achieving a cumulative 5-year EPS target; the remaining 50% will vest after 5 years of additional tenure as President and CEO.
EPS was determined to be the most appropriate financial metric, since it will reflect Nasdaq’s organic and inorganic earnings growth over time and will be a key driver of longer-term total shareholder return.
The performance condition for the vesting of the performance-based component of the award will be satisfied if Nasdaq’s fully diluted compounded annual EPS growth for the period of January 1, 2022 – December 31, 2026 is at least 3.0%. For purposes of the award, “fully diluted EPS” means EPS on a fully diluted basis and shall be determined by the Management Compensation Committee in accordance with the same non-GAAP EPS methodology used by Nasdaq for its external financial reporting. In making this determination, the Management Compensation Committee or Board may include or exclude the effect of any one or more of the applicable extraordinary events described
in our Equity Plan that may occur during the performance period. The Management Compensation Committee may also decide to include or exclude share buybacks or share issuances in making this determination.
Bradley J. Peterson
On October 1, 2020, we entered into a new employment agreement with Mr. Peterson, adding the title of CTO to his previous title of CIO. The term of the employment agreement is October 1, 2020 through December 31, 2023, replacing Mr. Peterson’s prior employment agreement, which was due to expire on July 31, 2021. Mr. Peterson’s compensation terms include:
· | | an annual base salary of no less than $600,000; |
· | | annual incentive compensation that is targeted at no less than $900,000, based on the achievement of performance goals established for such year by the CEO and the Management Compensation Committee; and |
· | | an annual equity award with a target value of no less than $1,800,000, in accordance with the terms of the Equity Plan. |
Under his agreement, if Mr. Peterson’s employment is terminated by the Company without cause, or by the executive for good reason, or upon Mr. Peterson’s retirement at the end of the agreement term, he will be entitled to the following severance payments and benefits from the Company:
· | | a pro-rata target bonus payment with respect to the calendar year in which the date of termination occurs; |
· | | continued vestingdeath or disability or their expiration date. Under the PSU award agreements for all the NEOs, in the event of all outstanding equity compensation issued prior todisability, unvested PSU awards will be forfeited. In the dateevent of termination as though Mr. Peterson was employed through all applicable periods; |
· | | $40,000 to offsetdeath, unvested PSU awards will vest upon the COBRA premiums for Mr. Peterson’s health benefits, payable in a lump sum within sixty (60) dayslater of the date of termination; anddeath or the date the performance period for the awards is completed. | | |
| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
· | | | | | | | 24 months of financial and tax services and executive physical exams. |
Additionally, Mr. Peterson is subject to certain customary post-termination restrictive covenants relating to non-competition, non-solicitation, non-disparagement and confidentiality.
Except in employment agreements and other agreements for certain officers as described in this Proxy Statement, we are not obligated to pay general severance or other enhanced benefits to any NEO upon termination of his or her employment.
Michael Ptasznik Retirement Agreement
On October 20, 2020, Mr. Ptasznik announced his retirement as EVP, Corporate Strategy and CFO of Nasdaq, effective as of February 28, 2021, which is referred to as the Retirement Date. On October 21, 2020, Mr. Ptasznik and the Company entered into a retirement agreement and release of claims, which is referred to as the Retirement Agreement.
Under the terms of the Retirement Agreement, Mr. Ptasznik received a 2021 bonus payment under the ECIP based upon his target bonus opportunity of $937,500, pro-rated for the period of January 1, 2021 through the Retirement Date, which was paid in 2021 in the amount of $151,541.
In addition, Mr. Ptasznik received the following retirement payments and benefits under the terms of the Retirement Agreement:
·Termination Due to Change in Control | | payment of the Company’s share of medical, dental and vision premiums for 12 months after the Retirement Date; |
· | | the continued vesting and payment of the three-year PSUs previously granted on April 1, 2019 and April 1, 2020, provided that the settlement of such PSUs shall be in accordance with the terms of the applicable award agreement and governing plan document; |
·(“Double Trigger”) | | the vesting of the RSUs previously granted on April 1, 2020, with the acceleration of any unvested RSUs within sixty (60) days of the Retirement Date; |
· | |  | | financial and tax services for tax years 2020, 2021, 2022 and 2023 and executive physical exams for one year following the Retirement Date; and |
· | | reimbursement of reasonable | | | | | Employment Agreements | | | | | | | | Under their employment agreements, if either Ms. Friedman or Mr. Peterson is terminated within two years after a change in control, either by the Company without cause or by the executive for good reason (as defined in their respective employment agreements), the executives will each be entitled to the severance payments and customary expenses to move back to Mr. Ptasznik’s home in Canada of up to $10,000. Mr. Ptasznik received such reimbursement during fiscal year 2020.benefits from the Company as described below: | | |
The Retirement Agreement also included a non-competition provision for a period of one year following the Retirement Date, as well as customary provisions regarding non-solicitation and non-disparagement.
Involuntary Termination Not for Cause or Voluntary Termination with Good Reason
Other Severance for NEOs
Severance payments and benefits payable to NEOs not subject to an employment agreement or other severance arrangement would be made at the sole discretion of the Company and the Management Compensation Committee. These payments are based on historical practices and predetermined guidelines that have been approved by the Management Compensation Committee.
ECIP
Under the ECIP, in the event an NEO’s employment is terminated for any reason other than death, disability or retirement, the executive’s right to a non-equity incentive plan compensation award for the year of termination is forfeited. The Management Compensation Committee, in its sole discretion, may pay a pro rata incentive compensation award to the executive for the year of termination.
Death or Disability
Employment Agreements
Under the employment agreements with Ms. Friedman and Mr. Peterson, in the event of death or disability, each executive is entitled to a pro rata target bonus for the year of termination. Additionally, Ms. Friedman (or her estate) is entitled to accelerated vesting of all unvested equity awarded as of December 31st of the year of termination, with any performance-based vesting based on actual performance goals during any complete performance periods, and vesting at target performance for grants vesting prior to the completion of a performance cycle, and Mr. Peterson is entitled to accelerated vesting of all unvested equity that was awarded as of the effective date of his agreement.
ECIP
Under the ECIP, an NEO may, in the discretion of the Management Compensation Committee, receive a pro rata portion of his or her incentive compensation award in the event of death or disability.
Equity Plan
With respect to the other NEOs, under the relevant terms and conditions of the Equity Plan and the individual equity award agreements, all stock options or RSUs that would have vested within one year from the date of death or disability will immediately vest and all vested options may be exercised until the earlier of one year from the date of death or disability or their expiration date. Under the PSU award agreements for all the NEOs, in the event of disability, unvested PSU awards will be forfeited. In the event of death, unvested PSU awards will vest upon the later of the date of death or the date the performance period for the awards is completed.
Termination Due to Change in Control (“Double Trigger”)
All “change in control” payments and benefits are subject to a “double trigger,” meaning that payments are made only when both a change in control of the Company and a qualifying termination of employment occur.
Employment Agreements
Under their employment agreements, if either Ms. Friedman or Mr. Peterson is terminated within two years after a change in control, either by the Company without cause or by the executive for good reason (as defined in their respective employment agreements), the executives will each be entitled to the severance payments and benefits from the Company as described below:
· | | | | | •a cash payment equal to the sum of (i) two times the prior year’s annual base salary, (ii) the target bonus amount for the year prior to the year termination occurs (two times for Ms. Friedman), and (iii) any pro rata target bonus for the year of termination if performance goals are satisfied; | | |
· | | | | | •for Ms. Friedman, accelerated vesting of all outstanding unvested equity awarded, subject to and in accordance with the terms of the Equity Plan; | | |
· | | | | | •a taxable monthly cash payment equal to the employer’s share of the COBRA premium for the highest level of coverage available under the Company’s group health plans, until the earlier of the second anniversary of termination or the date he or she is eligible for coverage under another employer’s health care plan; and | | |
· | | | | | •continued life insurance and accidental death and dismemberment insurance benefits for the same period as the continued health coverage payments. |
Change in Control Severance Plan
Under the Company’s change in control severance plan, each of Ms. Dennison and Mr. Griggs are entitled to benefits in the event of a change in control. If the executive’s employment is terminated by the Company without cause within two years following a change in control or by the executive for good reason within one year after a change in control, then he or she will be entitled to the following severance payments and benefits from the Company:
| | · | | Change in Control Severance Plan | | | | | | | | Under the Company’s change in control severance plan, Ms. Dennison and Messrs. Cohen and Griggs are each entitled to benefits in the event of a change in control. If the executive’s employment is terminated by the Company without cause within two years following a change in control or by the executive for good reason within one year after a change in control, then he or she will be entitled to the following severance payments and benefits from the Company: | | | | | | | | •a cash payment equal to the sum of (i) two times annual base salary, (ii) the target bonus amount as defined by the ECIP, (iii) any pro rata target bonus for the year of termination, and (iv) any unpaid bonus which had been earned for a completed plan year; | | |
· | | | | | •payment of the employer’s share of COBRA premiums for continued coverage under health plans until the earlier of the second anniversary of termination, or the date the executive is eligible for coverage under another employer’s health care plan; and | | |
· | | | | | •outplacement services for up to 12 months, with a maximum value of $50,000. | | |
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| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
Under a “best net” provision, if amounts payable due to a change in control would be subject to an excise tax under Section 4999 of the Internal Revenue Code, payments or benefits to the executive would either be reduced to an amount that would not trigger an excise tax or the executive would receive all payments and benefits subject to the excise tax, whichever approach yields the best after-tax outcome for the executive officer.
The change in control severance plan contains restrictive covenants, which, among other things, require the executive to maintain the confidentiality of the Company’s proprietary information and to refrain from disparaging the Company. Each executive also is prohibited from soliciting the Company’s employees or rendering services to a competitor for one year following termination. Further, to receive the benefits, the executive must execute a general release of claims against the Company. In addition, the change in control payments and benefits may be discontinued if the executive breaches the restrictive covenants.
Equity Plan
Under the Equity Plan, if outstanding awards are assumed or substituted by the successor company and an employee, including an NEO, is involuntarily terminated by the Company other than for cause within a one-year period after a change in control, all unvested equity awards will vest on the termination date. For awards not assumed or substituted by the successor Company, unvested awards shall vest immediately prior to the effective time of the change in control.
Estimated Termination or Change in Control Payments and Benefits
The table on the following page reflects the payments and benefits payable to each NEO in the event of a termination of the executive’s employment under several different circumstances. The amounts shown assume that termination was effective as of December 31, 2021, use the executive’s compensation and service levels as of that date and are estimates of the amounts that would be payable to the NEOs in each situation. The actual amounts to be paid can only be determined at the time of an executive’s actual separation from the Company, provided that the amounts shown for Mr. Ptasznik are actual amounts that he was paid upon his separation from the Company in connection with his retirement on February 28, 2021. Factors that may affect the nature and amount of payments made on termination of employment, among others, include the timing of the event, compensation level, the market price of the Company’s common stock and the executive’s age. Annual incentive amounts are shown at target. The reported value of the accelerated vesting of outstanding equity awards is based on the intrinsic value of these awards (the value based upon the market price of the Company’s common stock on December 31, 2021)
| | | | | | | Under a “best net” provision, if amounts payable due to a change in control would be subject to an excise tax under Section 4999 of the Internal Revenue Code, payments or benefits to the executive would either be reduced to an amount that would not trigger an excise tax or the executive would receive all payments and benefits subject to the excise tax, whichever approach yields the best after-tax outcome for the executive officer. | | | | | | | | The change in control severance plan contains restrictive covenants, which, among other things, require the executive to maintain the confidentiality of the Company’s proprietary information and to refrain from disparaging the Company. Each executive also is prohibited from soliciting the Company’s employees or rendering services to a competitor for one year following termination. Further, to receive the benefits, the executive must execute a general release of claims against the Company. In addition, the change in control payments and benefits may be discontinued if the executive breaches the restrictive covenants. | | | | | Equity Plan | | | | | | | | Under the Equity Plan, if outstanding awards are assumed or substituted by the successor company and an employee, including an NEO, is involuntarily terminated by the Company other than for cause within a one-year period after a change in control, all unvested equity awards will vest on the termination date. For awards not assumed or substituted by the successor Company, unvested awards shall vest immediately prior to the effective time of the change in control. | | | | | Estimated Termination or Change in Control Payments and Benefits | | | | | | | | The table on the following page reflects the payments and benefits payable to each NEO in the event of a termination of the executive’s employment under several different circumstances. The amounts shown assume that termination was effective as of December 31, 2022, use the executive’s compensation and service levels as of that date, and are estimates of the amounts that would be payable to the NEOs in each situation. The actual amounts to be paid can only be determined at the time of an executive’s actual separation from the Company. Factors that may affect the nature and amount of payments made on termination of employment, among others, include the timing of the event, compensation level, the market price of the Company’s common stock, and the executive’s age. Annual incentive amounts are shown at target. The reported value of the accelerated vesting of outstanding equity awards is based on the intrinsic value of these awards (the value based upon the market price of the Company’s common stock on December 31, 2022). The value of PSUs that continue to vest after termination is reported as if the grants vested at target on the termination date. The amounts shown in the table do not include payments and benefits available generally to salaried employees, such as accrued vacation pay, pension benefits and any death, disability or welfare benefits available under broad-based plans. For information on pension plans, see the “2021 Pension Benefits Table” on page 97. | | | | | | | | | | | | | | | | | | Name | | Involuntary Termination Not for Cause or Voluntary Termination with Good Reason ($) | | Death ($) | | Disability ($) | | Resignation through Retirement Notice ($)2 | | Termination Due to Change in Control (“Double Trigger”)($) | | | | | | | Adena T. Friedman | | | | | | | | | | | | | | | | | Severance | | $5,500,000 | | — | | — | | — | | $5,500,000 | | | | | | | Pro-Rata Current Year Annual Incentive | | $3,000,000 | | $3,000,000 | | $3,000,000 | | — | | $3,000,000 | | | | | | | Equity Vesting | | — | | $1,365,695 | | $1,365,695 | | — | | $6,880,768 | | | | | | | Continued Performance-Based Equity Vesting | | $16,387,290 | | $27,524,541 | | — | | — | | $27,524,541 | | | | | | | Health & Welfare Benefits Continuation | | $43,017 | | — | | — | | — | | $43,017 | | | | | | | TOTAL | | $24,930,307 | | $31,890,236 | | $4,365,695 | | — | | $42,948,326 | | | | | | | Ann M. Dennison | | | | | | | | | | | | | | | | | Severance | | $1,575,000 | | — | | — | | — | | $1,850,000 | | | | | | | Pro-Rata Current Year Annual Incentive1 | | $750,000 | | $750,000 | | $750,000 | | — | | $750,000 | | | | | | | Equity Vesting | | — | | $159,398 | | $159,398 | | — | | $811,689 | | | | | | | Continued Performance-Based Equity Vesting | | — | | $2,451,447 | | — | | — | | $2,451,447 | | | | | | | Health & Welfare Benefits Continuation | | $21,509 | | — | | — | | — | | $43,017 | | | | | | | Outplacement Services | | $50,000 | | — | | — | | — | | $50,000 | | | | | | | TOTAL | | $2,396,509 | | $3,360,845 | | $909,398 | | — | | $5,956,153 |
| | | | | | | | | | | | | | | | | | Name | | Involuntary Termination Not for Cause or Voluntary Termination with Good Reason ($) | | Death ($) | | Disability ($) | | Resignation through Retirement Notice ($)2 | | Termination Due to Change in Control (“Double Trigger”)($) | | | | | | | Michael Ptasznik | | | | | | | | | | | | | | | | | Pro-Rata Current Year Annual Incentive | | — | | — | | — | | $151,541 | | — | | | | | | | Equity Vesting | | — | | — | | — | | $621,200 | | — | | | | | | | Health & Welfare Benefits Continuation | | — | | — | | — | | $40,514 | | — | | | | | | | Financial and Tax Services/Exec Physical Exams | | — | | — | | — | | $50,751 | | — | | | | | | | | TOTAL | | — | | — | | — | | $864,006 | | — | | | | | | | Lauren B. Dillard3 | | | | | | | | | | | | | | | | | Severance | | $1,650,000 | | — | | — | | — | | $1,925,000 | | | | | | | Pro-Rata Current Year Annual Incentive1 | | $825,000 | | $825,000 | | $825,000 | | — | | $825,000 | | | | | | | Equity Vesting | | $455,302 | | $227,651 | | $227,651 | | — | | $1,652,569 | | | | | | | Continued Performance-Based Equity Vesting | | $2,731,180 | | $4,513,115 | | — | | — | | $4,513,115 | | | | | | | Health & Welfare Benefits Continuation | | $14,256 | | — | | — | | — | | $28,512 | | | | | | | Outplacement Services | | $50,000 | | — | | — | | — | | $50,000 | | | | | | | TOTAL | | $5,725,738 | | $5,565,766 | | $1,052,651 | | — | | $8,994,196 | | | | | | | P.C. Nelson Griggs | | | | | | | | | | | | | | | | | Severance | | $1,725,000 | | — | | — | | — | | $2,012,500 | | | | | | | Pro-Rata Current Year Annual Incentive1 | | $862,500 | | $862,500 | | $862,500 | | — | | $862,500 | | | | | | | Equity Vesting | | — | | $242,772 | | $242,772 | | — | | $1,173,746 | | | | | | | Continued Performance-Based Equity Vesting | | — | | $4,695,194 | | — | | — | | $4,695,194 | | | | | | | Health & Welfare Benefits Continuation | | $21,509 | | — | | — | | — | | $43,018 | | | | | | | Outplacement Services | | $50,000 | | — | | — | | — | | $50,000 | | | | | | | TOTAL | | $2,659,009 | | $5,800,466 | | $1,105,272 | | — | | $8,836,958 | | | | | | | Bradley J. Peterson | | | | | | | | | | | | | | | | | Severance | | — | | — | | — | | — | | $2,100,000 | | | | | | | Pro-Rata Current Year Annual Incentive | | $900,000 | | $900,000 | | $900,000 | | $900,000 | | $900,000 | | | | | | | Equity Vesting | | $1,348,264 | | $273,223 | | $273,223 | | — | | $1,348,264 | | | | | | | Continued Performance-Based Equity Vesting | | $5,393,477 | | $5,393,477 | | — | | — | | $5,393,477 | | | | | | | Health & Welfare Benefits Continuation | | $40,000 | | — | | — | | $40,000 | | $28,512 | | | | | | | Financial and Tax Services/Exec Physical Exams | | $36,050 | | — | | — | | $36,050 | | — | | | | | | | TOTAL | | $7,717,791 | | $6,566,700 | | $1,173,223 | | $976,050 | | $9,770,253 |
1. | Assumes payment at target.
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2. | For Mr. Ptasznik, the amounts set forth under “Resignation through Retirement Notice” reflect the amounts paid pursuant to his Retirement Agreement for each such item upon his retirement on February 28 2021, as further described above under “Michael Ptasznik Retirement Agreement.” Mr. Ptasznik is also entitled to continued vesting of his PSU awards under the terms of his Retirement Agreement.
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3. | The amounts shown in the table assume a hypothetical termination of Ms. Dillard’s employment, effective as of December 31, 2021, under several different circumstances. As previously disclosed, Ms. Dillard’s employment with the Company terminated on April 8, 2022 through voluntary resignation, which diddo not entitle Ms. Dillard to theinclude payments and benefits shownavailable generally to salaried employees, such as accrued vacation pay, pension benefits and any death, disability, or welfare benefits available under broad-based plans. For information on pension plans, see the “2022 Pension Benefits Table” on page 104. | | |
| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
| | | | | | | | | | | | | | | | | | | | | | | Name | | Involuntary Termination
Not for Cause or Voluntary Termination with Good Reason ($) | | | Death ($) | | | Disability ($) | | | Termination Due to Change in Control (“Double Trigger”) ($) | | | | | | | Adena T. Friedman | | | | | | | | | | | | | | | | | | | | | | Severance | | | $10,000,000 | | | | — | | | | — | | | | $10,000,000 | | | | | | | Pro-Rata Current Year Annual Incentive | | | $3,750,000 | | | | $3,750,000 | | | | $3,750,000 | | | | $3,750,000 | | | | | | | Equity Vesting1 | | | — | | | | $7,261,509 | | | | $7,261,509 | | | | $7,261,509 | | | | | | | Continued Performance-Based Equity Vesting1 | | | — | | | | $19,472,859 | | | | $19,472,859 | | | | $19,472,859 | | | | | | | Health & Welfare Benefits Continuation | | | $44,629 | | | | — | | | | — | | | | $44,629 | | | | | | | TOTAL | | | $13,794,629 | | | | $30,484,368 | | | | $30,484,368 | | | | $40,528,997 | | | | | | | Ann M. Dennison | | | | | | | | | | | | | | | | | | | | | | Severance | | | $1,725,000 | | | | — | | | | — | | | | $2,012,500 | | | | | | | Pro-Rata Current Year Annual Incentive2 | | | $862,500 | | | | $862,500 | | | | $862,500 | | | | $862,500 | | | | | | | Equity Vesting | | | — | | | | $237,056 | | | | $237,056 | | | | $875,158 | | | | | | | Continued Performance-Based Equity Vesting | | | — | | | | $1,171,110 | | | | — | | | | $2,385,104 | | | | | | | Health & Welfare Benefits Continuation | | | $22,315 | | | | — | | | | — | | | | $44,630 | | | | | | | Outplacement Services | | | $50,000 | | | | — | | | | — | | | | $50,000 | | | | | | | TOTAL | | | $2,659,815 | | | | $2,270,666 | | | | $1,099,556 | | | | $6,229,892 | | | | | | | Tal Cohen | | | | | | | | | | | | | | | | | | | | | | Severance | | | $1,800,000 | | | | — | | | | — | | | | $2,100,000 | | | | | | | Pro-Rata Current Year Annual Incentive2 | | | $900,000 | | | | $900,000 | | | | $900,000 | | | | $900,000 | | | | | | | Equity Vesting | | | — | | | | $1,435,038 | | | | $1,435,038 | | | | $4,577,139 | | | | | | | Continued Performance-Based Equity Vesting | | | — | | | | $1,463,934 | | | | — | | | | $3,082,654 | | | | | | | Health & Welfare Benefits Continuation | | | $22,315 | | | | — | | | | — | | | | $44,630 | | | | | | | Outplacement Services | | | $50,000 | | | | — | | | | — | | | | $50,000 | | | | | | | TOTAL | | | $2,772,315 | | | | $3,798,972 | | | | $2,335,038 | | | | $10,754,423 | | | | | | | P.C. Nelson Griggs | | | | | | | | | | | | | | | | | | | | | | Severance | | | $1,800,000 | | | | — | | | | — | | | | $2,100,000 | | | | | | | Pro-Rata Current Year Annual Incentive2 | | | $900,000 | | | | $900,000 | | | | $900,000 | | | | $900,000 | | | | | | | Equity Vesting | | | — | | | | $1,723,076 | | | | $1,723,076 | | | | $5,360,641 | | | | | | | Continued Performance-Based Equity Vesting | | | — | | | | $1,561,664 | | | | — | | | | $3,180,384 | | | | | | | Health & Welfare Benefits Continuation | | | $22,315 | | | | — | | | | — | | | | $44,630 | | | | | | | Outplacement Services | | | $50,000 | | | | — | | | | — | | | | $50,000 | | | | | | | TOTAL | | | $2,772,315 | | | | $4,184,740 | | | | $2,623,076 | | | | $11,635,655 | |
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| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
| | | | | | | | | | | | | | | | | | | | | | | Name | | Involuntary Termination Not for Cause or Voluntary Termination with Good Reason ($) | | | Death ($) | | | Disability ($) | | | Termination Due to Change in Control (“Double Trigger”) ($) | | | | | | | Bradley J. Peterson | | | | | | | | | | | | | | | | | | | | | | Severance | | | — | | | | — | | | | — | | | | $2,275,000 | | | | | | | Pro-Rata Current Year Annual Incentive | | | $975,000 | | | | $975,000 | | | | $975,000 | | | | $975,000 | | | | | | | Equity Vesting | | | $5,486,899 | | | | $1,773,874 | | | | $1,773,874 | | | | $5,486,899 | | | | | | | Continued Performance-Based Equity Vesting | | | $3,473,208 | | | | $1,854,488 | | | | — | | | | $3,473,208 | | | | | | | Health & Welfare Benefits Continuation | | | $40,000 | | | | — | | | | — | | | | $29,583 | | | | | | | Financial and Tax Services/Exec Physical Exams | | | $37,310 | | | | — | | | | — | | | | — | | | | | | | TOTAL | | | $10,012,417 | | | | $4,603,362 | | | | $2,748,874 | | | | $12,239,690 | | | 1. Upon an involuntary termination not for cause or voluntary termination with good reason, under the terms of Ms. Friedman’s employment agreement, she is entitled to continued vesting for 12 months of her outstanding PSUs, RSUs, and options, with any performance-based vesting based on actual performance goals during the respective performance periods. 2. Assumes payment at target. | |
| Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | |
| | | | | Pay Versus Performance | | | As required by Item 402(v) of RegulationS-K, we are providing the following information about the relationship between “compensation actually paid” (as defined in Item 402(v)) and performance. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Value of Initial Fixed $100 | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2022 | | $28,045,305 | | $25,888,844 | | $6,391,803 | | $6,467,133 | | $179 | | $123 | | $1,125 | | $1,820 | | | | | | | | | | | | 2021 | | $19,965,893 | | $69,015,180 | | $3,411,044 | | $11,672,259 | | $202 | | $139 | | $1,187 | | $1,849 | | | | | | | | | | | | 2020 | | $15,807,618 | | $31,960,132 | | $3,970,881 | | $7,136,488 | | $126 | | $125 | | $933 | | $1,530 |
| 1. The Principal Executive Officer (PEO) for 2022 was Adena T. Friedman and thenon-PEO NEOs for 2022 were Ann M. Dennison, Tal Cohen, P.C. Nelson Griggs, and Bradley J. Peterson. The PEO for 2021 was Adena T. Friedman and thenon-PEO NEOs were Ann M. Dennison, Michael Ptasznik, Lauren B. Dillard, P.C. Nelson Griggs, and Bradley J. Peterson. The PEO for 2020 was Adena T. Friedman and thenon-PEO NEOs were Michael Ptasznik, Lauren B. Dillard, P.C. Nelson Griggs, and Bradley J. Peterson. Amounts in all tables and accompanying footnotes in this Pay Versus Performance section may not sum or calculate due to rounding. 2. The dollar amounts reported in column (b) are the amounts of total compensation reported for Ms. Friedman for each corresponding year in the table.“Total” column of the Summary Compensation Table. Refer to “Summary Compensation Table.” 3. The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Ms. Friedman, as computed in accordance with Item 402(v) of RegulationS-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Ms. Friedman during the applicable year. In accordance with the requirements of Item 402(v) of RegulationS-K, the following adjustments were made to Ms. Friedman’s total compensation for each year to determine the compensation actually paid: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2022 | | $28,045,305 | | - | | ($22,378,805) | | $ 20,222,344 | | $25,888,844 | | | | | | | | | 2021 | | $19,965,893 | | - | | ($12,864,768) | | $ 61,914,055 | | $69,015,180 | | | | | | | | | 2020 | | $15,807,618 | | ($ 98,334 ) | | ($10,397,565) | | $ 26,648,413 | | $31,960,132 |
| a. Adjustments relating to defined benefit and pension plans (as applicable) were made to total compensation for each year to determine compensation actually paid. In this case, only a deduction was required, as there were no necessary additions for service costs. | b. The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) theyear-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation methodologies used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
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Awards Granted | | | | | | | | | | | | | | | | | | 2022 | | ($22,378,805) | | $23,483,481 | | ($1,504,959) | | ($1,756,178) | | $20,222,344 | | | | | | | | | | | | 2021 | | ($12,864,768) | | $21,020,995 | | $17,855,764 | | $23,037,295 | | $61,914,055 | | | | | | | | | | | | 2020 | | ($10,397,565) | | $16,488,944 | | $5,001,879 | | $5,157,589 | | $26,648,413 |
| | | | | | | | | | | | | | | 4. The dollar amounts reported in column (d) represent the average of the amounts reported for the NEOs as a group in the “Total” column of the Summary Compensation Table in each applicable year. | | | | | 5. The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group, as computed in accordance with Item 402(v) of RegulationS-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group during the applicable year. In accordance with the requirements of Item 402(v) of RegulationS-K, the following adjustments were made to average total compensation for the NEOs as a group for each year to determine the compensation actually paid, using the same methodology described above in footnote 3: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2022 | | $6,391,803 | | ($4,491,942) | | $4,567,271 | | $6,467,133 | | | | | | | | | | | 2021 | | $3,411,044 | | ($1,620,868) | | $9,882,083 | | $11,672,259 | | | | | | | | | | | 2020 | | $3,970,881 | | ($1,963,950) | | $5,129,557 | | $7,136,488 |
| | | | | | | | | | | | | | | a. The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) theyear-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation methodologies used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | Average Non-PEO NEO Equity Award Adjustments | | | | | | | | | | | Average Non-PEO NEO Equity Award Adjustments | | | | | | | | | | | | 2022 | | ($4,491,942) | | $5,060,560 | | ($232,106) | | ($261,183) | | $4,567,271 | | | | | | | | | | | | 2021 | | ($1,620,868) | | $2,648,502 | | $2,912,952 | | $4,320,629 | | $9,882,083 | | | | | | | | | | | | 2020 | | ($1,963,950) | | $3,118,475 | | $1,145,958 | | $865,124 | | $5,129,557 |
| | | | | | | | | | | | | | | 6. Represents the cumulative TSR for a custom peer group, as disclosed by Nasdaq for the purposes of Item 201(e) of RegulationS-K. Our custom peer group for 2022 is comprised of the following peer companies: ASX Limited, B3 S.A. - Brasil, Bolsa, Balcão, Bolsa Mexicana de Valores, S.A.B. de C.V., CBOE Global Markets, Inc., CME Group Inc., Deutsche Börse AG, Euronext N.V., Hong Kong Exchanges and Clearing Limited, Intercontinental Exchange, Inc., Japan Exchange Group, Inc., London Stock Exchange Group plc, Singapore Exchange Limited, and TMX Group Limited. Our custom peer group for the purposes of Item 201(e) of RegulationS-K for each of 2021 and 2020 was comprised of the same peer companies listed above. 7. The dollar amounts reported represent the amount of net income reflected in the Company’s audited consolidated financial statements for the applicable year. 8. The Company believes Non-GAAP Operating Income is the financial performance measure most closely linked to the calculation of compensation actually paid. Non-GAAP Operating Income is defined as set forth in footnote 1 of the “Corporate Objectives Performance vs. Goals” table on page 82 of this Proxy Statement. See also Annex A of this Proxy Statement for more information on adjustments to non-GAAP measures. |
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | Analysis of the Information Presented in the Pay versus Performance Table |
| | | | | The tables and graphs above demonstrate that over the measurement period, compensation actually paid for the PEO andnon-PEO NEOs trended directionally with the Company’s cumulative TSR, net income, and the Company Selected Measure(Non-GAAP Operating Income). These changes are largely attributable to the fluctuation in value of outstanding equity awards, wh ich correlate w ith increases and decreases in stock price and cumulative TSR. Over the measurement period, our cumulative TSR has outperformed the peer group. | | |
| | | | | Tabular List of Financial Performance Measures | | | | | The most important financial performance measures used by the Company to link executive compensation actually paid to the Company’s PEO andnon-PEO NEOs, for the most recently completed fiscal year, to the Company’s performance are as follows: | | | | | • Non-GAAP Operating Income | | | | | | | | | | | | | | | |
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Our methodology to identify the median of the annual total compensation of all employees in 2021 included the following assumptions, adjustments, and estimates.
· | | | | | Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are required to disclose the median of the annual total compensation of our employees, the annual total compensation of our principal executive officer, Adena T. Friedman, who serves as our Chair and CEO, and the ratio of these two amounts. The SEC’s CEO pay ratio rules permit us to use the same median employee for comparison purposes for up to three years, unless there has been a change in our employee population or compensation arrangements that we reasonably believe would result in a significant change in the disclosure. We have used the same median employee for years 2022 and 2021, as our employee population and compensation arrangements have not significantly changed since our initial determination date of October 22, 2021. As described in our 2022 Proxy Statement, our methodology to identify the median of the annual total compensation of all employees in 2021 included the following assumptions, adjustments, and estimates. | | | | | •We identified the median employee by reviewing the 2021 actual total compensation (which consists of the employee’s base salary, actual bonus paid in 2021, and grant date value of actual equity awards granted in 2021) of all full-time, part-time, and hourly employees employed by us as of October 22, 2021. |
· | | | | •Consistent with the applicable rules, in 2021 we excluded certain employees from our total employee population in determining our median employee. |
– As permitted under the non-U.S. de minimis exemption, we excluded 270 employees located in jurisdictions outside of the United States, as follows: (1) three employees in Belgium, (2) five employees in Italy, (3) three employees in South Korea, (4) three employees in the Netherlands, (5) 251 employees in the Philippines, (6) two employees in Saudi Arabia, (7) one employee in Turkey and (8) two employees in the United Arab Emirates.
– Following the application of these exclusions, the total number of employees used in our median employee analysis was 5,463 (3,041 employees from North America, 1,718 employees from Europe, the Middle East and Africa and 704 employees from Asia Pacific).
· | | | | » As permitted under the non-U.S. de minimis exemption, we excluded 270 employees located in jurisdictions outside of the United States, as follows: (1) three employees in Belgium, (2) five employees in Italy, (3) three employees in South Korea, (4) three employees in the Netherlands, (5) 251 employees in the Philippines, (6) two employees in Saudi Arabia, (7) one employee in Turkey, and (8) two employees in the United Arab Emirates. | | | | | » Following the application of these exclusions, the total number of employees used in our median employee analysis was 5,463 (3,041 employees from North America, 1,718 employees from Europe, the Middle East and Africa, and 704 employees from the Asia Pacific region). | | | | | •We annualized 2021 base cash compensation for full-time and part-time permanent employees who were hired after January 1, 2021. |
· | | | | •All base cash compensation for employees outside the U.S. was converted to U.S. dollars based on a conversion rate published in our internal human resources system that is updated annually. |
· | | | | •We did not make any cost-of-living adjustments or full-time equivalent adjustments in identifying the median employee. |
Using this methodology, we determined that the median employee was an exempt, full time professional employee located in the U.S. Based on those factors, we determined the 2021 CEO Pay Ratio as such:
· | | | | Using this methodology, we determined that the median employee was an exempt, full-time professional employee located in the U.S. Based on those factors, we determined the 2022 CEO Pay Ratio as such: | | | | | •The 20212022 annual total compensation of Ms. Friedman was $19,965,893.$28,045,305. |
· | | | | •Based on the same methodology we use for NEOs in the Summary Compensation Table, the 20212022 annual total compensation of the median employee was $98,946.$103,042. |
· | | | | •The ratio of the 20212022 annual total compensation of Ms. Friedman to the 20212022 annual total compensation of the median employee was 202272 to 1. |
Our CEO pay ratio is a reasonable estimate calculated in a manner consistent with the SEC’s rules. The SEC’s rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies to identify the median employee. The SEC’s rules also allow companies to exclude up to 5% of their workforce and make reasonable estimates and assumptions that may impact their employee populations. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above. Other companies have different employee populations and compensation practices and utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Audit & Risk Committee Report
The Audit & Risk Committee operates under a written charter. The charter, which was last amended effective February 23, 2022, includes the Audit & Risk Committee’s duties and responsibilities.
The Audit & Risk Committee assists the Board in fulfilling its responsibility for oversight of the quality and integrity of Nasdaq’s accounting, auditing, and financial reporting practices and risk management. As part of this effort, the Audit & Risk Committee reviews the disclosures in annual reports on Form 10-K, quarterly reports on Form 10-Q and quarterly earnings releases. In addition, the Audit & Risk Committee assists the Board by reviewing and discussing Nasdaq’s regulatory and compliance programs, ERM structure and process, Global Employee Ethics Program, SpeakUp! Program and confidential whistleblower process. The Audit & Risk Committee charter complies with the applicable provisions of the Sarbanes-Oxley Act of 2002 and related rules of the SEC and The Nasdaq Stock Market.
For a description of the Audit & Risk Committee’s key accomplishments in 2021, please refer to page 32.
Review of Audited Financial Statements
The Audit & Risk Committee:
| | | | | Nasdaq 2023 Proxy Statement | EXECUTIVE COMPENSATION | | | |
| | | | | A substantial portion of Ms. Friedman’s total compensation for 2022 was the one-time stock-option award she received on January 3, 2022 in connection with her new employment agreement, which had a grant date fair value of approximately $9,999,975. Excluding the one-time stock option award, the ratio would have been 175 to 1. Our CEO pay ratio is a reasonable estimate calculated in a manner consistent with the SEC’s rules. The SEC’s rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies to identify the median employee. The SEC’s rules also allow companies to exclude up to 5% of their total employees who are located in a particular country or countries outside of the United States and make reasonable estimates and assumptions that may impact their employee populations. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above. Other companies have different employee populations and compensation practices and utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios. |
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| | | | | Audit & Risk Committee Report | | | | | The Audit & Risk Committee operates under a written charter. The charter, which was last amended effective February 22, 2023, includes the Audit & Risk Committee’s duties and responsibilities. | | | | | The Audit & Risk Committee assists the Board in fulfilling its responsibility for oversight of the quality and integrity of Nasdaq’s accounting, auditing, and financial reporting practices and risk management. As part of this effort, the Audit & Risk Committee reviews the disclosures in annual reports on Form 10-K, quarterly reports on Form 10-Q, and quarterly earnings releases. In addition, the Audit & Risk Committee assists the Board by reviewing and discussing Nasdaq’s regulatory and compliance programs, ERM structure and process, Global Employee Ethics Program, and the SpeakUp! Program, which includes the confidential whistleblower process. The Audit & Risk Committee charter complies with the applicable provisions of the Sarbanes-Oxley Act of 2002 and related rules of the SEC and The Nasdaq Stock Market. | | | | | For a description of the Audit & Risk Committee’s key accomplishments in 2022, please refer to page 33. | | | | | Review of Audited Financial Statements | | | | | The Audit & Risk Committee: | | | | | •reviewed and discussed the audited financial statements with management; |
· | | | | •discussed with the independent registered public accounting firm all communicationsthe matters required by generally accepted auditing standards, including those described in Auditing Standard No. 1301, “Communications with Audit & Risk Committees,” as adoptedto be discussed by the PCAOB;applicable requirements of the PCAOB and the SEC; and |
· | | | | •received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the firm’s communications with the Audit & Risk Committee concerning independence and discussed with the independent registered public accounting firm the firm’s independence. | | | | | Based on the review and discussions outlined above, the Audit & Risk Committee recommended to the Board of Directors that the audited financial statements be included in the Form 10-K. | | | | | Audit & Risk Committee |
Based on the review and discussions discussed above, the Audit & Risk Committee recommended to the Board of Directors that the audited financial statements be included in the Form 10-K.
The Audit & Risk Committee
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Annual Evaluation and 2022 Selection of Independent Auditors
The Audit & Risk Committee annually evaluates the performance of the Company’s independent auditors, including the senior audit engagement team, and determines whether to reengage the current independent auditors or consider other audit firms.
The Audit & Risk Committee assessed Ernst & Young LLP’s performance as independent auditor during fiscal year 2021, including the performance of the Ernst & Young LLP lead audit partner and the audit team. As part of its assessment, the Audit & Risk Committee considered several factors, including:
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| | | | | | | | | | Thomas A. Kloet (Chair) | | | | Charlene T. Begley | | | | | | | | | | 
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| | | | | | | | | | Toni Townes-Whitley | | | | Alfred W. Zollar | | |
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| | | | | | | | | Annual Evaluation and 2023 Selection of Independent Auditors | | | | | | | | The Audit & Risk Committee annually evaluates the performance of the Company’s independent auditors, including the senior audit engagement team, and determines whether to reengage the current independent auditors or consider other audit firms. | | | | | | | | The Audit & Risk Committee assessed Ernst & Young LLP’s performance as independent auditor during fiscal year 2022, including the performance of the Ernst & Young LLP lead audit partner and the audit team. As part of its assessment, the Audit & Risk Committee considered several factors, including: | | | | | | | | •relevant industry expertise and geographical reach; |
· | | | | | | | •an annual report from Ernst & Young LLP describing the independent auditors’ internal quality control procedures; |
· | | | | | | | •the firm’s independence and integrity; |
· | | | | | | | •the quality of communication with the Audit & Risk Committee; |
· | | | | | | | •the appropriateness of fees; |
· | | | | | | | •any material issues raised by the most recent internal quality control review or peer review or other external data on audit quality and performance; and |
· | | | | | | | •the quality and efficiency of the services provided, including performance of the Ernst & Young LLP lead audit partner and the audit team. | | | | | | | | The Audit & Risk Committee also considered the impact of changing auditors when assessing whether to retain the current independent auditor. The Audit & Risk Committee determined that Ernst & Young LLP’s longer tenure is a benefit to Nasdaq as it brings their institutional expertise and knowledge of Nasdaq’s complex operations, accounting policies and practices, and internal controls over financial reporting. The Audit & Risk Committee last conducted a request for proposal for the independent auditor relationship in 2019. | | | | | | | | According to applicable SEC rules, the lead audit partner at Ernst & Young LLP, our external auditor, may provide a maximum of five consecutive years of service to us. The current Ernst & Young LLP lead audit partner was assigned to us commencing with the audit of our financial statements for the fiscal year ended December 31, 2019. | | | | | | | | Based on the assessment of Ernst & Young LLP’s performance, the Audit & Risk Committee believes that retaining Ernst & Young LLP for the fiscal year ending December 31, 2023 is in the best interests of Nasdaq and its shareholders. |
The Audit & Risk Committee also considered the impact of changing auditors when assessing whether to retain the current independent auditor. The Audit & Risk Committee determined that Ernst & Young LLP’s longer tenure is a benefit to Nasdaq as it brings their institutional expertise and knowledge of Nasdaq’s complex operations, accounting policies and practices, and internal controls over financial reporting. The Audit & Risk Committee most recently conducted a request for proposal for the independent auditor relationship in 2019.
According to applicable SEC rules, the lead audit partner at Ernst & Young LLP, our external auditor, may provide a maximum of five consecutive years of service to us. The current Ernst & Young LLP lead audit partner was assigned to us commencing with the audit of our financial statements for the fiscal year ended December 31, 2019.
Based on the assessment of Ernst & Young LLP’s performance, the Audit & Risk Committee believes that retaining Ernst & Young LLP for the fiscal year ending December 31, 2022 is in the best interests of Nasdaq and its shareholders.
Audit Fees and All Other Fees
The table below shows the amount of fees we paid to Ernst & Young LLP for fiscal years 2021 and 2020, including expenses.
| | | | | | | | | | | | 2021 | | 2020 | | | | Audit fees1 | | $5,354,450 | | $5,024,454 | | | | Audit-related fees2 | | $1,266,350 | | $1,072,720 | | | | Audit and audit-related fees | | $6,620,800 | | $6,097,174 | | | | Tax fees3 | | $445,507 | | $167,702 | | | | All other fees4 | | $2,098,306 | | $1,277,870 | | | | Total5 | | $9,164,613 | | $7,542,746 |
| | | | | Audit services were provided globally in 2021 and 2020. Fees related to audits of international subsidiaries are translated into U.S. dollars. Audit fees primarily represent fees for: the audit of Nasdaq’s annual financial statements included in the Form 10-K; the review of Nasdaq’s Quarterly Reports on Form 10-Q; statutory audits of subsidiaries as required by statutes and regulations; accounting consultations on matters addressed during the audit or interim reviews; comfort letters and consents; and the internal control attestation and reporting requirements of Section 404 of the Sarbanes-Oxley Act of 2002.Nasdaq 2023 Proxy Statement | AUDIT & RISK
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2. | | | | | | | | | The 2021Audit Fees and 2020 audit-related fees primarily include due diligence on strategic initiatives, including M&A, as well as other attestation reports issued related to Nasdaq’s regulatory environment.All Other Fees
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| | | | | | | | | | | | The table below shows the amount of fees we paid to Ernst & Young LLP for fiscal years 2022 and 2021, including expenses. | | | | | | | | | | 2022 | | 2021 | | | | | | | Audit fees 1 | | $6,764,899 | | $5,354,450 | | | | | | | Audit-related fees 2 | | $1,915,900 | | $1,266,350 | | | | | | | Total audit and audit-related fees | | $8,680,799 | | $6,620,800 | | | | | | | Tax fees | | $439,014 | | $445,507 | | | | | | | All other fees 3 | | $317,816 | | $2,098,306 | | | | | | | Total fees paid 4 | | $9,437,629 | | $9,164,613 | 1. Audit services were provided globally in 2022 and 2021. Fees related to audits of international subsidiaries are translated into U.S. dollars. Audit fees primarily represent fees for: the audit of Nasdaq’s annual financial statements included in the Form 10-K; the review of Nasdaq’s Quarterly Reports on Form 10-Q; statutory audits of subsidiaries as required by statutes and regulations; accounting consultations on matters addressed during the audit or interim reviews; comfort letters and consents; and the internal control attestation and reporting requirements of Section 404 of the Sarbanes-Oxley Act of 2002. 2. The 2022 and 2021 audit-related fees primarily include due diligence on strategic initiatives, including M&A, as well as other attestation reports issued related to Nasdaq’s regulatory environment. 3. The other fees in 2022 include fees for other non-financial assessments performed. Other fees in 2021 relate to the Swedish Financial Supervisory Authority listing requirements for companies applying for a listing on Nasdaq Stockholm AB. The validation of these companies is required to be performed by an external accounting firm. The fees were collected from the listing companies by us and paid to Ernst & Young LLP on behalf of the listing companies. In 2022, we no longer collected these fees on behalf of Ernst & Young LLP. 4. Fees exclude services provided to Nasdaq’s non-profit entities and services provided in relation to Nasdaq’s role as administrator for the Unlisted Trading Privileges Plan. | | The Audit & Risk Committee pre-approves both audit and non-audit services performed by the independent registered public accounting firm, and our Audit & Risk Committee pre-approved all such services in 2022 and 2021. |
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3. | | | | | The increase in tax fees in 2021Proposal 4: Ratification of the Appointment of Ernst & Young LLP as compared to 2020 was primarily due to higher consultation fees regarding tax matters.Our Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2023
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4. | Other fees in 2021 and 2020 relate to the Swedish Financial Supervisory Authority listing requirements for companies applying for a listing on Nasdaq Stockholm AB. The validation of these companies is required to be performed by an external accounting firm. The fees are collected from the listing companies by us and paid to Ernst & Young LLP on behalf of the listing companies. In addition, other fees include fees for services related to organization control audits under Statement on Standards for Attestation Engagements No. 18.
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5. | Fees exclude services provided to Nasdaq’s non-profit entities and services provided in relation to Nasdaq’s role as administrator for the Unlisted Trading Privileges Plan.
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The Audit & Risk Committee pre-approves both audit and non-audit services performed by the independent registered public accounting firm, and our Audit & Risk Committee pre-approved all such services in 2021 and 2020.
Proposal 3:
Ratification of the Appointment of Ernst & Young LLP as Our Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2022
✓ | | | | The Board unanimously recommends that shareholders vote FOR ratification of the appointment of Ernst & Young LLP. |
| | | | | Nasdaq is asking shareholders to ratify the Audit & Risk Committee’s appointment of Ernst & Young LLP as Nasdaq’s independent registered public accounting firm for the fiscal year ending December 31, 2023. As outlined in the Audit & Risk Committee charter, the Audit & Risk Committee is directly responsible for the appointment, compensation, retention, and oversight of the independent registered public accounting firm retained to audit Nasdaq’s financial statements. Following the process described under “Audit & Risk — Annual Evaluation and 2023 Selection of Independent Auditors,” the Audit & Risk Committee has appointed Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023. | | | | | If the shareholders do not ratify the selection, the Audit & Risk Committee will reconsider whether to retain Ernst & Young LLP. Even if the selection is ratified, the Audit & Risk Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of Nasdaq and its shareholders. Representatives of Ernst & Young LLP will be present during the Annual Meeting and will have the opportunity to make a statement and be available to respond to appropriate questions by shareholders. The Audit & Risk Committee and the Board believe that the continued retention of Ernst & Young LLP as the independent registered public accounting firm is in the best interests of Nasdaq and its shareholders. |
As outlined in the Audit & Risk Committee charter, the Audit & Risk Committee is directly responsible for the appointment, compensation, retention, and oversight of the independent registered public accounting firm retained to audit Nasdaq’s financial statements. Following the process described under “Audit & Risk — Annual Evaluation and 2022 Selection of Independent Auditors,” the Audit & Risk Committee has appointed Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022.
If the shareholders do not ratify the selection, the Audit & Risk Committee will reconsider whether to retain Ernst & Young LLP. Even if the selection is ratified, the Audit & Risk Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of Nasdaq and its shareholders. Representatives of Ernst & Young LLP will be present during the Annual Meeting and will have the opportunity to make a statement and be available to respond to appropriate questions by shareholders. The Audit & Risk Committee and the Board believe that the continued retention of Ernst & Young LLP as the independent registered public accounting firm is in the best interests of Nasdaq and its shareholders.
Other Items 111
Proposal 4:
Approve an Amendment to Nasdaq’s Charter to Increase the Total Number of Authorized Shares of Common Stock to Effect a Proposed 3-for-1 Stock Split
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| | | | | The Board unanimously recommends that shareholders vote FOR the amendment to Nasdaq’s charter.Nasdaq 2023 Proxy Statement | OTHER ITEMS
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After due consideration, and upon the recommendation of our Finance Committee, our Board of Directors has determined that it is advisable and in the best interests of Nasdaq and its shareholders to amend Nasdaq’s Amended and Restated Certificate of Incorporation to increase the total number of authorized shares of common stock from three hundred million (300,000,000) to nine hundred million (900,000,000), and correspondingly increase the total number of shares of capital stock that Nasdaq is authorized to issue from three hundred thirty million (330,000,000) to nine hundred thirty million (930,000,000) in order to provide us with sufficient authorized but unissued shares to effect a proposed 3-for-1 stock split. Thus, our Board of Directors has approved, adopted and authorized an amendment to our Amended and Restated Certificate of Incorporation, the text of which is set forth in Annex B to this Proxy Statement.
General
Article Fourth, Paragraph A of our Amended and Restated Certificate of Incorporation provides that the total number of shares of stock that we have the authority to issue is three hundred thirty million (330,000,000), consisting of thirty million (30,000,000) shares of Preferred Stock, and three hundred million (300,000,000) shares of common stock. The proposed amendment (the “Proposed Charter Amendment”) to our Amended and Restated Certificate of Incorporation would:
increase the total number of authorized shares of common stock from three hundred million (300,000,000) to nine hundred million (900,000,000); and
increase the total number of shares of capital stock from three hundred thirty million (330,000,000) to nine hundred thirty million (930,000,000).
The Proposed Charter Amendment would not change the total number of authorized shares of preferred stock.
In connection with our operation of self-regulatory organizations in the United States, Nasdaq is subject to SEC oversight, as prescribed by the Exchange Act. Under the Exchange Act, these self-regulatory organizations must submit to the SEC proposed changes to any of their rules, practices and procedures, including amendments to provisions of our Amended and Restated Certificate of Incorporation that are deemed to constitute rules. We expect to begin the process of obtaining approval from the SEC on or about the date of the filing of our Definitive Proxy Statement. We cannot guarantee that the SEC will approve of the proposed changes. If the Proposed Charter Amendment is adopted by our shareholders at the 2022 Annual Meeting and approved by the SEC, the Proposed Charter Amendment will be filed with the Secretary of State of the State of Delaware and become effective in connection with such filing. We expect to make such filing as soon as practicable after receiving the approval of both the SEC and our shareholders.
The additional shares of common stock authorized by the Proposed Charter Amendment, if and when issued, would have the same rights and privileges as the shares of common stock currently authorized under our Amended and Restated Certificate of Incorporation. The par value per share of our common stock will not be affected by the Proposed Charter Amendment.
As of the record date, we had three hundred million (300,000,000) shares of our common stock authorized, of which 164,677,774 shares were issued and outstanding and approximately 12,985,520 shares remain available for grant under our Equity Plan and ESPP. In addition, we have 30,000,000 shares of preferred stock authorized, of which no shares were issued and outstanding. Therefore, as of the record date, we had only approximately 122,336,706 shares of common stock available for issuance, which is not enough to effect the proposed stock split without effecting the Proposed Charter Amendment.
Purpose of the Proposed Charter Amendment
On March 23, 2022, the Board of Directors approved pursuing an effective 3-for-1 forward stock split by way of a stock dividend contingent upon the approval of the adoption of the Proposed Charter Amendment by both our shareholders and the SEC, pursuant to which the holders of record of shares of common stock would receive by way of a dividend, two shares of common stock for each share of common stock held by such holder (the “Stock Dividend”). In the event the Stock Dividend is declared and paid, we will also make appropriate adjustments to our Equity Plan, ESPP and outstanding equity-based awards, including adjustments to the number of shares of common stock authorized for issuance under such plans and to the terms of such awards, in accordance with the parameters of the Stock Dividend and the terms of such plans. As a result, the Stock Dividend would significantly increase the number of shares of common stock issued and outstanding and the number of shares of common stock authorized for issuance under our Equity Plan and ESPP, thus necessitating an increase in the number of authorized shares under our Amended and Restated Certificate of Incorporation.
If the Proposed Charter Amendment is filed with the Secretary of State of the State of Delaware and becomes effective, the shares of common stock authorized by our Amended and Restated Certificate of Incorporation (as amended by the Proposed Charter Amendment) that are in excess of those distributed pursuant to the Stock Dividend will be available for issuance at such times and for such corporate purposes as our Board of Directors (or an authorized committee thereof) may deem advisable, including, without limitation, potential acquisitions, strategic partnerships, equity financings, equity incentives to employees, payments of future stock dividends and other forms of recapitalizations, without further shareholder approval (except as may be required by applicable law or the rules of any stock exchange or stock market on which the common stock may be listed or traded).
Stock Dividend
The trading price of our common stock has risen significantly over the past several years, reflecting the consistently strong performance of our Company. Since we first became a publicly traded company, the total number of authorized shares of our common stock has remained constant at three hundred million (300,000,000). However, over the last five years, the trading price of our common stock has increased by approximately 162%. As the trading price of our common stock has risen, we have carefully evaluated the effect of the trading price of our common stock on the liquidity and marketability of our common stock. We believe that this considerable price appreciation may be affecting the liquidity of our common stock, making it more difficult to efficiently trade and less affordable to certain classes of investors and, therefore, potentially less attractive to certain investors. The price of one share of our common stock on March 31, 2017 was $69.45 and the closing market price of one share our common stock on April 1, 2022 was $181.92 as reported on the Nasdaq Stock Market. Our Board believes that declaring and paying the Stock Dividend may support liquidity in the trading of our common stock and make the common stock more attractive to a broader range of investors. The Board believes it is in our and our shareholders’ best interests to increase the number of authorized shares of common stock for the purpose of, among other things, providing Nasdaq with sufficient authorized but unissued shares of common stock to declare and pay the proposed Stock Dividend.
If our shareholders adopt and the SEC approves the Proposed Charter Amendment, it is expected that the Board of Directors (or an authorized committee thereof) will declare the Stock Dividend and fix a record date and distribution date for such Stock Dividend soon thereafter. While the Board of Directors currently intends that the Board of Directors (or an authorized committee thereof) will declare the Stock Dividend and fix a distribution date that is shortly after the Proposed Charter Amendment is filed with the Secretary of State of the State of Delaware and becomes effective, the decision of the Board of Directors (or an authorized committee thereof) as to whether and when to declare and pay the Stock Dividend will be based on a number of factors, including market conditions and existing and expected trading prices for the common stock.
Effect of the Proposed Charter Amendment
If the Proposed Charter Amendment is adopted and becomes effective and, if the Stock Dividend is declared and paid, the aggregate number of shares of common stock either issued and outstanding or that may be issued pursuant to equity awards or otherwise reserved for issuance under Nasdaq’s Equity Plan and ESPP would total approximately 533 million shares, which is in excess of the three hundred million (300,000,000) shares of common stock currently authorized under our Amended and Restated Certificate of Incorporation. Having an additional approximately 367 million shares of common stock available for issuance after the payment of the Stock Dividend would provide Nasdaq with similar flexibility to what we currently have to issue shares of common stock without the expense and delay of a shareholders’ meeting.
Future issuances of shares of common stock could have a dilutive effect on the EPS, voting power and percentage shareholdings of current shareholders. In addition, the availability of additional shares of common stock for issuance could, under certain circumstances, discourage or make more difficult any efforts to obtain control of Nasdaq. We do not believe, however, that the Proposed Charter Amendment would have an anti-takeover effect, and we have not proposed the increase in the authorized number of shares of common stock with the intention of using the additional shares for anti-takeover purposes.
Right to Abandon the Proposed Charter Amendment and Stock Dividend
We may abandon the Proposed Charter Amendment at any time before the effectiveness of the filing of the Proposed Charter Amendment with the Secretary of State of the State of Delaware and may also abandon the Stock Dividend, in each case without further action by our shareholders, notwithstanding the authorization of the Proposed Charter Amendment by our shareholders and the SEC.
No Appraisal Rights
Under the General Corporation Law of the State of Delaware, our shareholders are not entitled to appraisal rights in connection with the Proposed Charter Amendment or the Stock Dividend.
Vote Required
Approval of the adoption of the Proposed Charter Amendment requires the affirmative vote of the holders of a majority of the outstanding shares of common stock entitled to vote thereon.
If you abstain from voting on this matter, your abstention will have the same effect as a vote “against” the approval of the adoption of the Proposed Charter Amendment. If you hold your shares through a broker and you do not instruct the broker on how to vote on this proposal within a specified period of time prior to the meeting, your broker has the authority to vote your shares. Abstentions and broker non-votes will be counted as present for purposes of determining the presence of a quorum.
Proposal 5:
Shareholder Proposal – Special Shareholder Meeting Improvement
X | | | | | | | | | Proposal 5: Shareholder Proposal – Independent Board Chairman | | | | | | | | |  | | The Board unanimously recommends that shareholders vote AGAINST Proposal 5. | | | | | Mr. Kenneth Steiner, 14 Stoner Ave., 2M, Great Neck, NY 11021-2100, owner of no less than 500 shares of Nasdaq common stock, has informed Nasdaq that he plans to introduce the following proposal at the Annual Meeting. We are not responsible for the accuracy or content of the proposal and supporting statement, which are presented below as received from the proponent. The proposal and supporting statement are quoted verbatim in italics below. | | | | | Shareholder Proposal Proposal 5 - Independent Board Chairman 
Shareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary in order that 2 separate people hold the office of the Chairman and the office of the CEO. Whenever possible, the Chairman of the Board shall be an Independent Director. The Board has the discretion to select a Temporary Chairman of the Board who is not an Independent Director to serve while the Board is seeking an Independent Chairman of the Board. Although it is a best practice to adopt this policy soon this policy could be phased in when there is a contract renewal for our current CEO or for the next CEO transition. The roles of Chairman and CEO are fundamentally different and should be held by 2 directors, a CEO and a Chairman who is completely independent of the CEO and our company. The job of the CEO is to manage the company. The job of the Chairman is to oversee the CEO and management. Currently NDAQ can have a non-independent Chairman on short notice for an indefinite period. Plus the role of NDAQ Lead Director is weak with 5 functions. Two of the functions are presiding at meetings. Functions 3 and 4 involve briefing and liaison. Function 5 is the only approval function and it only involves approval of prepared in advance agendas to see that there is enough time for discussion. Please vote yes: Independent Board Chairman - Proposal 5 |
Mr. Kenneth Steiner, 14 Stoner Ave., 2M, Great Neck, NY 11021-2100, owner of no less than 100 shares of Nasdaq common stock, has informed Nasdaq that he plans to introduce the following proposal at the Annual Meeting. We are not responsible for the accuracy or content of the proposal and supporting statement, which are presented below as received from the proponent. The proposal and supporting statement are quoted verbatim in italics below.
SHAREHOLDER PROPOSAL
Proposal 5 - Special Shareholder Meeting Improvement
Shareholders ask our board to take the steps necessary to amend the appropriate company governing documents to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder meeting.
One of the main purposes of this proposal is to give shareholders the right to formally participate in calling for a special shareholder meeting regardless of their length of stock ownership to the fullest extent possible.
Currently it takes a theoretical 15% of all shares outstanding to call for a special shareholder meeting. This theoretical 15% of all shares outstanding translates into 24% of the shares that vote at our annual meeting.
It would be hopeless to think that shares that do not have time to vote would have time to go through the special procedural steps to call for a special shareholder meeting.
And it goes downhill from here. All shares held for less than one full year are 100% disqualified from formal participation in calling for a special shareholder meeting. Thus the shareholders who own 24% of the shares that vote at the annual meeting could determine that they own 33% of NDAQ stock when length of stock ownership is factored out.
And then all NDAQ shares not held long are 100% disqualified. Thus the shareholders who own 33% of NDAQ stock could determine that they own close to 40% of NDAQ stock when their shares not held long are included.
A 15% stock ownership requirement that can in practice be close to a 40% stock ownership requirement is nothing for management to brag about. And NDAQ management likes to brag about its shareholder engagement even when management disingenuously distributes voter guides for dummies shortly before the voting at the annual meeting that tell shareholders how to vote in lockstep with the management party line.
It is also important to vote for this proposal because we gave 46% support to a 2018 proposal for a shareholder right to act by written consent and we still do not have a right to act by written consent. This 46% support may have represented 51% support from the NDAQ shares that have access to independent proxy voting advice and are not forced to rely on the conflicted opinions of management.
Many companies provide for both a shareholder right to call a special shareholder meeting and a shareholder right to act by written consent. Southwest Airlines and Target are companies that do not provide for shareholder written consent and yet provide for 10% of shares to call for a special shareholder meeting.
Please vote yes:
Special Shareholder Meeting Improvement, Proposal 5
Board Of Directors’ Statement In Opposition
The Board has carefully considered this proposal and concluded that its adoption is unnecessary and not in the best interests of the Company or our shareholders. The Board unanimously recommends that shareholders vote AGAINST this proposal, as further explained below.
| | | | | Nasdaq 2023 Proxy Statement | OTHER ITEMS Reasons to vote against | | | |
| | | | | | | | | | | Board Of Directors’ Statement In Opposition | | | | | | | | The Board has carefully considered this proposal and concluded that its adoption is unnecessary and not in the best interests of the Company or our shareholders. The Board unanimously recommends that shareholders vote AGAINST this proposal, as further explained below. | | | | | | | | ✓It is important to maintain flexibility in our leadership structure: Our Board believes it is critically important to maintain the flexibility to choose the leadership structure that will best fit the Company’s circumstances and Board composition at any given time. By requiring a fixed leadership structure regardless of the circumstances, the Board’s effectiveness could be constrained, harming shareholders. | | | | | | | | ✓Nasdaq’s Lead Independent Director has expansive duties: The role of our Lead Independent Director helps ensure an independent and engaged Board of Directors. As further described in our publicly available Corporate Governance Guidelines and as detailed on page 46, the Lead Independent Director role has clearly defined and comprehensive duties to ensure oversight of the Chair and CEO. | | | | | | | | ✓Nasdaq has robust corporate governance: Our robust corporate governance practices, including our current leadership structure, provide strong independent leadership and an appropriate framework for effective Board oversight. | | | | | | | | | A Flexible Leadership Structure Benefits Nasdaq and our Shareholders | | | | | | | | | | The Board values having the flexibility to select the structure of leadership best suited to meet the needs of Nasdaq and our shareholders at any given time. The independent directors of the Board, with their diverse backgrounds, experience, perspectives, and extensive knowledge about the Company and our industry, are best positioned to evaluate the Board’s leadership structure annually and elect a Chair. Rather than a “one size fits all” approach to corporate governance, the Board believes the leadership structure best suited to meet the needs of Nasdaq and our shareholders should be based on the particular circumstances, opportunities, and challenges confronting the Company at any given time, as well as the individual skills and experiences that may be required in an effective Chair. The dynamic and competitive fintech and financial services industry in which we operate requires a nimble leadership structure, and the Board believes that the right leadership structure may change as circumstances warrant and thus does not view a fixed leadership structure as beneficial to the Company or shareholders. To that end, the Board evaluates its leadership structure on an annual basis (or more frequently as appropriate) to determine the ideal structure for Nasdaq at such time. | | | | | | | | In September 2022, we announced our new corporate structure, which we believe will align the Company more closely to the foundational shifts that are driving the evolution of the global financial system and evolving client needs. In December 2022, the independent directors unanimously elected Adena T. Friedman, the Company’s CEO, as the Chair of the Board, effective as of January 1, 2023, and elected Michael R. Splinter, who previously served as Chair, as Lead Independent Director. The Board concluded that it is in the best interests of the Company and its shareholders to combine the roles at this time in order to enable the most efficient execution of our strategic priorities and financial performance. | | | | | | | | The determination to elect Ms. Friedman as Chair, in addition to continuing as CEO, was based on Ms. Friedman’s extensive experience in, and knowledge of, global financial markets and the fintech industry; her ability to navigate Nasdaq through, and capitalize | | |
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| | | | | | | on, new developments in the modern financial and technology ecosystems; her expertise regarding Nasdaq’s complex regulatory operating environment and its role as a regulator for exchanges around the world; and her leadership to drive Nasdaq’s strategic vision. Ms. Friedman’s more than 25 years of experience at Nasdaq, including serving as CEO since 2017 and as CFO and in other senior leadership roles, brings unparalleled expertise and industry knowledge to her role as Chair. | | | | | Finally, our strong performance under Ms. Friedman’s leadership as CEO since 2017 underscores these benefits, as the Company has significantly outperformed its performance peers in terms of total shareholder return during her tenure. For example, from January 1, 2017, when Ms. Friedman was first appointed as CEO, until December 31, 2022, our annualized TSR was 20.3%, compared to 14.0% for our peer exchanges group and 11.4% for the S&P 500 for such period. Our TSR has also outperformed the S&P 500 TSR over the one-year and three-year periods ending December 31, 2022. Additionally, under Ms. Friedman’s leadership, Nasdaq has consistently returned capital to shareholders through quarterly dividends and share repurchases. During Ms. Friedman’s tenure as CEO and as a director, the Board and management team have continued to enhance Nasdaq’s ESG and executive compensation practices and processes, and strengthened the Board’s oversight of significant operating, financial, and human capital management issues. Our Board believes Ms. Friedman’s dual role will enable her to continue to position Nasdaq for growth and success. | | | | | | A Strong Lead Independent Director Provides Oversight and Balance | | | | | | | Nasdaq’s Corporate Governance Guidelines require the Board to elect a non-management, independent director annually to serve as the Lead Independent Director when the roles of Chair and CEO are combined. The responsibilities of the Lead Independent Director include, but are not limited to: | | | | | • presiding at all meetings of the Board at which the Chair is not present; | | | ✓ | | Shareholders already have a meaningful right to call a special meeting with a 15% threshold• presiding during Executive Sessions of the Board;
| | | ✓ | | The proposed 10% threshold is lower than• calling meetings of the threshold at a majority of S&P 500 companies that offer shareholdersindependent directors or the right to call a special meetingBoard, as appropriate;
| | | ✓ | | Special• facilitating discussion and open dialogue among the independent directors during Board meetings, require significant resources,Executive Sessions, and the lower threshold could be abused or lead to an unnecessary disruptionoutside of management’s time and energy in leading Nasdaq and driving value for all shareholdersBoard meetings;
| | | ✓ | | Nasdaq’s existing strong corporate governance practices emphasize• briefing the Chair and CEO on issues discussed during Executive Sessions;
| | | | | • serving as a liaison among the Chair and CEO and the other directors; | | | | | • together with the Chair and CEO, approving Board accountabilitymeeting agendas and provide shareholdersschedules to assure content and sufficient time for discussion of all agenda items; | | | | | • authorizing the retention of advisors and consultants who report directly to the Board, when appropriate; | | | | | • reviewing and reporting on the results of the Board and Committee assessments; | | | | | • discussing Board and Committee performance, effectiveness, and composition (including feedback from individual directors), with numerous opportunitiesthe Chair and CEO and meeting individually with independent directors as needed; and | | | | | • being available for shareholder actionconsultation and direct communication with major investors and other stakeholders upon request. | | | | | Our Corporate Governance Guidelines are available on our website at ir.nasdaq.com. | | | | | These significant Lead Independent Director responsibilities contribute meaningfully to the Board’s independent oversight of management and help ensure that the perspectives of our independent directors are represented on |
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Nasdaq shareholders already have the ability to call special meetings.
The Board acknowledges the importance of allowing shareholders a meaningful right to call special meetings in appropriate circumstances. Currently, shareholders holding at least 15% of Nasdaq’s outstanding capital stock for at least one year may call a special meeting of shareholders. This right, which was adopted in response to feedback from our shareholders, permits Nasdaq’s shareholders to bring important matters before all shareholders for consideration in a fully transparent and equitable manner.
The Board believes that our current 15% ownership threshold achieves a reasonable and appropriate balance between providing shareholders with the ability to call a special meeting, while protecting shareholders against a small minority of shareholders who may utilize the special meeting right to advance their own self-interests. Given our shareholder base, reducing the ownership threshold to 10% could enable a small minority of shareholders (or even a single shareholder) to trigger the expense and distraction of a special meeting to pursue narrow short-term interests that are not widely viewed among our shareholder base as requiring immediate attention or that are not aligned with the long-term interests of the Company or our shareholders generally.
The Board believes maintaining the 15% ownership threshold preserves a reasonable and appropriate balance between providing shareholders with a right to call a special meeting and protecting against the unnecessary waste of corporate resources and disruption associated with convening a special meeting that may be inappropriate.
Statements in the shareholder proposal are incorrect and misleading.
We believe that certain assertions made in the shareholder proposal and supporting statement are incorrect and misleading. While we will not address each such statement, the proposal includes various percentages that the proponent claims are required to call a special meeting, from the current 15% as set forth in the Company’s By-Laws up to a 40% requirement. These references to various thresholds are particularly misleading given the purpose of this proposal is to reduce the relevant threshold from 15% to 10%. The proponent repeatedly overstates the current 15% ownership threshold with references to higher numbers that are not included in the Company’s By-Laws.
Additionally, the Company did not “disingenuously distribute[s] voter guidelines for dummies shortly before the voting at the annual meeting.” The only materials provided by the Company to our shareholders in 2021 were publicly filed with the SEC. The Company has no plans to distribute any materials, other than those that are or will be publicly filed, prior to the 2022 Annual Meeting.
Our existing 15% special shareholder meeting threshold is more favorable to shareholders than thresholds of other large public companies.
Among S&P 500 companies, approximately 70% provide shareholders with a right to call special meetings. Of those, approximately 62% set the threshold above 15%, and approximately 14% set the threshold at 15%, as does Nasdaq. Among our exchange peers, our threshold of 15% to call a special meeting is the lowest, and several peers do not afford shareholders the right to call a special shareholder meeting at all.
Together with our strong corporate governance policies and practices, our annual shareholder engagement program and the various shareholder-friendly governance provisions that we have adopted (as described below and elsewhere in this Proxy Statement), the Board believes that our current 15% special meeting threshold remains appropriate and enhances shareholder rights, yet still reasonably allows shareholders to call a special meeting.
Special shareholder meetings require significant resources and management time.
A special shareholder meeting requires a substantial commitment of time, effort and resources by the Company, regardless of whether the meeting is held in person or virtually. The Company must pay to prepare, print and distribute to shareholders the required SEC disclosure documents related to the meeting, solicit proxies, hold the meeting, tabulate votes, file the voting results with the SEC and, for a virtual meeting, engage a service provider to host the meeting online. A threshold of just 10% risks that a group of shareholders whose interests do not align with shareholders generally will call a meeting, thus spending Company time and resources and risking distraction of our Board and management from their primary focus of growing our business and enhancing shareholder value.
Nasdaq’s corporate governance practices emphasize Board accountability and provide numerous opportunities for shareholder action.
In addition to providing for extensive shareholder engagement throughout the year and our current shareholder right to call special meetings, Nasdaq’s existing corporate governance practices and policies emphasize Board accountability and give shareholders ample opportunity to take action. Significant examples include the following:
Proxy Access. In response to feedback from shareholders, Nasdaq adopted a proxy access provision that allows a shareholder (or group of shareholders) that complies with certain customary requirements to nominate candidates for service on the Board and have those candidates included in Nasdaq’s proxy materials.
Elimination of Supermajority Voting. In response to feedback from shareholders, Nasdaq eliminated supermajority voting requirements from its governance documents.
Majority Voting in Director Elections. In response to feedback from shareholders, Nasdaq amended its governance documents to provide that, in an uncontested election of directors, director nominees are elected by a majority of the votes cast. Moreover, our Corporate Governance Guidelines require that, in an uncontested election, an incumbent director must submit an irrevocable resignation as a condition to his or her nomination for election. If an incumbent director fails to receive the requisite number of votes in an uncontested election, the irrevocable resignation becomes effective and the resignation will be considered by the Nominating & ESG Committee, which will recommend to the full Board whether or not to accept the resignation.
Annual Elections of Directors. All of Nasdaq’s directors are elected annually by our shareholders.
Director Nominations. Nasdaq’s By-Laws permit shareholders to nominate persons for election to the Board or propose other business to be considered at an annual or special meeting called by the Board.
Independent Board Leadership. Nasdaq has separated the roles of Chairman of the Board and President and CEO. The Chairman of the Board is an independent director, as are all of the Chairs of the Board Committees.
No “Poison Pill.” We do not have a “poison pill,” which is a defensive tactic used by a corporation’s board of directors against a takeover. Such plans are generally viewed negatively by shareholder rights advocates.
Annual Advisory Vote to Approve Executive Compensation. On an annual basis, shareholders have the opportunity to provide feedback on the compensation of our NEOs through an advisory vote.
Advance Notice Provisions. Nasdaq’s By-Laws establish an advance notice procedure for director nominations or other proposals that are not submitted for inclusion in the Proxy Statement, but that a shareholder instead wishes to present directly at an Annual Meeting.
Nasdaq has consistently demonstrated that when it believes a particular action requested by a shareholder is in the best interests of all shareholders, the Board will support that action. Many of the practices described above were adopted in response to shareholder feedback.
Nasdaq believes that its corporate governance practices and policies enable shareholders to act in support of their interests while avoiding the risks associated with a lower threshold to call a special meeting.
Summary
The Company is proud of its consistent engagement with, and responsiveness to, its shareholders, as shown by its adoption of corporate governance policies that seek to serve the interests of all of our shareholders. Nasdaq’s existing 15% threshold to call a special shareholder meeting is strongly supportive of shareholder rights and is lower than the threshold at most S&P 500 companies. Accordingly, the adoption of the proposal to lower such percentage is unnecessary, inappropriate and not in the best interests of Nasdaq and its shareholders.
Other Business
The Nasdaq Board knows of no business other than the matters described in this Proxy Statement that will be presented at the Annual Meeting. To the extent that matters not known at this time may properly come before the Annual Meeting, absent instructions thereon to the contrary, the enclosed proxy will confer discretionary authority with respect to such other matters and it is the intention of the persons named in the proxy to vote in accordance with their judgment on such other matters.
Security Ownership of Certain Beneficial Owners and Management
The following table and accompanying footnotes show information regarding the beneficial ownership of our common stock as of the record date by:
• each person who is known by us to own beneficially more than 5% of our common stock;
• each current director and nominee for director;
• each NEO; and
• all directors and executive officers as a group.
Except as otherwise indicated, we believe that the beneficial owners listed below, based on information furnished by such owners, will have sole investment and voting power with respect to such shares, subject to community property laws where applicable. All vested options, vested shares of restricted stock and vested shares underlying PSUs referred to in the table were granted under the Equity Plan. Shares of common stock underlying options that are currently exercisable, or shares of restricted stock units that will vest within 60 days of the record date, are considered outstanding and beneficially owned by the person holding the options or restricted stock units for the purposes of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Holders of RSUs and PSUs granted under the Equity Plan have the right to direct the voting of the shares underlying those RSUs and PSUs only to the extent the shares are vested.
As of the record date, 164,677,774 shares of common stock were outstanding. Except as noted below, each shareholder is entitled to the number of votes equal to the number of shares of common stock held by such shareholder, subject to the 5% voting limitation contained in our Amended and Restated Certificate of Incorporation that generally prohibits a shareholder from voting in excess of 5% of the total voting power of Nasdaq.
| | | | | | Name of Beneficial Owner | | Common Stock
Beneficially
Owned | | Percent
of Class | | | | Borse Dubai Limited1 | | | | | | | | Level 7, Precinct Building 5, Gate District | | 29,780,515 | | 18.1% | DIFC, Dubai UAE | | | | | | | | | Investor AB2 | | | | | Innax AB, Arsenalsgatan 8C, S-103 32 | | 19,394,142 | | 11.8% | Stockholm, Sweden V7 | | | | | | | | | The Vanguard Group, Inc.3 | | 12,629,907 | | 7.7% | 100 Vanguard Blvd. Malvern, PA 19355 | | | | | | | | | Massachusetts Financial Services Company4 | | 11,150,926 | | 6.8% | 111 Huntington Avenue, Boston, MA 02199 | | | | | | | | | Capital World Investors5 | | | | | 333 South Hope Street, 55th Fl | | 9,272,130 | | 5.6% | Los Angeles, CA 90071 | | | | | | | | | BlackRock, Inc.6 | | 8,546,784 | | 5.2% | 55 East 52nd Street, New York, NY 10055 | | | | | | | | | Melissa M. Arnoldi7 | | 10,568 | | * | | | | | Charlene T. Begley8 | | 10,461 | | * | | | | | Steven D. Black9 | | 44,383 | | * | | | | | Adena T. Friedman10 | | 744,178 | | * | | | | | Essa Kazim11 | | 41,038 | | * | | | | | Thomas A. Kloet12 | | 24,903 | | * | | | | | John D. Rainey13 | | 14,890 | | * | | | | | Michael R. Splinter14 | | 65,871 | | * | | | | | Toni Townes-Whitley15 | | 951 | | * | | | | | Jacob Wallenberg16 | | 9,196 | | * | | | | | Alfred W. Zollar17 | | 8,591 | | * | | | | | Ann M. Dennison18 | | 12,689 | | * | | | | | Lauren B. Dillard19 | | 44,633 | | * | | | | | P.C. Nelson Griggs20 | | 28,955 | | * | | | | | Bradley J. Peterson21 | | 19,320 | | * | | | | | Michael Ptasznik22 | | 22,300 | | * | | | | All Directors and Executive Officers of Nasdaq as a Group (23 Persons) | | 1,119,855 | | * |
* Represents less than 1%.
| | | | | | | the Board. Our Board believes that our leadership structure creates an environment in which the Board can work effectively and communication flows openly and efficiently between management and the Board. | | | | | | A Robust Governance Framework Is In Place to Protect Shareholders | | | | | | | Our Board also believes that the robust governance framework in place provides the independent leadership and oversight sought by the proposal. The current governance frame-work supports the independent Board leadership structure necessary to oversee management, including the CEO. This framework includes: | | | | | • All of our Board members, except Ms. Friedman, are independent under applicable listing standards, and all directors are elected annually by shareholders by majority voting. | | | | | • We have elected three new directors since 2019, all of whom are independent, have brought new and diverse perspectives and experiences, and have added to our Board’s mix of objectivity, skills, and varied expertise. We are a leader in board diversity; assuming that all of the director nominees are elected at the 2023 Annual Meeting, women will comprise 36% of our Board and 36% of our Board will be racially/ethnically diverse. | | | | | • Our Lead Independent Director has extensive expertise regarding our business and operations, and our Board, having previously served as Chair. The Board believes he is well-qualified to serve as our Lead Independent Director. | | | | | • At each of our Board meetings, our independent directors have the opportunity to meet in independent director-only executive sessions chaired by our Lead Independent Director without members of management present. Our independent directors use these executive sessions to discuss matters of concern as well as any matter they deem appropriate, including compensation of the Chair and CEO, succession planning, and Board effectiveness. | | | | | • Our Audit & Risk, Management Compensation, and Nominating & ESG Committees are fully independent and operate under a written charter approved by such Committee. The Committee charters are annually reviewed and, if necessary, revised to reflect new regulations, incorporate governance best practices, or reflect changing Company operations or processes. | | | | | • The Board, and each Board committee, are authorized to engage independent advisors and consultants on any matter. | | | | | • Our Board conducts a formal annual evaluation of the Chair and CEO in an executive session where Ms. Friedman is not present. | | | | | • Our Board has access to members of management, and if necessary, their reports, to discuss matters confidentially. | | | | | • We adopted a proxy access provision that allows a shareholder (or group of shareholders) that complies with certain customary requirements to nominate candidates for service on the Board and have those candidates included in Nasdaq’s proxy materials. | | | | | • Shareholders have resolutely endorsed our executive compensation policies and practices through our annual say on pay shareholder votes at our Annual Meetings, with 95.9% approval in 2022, 94.5% approval in 2021, and 96.9% approval in 2020. | | | | | For further information on Nasdaq’s robust governance framework, see the “Our Board” and “Governance” sections of this Proxy Statement. |
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| | | | | Nasdaq 2023 Proxy Statement | OTHER ITEMS | | | |
| | | | | | | Summary | | | | | The Board believes that a rigid policy, set forth in our governing documents, for the selection of the Board’s leadership structure is unnecessary and not in the best interests of the Company and our shareholders. | | | | | Moreover, the Board believes that the most appropriate Board leadership structure for Nasdaq at this time is to combine the roles of Chair and CEO and to have a separate Lead Independent Director. | | | | | The Board believes that our strong corporate governance policies and practices, including the clear and significant role of our Lead Independent Director, empower our independent directors to effectively oversee Nasdaq’s management and provide an effective and appropriately balanced Board governance structure, which benefits both Nasdaq and our shareholders. |
| | | | | Nasdaq 2023 Proxy Statement | OTHER ITEMS | | | |
| | | | | Other Business | | | | | The Nasdaq Board knows of no business other than the matters described in this Proxy Statement that will be presented at the Annual Meeting. To the extent that matters not known at this time may properly come before the Annual Meeting, absent instructions thereon to the contrary, the enclosed proxy will confer discretionary authority with respect to such other matters and it is the intention of the persons named in the proxy to vote in accordance with their judgment on such other matters. | | | | | | Security Ownership of Certain Beneficial Owners and Management | | | | | The following table and accompanying footnotes show information regarding the beneficial ownership of our common stock as of the record date by: | | | | | • each person who is known by us to own beneficially more than 5% of our common stock; | | | | | • each current director and nominee for director; | | | | | • each NEO; and | | | | | • all directors and executive officers as a group. | | | | | Except as otherwise indicated, we believe that the beneficial owners listed below, based on information furnished by such owners, will have sole investment and voting power with respect to such shares, subject to community property laws where applicable. All vested options, vested shares of underling RSUs, and vested shares underlying PSUs referred to in the table were granted under the Equity Plan. Shares of common stock underlying options that are currently exercisable, or shares of RSUs that will vest within 60 days of the record date, are considered outstanding and beneficially owned by the person holding the options or RSUs for the purposes of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Holders of RSUs and PSUs granted under the Equity Plan have the right to direct the voting of the shares underlying those RSUs and PSUs only to the extent the shares are vested. | | | | | As of the record date, 490,765,926 shares of common stock were outstanding. Except as noted below, each shareholder is entitled to the number of votes equal to the number of shares of common stock held by such shareholder, subject to the 5% voting limitation contained in our Amended and Restated Certificate of Incorporation that generally prohibits a shareholder from voting in excess of 5% of the total voting power of Nasdaq. |
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| | | | | | | | | Name of Beneficial Owner | | Common Stock Beneficially Owned | | Percent of Class | | | | Borse Dubai Limited1 Level 7, Precinct Building 5, Gate District DIFC, Dubai UAE | | 89,341,545 | | 18.2% | | | | Investor AB2 Innax AB, Arsenalsgatan 8C, SE-103 32 Stockholm, Sweden | | 58,182,426 | | 11.9% | | | | The Vanguard Group, Inc.3 100 Vanguard Blvd. Malvern, PA 19355 | | 42,696,652 | | 8.7% | | | | Massachusetts Financial Services Company4 111 Huntington Avenue Boston, MA 02199 | | 34,141,493 | | 7.0% | | | | BlackRock, Inc.5 55 East 52nd Street New York, NY 10055 | | 26,673,504 | | 5.4% | | | | Melissa M. Arnoldi6 | | 37,071 | | * | | | | Charlene T. Begley7 | | 36,459 | | * | | | | Steven D. Black8 | | 140,469 | | * | | | | Adena T. Friedman9 | | 2,482,376 | | * | | | | Essa Kazim10 | | 129,099 | | * | | | | Thomas A. Kloet11 | | 82,029 | | * | | | | Michael R. Splinter12 | | 207,765 | | * | | | | Johan Torgeby13 | | 3,857 | | * | | | | Toni Townes-Whitley14 | | 7,929 | | * | | | | Jeffery W. Yabuki15 | | 75 | | * | | | | Alfred W. Zollar16 | | 32,799 | | * | | | | Tal Cohen | | 64,600 | | * | | | | Ann M. Dennison | | 51,451 | | * | | | | P.C. Nelson Griggs | | 121,207 | | * | | | | Bradley J. Peterson | | 87,918 | | * | | | | All Directors and Executive Officers of Nasdaq as a Group (20 Persons)17 | | 3,674,745 | | * |
| | | | | * Represents less than 1%. | | | | | 1. As of the record date, based solely on information included in an amendment to Schedule 13D, filed March 27, 2012, Borse Dubai had shared voting and dispositive power over 29,780,51589,341,545 shares. Borse Dubai is a majority-owned subsidiary of Investment Corporation of Dubai and therefore, each of Borse Dubai and Investment Corporation of Dubai may be deemed to be the beneficial owner of the 29,780,51589,341,545 shares held by Borse Dubai. Borse Dubai and Nasdaq have entered into an agreement that limits Borse Dubai’s voting power to 4.35% of Nasdaq’s total outstanding shares. All of the shares held by Borse Dubai are pledged as security for outstanding indebtedness. |
2 | | | | 2. As of the record date, based solely on information included in an amendment to Schedule 13D, filed April 24, 2020,December 16, 2022, Innax AB had sole voting and dispositive power over 19,394,14258,182,426 shares. Innax AB is 100% owned and controlled by Investor AB and therefore, each of Innax AB and Investor AB may be deemed to be the beneficial owner of the 19,394,14258,182,426 shares held by Innax AB. |
3. | | | | 3. As of the record date, based solely on information included in a Schedule 13G/A, filed February 10, 2022,9, 2023, The Vanguard Group, Inc. indicated that it has beneficial ownership of 12,629,90742,696,652 shares, sole voting power with respect to 0 shares, shared voting power with respect to 183,645473,748 shares, sole dispositive power with respect to 12,159,75241,305,171 shares, and shared dispositive power with respect to 470,1551,391,481 shares. |
| | | | | Nasdaq 2023 Proxy Statement | OTHER ITEMS | | | |
| | | | | 4. As of the record date, based solely on information included in a Schedule 13G/A, filed February 2, 2022,8, 2023, Massachusetts Financial Services Company indicated that it has beneficial ownership of and34,141,493 shares, sole voting power with respect to 31,853,798 shares, shared voting power with respect to 0 shares, sole dispositive power with respect to 11,150,92634,141,493 shares, and sole voting power with respect to 10,463,872 shares. |
5. | As of the record date, based solely on information included in a Schedule 13G/A, filed February 11, 2022, Capital World Investors indicated that it has beneficial ownership of and sole voting andshared dispositive power with respect to 9,272,1300 shares.
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6. | | | | 5. As of the record date, based solely on information included in a Schedule 13G, filed February 4, 2022,3, 2023, BlackRock, Inc. indicated that it has beneficial ownership of and26,673,504 shares, sole voting power with respect to 23,871,430 shares, shared voting power with respect to 0 shares, sole dispositive power with respect to 8,546,78426,673,504 shares, and sole votingshared dispositive power with respect to 7,377,6510 shares. The Schedule 13G includes shares beneficially held by the following subsidiaries of BlackRock, Inc.: BlackRock Life Limited; BlackRock International Limited; BlackRock Advisors, LLC; Aperio Group, LLC; BlackRock (Netherlands) B.V.; BlackRock Institutional Trust Company, National Association; BlackRock Asset Management Ireland Limited; BlackRock Financial Management, Inc.; BlackRock Japan Co., Ltd.; BlackRock Asset Management Schweiz AG; BlackRock Investment Management, LLC; BlackRock Investment Management (UK) Limited; BlackRock Asset Management Canada Limited; BlackRock (Luxembourg) S.A.; BlackRock Investment Management (Australia) Limited; BlackRock Advisors (UK) Limited; BlackRock Fund Advisors; BlackRock Asset Management North Asia Limited; BlackRock (Singapore) Limited; and BlackRock Fund Managers Ltd. |
7. | | | | Represents 8,584 vested shares of restricted stock and 1,984 shares of restricted stock6. Includes 5,367 RSUs vesting within 60 days.
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8. | | | | Represents 8,987 vested shares of restricted stock and 1,474 shares of restricted stock7. Includes 5,076 RSUs vesting within 60 days.
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9. | | | | Represents 42,258 vested shares of restricted stock and 2,125 shares of restricted stock8. Includes 7,320 RSUs vesting within 60 days.
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10. | | | | Represents (i) 268,8179. Includes 806,451 vested options (ii) 84,827 vested shares of restricted stock, (iii) 307,083 vested shares underlying PSUs and (iv) 34,451 shares granted under the Equity Plan or purchased pursuant to the ESPP when Ms. Friedman was previously an employee of Nas-daq prior to returning as President in 2014. Also includes an aggregate of 49,000147,000 shares indirectly held by Ms. Friedman, which shares were gifted for estate planning purposes to two separate family trusts for the benefit of her children, of which trusts Ms. Friedman’s spouse is the trustee and Ms. Friedman’s brother is the investment advisor.
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11. | | | | Represents 39,111 vested shares of restricted stock and 1,927 shares of restricted stock10. Includes 6,636 RSUs vesting within 60 days. Excludes shares of Nasdaq common stock owned by Borse Dubai. H.E. Kazim, who is Chairman of Borse Dubai, disclaims beneficial ownership of such shares.
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12. | | | | Represents (i) 20,778 vested shares of restricted stock and 2,125 shares of restricted stock11. Includes 7,320 RSUs vesting within 60 daysdays. Also includes an aggregate of 68,709 shares indirectly held by Mr. Kloet, which shares were gifted to a family trust, of which trust Mr. Kloet is trustee and (ii) 2,000beneficiary.
| | | | | 12. Includes 10,152 RSUs vesting within 60 days. Also includes an aggregate of 4,074 shares acquired through open market purchases.indirectly held by Mr. Splinter, which shares were gifted to family trusts, of which trusts Mr. Splinter is a trustee. |
13. | | | | Represents 12,765 vested13. Includes 3,857 RSUs vesting within 60 days.
| | | | | 14. Includes 5,076 RSUs vesting within 60 days. | | | | | 15. Includes 60 shares indirectly held by Mr. Yabuki in a revocable family trust in which he is the trustee, and 15 shares held by the Yabuki Family Foundation. Mr. Yabuki is a trustee of restricted stockthe Yabuki Family Foundation. As a trustee, Mr. Yabuki has voting and 2,125investment power over the shares of restricted stockheld by the foundation. These shares are, accordingly, included in his reported beneficial ownership. | | | | | 16. Includes 7,026 RSUs vesting within 60 days. | | | | | 17. Includes 57,830 RSUs vesting within 60 days. |
14. | Represents 62,923 vested shares
| | | | Delinquent Section 16(a) Reports | | | | | Section 16(a) of restricted stockthe Exchange Act requires our directors and 2,948 sharesexecutive officers and persons who own more than 10% of restricted stock vesting within 60 days.a registered class of our equity securities, to file reports of ownership on Form 3 and changes in ownership on Form 4 or Form 5 with the SEC. Such executive officers, directors, and shareholders also are required by SEC rules to furnish us with copies of all Section 16(a) forms that they file. | | | | | We believe that during fiscal year 2022 all of our directors and executive officers complied with these requirements with the following exception: a filing by Mr. Oliver Albers on Form 3 was filed one day late due to a ministerial error. |
15. | Represents 951 shares of restricted stock vesting within 60 days.
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16. | Represents 7,241 vested shares of restricted stock and 1,955 shares of restricted stock vesting within 60 days. Excludes shares of Nasdaq common stock held by Investor AB. Mr. Wallenberg, who is Chairman of Investor AB, disclaims beneficial ownership of such shares.
2023 Proxy Statement | OTHER ITEMS |
17. | Represents 6,551 vested shares of restricted stock and 2,040 shares of restricted stock vesting within 60 days.
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18. | Represents (i) 371 vested shares of restricted stock, (ii) 11,268 vested shares underlying PSUs and (iii) 1,050 shares purchased pursuant to the ESPP.
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19. | Represents (i) 13,519 vested shares of restricted stock, (ii) 30,436 vested shares underlying PSUs and (iii) 678 shares purchased pursuant to the ESPP. Reflects holdings on April 8, 2022, the date of Ms. Dillard’s resignation.
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20. | Represents (i) 565 vested shares of restricted stock and (ii) 28,390 vested shares underlying PSUs.
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21. | Represents (i) 5,891 vested shares of restricted stock, (ii) 12,241 vested shares underlying PSUs and (iii) 1,188 shares purchased pursuant to the ESPP.
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22. | Reflects holdings as of April 8, 2022. Mr. Ptasznik retired from Nasdaq on February 28, 2021.
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Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors and executive officers and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with the SEC. Such executive officers, directors and shareholders also are required by SEC rules to furnish us with copies of all Section 16(a) forms that they file.
We believe that during fiscal year 2021 all of our directors and executive officers complied with these requirements with the following exceptions: due to ministerial errors, (i) a filing by Ms. Michelle L. Daly on Form 4 regarding an award of restricted stock units was filed one day late and (ii) a filing by Mr. Jeremy Skule on Form 4 regarding the sale of shares was filed one day late.
| | | | | | | | | | | | Nasdaq’s Employee Networks | | ¡Adelante Nasdaq! Employee
Networks¡Adelante Nasdaq! is our global employee network dedicated to employees who have an interest in Hispanic/Latino culture and heritage.
Asian Professionals at Nasdaq (APAN) APAN is a platform to support and empower our community of members through professional development and social engagements. | | | Nasdaq’s employee-led affinity networks enable employees to support each other and come together on shared topics and interests. Our Employee Networks celebrate our diversity and provide a sense of inclusion and belonging. The networks aim to empower success of employees with initiatives that promote professional advancement; provide networking opportunities; and build mentorship, advocacy, and community outreach efforts. Our employee networks are supported by the executive leadership, team and each employee network has an executive sponsor. These employee networks include more than 2,400 employee members, representing 37% of our employees and contractors. | | | | ¡Adelante Nasdaq!
Global Green Team Global Green Team brings together Nasdaq employees who are passionate about sustainability and making a positive impact on the environment and planet. ¡Adelante Nasdaq! is our global employee networkGlobal Link of Black Employees (GLOBE)
dedicated to employees who have an interest in Hispanic/
Latino culture and heritage.
Asian Professionals at Nasdaq (APAN)
APAN isGLOBE provides a platform for professionalconnection and social activitiescollaboration for
employees thatwho have an affinity for or interest in Asian culture. Global Green Team
Global Green Team brings together Nasdaq employees
who are passionate about sustainability and making a
positive impact on the environment and planet.
Global Link of Black Employees (GLOBE)
GLOBE provides a platform for connection and
collaboration for employees that have an affinity or
interest in Black, African, African American, and West
Indian culture at Nasdaq. Nasdaq Accessibility Network Nasdaq Accessibility Network is for Nasdaq employees with who have disabilities themselves, who have disabilities in their families, and supporters.or who have an interest in accessibility topics.
Nasdaq Administrative Professionals Network This network enables administrative professionals across all geographies and demographics to collaborate with each other on shared topics, best practices, and interests. The Out Proud Employees of Nasdaq (The OPEN) The OPEN represents the LGBTQ+ employees, their families, and allies. Parents and Caregivers This network, which is for Nasdaq employees who identify themselves as parents or caregivers, aims to foster a workplace where employees feel confident that they can have a rewarding career while being fully committed to their family. Software Engineer Employee Network (SEEN) This network is for Nasdaq colleagues who are enthusiastic about Software Engineering.software engineering. The group seeks to bring like-minded individuals together by fostering a sense of community for software professionals in a fast- pacedfast-paced technology environment.
Veterans@Nasdaq This network brings together those employees who have served or are currently serving in the military, military families, and their supporters. Women in Nasdaq (WIN) WIN brings women and their allies at Nasdaq together and provides community, growth, and learning opportunities, and networking, and visibility that supports support the advancement of women at Nasdaq personally and professionally. |
| | Nasdaq 2023 Proxy Statement | OTHER ITEMS |
Executive Officers
Nasdaq’s executive officers, as of April 28, 2022, are listed below.
| | | | | 
| | Adena T. Friedman
Age: 52
Title: President and CEO
| | Ms. Friedman was appointed President and CEO and elected to the Board effective January 1, 2017. Previously, Ms. Friedman served as President and Chief Operating Officer from December 2015 to December 2016 and President from June 2014 to December 2015. Ms. Friedman served as CFO and Managing Director at The Carlyle Group, a global alternative asset manager, from March 2011 to June 2014. Prior to joining Carlyle, Ms. Friedman was a key member of Nasdaq’s management team for over a decade including as head of data products, head of corporate strategy and CFO.
Executive Officers | | | 
| | Nasdaq’s executive officers, as of April 28, 2023, are listed below. | | |  | | Oliver Albers
Age: 43
Title: EVP, Investment Intelligence
| | Mr. Albers was appointed EVP, Investment Intelligence, in April 2022. Prior to that, Mr. Albers served as SVP and Head of Data for Investment Intelligence from January 2020 through April 2022, and was previously SVP and Head of Sales from 2018 through January 2020. He has served at Nasdaq since 2000 in various leadership roles across research, product development, sales, and operations.
Adena T. Friedman | | | 
| | Roland Chai
Age: 49 Title: EVP, Market Infrastructure Technology
Executive Sponsor: Asian Professionals at Nasdaq (APAN)
| | Mr. Chai has served as EVP since April 2022 and leads our Market Infrastructure Technology business, which comprises purpose-built products to meet the technology needs of marketplace infrastructure clients. Prior to that, Mr. Chai served as Nasdaq’s Chief Risk Officer since June 2020. Before joining Nasdaq, Mr. Chai served in various senior roles at Hong Kong Exchange since June 2017, most recently as Head of Post-Trade and Group Risk Officer. Prior to joining Hong Kong Exchange, Mr. Chai served as Head of Equities at LCH.Clearnet since 2009.
53 | | | Title: Chair and CEO | 
| | Tal Cohen
Age: 49
Title: EVP, North American Markets
Employee Network Executive Sponsor: Asian Professionals at Nasdaq (APAN)
For Ms. Friedman’s biography, see “Our Board - Proposal 1: Election of Directors.” | | |  | | Brendan Brothers | | | Age: 44 | | | Title: Interim Head of Anti-Financial Crime | | | Brendan Brothers was appointed Interim Head of Anti-Financial Crime in January 2023. As co-founder of Verafin, a Nasdaq subsidiary acquired in February 2021, Mr. Brothers was the Head of Strategy from February 2021 to January 2023. Prior to the acquisition, Mr. Brothers held various senior positions at Verafin from 2003 through February 2021. | | |  | | Tal Cohen | | | Age: 50 | | | Title: President | | | Tal Cohen was appointed President of Nasdaq effective April 18, 2023. Mr. Cohen hascontinues to serve as Division President, Market Platforms, a role he assumed January 1, 2023. Previously, he served as EVP, North American Markets sincefrom July 2019.2019 through December 2022. Mr. Cohen joined Nasdaq in April 2016 as the SVP of North American Market Services. Prior to that, he was SVP, North American Market Services since April 2016. He joined Nasdaq following the acquisition of Chi-X Canada. Previously, Mr. Cohen was the CEO of Chi-X Global Holdings, LLC, a global operator of trading venues, for six years.from 2010 to 2016. Prior to Chi-X, he held senior positions at Instinet, American Express, and Arthur Andersen. |
| | | 
 | | Michelle L. Daly | | | Age: 4647 | | | Title: SVP and Controller and Principal Accounting Officer | | | Ms.
Michelle L. Daly has served as SVP and Controller and Principal Accounting Officer since May 2021. Prior to joining Nasdaq, Ms. Daly was Managing Director and Deputy Controller at BlackRock from April 2018 through April 2021. Previously, Ms. Daly held various senior leadership positions at Goldman Sachs from 2008 through 2018, including as head of SEC reporting, and in the corporate treasury department. Prior to joining Goldman Sachs in 2008, Ms. Daly served in the audit practice at Ernst & Young LLP. |
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| | Nasdaq 2023 Proxy Statement | OTHER ITEMS |
| | |  | | Ann M. Dennison Age: 51
Title: EVP and CFO
Employee Network Executive Sponsor: Women in Nasdaq (WIN)
| | | Ms.
Age: 52 | | Title: EVP and CFO | | Employee Network Executive Sponsor: Women in Nasdaq (WIN) | | Ann M. Dennison has served as EVP and CFO since March 2021. Prior to that, she was SVP, Controller and Principal Accounting Officer since April 2016. Prior to joining Nasdaq, Ms. Dennison was employed by Goldman Sachs for 19 years, where she was Managing Director. Ms. Dennison joined Goldman Sachs from Price Waterhouse. PriceWaterhouse. | | | 
 | | P.C. Nelson Griggs | | Age: 51 52 | | Title: EVP, Corporate Platforms President | | Employee Network Executive Sponsor: The Out Proud Employees of Nasdaq (The OPEN) | | | P.C. Nelson Griggs was appointed President of Nasdaq effective April 18, 2023. Mr. Griggs hascontinues to serve as Division President, Capital Access Platforms, a role he assumed January 1, 2023. Prior to that, he served as EVP, Corporate Platforms sincefrom April 2018.2018 through December 2022. Mr. Griggs is also President of The Nasdaq Stock Market. Previously, Mr. Griggs was EVP, Listing Services from October 2014 through April 2018 and SVP, New Listings from July 2012 through October 2014. Since joining Nasdaq in 2001, Mr. Griggs has served in a myriad of other roles including SVP, Listings Asia Sales and VP, Listings. Prior to joining Nasdaq, Mr. Griggs worked at Fidelity Investments and a San Francisco basedFrancisco-based startup company. |
| | | 
 | | Jamie King
Age: 48
Title: EVP, Anti-Financial Crime Technology
Bradley J. Peterson | | | Jamie King has served as EVP since April 2022 and leads our Anti-Financial Crime Technology business. Mr. King is the President and CEO of Verafin, which Nasdaq acquired in February 2021. Mr. King co-founded Verafin, a provider of anti-financial crime management solutions used by thousands of banks and other financial institutions.
Age: 63 | | | 
| | Bradley J. Peterson
Age: 62
Title: EVP and CIO/CTO | | Employee Network Executive Sponsor: Software Engineer Employee Network (SEEN); Women in Nasdaq (WIN) | | | Mr.Bradley J. Peterson has served as EVP and CIO/CTO since February 2013. Previously, Mr. Peterson served as EVP and CIO at Charles Schwab, Inc. from May 2008 to February 2013. Mr. Peterson was CIO at eBay from April 2003 through May 2008. From July 2001 through March 2003, Mr. Peterson was the Managing Director and Chief Operating Officer at Epoch Securities after its merger with Goldman Sachs Group, Inc. He also has held senior executive positions at Epoch Partners, Inc., Charles Schwab & Company, and Pacific Bell Wireless (now part of AT&T). |
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| Bjørn SibbernNasdaq 2023 Proxy Statement | OTHER ITEMS
|
Age: 48
Title: EVP, Nasdaq Europe
Employee Network Executive Sponsor: Parents and Caregivers
| | Mr. Sibbern has served as EVP, Nasdaq Europe since June 2019. He also is President of Nasdaq Nordic Ltd. Previously, Mr. Sibbern served as EVP, Investment Intelligence from October 2016 to May 2019, SVP, Nasdaq Global Commodities from February 2013 to October 2016 and SVP, Nasdaq Nordic Equities & Equities Derivatives from 2009 to February 2013. Mr. Sibbern also served as President of the Nasdaq Copenhagen Stock Exchange from 2008 to 2016. |
| | | 
 | | Jeremy Skule | | Age: 4849 | | Title: EVP and Chief Strategy Officer Employee Network Executive Sponsor: Global Green Team; Veterans@Nasdaq
| | | Mr.
Employee Network Executive Sponsor: Global Green Team; Veterans@Nasdaq | | Jeremy Skule has served as EVP and Chief Strategy Officer since January 2021. Previously, Mr. Skule was EVP and Chief Marketing Officer since April 2018, after previously serving as SVP and Chief Marketing Officer since 2012. Mr. Skule joined Nasdaq in 2012 from UBS, where he led Marketing and Communications for the Wealth Management business. Prior to UBS, Mr. Skule was the Chief Communications Officer at MF Global. Previously, he led the financial services practice at FleishmanHillard, a division of Omnicom Group, one of the largest global public relations and marketing agencies. Mr. Skule’s career has spanned senior communications positions and marketing leadership roles in Washington, DC and New York. | 
 | | Bryan E. Smith | | Age: 4950 | | Title: EVP and Chief People Officer Employee Network Executive Sponsor: ¡Adelante Nasdaq!
| | | Mr.
Employee Network Executive Sponsor: ¡Adelante Nasdaq! | | Bryan E. Smith has served as EVP and Chief People Officer since January 2020, after previously serving as SVP and Chief People Officer since 2012. Prior to joining Nasdaq in 2012, he was a founding partner with Meridian Compensation Partners LLC, an independent executive compensation advisory firm, where he provided advice to boards of directors and senior management teams on the full range of executive and board compensation issues. Prior to Meridian Compensation Partners, Mr. Smith was a Principal at Hewitt Associates LLC (now Aon Hewitt), a global human resource consulting and outsourcing firm, where he held various senior HRhuman resources outsourcing and consulting roles. | 
 | | John A. Zecca | | Age: 5455 | | Title: EVP and Chief Legal, Risk and Regulatory Officer | | Employee Network Executive Sponsor: Parents and Caregivers | | | Mr.John A. Zecca has served as EVP and Chief Legal and Regulatory Officer since October 2019. In April 2022, Mr. Zecca also became the Chief Risk Officer. Previously, Mr. Zecca was SVP, General Counsel North America, and Chief Regulatory Officer from April 2018 to September 2019, after serving as SVP, Senior Deputy General Counsel from July 2017 to April 2018. Mr. Zecca was SVP, MarketWatch, Nasdaq’s market surveillance group, from January 2010 to July 2017 and before that, he held a variety of other legal and regulatory roles at Nasdaq. Prior to joining Nasdaq in 2001, Mr. Zecca served as legal counsel to an SEC Commissioner and practiced corporate and securities law at both Hogan Lovells and Kaye Scholer. |
Certain Relationships and Related Transactions
The Audit & Risk Committee of the Board has adopted a written policy requiring notification, review, and approval of related person transactions. Every two years, the Audit & Risk Committee reviews and approves the policy on related person transactions.
Under the policy, all related person transactions are subject to ongoing review and approval or ratification by the Audit & Risk Committee. For purposes of the policy, a “related person” generally includes directors, director nominees, executive officers, greater than 5% shareholders, immediate family members of any of the foregoing and entities that are affiliated with any of the foregoing.
Under the policy, related person transactions that are conducted in the ordinary course of Nasdaq’s business and on substantially the same terms as those prevailing at the time for comparable services provided to unrelated third parties are considered pre-approved by the Audit & Risk Committee. The Transaction Review Committee (consisting of employees in Finance, Internal Audit, and the Legal, Risk and Regulatory Group) is responsible for determining if a transaction meets the pre-approval requirements. If the pre-approval requirements are not met, the transaction is referred to the Audit & Risk Committee for review and approval or ratification.
In determining whether to approve or ratify a related person transaction, the Audit & Risk Committee considers, among other things, the following factors:
whether the terms of the related person transaction are fair to Nasdaq and whether such terms would be on the same basis if the transaction did not involve a related person;
whether there are business reasons for Nasdaq to enter into the related person transaction;
whether the related person transaction would impair the independence of an outside director;
whether the related person transaction would present a conflict of interest for any director or executive officer of Nasdaq, taking into account:
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| | | | | Certain Relationships and Related Transactions | | | | | The Audit & Risk Committee of the Board has adopted a written policy requiring notification, review, and approval of related person transactions. On an annual basis, the Audit & Risk Committee reviews and approves the policy on related person transactions. Under the policy, all related person transactions are subject to ongoing review and approval or ratification by the Audit & Risk Committee. For purposes of the policy, a “related person” generally includes directors, director nominees, executive officers, greater than 5% shareholders, immediate family members of any of the foregoing, and entities that are affiliated with any of the foregoing. Under the policy, related person transactions that are conducted in the ordinary course of Nasdaq’s business and on substantially the same terms as those prevailing at the time for comparable services provided to unrelated third parties are considered pre-approved by the Audit & Risk Committee. The Transaction Review Committee (consisting of employees in Finance, Internal Audit, and the Legal, Risk and Regulatory Group) is responsible for determining if a transaction meets the pre-approval requirements. If the pre-approval requirements are not met, the transaction is referred to the Audit & Risk Committee for review and approval or ratification. In determining whether to approve or ratify a related person transaction, the Audit & Risk Committee considers, among other things, the following factors: • whether the terms of the related person transaction are fair to Nasdaq and whether such terms would be on the same basis if the transaction did not involve a related person; • whether there are business reasons for Nasdaq to enter into the related person transaction; • whether the related person transaction would impair the independence of an outside director; • whether the related person transaction would present a conflict of interest for any director or executive officer of Nasdaq, taking into account: »the size of the transaction; |
| - | »the overall financial position of the director or executive officer; |
| - | »the direct or indirect nature of the director’s or executive officer’s interest in the transaction; and |
| - | »the ongoing nature of any proposed relationship; |
whether the related person transaction is material, taking into account:
| - | • whether the related person transaction is material, taking into account: »the importance of the interest to the related person; |
| - | »the relationship of the related person to the transaction and of related persons to each other; |
| - | »the dollar amount involved; and |
| - | »the significance of the transaction to Nasdaq investors in light of all the circumstances; and • whether the related person transaction aligns with Nasdaq’s culture of integrity and potential reputational risk implications. |
whether the related person transaction aligns with Nasdaq’s culture of integrity and potential reputational risk implications.
The following section describes certain transactions since the beginning of the fiscal year ended December 31, 2021, in which Nasdaq or any of its subsidiaries was a party, the amount involved exceeded $120,000 and a related person may have had, or may have, a direct or indirect material interest. In addition to the transactions described below, certain of our directors or director nominees are officers or partners of companies or private equity firms which, directly or through their controlled portfolio companies, enter into commercial transactions with Nasdaq or its subsidiaries from time to time in the ordinary course of business. We do not believe that such directors or director nominees have a direct or indirect material interest in such transactions. In accordance with our policy, all such transactions, and the transactions discussed below, have been reviewed and approved or ratified by the Audit & Risk Committee of our Board or received pre-approval, as discussed above.
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Borse Dubai
As of the record date, Borse Dubai owned approximately 18.1% of Nasdaq’s common stock. Nasdaq is party to several commercial agreements with Borse Dubai and/or its affiliates that were negotiated on an arms-length basis and entered into in the ordinary course of business. Under these agreements, Borse Dubai or its affiliates paid Nasdaq approximately $2.7 million, primarily for market technology products and services, during the fiscal year ended December 31, 2021.
| The following section describes certain transactions since the beginning of the fiscal year ended December 31, 2022, in which Nasdaq or any of its subsidiaries was a party, the amount involved exceeded $120,000, and a related person may have had, or may have, a direct or indirect material interest. In addition to the transactions described below, certain of our directors or director nominees are officers or partners of companies or private equity firms which, directly or through their controlled portfolio companies, enter into commercial transactions with Nasdaq or its subsidiaries from time to time in the ordinary course of business. We do not believe that such directors or director nominees have a direct or indirect material interest in such transactions. In accordance with our policy, all such transactions, and the transactions discussed below, have been reviewed and approved or ratified by the Audit & Risk Committee of our Board or received pre-approval, as discussed above. | Borse Dubai | | As of the record date, Borse Dubai owned approximately 18.2% of Nasdaq’s common stock. Nasdaq is party to several commercial agreements with Borse Dubai and/or its affiliates that were negotiated on an arms-length basis and entered into in the ordinary course of business. Under these agreements, Borse Dubai or its affiliates paid Nasdaq approximately $0.9 million in 2022, primarily for marketplace technology and surveillance products and services. | Skandinaviska Enskilda Banken AB | | Mr. Johan Torgeby, the President and CEO of Skandinaviska Enskilda Banken AB (SEB), a Nordic financial services group listed on Nasdaq Stockholm that offers banking services in Sweden and the Baltic countries, is a member of our Board and is the Board designee of Investor AB, which owned approximately 11.9% of our common stock as of the record date. Mr. Torgeby joined the Board in July 2022 and became Investor AB’s Board designee in December 2022 in connection with an amendment to our stockholders’ agreement with Investor AB executed in December 2022. Nasdaq has from time to time entered into various transactions with SEB in the ordinary course of business. SEB paid Nasdaq approximately $11.5 million in 2022 for various products and services, primarily related to trading fees and market data, and Nasdaq paid SEB approximately $1.5 million in 2022, which amount includes expenses for treasury services, including related to SEB acting as a passive manager for Nasdaq’s bond offering in March 2022, and services related to the administration of Nasdaq’s employee pension program in Europe. SEB is also one of several lenders for certain of Nasdaq’s credit facilities, with such loans made in the ordinary course and on substantially the same terms as those for comparable loans. As of April 28, 2023, Nasdaq had no amounts outstanding under such facilities. |
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Questions and Answers About Our Annual Meeting
1. | | | | | Annual Meeting FAQs | | | | | 1. What is included in the proxy materials? What is a proxy statement and what is a proxy? What is the Notice of Internet Availability? | |
| The proxy materials for our 20222023 Annual Meeting of Shareholders include the notice of annual meeting, this Proxy Statement (including the Meeting Notice) and the Form 10-K. If you received a paper copy of these materials, the proxy materials also include a proxy card or voting instruction form. | |
| A proxy statement is a document that SEC regulations require us to give you when we ask you to sign a proxy designating individuals to vote on your behalf. A proxy involves your legal designation of another person to vote the stock you own. That other person is called a proxy. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card. We have designated two of our officers as proxies for the 20222023 Annual Meeting of Shareholders. These two officers are John A. Zecca and Erika Moore. The form of proxy and this Proxy Statement have been approved by the Board and are being provided to shareholders by its authority. | |
| Shareholders who have not requested “full set delivery” of the proxy materials will receive a Notice of Internet Availability of Proxy Materials. The Notice of Internet Availability contains instructions for accessing and reviewing our proxy materials and submitting a proxy over the internet. Our proxy materials were made available at www.proxyvote.com on the date that we first mailed or delivered the Notice of Internet Availability. The Notice also will tell you how to request our proxy materials in printed form or by e-mail, at no charge. The Notice contains a 16-digit control number that you will need to submit a proxy to vote your shares. We encourage shareholders to access our Proxy Statementproxy materials electronically to reduce our impact on the environment. | |
2. | What different methods can I use to vote? | |
| You can vote by any of the following methods. | |
| By Internet. The Notice of Internet Availability of Proxy Materials contains the website address (www.proxyvote.com) for internet proxy submission. Internet proxy submission is available 24 hours a day until 11:59 p.m. (Eastern Time) on June 21, 2022.20, 2023. You must enter your 16-digit control number, which is printed in the lower right-hand corner of the Notice of Internet Availability, and you will be given the opportunity to confirm that your instructions have been properly recorded. | |
| By Phone. In the U.S. and Canada, you can vote your shares by calling +1 800 690 6903. Telephone proxy submission is available 24 hours a day until 11:59 p.m. (Eastern Time) on June 21, 2022.20, 2023. When you submit a proxy by telephone, you will be required to enter your 16-digit control number. You will then receive easy-to-follow voice prompts allowing you to instruct the proxy holders how to vote your shares and to confirm that your instructions have been properly recorded. If you are located outside the U.S. or Canada, you should instruct the proxy holders how to vote your shares by internet or by mail. | |
| By Mail.If you choose to submit a proxy by mail after requesting and receiving printed proxy materials, simply complete, sign, and date your proxy card and return it in the postage-paid envelope provided. | |
| | Nasdaq 2023 Proxy Statement | OTHER ITEMS | |
| 3. Why is the Annual Meeting a virtual meeting? How do I attend? | |
| Our Annual Meeting of Shareholders is conducted virtually through a live webcast and online shareholder tools. This promotes shareholder attendance and participation, enabling shareholders to participate fully, and equally, from any location around the world, free of charge. Given our global footprint, we believe this is the right choice. The virtual format results in cost savings to the Company and shareholders and is designed to enhance shareholder access, participation, and communication. | |
| Shareholders as of the record date may attend the Annual Meeting by logging in at www.virtualshareholdermeeting.com/NDAQ2022NDAQ2023. To log in, shareholders (or their authorized representatives) will need the 16-digit control number provided on their proxy card, voting instruction form, or Notice of Internet Availability of Proxy Materials. If you are not a shareholder or do not have a 16-digit control number, you still may access the meeting as a guest, but you will not be able to participate. | |
| We encourage you to access the Annual Meeting before it begins. Online check-in will start shortly before the meeting on June 22, 2022.21, 2023. We will have technicians ready to assist you with any technical difficulties that you may have accessing our virtual Annual Meeting. If you encounter any problems accessing the virtual Annual Meeting during check-in or during the Annual Meeting, please call the technical support number that will be posted on our Annual Meeting platform log-in page, at www.virtualshareholdermeeting.com/NDAQ2022NDAQ2023. | |
| You do not need to access the Annual Meeting webcast to vote if you submitted your vote via proxy in advance of the meeting. An audio replay of the Annual Meeting, including the questions answered during the meeting, will be available on http://ir.nasdaq.com/investors/annual-meetingir.nasdaq.com until the 20232024 Annual Meeting of Shareholders. | |
4. | Can I ask questions at the Annual Meeting? | |
| The Annual Meeting will include a question and answer session that will include questions submitted in advance of, and questions submitted during, the meeting. You may submit a question in advance of the meeting at www.proxyvote.com. You may submit a question during the meeting through www.virtualshareholdermeeting.com/NDAQ2022NDAQ2023. In both cases, you must provide your 16-digit control number. | |
| As part of the Annual Meeting, we will hold a Q&A session, during which we intend to answer all questions submitted before or during the Annual Meeting in accordance with the Meeting Rules (which will be made available on the Annual Meeting website) and which are pertinent to the Company and the Annual Meeting matters, as time permits. We will limit each shareholder to one question in order to allow us to answer questions from as many shareholders as possible. Questions and answers will be grouped by topic and substantially similar questions will be grouped and answered once. Answers to questions that are not addressed during the Annual Meeting will be published following the meeting at ir.nasdaq.com. | |
| Questions regarding personal matters, includingor regarding general economic, political, or other views that are not directly related to the business of Nasdaq, are not pertinent to Annual Meeting matters and therefore will not be answered. | |
| We want to be sure that our shareholders are afforded the same rights and opportunities to participate as at an in-person meeting, so our Board and Committee Chairs, Lead Independent Director, members of the Executive Leadership TeamManagement Committee, and representatives of Ernst & Young LLP will join the virtual Annual Meeting and be available for questions. | |
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| 5. What is the difference between holding shares as a shareholder of record and as a beneficial owner? | |
| If your shares are registered directly in your name with our registrar and transfer agent, Computershare, you are considered a “shareholder of record” with respect to those shares. If your shares are held in a bank or brokerage account, you are considered the “beneficial owner” of those shares. | |
6. | What if I am a beneficial owner and do not give voting instructions to my broker? What is a broker non-vote? | |
| As a beneficial owner, in order to ensure your shares are voted in the way you would like, you must provide voting instructions to your bank, broker, or other nominee by the deadline provided in the materials you receive from your bank, broker, or other nominee. If you do not provide voting instructions to your bank, broker, or other nominee, whether your shares can be voted by such person depends on the type of item being considered for vote. | |
| Discretionary Items. The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm is a discretionary item. Banks, brokers, and other nominees that do not receive voting instructions from beneficial owners may vote on this proposal at their discretion. | |
| Non-Discretionary Items.All the other proposals in this Proxy Statement are non-discretionary items. Banks, brokers, and other nominees that do not receive voting instructions from beneficial owners may not vote on these proposals, resulting in a “broker non-vote.” | |
| If you hold your shares through a bank, broker, or other nominee, it is important that you cast your vote if you want it to count on all of the matters to be considered at the Annual Meeting. | |
7. | What proposals are to be voted on at the 20222023 Annual Meeting of Shareholders, and what are the voting standards? | |
| | | | | | | | | | | | | Proposal | | Nasdaq Board’s Recommendation | | Voting Standard | | Effect of Abstentions and Broker Non-Votes | | | | | | 1. | | Election of ten11 directors
(Non-Discretionary Item)
| | FOR EACH NOMINEE | | Majority of votes cast | | Not counted as votes cast and therefore have no effect | | | | | | 2. | | Advisory vote to approve the Company’s executive compensation
(Non-Discretionary Item)
| | FOR | | Majority of the votes present in person or represented by proxy and entitled to vote on the matter | | Abstentions have the effect of a vote against the proposal; broker non-votes have no effect | | | | | | 3. | | Advisory vote to approve the frequency of future advisory votes on the Company’s executive compensation
(Non-Discretionary Item) | | ONE YEAR | | The frequency (every one year, two years or three years) receiving the greatest number of votes will be considered the frequency recommended by shareholders | | Abstentions and broker non-votes have no effect | | | | | | 4. | | Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022 (Discretionary2023
(Discretionary Item)
| | FOR | | Majority of the votes present in person or represented by proxy and entitled to vote on the matter | | Abstentions have the effect of a vote against the proposal; there will not be broker non-votes |
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| | | | | | | | | | | | | 4. To approve an amendment to Nasdaq’s charter to increase the total number of authorized shares of common stock to effect a proposed 3-for-1 stock split
(Non-Discretionary Item)Proposal
| | FORNasdaq Board’s Recommendation | | Majority of the outstanding shares of common stockVoting Standard | | Effect of Abstentions have the effect of a vote against the proposal; broker non-votes have no effectand Broker Non-Votes | | | | | | 5. | | Shareholder proposal – Special Shareholder Meeting ImprovementIndependent Board Chairman (Non-Discretionary Item) | | AGAINST | | Majority of the votes present in person or represented by proxy and entitled to vote on the matter | | Abstentions have the effect of a vote against the proposal; broker non-votes have no effect |
| The proxy provides that each shareholder may vote his or her Nasdaq shares “For,” “Against”“Against,” or “Abstain” on individual nominees and each of the other proposals.proposals, except on Proposal 3. Shareholders may vote to hold advisory votes every “One Year,” “Two Years,” or “Three Years” or may “Abstain” on Proposal 3. Whichever method you select to transmit your instructions, the proxy holders will vote your shares as provided by those instructions.If you provide a proxy without specific voting instructions, the proxy holders will vote your Nasdaq shares in accordance with the Board recommendations noted above. | |
| The votevotes to approve executive compensation isand on the frequency of future votes on executive compensation are advisory only and, therefore, the result of this votethese votes will not be binding on our Board or Management Compensation Committee. OurAccordingly, our Board and Management Compensation Committee will however, consider the outcome of this votethese votes when evaluating our executive compensation program in the future.future and when determining how often to hold future advisory votes on executive compensation. | |
| The shareholder proposal (Proposal 5) is precatory, meaning that it requests that the Board take a specific action, and therefore, the results of the vote on that proposal will not be binding on the Board. The Board will consider the outcome of the shareholder vote in considering next steps on this matter for the upcoming year. If the shareholder proposal is not properly presented by the proponent at the Annual Meeting, it will not be voted upon. | |
8. | What can I do if I change my mind after I vote my shares? | |
| You can change your vote by revoking your proxy at any time before it is exercised in one of two ways: submit a later dated proxy (including a proxy submitted through the internet at www.proxyvote.com, by telephone or by proxy card); or notify Nasdaq’s Corporate Secretary by email at corporatesecretary@nasdaq.com that you are revoking your proxy. | |
| If you are a beneficial owner of Nasdaq shares held by a bank, broker, or other nominee, you will need to contact the bank, broker, or other nominee to revoke your proxy. | |
9. | How many votes do I have? | |
| Each share of common stock has one vote, subject to the voting limitation in our Amended and Restated Certificate of Incorporation that generally prohibits a shareholder from voting in excess of 5% of the total voting power of Nasdaq. | |
10. | Are votes confidential? | |
| Proxies, ballots, and voting instruction forms are handled on a confidential basis to protect your voting privacy. This information will be disclosed only to those recording the vote, except if there is a proxy contest, if the shareholder authorizes disclosure, to defend legal claims, or as otherwise required by law. Comments written on your proxy, ballot, or voting instruction form are not confidential. | |
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| 11. What constitutes a quorum for the Annual Meeting? | |
| The presence of the holders of a majority (greater than 50%) of the votes entitled to be cast at the meeting constitutes a quorum. Presence may be in person or by proxy. Abstentions and broker non-votes are counted as present and entitled to vote at the meeting for purposes of determining a quorum. Virtual attendance at our Annual Meeting constitutes presence in person for purposes of a quorum at the meeting. | |
12. | Who counts and tabulates the votes? | |
| Broadridge Financial Solutions, Inc. counts and tabulates the votes and acts as the inspector of elections. | |
13. | When will the Company announce the voting results? | |
| Preliminary results will be announced at the meeting and, thereafter, final results will be reported in a current report on Form 8-K, which is expected to be filed with the SEC within four business days after the meeting and will be posted on http://ir.nasdaq.com. | |
14. | How are proxies solicited, and what is the cost? | |
| Soliciting a proxy is the outreach to obtain the authorization of shareholders to vote on their behalf at a shareholder meeting. We will pay the cost of soliciting proxies. Proxies may be solicited on our behalf by directors, officers, or employees (who will not receive any additional compensation for these solicitations), in person or bymail, telephone, electronic transmissionvideoconference, email, or facsimileother electronic transmission. Upon request, Nasdaq will reimburse banks, brokers, and other nominees for their reasonable expenses in sending proxy materials to their customers and obtaining their proxies. Nasdaq has engaged D.F. King & Co., Inc.Innisfree M&A Incorporated to assist in soliciting proxies at a fee of $9,500,$30,000, plus costs and expenses. | |
15. | What is “householding,” and how does it affect me? | |
| Nasdaq has adopted a practice approved by the SEC known as “householding” to reduce printing and postage fees for the meeting notice. “Householding” means that shareholders who share the same last name and address will receive only one copy of the proxy materials unless we receive instructions to the contrary from any shareholder at that address. We will promptly deliver a separate copy of the proxy materials to you if you contact us with your request via phone (+1 212 401 8737) or email (investor.relations@nasdaq.com). If you wish to receive separate copies of the proxy materials in the future, or if you are receiving multiple copies and would like to receive only one copy per household, you should contact your bank, broker, or other nominee, or you may contact us at the above telephone number or email address. | |
16. | Will you make a list of shareholders entitled to vote at the 20222023 Annual Meeting of Shareholders available? | |
| A list of record holders entitled to vote at the Annual Meeting will be available from June 8, 20227, 2023 through the Annual Meeting, between the hours of 9:00 a.m. and 5:00 p.m. (Eastern Time), at our principal executive offices (151 W. 42nd Street, New York, New York 10036). To make arrangements to view the list, please contact our Corporate Secretary by email at corporatesecretary@nasdaq.com. To access the list during the Annual Meeting, please visit www.virtualshareholdermeeting.com/ NDAQ2022NDAQ2023 and enter your 16-digit control number. | |
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| 17. How can I view or request copies of the Company’s SEC filings? | |
| The Form 10-K, our Quarterly Reports on Form 10-Q, our current reports on Form 8-K, and any amendments to those reports are available free of charge on the “Financials—SEC Filings” page of our Investor Relations website, which can be found at http://ir.nasdaq.com/financials/sec-filings. We will furnish, without charge, a copy of the Form 10-K, including the financial statements, to any shareholder upon request to the Nasdaq Investor Relations Department, Attention: Edward Ditmire,Ato Garrett, 151 W. 42nd Street, New York, New York 10036, in writing, or by email at investor.relations@nasdaq.com. | |
18. | How do I submit a proposal or director nomination for inclusion in the 20232024 Proxy Statement? | |
| Nasdaq shareholders who wish to submit proposals pursuant to Rule 14a-8 of the Exchange Act for inclusion in the Proxy Statement for Nasdaq’s 20232024 Annual Meeting must submit them on or before December 29, 202230, 2023 to the Corporate Secretary and must otherwise comply with the requirements of Rule 14a-8. | |
| Our By-Laws include a proxy access provision that permits a shareholder, or a group of shareholders, owning at least 3% of our outstanding shares of common stock continuously for at least three years, to nominate and include in the proxy materials for an Annual Meeting, director nominees constituting up to the greater of two individuals and 25% of the total number of directors then in office, provided that the shareholder(s) and nominee(s) satisfy the requirements specified in the By-Laws. Notice of director nominations submitted under these requirements must be received no earlier than November 29, 202230, 2023 and no later than December 29, 2022.30, 2023. | |
| In addition, Nasdaq shareholders may also recommend individuals for consideration by the Nominating & ESG Committee for nomination to the Nasdaq Board. Holders should submit such recommendations in writing, together with any supporting documentation the holder deems appropriate, to Nasdaq’s Corporate Secretary prior to January 31, 2023.2024.
| |
19. | How do I submit other proposals or director nominations for presentation at the 20232024 Annual Meeting? | |
| Our By-Laws also establish an advance notice procedure for other proposals or director nominations that are not submitted for inclusion in the Proxy Statement, but that a shareholder instead wishes to present directly at an Annual Meeting. Under these procedures, a shareholder must deliver a notice containing certain information, as set forth in the By-Laws, to Nasdaq’s Corporate Secretary not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the prior year’s meeting. Assuming the 20232024 Annual Meeting is held according to this year’s schedule, the notice must be delivered on or prior to the close of business on March 24, 2023,23, 2024, but no earlier than the close of business on February 22, 2023.2024. However, if Nasdaq holds its Annual Meeting on a date that is more than 30 days before or 70 days after such anniversary date, the notice must be delivered no earlier than the close of business on the 120th day prior to the date of the Annual Meeting nor later than the close of business on the later of (i) the 90th day prior to the date of the Annual Meeting or (ii) the 10th day following the day on which public announcement of the date of such meeting is first made by Nasdaq. | In addition to satisfying the foregoing requirements of our By-Laws, to comply with the SEC’s universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than Nasdaq’s director nominees in compliance with Exchange Act Rule 14a-19 must provide a notice that sets forth the information required by Rule 14a-19 no later than April 22, 2024. |
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| | | | | How to Vote | | | | | Use any of the following methods and your 16-digit control number: |  | | Online | | Visit www.proxyvote.com | | Visit 24/7 | | | | |  |  | | By Internet Using Your Computer Phone | | | Visit www.proxyvote.com
| | | Visit 24/7
| | | | | |  | | By Phone
| | | Call +1 800 690 6903 in the U.S. or Canada to vote your shares | | | | | Canada to vote your shares
| | | |  | |  | | | By mail
| | | Cast your ballot, sign your proxy card, and return by postage-paid envelope | | | | | |  |  | | Attend the Annual Meeting | | | Vote during the meeting by following the instructions on the website | | |
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| | Nasdaq 2023 Proxy Statement | ANNEX A |
| | | | | Non-GAAP Financial Measures | | | | | We recommend investors review the U.S. GAAP financial measures included in this Proxy Statement, as well as the Form 10-K, including our consolidated financial statements and the notes thereto. In addition to disclosing results determined in accordance with U.S. GAAP, we have also provided non-GAAP net income attributable to Nasdaq and non-GAAP diluted EPS. Management uses this non-GAAP information internally, along with U.S. GAAP information, in evaluating our performance and in making financial and operational decisions. We believe our presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations. In addition, we believe the presentation of these measures is useful to investors for period-to-period comparisons of our ongoing operating performance. These measures are not in accordance with, or an alternative to, U.S. GAAP, and may be different from non-GAAP measures used by other companies. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces their usefulness as comparative measures. Investors should not rely on any single financial measure when evaluating our business. This non-GAAP information should be considered as supplemental in nature and is not meant as a substitute for our operating results in accordance with U.S. GAAP. We recommend investors review the U.S. GAAP financial measures included in this Proxy Statement, as well as the Form 10-K, including our consolidated financial statements and the notes thereto. When viewed in conjunction with our U.S. GAAP results and the accompanying reconciliation, we believe these non-GAAP measures provide greater transparency and a more complete understanding of factors affecting our business than U.S. GAAP measures alone. We understand that analysts and investors regularly rely on non-GAAP financial measures, such as non-GAAP net income attributable to Nasdaq and non-GAAP diluted EPS, to assess operating performance. We use non-GAAP net income attributable to Nasdaq and non-GAAP diluted EPS because they highlight trends more clearly in our business that may not otherwise be apparent when relying solely on U.S. GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our ongoing operating performance. Non-GAAP net income attributable to Nasdaq for the periods presented below is calculated by adjusting for the following items: Amortization expense of acquired intangible assets: We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations. As such, if intangible asset amortization is included in performance measures, it is more difficult to assess the day-to-day operating performance of the businesses and the relative operating performance of the businesses between periods. Merger and strategic initiatives expense: We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years that have resulted in expenses which would not have otherwise been incurred. The frequency and the amount of such expenses vary significantly based on the size, timing, and complexity of the transaction. These expenses generally include integration costs, as well as legal, due diligence, and other third-party transaction costs. Restructuring charges: In 2022, following our September announcement to realign our segments and leadership, we initiated a divisional alignment program with a focus on realizing the full potential of this structure. In 2019, we initiated the transition of certain technology platforms to advance our strategic opportunities as a technology and analytics provider and continue the realignment of certain business areas. See Note 20, “Restructuring Charges,” to the consolidated financial statements in the Form 10-K for further discussion of our 2022 divisional alignment program as well as our 2019 restructuring plan, which was completed in June 2021. Net income from unconsolidated investee: See “Equity Method Investments,” of Note 6, “Investments,” to the consolidated financial statements in the Form 10-K for further discussion. Our income on our investment in The Options Clearing Corporation, or OCC, may vary significantly compared to prior periods due to the changes in OCC’s capital management policy. Other significant items: We have excluded certain other charges or gains, including certain tax items, that are the result of other non-comparable events to measure operating performance. |
Annexes 136
Annex A
Non-GAAP Financial Measures
We recommend investors review the U.S. GAAP financial measures included in this Proxy Statement, as well as the Form 10-K, including our consolidated financial statements and the notes thereto.
In addition to disclosing results determined in accordance with U.S. GAAP, we have also provided non-GAAP net income attributable to Nasdaq and non-GAAP diluted EPS. Management uses this non-GAAP information internally, along with U.S. GAAP information, in evaluating our performance and in making financial and operational decisions. We believe our presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations. In addition, we believe the presentation of these measures is useful to investors for period-to-period comparisons of our ongoing operating performance.
These measures are not in accordance with, or an alternative to, U.S. GAAP, and may be different from non-GAAP measures used by other companies. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces their usefulness as comparative measures. Investors should not rely on any single financial measure when evaluating our business. This non-GAAP information should be considered as supplemental in nature and is not meant as a substitute for our operating results in accordance with U.S. GAAP. We recommend investors review the U.S. GAAP financial measures included in this Proxy Statement, as well as the Form 10-K, including our consolidated financial statements and the notes thereto. When viewed in conjunction with our U.S. GAAP results and the accompanying reconciliation, we believe these non-GAAP measures provide greater transparency and a more complete understanding of factors affecting our business than U.S. GAAP measures alone.
We understand that analysts and investors regularly rely on non-GAAP financial measures, such as non-GAAP net income attributable to Nasdaq and non-GAAP diluted EPS, to assess operating performance. We use non-GAAP net income attributable to Nasdaq and non-GAAP diluted EPS because they highlight trends more clearly in our business that may not otherwise be apparent when relying solely on U.S. GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our ongoing operating performance. Non-GAAP net income attributable to Nasdaq for the periods presented below is calculated by adjusting for the following items:
Amortization expense of acquired intangible assets: We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations. As such, if intangible asset amortization is included in performance measures, it is more difficult to assess the day-to-day operating performance of the businesses, the relative operating performance of the businesses between periods, and the earnings power of Nasdaq. Performance measures excluding intangible asset amortization expense therefore provide investors with a useful representation of our businesses’ ongoing activity in each period.
Merger and strategic initiatives expense: We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years that have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs. The frequency and the amount of such expenses vary significantly based on the size, timing and complexity of the transaction. Accordingly, we exclude these costs for purposes of calculating non-GAAP measures, which provide a more meaningful analysis of Nasdaq’s ongoing operating performance or comparisons in Nasdaq’s performance between periods.
Restructuring charges: We initiated the transition of certain technology platforms to advance our strategic opportunities as a technology and analytics provider and continue the re-alignment of certain business areas. See Note 20, “Restructuring Charges,” to the consolidated financial statements in the Form 10-K for further discussion of our 2019 restructuring plan, which was completed in June 2021. Charges associated with
this plan represented a fundamental shift in our strategy and technology as well as executive re-alignment and were excluded for purposes of calculating non-GAAP measures as they are not reflective of ongoing operating performance or comparisons in Nasdaq’s performance between periods.
Net income from unconsolidated investee: See “Equity Method Investments,” of Note 6, “Investments,” to the consolidated financial statements in the Form 10-K for further discussion. Our income on our investment in The Options Clearing Corporation, or OCC, may vary significantly compared to prior periods due to the changes in OCC’s capital management policy. Accordingly, we will exclude this income from current and prior periods for purposes of calculating non-GAAP measures which provide a more meaningful analysis of Nasdaq’s ongoing operating performance or comparisons in Nasdaq’s performance between periods.
Other significant items: We have excluded certain other charges or gains, including certain tax items, that are the result of other non-comparable events to measure operating performance. We believe the exclusion of such amounts allows management and investors to better understand the ongoing financial results of Nasdaq.
For 2021, other significant items primarily included:
a charge related to an administrative fine imposed by the Swedish Financial Supervisory Authority, or SFSA, associated with the default that occurred in 2018. See “Nasdaq Commodities Clearing Default,” of Note 15, “Clearing Operations,” to the consolidated financial statements in the Form 10-K for further discussion;
| | Nasdaq 2023 Proxy Statement | ANNEX A |
a loss on extinguishment of debt;
a net gain on a divestiture of a business, which represents our pre-tax net gain of $84 million on the sale of our U.S. Fixed Income business; and
gains from strategic investments entered into through our corporate venture program included in other income in our Consolidated Statements of Income in the Form 10-K.
For 2020, other significant items primarily included:
a provision for notes receivable associated with the funding of technology development for the Consolidated Audit Trail;
a loss on extinguishment of debt;
charges associated with duplicative rent and impairment of leasehold assets related to our global headquarters move;
charitable donations made to the Nasdaq Foundation, COVID-19 response and relief efforts, and social justice charities; and
| For 2022, other significant items primarily included: • accruals related to a legal matter and a regulatory matter offset by the release of $5 million in relation to the reduction of the administrative fine issued by the Swedish Financial Supervisory Authority, or SFSA, which are included in regulatory expense in the consolidated financial statements in the Form 10-K; and • a loss on extinguishment of debt, which is included in general, administrative and other expense in our Consolidated Statements of Income and net gains and losses from strategic investments entered into through our corporate venture program, which are included in other income in our Consolidated Statements of Income in the Form 10-K. For 2021, other significant items primarily included: • a charge related to an administrative fine imposed by the SFSA associated with the default that occurred in 2018. See “Nasdaq Commodities Clearing Default,” of Note 15, “Clearing Operations,” to the consolidated financial statements in the Form 10-K for further discussion; • a loss on extinguishment of debt; • a net gain on a divestiture of a business, which represents our pre-tax net gain of $84 million on the sale of our U.S. Fixed Income business; and • gains from strategic investments entered into through our corporate venture program, which are included in other income in our Consolidated Statements of Income in the Form 10-K. For 2020, other significant items primarily included: • a provision for notes receivable associated with the funding of technology development for the Consolidated Audit Trail; • a loss on extinguishment of debt; • charges associated with duplicative rent and impairment of leasehold assets related to our global headquarters move; • charitable donations made to the Nasdaq Foundation, COVID-19 response and relief efforts, and social justice charities; and • the reversal of a $6 million regulatory fine issued by the SFSA, which is recorded in regulatory expense in the Consolidated Statements of Income in the Form 10-K. For 2019, other significant items primarily included:
a provision for notes receivable associated with the funding of technology development for the Consolidated Audit Trail;
a loss on extinguishment of debt;
a net gain on a divestiture of a business, which represents our pre-tax net gain of $27 million on the sale of BWise; and
| - | a tax reserve for certain prior year examinations; and
|
| - | certain litigation costs which are recorded in professional and contract services expense in the Consolidated Statements of Income in the Form 10-K.
The above charges, with the exception of those noted differently above, are recorded in general, administrative, and other expense in our Consolidated Statements of Income in the Form 10-K. | Significant tax items: | | The non-GAAP adjustment to the income tax provision included the tax impact of each non-GAAP adjustment and: • for 2021, return-to-provision adjustment and a prior period tax benefit. • for 2020, a tax benefit on compensation-related deductions determined to be allowable. • for 2020, excess tax benefits related to employee share-based compensation to reflect the recognition of the income tax effects of share-based awards when awards vest or are settled. This item is subject to volatility and will vary based on the timing of the vesting of employee share-based compensation arrangements and fluctuation in our stock price. Beginning with the quarter ended March 31, 2021, such excess tax benefits are no longer included as a non-GAAP adjustment as they do not have a material impact on period-over-period comparison. |
The above charges, with the exception of those noted differently above, are recorded in general, administrative, and other expense in our Consolidated Statements of Income in the Form 10-K.
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| | Nasdaq 2023 Proxy Statement | ANNEX A |
Significant tax items:
The non-GAAP adjustment to the income tax provision included the tax impact of each non-GAAP adjustment and:
for 2021, return-to-provision adjustments and prior period tax benefits.
| | | | | | | | | | | | Year Ended December 31, | | | | | | | | 2022 | | 2021 | | 2020 | | | | | | (in millions, except per share amounts) | | | | | U.S. GAAP net income attributable to Nasdaq | | $1,125 | | $1,187 | | $933 | | | | | Non-GAAP adjustments: | | | | | | | | | | | Amortization expense of acquired intangible assets | | 153 | | 170 | | 103 | | | | | Merger and strategic initiatives expense | | 82 | | 87 | | 33 | | | | | Restructuring charges | | 15 | | 31 | | 48 | | | | | Net income from unconsolidated investee | | (29) | | (52) | | (70) | | | | | Regulatory matters | | 1 | | 33 | | (6) | | | | | Provision for notes receivable | | — | | — | | 6 | | | | | Extinguishment of debt | | 16 | | 33 | | 36 | | | | | Net gain on divestiture of business | | — | | (84) | | — | | | | | Charitable donations | | — | | — | | 17 | | | | | Other | | 27 | | (71) | | 14 | | | | | Total non-GAAP adjustments | | 265 | | 147 | | 181 | | | | | Total non-GAAP tax adjustments | | (66) | | (61) | | (83) | | | | | Total non-GAAP adjustments, net of tax | | 199 | | 86 | | 98 | | | | | Non-GAAP net income attributable to Nasdaq | | $1,324 | | $1,273 | | $1,031 | | | | | | | | | | | | | | | | | U.S. GAAP effective tax rate | | 23.9% | | 22.6% | | 23.0% | | | | | Total adjustments from non-GAAP tax rate | | 0.1% | | 1.7% | | 3.0% | | | | | Non-GAAP effective tax rate | | 24.0% | | 24.3% | | 26.0% | | | | | | | | | | | | | | | | | Weighted-average common shares outstanding for diluted EPS | | 497.9 | | 505.1 | | 500.7 | | | | | | | | | | | | | | | | | U.S. GAAP diluted EPS | | $ 2.26 | | $ 2.35 | | $ 1.86 | | | | | Total adjustments from non-GAAP net income | | 0.40 | | 0.17 | | 0.20 | | | | | Non-GAAP diluted EPS | | $2.66 | | $2.52 | | $2.06 |
for 2020, a tax benefit on compensation-related deductions determined to be allowable.
for 2020 and 2019, excess tax benefits related to employee share-based compensation to reflect the recognition of the income tax effects of share-based awards when awards vest or are settled. This item is subject to volatility and will vary based on the timing of the vesting of employee share-based compensation arrangements and fluctuation in our stock price. Beginning with the quarter ended March 31, 2021, such excess tax benefits are no longer included as a non-GAAP adjustment as they do not have a material impact on period-over-period comparison.
| | | | | | | | | Cautionary Note Regarding Forward-Looking Statements | | | | | | | | Information set forth in this Proxy Statement contains forward-looking statements that involve a number of risks and uncertainties. Words such as “may,” “will,” “could,” “should,” “anticipates,” “envisions,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes,” and words or terms of similar substance used in connection with any discussion of future expectations as to industry or regulatory developments, business initiatives or strategies, future operating results or financial performance, and other future developments are intended to identify forward-looking statements. Nasdaq cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information. These include, among others, statements relating to: • our strategic direction, including changes to our corporate structure; • the integration of acquired businesses, including accounting decisions relating thereto; • the scope, nature, or impact of acquisitions, divestitures, investments, joint ventures, or other transactional activities; • the effective dates for, and expected benefits of, ongoing initiatives, including transactional activities and other strategic, restructuring, technology, de-leveraging, and capital return initiatives; • our products and services; • our corporate governance; • our shareholder engagement; • our corporate culture and human capital management policies, practices, and initiatives; • our executive compensation program; and • our ESG programs, policies, goals, and initiatives. Forward-looking statements involve a number of risks, uncertainties, or other factors beyond Nasdaq’s control. These factors include, but are not limited to: Nasdaq’s ability to implement its strategic initiatives; economic, political, and market conditions and fluctuations; geopolitical instability; government and industry regulation; interest rate risk; U.S. and global competition; and other factors detailed in Nasdaq’s filings with the SEC, including its annual reports on Form 10-K and quarterly reports on Form 10-Q, which are available on Nasdaq’s investor relations website at ir.nasdaq.com and the SEC’s website at www.sec.gov. Nasdaq undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. | | | | | | References To Websites | | | | | | | | Information contained on our website, or any website that is linked to or otherwise referenced herein, is not incorporated into, or a part of, this Proxy Statement. |
for 2019, a tax benefit primarily related to an adjustment to the 2018 federal and state tax returns and a tax benefit related to capital distributions from the OCC. See “Equity Method Investments,” of Note 6, “Investments,” to the consolidated financial statements in the Form 10-K for further discussion of our OCC investment.
Non-GAAP Financial Measures
| | | | | | | | | | | | | | | | Year Ended December 31, | | | | | | | | | 2021 | | | 2020 | | | 2019 | | | | | | | (in millions, except per share amounts) | | | | | | U.S. GAAP net income attributable to Nasdaq | | | $1,187 | | | | $933 | | | | $774 | | | | | | Amortization expense of acquired intangible assets | | | 170 | | | | 103 | | | | 101 | | | | | | Merger and strategic initiatives expense | | | 87 | | | | 33 | | | | 30 | | | | | | Restructuring charges | | | 31 | | | | 48 | | | | 39 | | | | | | Net income from unconsolidated investee | | | (52 | ) | | | (70 | ) | | | (82 | ) | | | | | Regulatory matters | | | 33 | | | | (6 | ) | | | - | | | | | | Provision for notes receivable | | | - | | | | 6 | | | | 20 | | | | | | Extinguishment of debt | | | 33 | | | | 36 | | | | 11 | | | | | | Net gain on divestiture of businesses | | | (84 | ) | | | - | | | | (27 | ) | | | | | Charitable donations | | | - | | | | 17 | | | | - | | | | | | Other | | | (71 | ) | | | 14 | | | | 17 | | | | | | Total non-GAAP adjustments | | | 147 | | | | 181 | | | | 109 | | | | | | Adjustment to the income tax provision to reflect non-GAAP adjustments and other tax items | | | (61 | ) | | | (77 | ) | | | (43 | ) | | | | | Excess tax benefits related to employee share-based compensation | | | - | | | | (6 | ) | | | (5 | ) | | | | | Total non-GAAP tax adjustments | | | (61 | ) | | | (83 | ) | | | (48 | ) | | | | | Total non-GAAP adjustments, net of tax | | | 86 | | | | 98 | | | | 61 | | | | | | Non-GAAP net income attributable to Nasdaq | | | $1,273 | | | | $1,031 | | | | $835 | | | | | | | | | | | | | | | | | | | U.S. GAAP effective tax rate | | | 22.6% | | | | 23.0% | | | | 24.0% | | | | | | Total adjustments from non-GAAP tax rate | | | 1.7% | | | | 3.0% | | | | 2.0% | | | | | | Non-GAAP effective tax rate | | | 24.3% | | | | 26.0% | | | | 26.0% | | | | | | | | | | | | | | | | | | | Weighted-average common shares outstanding for diluted EPS | | | 168.4 | | | | 166.9 | | | | 167.0 | | | | | | | | | | | | | | | | | | | U.S. GAAP diluted EPS | | | $7.05 | | | | $5.59 | | | | $4.63 | | | | | | Total adjustments from non-GAAP net income | | | 0.51 | | | | 0.59 | | | | 0.37 | | | | | | Non-GAAP diluted EPS | | | $7.56 | | | | $6.18 | | | | $5.00 | |
Annex B
Form of Amendment to Amended and Restated Certificate of Incorporation
Article First, Paragraph A of Nasdaq’s Amended and Restated Certificate of Incorporation shall be amended to read as follows. Proposed additions are underlined; proposed deletions are stricken through.
A. The total number of shares of Stock which Nasdaq shall have the authority to issue isThreeNine Hundred Thirty Million (330930,000,000), consisting of Thirty Million (30,000,000) shares of Preferred Stock, par value $.01 per share (hereinafter referred to as “Preferred Stock”), andThreeNine Hundred Million (300900,000,000) shares of Common Stock, par value $.01 per share (hereinafter referred to as “Common Stock”).
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information set forth in this Proxy Statement contains forward-looking statements that involve a number of risks and uncertainties. Words such as “may,” “will,” “could,” “should,” “anticipates,” “envisions,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words or terms of similar substance used in connection with any discussion of future expectations as to industry and regulatory developments or business initiatives and strategies, future operating results or financial performance, and other future developments are intended to identify forward-looking statements. Nasdaq cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information. These include, among others, statements relating to:
the integration of acquired businesses, including accounting decisions relating thereto;
the scope, nature or impact of acquisitions, divestitures, investments, joint ventures or other transactional activities;
the effective dates for, and expected benefits of, ongoing initiatives, including transactional activities and other strategic, restructuring, technology, de-leveraging and capital return initiatives;
the ongoing impact of the COVID-19 pandemic on our business, operations, results of operations, financial condition and workforce;
our products and services;
our corporate governance;
our shareholder engagement;
our corporate culture and human capital management policies, practices and initiatives;
our executive compensation program; and
our ESG programs and initiatives.
Forward-looking statements involve a number of risks, uncertainties, or other factors beyond Nasdaq’s control. These factors include, but are not limited to: Nasdaq’s ability to implement its strategic initiatives; economic, political and market conditions and fluctuations; geopolitical instability arising from the Russian invasion of Ukraine; government and industry regulation; and other factors detailed in Nasdaq’s filings with the SEC, including its annual reports on Form 10-K and quarterly reports on Form 10-Q, which are available on Nasdaq’s investor relations website at ir.nasdaq.com and the SEC’s website at www.sec.gov. Nasdaq undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
REFERENCES TO WEBSITES
Information contained on our website, or any website that is linked to or otherwise referenced herein, is not incorporated into, or a part of, this Proxy Statement.
NASDAQ, INC. 151 W. 42ND ST. NEW YORK, NY 10036 VOTE BY INTERNET ATTN: ERIKA MOORE 
VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/NDAQ2022 NDAQ2023 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D79367-P66952 V14882-P88051 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | | | The Board of Directors recommends you vote FOR each of the nominees listed in Proposal 1.
| | |
| | | | | | | | | | | | | | | 1.
| | Election of 10 Directors | | For | | Against | | Abstain | | | | | | | | | | | | 1a. | | Melissa M. Arnoldi | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | 1b. | | Charlene T. Begley | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | 1c. | | Steven D. Black | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | 1d. | | Adena T. Friedman | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | 1e. | | Essa Kazim | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | 1f. | | Thomas A. Kloet | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | 1g. | | John D. Rainey | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | 1h. | | Michael R. Splinter | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | 1i. | | Toni Townes-Whitley | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | 1j. | | Alfred W. Zollar | | ☐ | | ☐ | | ☐ |
| | | | | | | | | | | | | The Board of Directors recommends you vote FOR Proposal 2. | | For | | Against | | Abstain | | | | | | 2. | | Advisory vote to approve the Company’s executive compensation as presented in the Proxy Statement
| | ☐ | | ☐ | | ☐ | | | | | The Board of Directors recommends you vote FOR Proposal 3. | | For | | Against | | Abstain | | | | | | 3. | | Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022
| | ☐ | | ☐ | | ☐ | | | | | The Board of Directors recommends you vote FOR Proposal 4. | | For | | Against | | Abstain | | | | | | 4. | | Approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock in order to effect a 3-for-1 stock split
| | ☐ | | ☐ | | ☐ | | | | | The Board of Directors recommends you vote AGAINST Proposal 5. | | For | | Against | | Abstain | | | | | | 5. | | A Shareholder Proposal entitled “Special Shareholder Meeting Improvement”
| | ☐ | | ☐ | | ☐ | | | | | NOTE: To transact such other business as may properly come before the annual meeting or any adjournment or postponement of the meeting.
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DETACH AND RETURN THIS PORTION ONLY NASDAQ, INC. The Board of Directors recommends you vote FOR each of the nominees listed in Proposal 1. 1. Election of 11 Directors For Against Abstain 1a. Melissa M. Arnoldi 1b. Charlene T. Begley The Board of Directors recommends you vote FOR For Against Abstain Proposal 2. 1c. Steven D. Black 2. Advisory vote to approve the Company’s executive compensation as presented in the Proxy Statement 1d. Adena T. Friedman The Board of Directors recommends you vote 1 Year 2 Years 3 Years Abstain 1 YEAR on Proposal 3. 1e. Essa Kazim 3. Advisory vote on the frequency of future advisory votes on executive compensation 1f. Thomas A. Kloet The Board of Directors recommends you vote FOR For Against Abstain Proposal 4. 1g. Michael R. Splinter 4. Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023 1h. Johan Torgeby 1i. Toni Townes-Whitley The Board of Directors recommends you vote AGAINST For Against Abstain Proposal 5. 1j. Jeffery W. Yabuki 5. A Shareholder Proposal entitled “Independent Board Chairman” 1k. Alfred W. Zollar NOTE: To transact such other business as may properly come before the annual meeting or any adjournment or postponement of the meeting. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
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| Signature (Joint Owners) Date |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
D79368-P66952
V14883-P88051 NASDAQ, INC. Annual Meeting of Shareholders June 22, 202221, 2023 at 8:00 AM, Eastern Time This proxy is solicited by the Board of Directors The shareholder(s) hereby appoint(s) John A. Zecca and Erika Moore, or either of them, as proxies, each with the power to appoint his or her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of Nasdaq, Inc. that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held virtually at www.virtualshareholdermeeting.com/NDAQ2022,NDAQ2023, at 8:00 AM, Eastern Time on June 22, 2022,21, 2023, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. CONTINUED AND TO BE SIGNED ON REVERSE SIDE |
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