PRE 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

 

Filed by the Registrant  ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material Pursuant to (§)240.14a-12

Nasdaq, Inc.

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.


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Board Refreshment

One focus area for us in 2021 was our ongoing Board refreshment to ensure that the Board has the right mix of skills and expertise to oversee the Company’s strategy, culture, and risks. In September 2021, we proudly welcomed Toni Townes-Whitley, our seventh new director in the past seven years. Ms. Townes-Whitley, formerly the President of U.S. Regulated Industries at Microsoft, brings extensive experience in the areas of technology, customer success, digital transformation, human capital management and regulation. Going forward, our Nominating & ESG Committee will optimize the skills and expertise of the Board to provide the best possible oversight for the Company as its strategy evolves.

People & Culture

Many companies experienced high turnover in 2021 due to the ongoing macroeconomic trend known as the Great Resignation. At Nasdaq, we renamed the phenomenon the Great Retention, reflecting our emphasis on attracting and retaining high-performing talent. The voluntary attrition rate for our workforce during 2021 was 11.5%, which is lower than average for the financial services and technology sectors, as well as for all industries. Looking forward, we included short- and mid-term investments in our 2022 budget to ensure that our compensation structures remain competitive. In the longer term, Nasdaq will continue to evolve its already-strong culture, with emphasis on inspiring management and leadership, career progression and a sense of belonging.

An essential part of Nasdaq’s culture is its diversity, equity, and inclusion initiatives. For the first time in 2021, the Company published statistics on the composition of its global workforce, including its EEO-1 data, in its Sustainability Report.6 The Company also initiated a pay equity analysis covering both gender and race, strengthened its diversity recruiting efforts and created customized developmental and talent retention programs for underrepresented talent. Reflective of our efforts, Nasdaq was included in the 2022 Bloomberg Gender-Equality Index, recognized as a “Best Place to Work for LGBTQ+ Equality” for the fourth consecutive year and named to Seramount’s list of “Best Companies for Dads.” In addition, our President and CEO, Adena T. Friedman, was included in TIME Magazine’s inaugural Women of the Year List for her role in working toward a more equal world.

Sustainability & ESG Initiatives

In 2021, Nasdaq continued to advance its sustainability and ESG initiatives. Nasdaq received SEC approval for its board diversity disclosure listing rule, which will enhance disclosures and encourage the creation of more diverse boards through a market-led solution. Nasdaq is working with its listed companies to implement the listing rule and set a new standard for corporate governance.

In the environmental area, we signed the Science Based Targets initiative (SBTi) commitment letter and published our first Task Force on Climate-Related Financial Disclosures (TCFD) Report. In recognition of our commitment to sustainability and ESG, Nasdaq was named to the Dow Jones Sustainability Index for the sixth consecutive year, and our new global headquarters in New York City achieved a Green Building LEED Platinum Certification.

Looking Ahead

As we look ahead, the Board is incredibly excited about the future opportunities for the Company. We thank you for your investment in Nasdaq and for the opportunity to serve as your Board of Directors.

 

     
Melissa M. Arnoldi    Essa Kazim    Toni Townes-Whitley
Charlene T. Begley    Thomas A. Kloet    Jacob Wallenberg
Steven D. Black    John D. Rainey    Alfred W. Zollar
Adena T. Friedman    Michael R. Splinter   

 

 

 

 

6

Diversity data was provided from countries where such data collection is permitted.

 

  

  

 


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Dear Shareholders,

 

In 2021, we experienced another year largely defined by uncertainty. The world continued to grapple with the impacts of COVID-19, supply chains were hit by disruptions, and inflation accelerated significantly. But amid these challenges, markets and market participation remained strong, and Nasdaq continued to demonstrate its resilience and ability to lead in a complex world.

 

Nasdaq’s enduring growth is a testament to the strength and agility of our team, the diverse composition of our business, our valued partnerships with clients, and our trusted stewardship of a global financial infrastructure rooted in technology. As we look ahead into 2022, opportunities remain untapped for sustainable long-term growth and ever greater global impact.

 

As we strengthen a culture of inclusive growth and prosperity within our organization, we will find new ways to increase collaboration across our entire enterprise to deliver more to our clients, to further increase our value proposition as an employer, and to continue to advance our sustainability practices.

 

Our commitment to anticipating client needs has also pushed us to make important technology investments that will define Nasdaq’s future. Our new multi-year partnership with Amazon Web Services will help us build next-gen cloud-based infrastructure for the world’s capital markets, as well as additional use cases for our clients as we continue our cloud journey. Investing in our next generation solutions to fight financial crime will improve how we can deliver these capabilities to financial institutions globally. In addtion, our artificial intelligence and machine learning efforts have the potential to transform how our clients engage with markets in the years ahead.

 

These client-centered and technology-focused advancements all flow from the same place: a clearly defined sense of purpose and a culture of excellence that pushes us to be better than we were yesterday. We are deeply committed to being champions for inclusive growth and prosperity, and this purpose-oriented mission has helped us attract and retain the best global talent amid historic labor market churn.

 

Nasdaq’s ongoing evolution is also a catalyst for our growing impact within the global financial system. We recognize that capital markets have an essential role to play in creating a more sustainable, inclusive, and equitable economy. But markets are only as impactful as the rules, policies, and mindsets that underpin them. That is why we are advocates for pragmatic idealism, which addresses complex, systemic issues with methodical, consistent action.

 

We are deploying our innovative technology in the global fight against financial crimes. These illicit activities – including human trafficking, illegal narcotics, and terrorism – challenge the sustainability and integrity of the global financial system. Because financial crime is a borderless issue, it is imperative to break down silos and improve data sharing between those on the frontlines. We are committed to leading our industry in these efforts and leveraging the most advanced technology and secure data sharing capabilities to make progress on this $2 trillion problem.

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We are also focused on helping corporate clients and investment managers navigate the complex ESG and climate landscape. Companies are listening to their employees, clients, and shareholders, and they increasingly understand that they have an opportunity to achieve financial success while also managing their business in more sustainable and community-oriented ways. Nasdaq has developed a comprehensive suite of consultative and technology solutions that support companies in building their ESG programs and reporting their progress and measurements to the investment community. Additionally, through our majority investment in the carbon removal marketplace, Puro.earth, we provide key support to companies seeking to reduce their carbon footprint by purchasing high-quality, industrial and nature-based carbon removal credits.

 

In serving the ESG needs of the investment community through our eVestment platform and ecosystem, we gather and provide ESG data related to the asset management industry. We also provide retail and institutional investors with new index investment choices that include key ESG criteria.

 

As corporate sustainability matures, the need for accurate measurement will naturally follow, along with investor and regulatory scrutiny. There is a clear need for common, pragmatic tools and frameworks that allow corporate clients to measure their goals and impacts while also empowering investors to make decisions that align with their values.

 

Last year marked Nasdaq’s 50th anniversary, which served as a natural moment to reflect on our legacy and plan for what’s next. This year is about boldly stepping into the future—confident in our people, our innovative client solutions, our foundational markets, and our purpose.

 

Sincerely,

 

Adena T. Friedman

President and CEO

Nasdaq, Inc.

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*Members of the Board as of April 28, 2022


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Executive Officers   
Adena T. Friedman    Jamie King
President and CEO    EVP, Anti-Financial Crime Technology
Oliver Albers    Bradley J. Peterson
EVP, Investment Intelligence    EVP and CIO/CTO
Roland Chai    Bjørn Sibbern
EVP, Market Infrastructure Technology    EVP, Nasdaq Europe
Tal Cohen    Jeremy Skule
EVP, Head of North American Markets    EVP and Chief Strategy Officer
Michelle L. Daly    Bryan E. Smith
SVP, Controller and Principal Accounting Officer    EVP and Chief People Officer
Ann M. Dennison    John Zecca
EVP and CFO    EVP and Chief Legal, Risk and Regulatory Officer
P.C. Nelson Griggs   
EVP, Corporate Platforms   

 

 


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Acronyms and Certain Defined Terms

 

   

AUM

   Assets Under Management

CEO

   Chief Executive Officer

CFO

   Chief Financial Officer

CIO

   Chief Information Officer

COBRA

   Consolidated Omnibus Budget Reconciliation Act

CTO

   Chief Technology Officer

ECIP

   Executive Corporate Incentive Plan

EPS

   Earnings Per Share

Equity Plan

   Nasdaq’s Equity Incentive Plan

ERM

   Enterprise Risk Management

ESG

   Environmental, Social and Governance

ESPP

   Employee Stock Purchase Plan

ETP

   Exchange Traded Products

Exchange Act

   Securities Exchange Act of 1934, as amended

EVP

   Executive Vice President

FASB ASC Topic 718

   Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Stock Compensation”

Form 10-K

   Nasdaq’s Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2021, as filed with the SEC on February 23, 2022

GAAP

   Generally Accepted Accounting Principles

H.E.

   His Excellency

IPO

   Initial Public Offering

M&A

   Mergers and Acquisitions

NEO

   Named Executive Officer

PCAOB

   Public Company Accounting Oversight Board

People@Nasdaq

   Nasdaq’s Human Resources Team

PSU

   Performance Share Unit

RSU

   Restricted Stock Unit

SaaS

   Software as a Service

SEC

   U.S. Securities and Exchange Commission

S&P

   Standard & Poor’s

SVP

   Senior Vice President

TSR

   Total Shareholder Return

VP

   Vice President


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About Nasdaq

     1  

Meeting Notice

     3  

Voting Roadmap

     5  

Shareholder Engagement

  

Year-Round Engagement

     8  

Annual Meeting of Shareholders

     8  

Responsiveness to Investors and Stakeholders

     8  

Our Board

  

Proposal 1: Election of Directors

     11  

Board Composition

     13  

Board Diversity

     15  

Director Criteria and Qualifications

     16  

Director Orientation and Continuing Education

     19  

Board Assessment Process

     19  

Board Refreshment and Nominations

     21  

Director Nominees

     22  

Board Committees

     32  

Director Compensation

     37  

Governance

  

Corporate Governance Framework

     41  

Leadership Structure

     42  

Board Independence

     42  

Committee Independence and Expertise

     43  

Strategic Oversight

     43  

ESG Oversight

     43  

Cybersecurity and Information Security Oversight

     44  

Risk Oversight

     44  

Human Capital Management and Executive Succession Planning

     46  

Board Meetings and Attendance

     47  

Shareholder Rights

     47  

Public Policy Advocacy for Investors, Capital Formation and Inclusive Capitalism

     48  

Communicating with the Board

     49  

 

  

  

 


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Environmental & Social Responsibility

  

Our ESG Strategy

     51  

Environmental Initiatives

     51  

Talent and Culture

     53  

Operating with Integrity

     56  

Community Impact

     58  

ESG Reporting and Analytics

     59  

ESG Documents

     60  

Executive Compensation

  

Proposal 2: Approval of the Company’s Executive Compensation on an Advisory Basis

     63  

Compensation Discussion and Analysis

     64  

Management Compensation Committee Report

     92  

Management Compensation Committee Interlocks and Insider Participation

     92  

Executive Compensation Tables

     93  

Employment Agreements and Potential Payments Upon Termination or Change in Control

     97  

CEO Pay Ratio

     105  

Audit & Risk

  

Audit and Risk Committee Report

     108  

Annual Evaluation and 2022 Selection of Independent Auditors

     108  

Proposal 3: Ratification of the Appointment of Ernst  & Young LLP as Our Independent Registered Public Accounting Firm for the Fiscal Year Ended December 31, 2022

     110  

Other Items

  

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

     112  

Proposal 5: Shareholder Proposal – Special Shareholder Meeting Improvement

     116  

Other Business

     120  

Security Ownership of Certain Beneficial Owners and Management

     120  

Delinquent Section 16(a) Reports

     122  

Executive Officers

     124  

Certain Relationships and Related Transactions

     128  

About Our Annual Meeting

  

Questions and Answers About Our Annual Meeting

     130  
Annexes   

Annex A: Non-GAAP Financial Measures

     137  

Annex B: Form of Amendment to Amended and Restated Certificate of Incorporation

     141  

 

 

  

  

 


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Meeting Notice

Virtual Meeting Logistics

 

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Date

   Time    Where

Wednesday, June 22, 2022

   8:00 a.m., Eastern Time    www.virtualshareholdermeeting.com/NDAQ2022

Items of Business

 

1.

To elect 10 directors for a one-year term

 

2.

To approve the Company’s executive compensation on an advisory basis

 

3.

To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ended December 31, 2022

 

4.

To approve an amendment to Nasdaq’s Amended and Restated Certificate of Incorporation to increase the total number of authorized shares of common stock to effect a proposed 3-for-1 stock split

 

5.

To consider a shareholder proposal described in the accompanying Proxy Statement, if properly presented at the meeting

 

6.

To consider any other business that may properly come before the Annual Meeting or any adjournment or postponement of the meeting

Important Meeting Information

Record Date

Shareholders of record as of April 25, 2022 will be eligible to vote and participate in the Annual Meeting using the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, voter instruction form or proxy card.

A Notice of Internet Availability of Proxy Materials will be mailed on or about April 28, 2022.

Asking Questions

Prior to the meeting, questions can be submitted at www.proxyvote.com. During the meeting, questions may be submitted in the question box provided at www.virtualshareholdermeeting.com/NDAQ2022.

Replays

A replay of the Annual Meeting will be posted as soon as practical at ir.nasdaq.com along with answers to shareholder questions pertinent to meeting matters that are received before and during the Annual Meeting that cannot be answered due to time constraints. The replay will be available for one year following the Annual Meeting.

 

  

 

 

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Voting

Your vote is important to us. Please promptly vote your shares as soon as possible by internet, telephone, or returning your proxy card.

We have also created an Annual Meeting website to make it easy for you to access our Annual Meeting materials at www.nasdaq.com/annual-meeting. There you will find an overview of voting items, this Proxy Statement, other important information, as well as a link to vote your shares.

To express our appreciation for your participation, Nasdaq will make a $1 charitable donation to RespectAbility on behalf of every unique holder that votes.

How to Vote

Use any of the following methods and your 16 digit control number:

 

LOGO

  By Internet Using Your Computer
 

 

Visit www.proxyvote.com

  Visit 24/7
LOGO   By Phone
 

 

Call +1 800 690 6903 in the U.S. or

  Canada to vote your shares
LOGO   By mail
 

 

Cast your ballot, sign your proxy card,

and return by postage-paid envelope

LOGO   Attend the Annual Meeting
  Vote during the meeting by following the instructions on the website

By Order of the Board of Directors,

Erika Moore

VP, Deputy General Counsel and Corporate Secretary

 

 

Important notice regarding the availability of proxy materials for the 2022 Annual

Meeting of Shareholders to be held on June 22, 2022.

 

Nasdaq’s 2022 Proxy Statement and 2021 Form 10-K are available at

www.nasdaq.com/annual-meeting

 

 

  

 

 

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Voting Roadmap

This summary of proposals and recommendations is intended to provide an overview of voting matters and may not contain all the information that is important to you. Please review this entire Proxy Statement, as well as our Form 10-K, prior to voting.

Proposal 1: Election of Directors (page 11)

 

 

Elect 10 directors to hold office until the 2023 Annual Meeting.

Board Recommendation:  

FOR each director nominee.

We have built a highly engaged, independent Board with broad and diverse experience that is committed to representing the long-term interests of our shareholders.

Proposal 2: Advisory Vote on Executive Compensation (page 63)

 

 

Approve, on an advisory (non-binding) basis, the 2021 compensation of the Company’s NEOs.

Board Recommendation:  

FOR the approval, on an advisory basis, of our executive compensation.

Compensation decisions are based on Nasdaq’s financial and operational performance and reflect a continued emphasis on variable, at-risk compensation paid over the long-term. Incentives are aligned with strategic priorities, business objectives, and shareholder interests.

Proposal 3: Ratification of Appointment of Independent Registered Public Accounting Firm (page 110)

 

 

Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022.

Board Recommendation:  

FOR the ratification of Ernst & Young LLP.

The Audit & Risk Committee is directly responsible for the annual review, compensation, retention, and oversight of our independent external auditor. The Audit & Risk Committee, and our Board, believe that the continued retention of Ernst & Young LLP is in the best interests of Nasdaq and its shareholders.

 

  

 

 

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Proposal 4: Charter Amendment to Increase the Authorized Shares to Effect a 3-for-1 Stock Split (page 112)

 

 

Approve an amendment to the Company’s Amended and Restated Certificate of Incorporation, or charter, to increase the number of authorized shares of common stock to effect a 3-for-1 stock split.

Board Recommendation:  

FOR the proposed charter amendment

The Board wishes to effect a 3-for-1 stock split in the form of a stock dividend to our shareholders. In order to have sufficient authorized but unissued shares to effect the stock split, Nasdaq seeks shareholder approval to amend our charter to increase the total number of authorized shares of common stock.

Proposal 5: Shareholder Proposal – Special Shareholder Meeting Improvement (page 116)

 

 

A shareholder proposal, if properly presented at the meeting, requesting amendment of the Company’s governing documents to lower the stock ownership threshold to call a special meeting of shareholders.

Board Recommendation:  X

AGAINST this proposal.

We provide a shareholder-friendly right for shareholders to call a special meeting. The proposed decrease in the percentage of shares required to call a special meeting from the current 15% to 10% is unnecessary and not in the best interests of the Company and our shareholders.

 

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Accountability to shareholders is not just a mark of good governance, it is a critical component of our success. Fostering long-term relationships and maintaining trust with our shareholders is a key priority for both management and the Board. We are committed to constructive, honest, and year-round engagement with portfolio managers and investment stewardship teams—and our Corporate Governance Guidelines codify our Board’s commitment to oversight of shareholder engagement.

Year-Round Engagement

We actively listen to our investors through industry conferences, non-deal roadshows and meetings on a regular basis. Shareholder feedback provides our Board and management with valuable insights on our business strategy and performance, corporate responsibility, executive compensation, ESG initiatives and many other topics. This feedback informs various business decisions and helps us more effectively tailor the information we disclose to the public. Generally, webcasts of management’s presentations at industry or investor conferences are made available to investors and are accessible for a period of time at ir.nasdaq.com.

During 2021, we conducted outreach to a cross-section of shareholders who beneficially owned approximately 75% of our outstanding shares. Our key shareholder engagement activities included four virtual investor (non-deal) road shows, attendance at 15 investor conferences, and our Annual Meeting of Shareholders.

Annual Meeting of Shareholders

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.

For more information on the meeting format and access, see page 3.

Responsiveness to Investors and Stakeholders

Below is a summary of the key themes we recently discussed with the investment stewardship teams of our institutional investors and the actions we have taken in each area.

Our continuous engagement and ongoing dialogue with our shareholders have led to improvements in our corporate governance, corporate strategy, human capital management, ESG, ERM practices, and disclosures. For example, we:

 

  Advanced our strategic positioning to maximize opportunities as a technology, markets and analytics provider with significant, strategic organic and inorganic investments in high growth markets such as anti-financial crime, ESG, index and investment analytics.

 

  Increased our regular quarterly dividend by 10% to $0.54 per share, consistent with our Board’s policy to provide shareholders with regular and growing dividends over the long-term as our earnings and cash flow grow.

 

  

 

 

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  Received approval from the SEC on the Board Diversity listing rule, which requires Nasdaq listed companies to publicly disclose consistent, transparent diversity statistics regarding their board of directors and choose whether to meet recommended board diversity objectives or disclose their reasons for not doing so.

 

  Published our first TCFD report, committed to develop science-based environmental targets, and had our rating from CDP (formerly Carbon Disclosure Project) increased to reflect that Nasdaq is a “company taking coordinated action on climate issues.”

 

  Continued our net carbon neutral program for the fourth consecutive year (see page 51).

 

  Improved our Sustainalytics and ISS ESG risk ratings, with each placing Nasdaq in the top decile of issuers.

 

  Named for the sixth consecutive year to the Dow Jones Sustainability Index (DJSI) and maintained our position as the only stock exchange operator selected for inclusion in the 2021 North America index.

 

  Actively conducted year-round planning for director succession and Board refreshment, including a review and analysis of the skills, attributes and expertise for future Board nominees (see page 21).

 

  Increased diversity on our board and implemented committee rotations to ensure 100% female representation on each committee (see page 19).

 

  Continued to strengthen our diversity and inclusion initiatives, resources and leadership training tools by leveraging existing programs, such as our 11 employee-led internal affinity networks and undertaking new initiatives (see page 54).

 

  Enhanced our Supplier Code of Ethics to improve our supplier diversity and environmental sustainability (see page 57).

 

  Conducted a global pay equity study covering both gender and race to assess employee base salary and total compensation.

 

  Administered Nasdaq’s first global human rights assessment to strengthen our understanding of, and enhance our approach to, human rights.

 

  

 

 

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Proposal 1:

Election of Directors

 

  The Board unanimously recommends that shareholders vote FOR each nominee to serve as a director.

The business and affairs of Nasdaq are managed under the direction of our Board. Our directors have diverse backgrounds, attributes and experiences that provide valuable insights for the Board’s oversight of the Company.

Pursuant to our Amended and Restated Certificate of Incorporation and By-Laws and based on our governance needs, the Board determines the total number of directors. The Board is authorized to have ten directors following our 2022 Annual Meeting.

Each of the ten nominees identified in this Proxy Statement has been nominated by our Nominating & ESG Committee and Board for election to a one-year term expiring at our 2023 Annual Meeting of Shareholders. Each director will hold office until his or her successor has been elected and qualified or until the director’s earlier death, resignation or removal. All nominees have consented to be named in this Proxy Statement and to serve on the Board, if elected.

In an uncontested election, our directors are elected by a majority of votes cast at any meeting for the election of directors at which a quorum is present. This election is an uncontested election, and therefore, each of the ten nominees must receive the affirmative vote of a majority of the votes cast to be duly elected to the Board. Any shares not voted, including as a result of abstentions or broker non-votes, will not impact the vote.

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 such resignation will be considered by the Nominating & ESG Committee, which will recommend to the full Board whether or not to accept the resignation. The Board will act on the Committee’s recommendation and disclose publicly its decision-making process with respect to the resignation. Each of the incumbent directors has submitted an irrevocable resignation.

 

  

 

 

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Our 2022 Director Nominees

 

 

 

           
  Name and Classification1   Age      Director
Since
     Title     

No. of Other

Public

Company

Boards

   Committee Memberships

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Melissa M. Arnoldi

Non-Industry; Public

  49      2017     

EVP and Chief Customer Officer,

AT&T Consumer

     0   

Finance

 

Management Compensation

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Charlene T. Begley

Non-Industry; Public

  55      2014      Retired SVP & CIO, General Electric Company      2   

Audit & Risk

 

Nominating & ESG (Chair)

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Steven D. Black

Non-Industry; Public

  69      2011      Former Co-CEO, Bregal Investments      1   

Management Compensation (Chair)

 

Nominating & ESG

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Adena T. Friedman

Staff

  52      2017      President and CEO, Nasdaq      0    Finance

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Essa Kazim

Non-Industry

  63      2008     

Governor, Dubai International

Financial Centre

     1    Finance

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Thomas A. Kloet

Non-Industry; Public

  63      2015      Retired CEO & Executive Director, TMX Group Limited      0    Audit & Risk (Chair)

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John D. Rainey

Non-Industry; Issuer

  51      2017      CFO & EVP of Global Customer Operations, PayPal Holdings, Inc.      0   

Management Compensation

 

Finance (Chair)

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Michael R. Splinter2

Non-Industry; Public

  71      2008      Retired Chairman & CEO, Applied Materials, Inc.      2   

Management Compensation

 

Nominating & ESG

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Toni Townes-Whitley

Non-Industry; Public

  58      2021      Former President, U.S. Regulated Industries, Microsoft      2    Audit & Risk

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Alfred W. Zollar

Non-Industry; Public

  67      2019      Executive Advisor, Siris Capital Group, LLC      3   

Audit & Risk

 

Finance

 

 

 

1

To ensure that balanced viewpoints are represented on our Board of Directors, Nasdaq’s By-Laws require that all directors be classified as: Industry Directors; Non-In-dustry Directors, which may be further classified as either Issuer Directors or Public Directors; or Staff Directors. The requirements for each classification are outlined in the By-Laws.

 

2

Mr. Splinter is the Chairman of the Board.

 

  

 

 

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Board Diversity

The Board values diversity in evaluating new candidates and seeks to incorporate a wide range of attributes across the Board of Directors and on each of our Committees. The following matrix is provided in accordance with applicable Nasdaq listing requirements and includes all directors as of April 28, 2022.

The matrix includes Jacob Wallenberg, who is retiring from the Board effective upon the conclusion of the 2022 Annual Meeting of Shareholders.

Board Diversity Matrix (As of April 28, 2022)

 

 

  Total Number of Directors          11   
     Female    Male    Non-Binary   

Did not Disclose      

Gender

 
         

  Part I: Gender Identity

                       

  Directors

   4    7    -          -          

  Part II: Demographic Background

                       

  African American or Black

   1    1    -          -          

  Alaskan Native or Native American

   -    -    -          -          

  Asian

   -    -    -          -          

  Hispanic or Latinx

   -    -    -          -          

  Native Hawaiian or Pacific Islander

   -    -    -          -          

  White

   3    6    -          -          

  Two or More Races or Ethnicities

   -    -    -          -          

  LGBTQ+

   -    -    -          -          

  Did Not Disclose Demographic Background

   -    -    -          -          

 

  

 

 

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Director Criteria and Qualifications

In evaluating individual Board nominees, the Nominating & ESG Committee takes into account many factors, including:

 

·   a general and diverse understanding of the global economy, capital markets, finance and other disciplines relevant to the success of a large publicly-traded financial technology company, including cybersecurity;

 

·   a general understanding of Nasdaq’s business and technology;

 

·   a client experience orientation;

 

·   the requirements in our By-Laws;

 

·   the individual’s educational and professional background and personal accomplishments;

 

·   diversity, including, but not limited to, factors such as gender, ethnicity, race, sexual orientation, and geography; and

 

·   an independent mindset that constructively challenges the status quo and provides a strong view of the future.

The Nominating & ESG Committee evaluates each individual candidate in the context of the Board as a whole, with the objective of maintaining a group of directors that can further the success of our businesses, while representing the interests of shareholders, employees and the communities in which the Company operates. In determining whether to recommend a Board member for re-election, the Nominating & ESG Committee also considers the director’s participation in and contributions to the activities of the Board, the results of the most recent Board and Committee assessment and attendance at meetings.

The Board and the Nominating & ESG Committee believe all director nominees embody our corporate values and exhibit the characteristics below:

 

·   a commitment to long-term value creation for our shareholders;

 

·   an appreciation for shareholder feedback;

 

·   high personal and professional ethics;

 

·   a proven record of success;

 

·   a commitment to the integrity of affiliated self-regulatory organizations;

 

·   sound business judgment;

 

·   a strategic vision and leadership experience;

 

·   knowledge of financial services;

 

·   sufficient time to devote to Board service; and

 

·   an appreciation of multiple cultures and perspectives.

 

  

 

 

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Skills and Expertise Matrix

The skills and expertise included in the matrix below have been identified as most important for effective oversight in light of our business and strategy. We believe each director brings a unique perspective and different set of skills to the boardroom. While each of our directors possesses additional skills and expertise to the ones listed below, this matrix reflects each director’s primary strengths given his or her particular role on our Board. The director biographies that follow describe each director’s qualifications and relevant experience in more detail.

 

Capital Markets

 

Deep industry knowledge of the capital markets landscape helps us execute on our strategy, expand client relationships, accelerate growth and deliver strong shareholder returns.

 

Client Experience

 

Expertise in enhancing and transforming customer service experiences is critical to overseeing our client-first approach.

Corporate Governance

 

Experience on other public company boards provides insight into developing practices consistent with our commitment to corporate governance excellence.

 

Cybersecurity

 

Experience in understanding the impact and increasing importance of the cybersecurity threat landscape on our business and that of our clients is crucial to an effective risk management program.

 

Environmental and Social (Including Human Capital Management)

 

Experience in support of environmental and social initiatives and in human capital management strengthens the Board’s oversight and assures that business imperatives and long-term value creation are achieved within a responsible and sustainable business model.

Financial

 

A deep understanding of financial and accounting metrics is essential to overseeing our performance.

 

Global Leadership

 

Experience in a leadership position at a global company provides practical insight into the skills needed to advance the corporate strategy and enhances the ability to recognize those skills in others.

M&A

 

Experience with assessing and executing on new opportunities is crucial for overseeing tactical and strategic M&A transactions.

 

Risk Management

 

Operating in a complex regulatory and risk environment necessitates skillful oversight of the identification, evaluation and prioritization of risks and the development of comprehensive policies and procedures to effectively mitigate risk and manage compliance.

Technology and Innovation

 

Experience in traditional, new and emerging technologies is core to understanding our business as an innovative technology leader.

 

  

 

 

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Director Orientation and Continuing Education

Our director orientation program familiarizes new directors with our businesses, strategies and policies, providing experiences to directly engage with our Executive Leadership Team. We also provide year-round in-person or virtual tutorials to educate Board members on emerging and evolving initiatives and strategies. Our directors receive frequent updates on recent developments, press coverage and current events that relate to our strategy and business.

Newly elected directors are matched with an experienced director for ongoing mentorship.

Ongoing director education is essential for the Board to be a strategic asset for the company. Our directors are encouraged to participate in, and are reimbursed for, continuing education programs at external organizations and universities to enhance the skills and knowledge used to perform their duties on the Board and relevant Committees.

Attendance at these programs provides directors with additional insight into our business and industry and gives them valuable perspective on the performance of our Company, the Board, our President and CEO and members of senior management.

Board Assessment Process

We have a three-tiered annual Board assessment process that is coordinated by the Chairman of the Board and the Chair of the Nominating & ESG Committee. The assessment consists of a full Board evaluation, Committee evaluations and individual director assessments and feedback. The Board and all the Board Committees determine action plans for the next year based on input from the annual assessment.

Results and Implemented Changes

In an effort to continuously strengthen our Board’s effectiveness, results from our Board assessment process are used to:

 

·   determine the skills and experience desired for future Board nominees;

 

·   facilitate the Board refreshment process;

 

·   monitor Committee roles and inform plans for rotations and new leadership assignments;

 

·   strengthen the relationship between the Board and management;

 

·   enhance governance processes and Board meeting agendas; and

 

·   identify opportunities for Director education.

Feedback Incorporated

In response to feedback from recent Board evaluations, actions taken and continuous enhancements include:

 

  increased Board diversity and diversity on each Committee;

 

  included educational videos on key topics in pre-read meeting materials;

 

  streamlined meeting materials to better highlight important information and focus on key decisions;

 

  provided opportunities for our Board to interact with more employees throughout the organization; and

 

  provided education to our Nominating & ESG Committee on ESG topics.

 

  

 

 

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Board Refreshment and Nominations

The selection of qualified directors is key to ensuring that the Board fulfills its mission. We believe our director nominees—individually and collectively—have the right skills, qualifications, experience, diversity and tenure needed for the successful oversight of Nasdaq’s strategy and enterprise risks.

The Nominating & ESG Committee oversees and plans for director succession and refreshment of the Board to ensure the proper mix continues to promote and support our long-term vision. In doing so, the Committee takes into consideration the corporate strategy and the overall needs, composition and size of the Board, as well as the criteria adopted by the Board regarding director qualifications.

The Nominating & ESG Committee considers possible candidates suggested by Board and Committee members, shareholders and senior management. In addition to submitting suggested nominees to the Nominating & ESG Committee, a Nasdaq shareholder may nominate a person for election as a director, provided the shareholder follows the procedures specified in Nasdaq’s By-Laws. The Nominating & ESG Committee reviews all candidates in the same manner, regardless of the source of the recommendation. In addition, the Nominating & ESG Committee may engage a third-party search firm from time-to-time to assist in identifying and evaluating qualified candidates. The new Director elected in 2021 was brought to the attention of the Nominating & ESG Committee by our President and CEO.

Director Recruitment Process

 

LOGO  

 

Board composition is continuously analyzed to ensure alignment with strategy.

 

Candidate recommendations are identified with input from directors, management, shareholders, and search firms as needed.

 

Nominating & ESG Committee screens qualifications, considers diversity and skills, interviews potential candidates and makes recommendations to the Board.

 

Board of Directors evaluates candidates, reviews conflicts and independence, discusses impact to the Board, and selects nominees.

 

Shareholders vote on nominees at Nasdaq’s Annual Meeting.

 

Implementation

Seven new directors have been nominated to our Board in the last seven years—each bringing a fresh perspective and unique skill set.

 

 

  

 

 

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Director Nominees

 

LOGO             

Melissa M. Arnoldi

 

EVP and Chief Customer Officer, AT&T Customer

 

Age: 49

 

Director since: 2017

 

Independent

 

United States

 

Committee Membership

 

·  Finance

 

·  Management Compensation

 

Impact on Board

 

·  Innovative technology leader with experience in cybersecurity, software development and network operations

 

·  Broad expertise in providing a superior customer experience

 

·  Strategic thinker with global business and operational capabilities

 

Career Highlights

 

Since August 2021, Ms. Arnoldi has been the Chief Customer Officer for AT&T Consumer, leading field technician and contact center teams that support 180 million annual customer interactions. From September 2018 to July 2021, she served as the CEO of Vrio Corp., a multi-billion-dollar AT&T digital entertainment services company in Latin America with more than 9,000 employees across 11 countries during her tenure. Prior to that, Ms. Arnoldi served in various capacities at AT&T Inc. since 2008. This included President of Technology & Operations where she was responsible for the company’s global technology, software development, supply chain, network and cybersecurity operations, chief data office, as well as AT&T’s Intellectual Property group, Labs and Foundries. Before joining AT&T, Ms. Arnoldi was a senior executive at Accenture from 1996 to 2008.

 

Select Professional and Community Contributions

 

·  Former Director of Sky Mexico

 

·  Former Director of the Girl Scouts of Northeast Texas

 

·  Former Member of the National Action Council for Minorities in Engineering

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

  

 

 

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LOGO             

Charlene T. Begley

 

Retired SVP & CIO, General Electric Company

 

Age: 55

 

Director since: 2014

 

Independent

 

United States

 

Committee Membership

 

·  Audit & Risk

 

·  Nominating & ESG (Chair)

 

Impact on Board

 

·  Extensive leadership experience of highly complex and global industrial, customer, and technology businesses

 

·  Significant risk management experience as a member of the executive-level Risk Management Committee at GE

 

·  Broad financial and audit expertise from prior roles at GE and service on the Audit Committees of several public companies

 

Career Highlights

 

Ms. Begley served in various capacities for the General Electric Company, a diversified infrastructure and financial services company, from 1988 to 2013. Ms. Begley served in a dual role as SVP and CIO, as well as President and CEO of GE’s Home and Business Solutions, from January 2010 to December 2012. Previously, Ms. Begley served as President and CEO of GE’s Enterprise Solutions from 2007 to 2009. At GE, Ms. Begley served as President and CEO of GE Plastics and GE Transportation. She also led GE’s Corporate Audit staff and served as CFO for GE Transportation and GE Plastics Europe and India.

 

Current Public Company Boards

 

·  Hilton Worldwide Holdings Inc.: Audit Committee (Chair), Nominating and Governance Committee

 

·  SentinelOne, Inc.: Audit Committee (Chair)

 

Other Public Company Boards in the Past Five Years

 

·  Red Hat, Inc.

 

·  WPP plc

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

  

 

 

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LOGO             

Steven D. Black

 

Former Co-CEO, Bregal Investments

 

Age: 69

 

Director since: 2011

 

Independent

 

United States

 

Committee Membership

 

·  Management Compensation (Chair)

 

·  Nominating & ESG

 

Impact on Board

 

·  Extensive leadership experience of a highly complex global financial services company

 

·  Depth of knowledge from over 40 years of experience in the global financial services industry

 

·  Management development, compensation and succession planning experience

 

Career Highlights

 

Mr. Black was Co-CEO of Bregal Investments, a private equity firm, from September 2012 through December 2021. He was the Vice Chairman of JP Morgan Chase & Co. from March 2010 to February 2011 and a member of the firm’s Operating and Executive Committees. Prior to that position, Mr. Black was the Executive Chairman of JP Morgan Investment Bank from October 2009 to March 2010. Mr. Black served as Co-CEO of JP Morgan Investment Bank from 2004 to 2009. Mr. Black was the Deputy Co-CEO of JP Morgan Investment Bank from 2003 to 2004. He also served as head of JP Morgan Investment Bank’s Global Equities business from 2000 to 2003 following a career at Citigroup and its predecessor firms.

 

Current Public Company Boards

 

·  Wells Fargo & Company (Board Chair): Finance Committee (Chair); Human Resources Committee

 

Other Public Company Boards in the Past Five Years

 

·  The Bank of New York Mellon Corporation

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

  

 

 

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LOGO             

Adena T. Friedman

 

President and CEO, Nasdaq

 

Age: 52

 

Director since: 2017

 

United States

 

Committee Membership

 

·  Finance

 

Impact on Board

 

·  More than 25 years of industry leadership and expertise, including five years as Nasdaq’s President and CEO

 

·  Significant contributions that shaped Nasdaq’s strategic transformation to a leading global exchange and technology solutions company with operations on six continents

 

·  Deep strategy, financial, M&A and product development experience

 

Career Highlights

 

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.

 

Select Professional and Community Contributions

 

·  Member of the Vanderbilt University Board of Trust

 

·  Director of the Federal Reserve Bank of New York

 

·  Director of FCLTGlobal, a non-profit organization that researches tools to encourage long-term investing

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

  

 

 

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LOGO    

Essa Kazim

 

Governor, Dubai International Financial Centre

 

Age: 63

 

Director since: 2008

 

Independent

 

United Arab Emirates

 

Committee Membership

 

·  Finance

 

Impact on Board

 

·  Extensive leadership of a complex regulated business in the financial services industry

 

·  Broad knowledge of international markets with experience in finance, accounting and corporate strategy

 

·  Global perspective, as well as a representative of a large shareholder

 

Career Highlights

 

H.E. Essa Kazim is the Governor of Dubai International Financial Centre, having joined the Centre in January 2014. He is the Chairman of Borse Dubai, and he was the Chairman of Dubai Financial Market through November 2021. H.E. Kazim began his career as a Senior Analyst in the Research and Statistics Department of the UAE Central Bank in 1988 and then moved to the Dubai Department of Economic Development as Director of Planning and Development in 1993. He was then appointed as Director General of the Dubai Financial Market from 1999 to 2006.

 

Select Professional and Community Contributions

 

·  Deputy Chairman of the Supreme Legislation Committee in Dubai

 

·  Member of the Securities and Exchange Higher Committee

 

·  Member of the Dubai Supreme Fiscal Committee

 

·  Board Member of the Dubai Free Zones Council

 

Current Public Company Boards

 

·  Emirates Telecommunications Group Company PJSC (Etisalat Group): Audit Committee (Chair)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

  

 

 

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LOGO    

Thomas A. Kloet

 

Retired CEO & Executive Director, TMX Group Limited

 

Age: 63

 

Director since: 2015

 

Independent

 

United States

 

Committee Membership

 

·  Audit & Risk (Chair)

 

Impact on Board

 

·  Leadership of complex regulated businesses in the financial services industry

 

·  Broad knowledge of international markets with experience in finance, accounting and corporate strategy

 

·  Significant experience in risk management, clearing house, central depository and broker-dealer operations at executive and board levels in North America and Asia

 

Career Highlights

 

Mr. Kloet was the first CEO and Executive Director of TMX Group Limited, the holding company of the Toronto Stock Exchange; TSX Venture Exchange; Montreal Exchange; Canadian Depository for Securities; Canadian Derivatives Clearing Corporation and the BOX Options Exchange, from 2008 to 2014. Previously, he served as CEO of the Singapore Exchange and as a senior executive at Fimat USA (a unit of Société Générale), ABN AMRO and Credit Agricole Futures, Inc. He also served on the Boards of CME and various other exchanges worldwide. Mr. Kloet is a CPA and a member of the AICPA.

 

Select Professional and Community Contributions

 

·  Chair of the Boards of Nasdaq’s U.S. exchange subsidiaries

 

·  Chair of the Board of Northern Funds, which offers 44 portfolios, and Northern Institutional Funds, which offers 7 portfolios

 

·  Member of the FIA Hall of Fame

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

  

 

 

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LOGO    

John D. Rainey

 

CFO & EVP of Global Customer Operations, PayPal Holdings, Inc.

 

Age: 51

 

Director since: 2017

 

Independent

 

United States

 

Committee Membership

 

·  Management Compensation

 

·  Finance (Chair)

 

Impact on Board

 

·  More than 20 years of financial management experience, including leading PayPal’s financial operations, corporate accounting, treasury, financial planning and analysis, investor relations, internal audit, tax, real estate and sourcing functions

 

·  Experience in highly regulated businesses within the financial services industry with responsibility for risk management

 

·  Leadership experience at a global technology company

 

Career Highlights

 

Mr. Rainey is CFO and EVP of Global Customer Operations at PayPal Holdings, Inc., a company that creates innovative technology to make the management and movement of money safer, simpler and more affordable in over 200 markets around the globe. Mr. Rainey will become the EVP and CFO of Walmart Inc. on June 6, 2022. Prior to joining PayPal in 2015, Mr. Rainey was EVP and CFO at United Airlines, having spent 18 years at Continental Airlines, and later United Airlines.

 

Select Professional and Community Contributions

 

·  Member of the Advisory Board of the Hankamer School of Business at Baylor University

 

·  Former Member of the National Board of Trustees for the March of Dimes

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

  

 

 

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LOGO    

Michael R. Splinter

 

Retired Chairman & CEO, Applied Materials, Inc.

 

Age: 71

 

Director since: 2008

 

Independent

 

United States

 

Committee Membership

 

·  Management Compensation

 

·  Nominating & ESG

 

Impact on Board

 

·  Leadership of a complex global technology business

 

·  Extensive background in international public company governance at a Nasdaq-listed company

 

·  Management development, compensation and succession planning experience

 

Career Highlights

 

Mr. Splinter was elected Chairman of Nasdaq’s Board effective May 10, 2017. He is currently a business and technology consultant. Mr. Splinter served as Executive Chairman of the Board of Applied Materials, a Nasdaq-listed company, from 2009 to his retirement in 2015 and was CEO from 2003 to 2013. An engineer and technologist, Mr. Splinter is a 40-year veteran of the semiconductor industry. Prior to joining Applied Materials, he was an executive at Intel Corporation for 20 years.

 

Select Professional and Community Contributions

 

·  Co-Chair of the American Semiconductor Center

 

·  Chair of the US-Taiwan Business Council

 

·  Member of the National Academy of Engineers

 

·  Splinter Scholarships for Diversity in Engineering at University of Wisconsin

 

Current Public Company Boards

 

·  Gogoro Inc.: Compensation Committee (Chair)

 

·  TSMC, Ltd.: Audit Committee, Compensation Committee (Chair)

 

Other Public Company Boards in the Past Five Years

 

·  Meyer Burger Technology Ltd.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

  

 

 

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LOGO    

Toni Townes-Whitley

 

Former President, U.S. Regulated Industries, Microsoft

 

Age: 58

 

Director since: 2021

 

Independent

 

United States

 

Committee Membership

 

·  Audit & Risk

 

Impact on Board

 

·  Extensive background in the technology industry and with driving digital transformations

 

·  Led a sales organization of almost 5,000 employees, resulting in significant knowledge on human capital management topics

 

·  ESG expertise, including by representing Microsoft on the World Business Council for Sustainable Development, participating in the establishment of Microsoft’s framework and plan for social equity, and leading Microsoft’s Artificial Intelligence Ethics Program

 

Career Highlights

 

As president of U.S. Regulated Industries at Microsoft from July 2018 to September 2021, Ms. Townes-Whitley led the company’s U.S. sales strategy for driving digital transformation across customers and partners within the public sector and commercial regulated industries. Previously, Ms. Townes-Whitley was Corporate VP for Global Industry at Microsoft, a role she held since 2015. Before starting with Microsoft, Ms. Townes-Whitley worked for CGI Corporation, an IT and business consulting services firm, from 2010 to 2015. During her tenure at CGI, Ms. Townes-Whitley held the positions of President and Chief Operating Officer from 2011 to 2015 and SVP, Civilian Agency Program from 2010 to 2011. From 2002 to 2010, Ms. Townes-Whitley held various senior leadership positions at Unisys Corporation, a global information technology company that provides a portfolio of IT services, software and technology.

 

Select Professional and Community Contributions

 

·  Trustee of Johns Hopkins Medicine

 

·  Director of the Thurgood Marshall College Fund

 

·  Director of the Partnership for Public Service

 

·  Advisory Board Member for the Princeton University Faith & Work Initiative

 

·  Trustee of The United Way Worldwide

 

Current Public Company Boards

 

·  Empowerment & Inclusion Capital I Corp.: Audit Committee (Chair)

 

·  The PNC Financial Services Group, Inc.: Risk Committee, Special Committee on Equity & Inclusion, Technology Subcommittee

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

  

 

 

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LOGO    

Alfred W. Zollar

 

Executive Advisor, Siris Capital Group, LLC

 

Age: 67

 

Director since: 2019

 

Independent

 

United States

 

Committee Membership

 

·  Audit & Risk

 

·  Finance

 

Impact on Board

 

·  Career technologist with skills in product development, customer satisfaction and strategy

 

·  Broad leadership experience, including senior management positions in every IBM software group division

 

·  Extensive service on the boards of several large public companies

 

Career Highlights

 

Mr. Zollar has been an Executive Advisor with Siris Capital Group, LLC since March 2021. Previously, he was an Executive Partner since February 2014. Mr. Zollar retired from IBM in January 2011 following a 34-year career. Mr. Zollar was formerly general manager of IBM Tivoli Software from July 2004 until January 2011, where he was responsible for the executive leadership, strategy and P&L of the Tivoli Software. Previously, Mr. Zollar was general manager, IBM iSeries, where he was responsible for the executive leadership, strategy and P&L of the iSeries (formerly AS/400) server product line. Prior to that, he held senior management positions in each of IBM’s diverse software businesses, including general manager of IBM Lotus Software.

 

Select Professional and Community Contributions

 

·  Director of EL Education

 

·  Director of the Eagle Academy Foundation

 

·  Trustee of the UC San Diego Foundation

 

·  Lifetime Member of the National Society of Black Engineers

 

Current Public Company Boards

 

·  International Business Machines Corporation: Directors and Corporate Governance Committee

 

·  Public Service Enterprise Group Incorporated: Audit Committee, Finance Committee (Chair), Industrial Operations Committee

 

·  The Bank of New York Mellon Corporation: Risk Committee, Technology Committee (Chair)

 

Other Public Company Boards in the Past Five Years

 

·  Red Hat, Inc.

 

·  The Chubb Corporation

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

  

 

 

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Board Committees

 

Our Board has four standing Committees: Audit & Risk, Finance, Management Compensation and Nominating & ESG. Each of these Committees, other than the Finance Committee, consists exclusively of independent directors. The Chair of each Committee reports to the Board in Chairman’s Session or Executive Session on the topics discussed and actions taken at each meeting. Each of these Committees operates under a written charter that includes the Committee’s duties and responsibilities.

 

A description of each standing Committee is included on the following pages.

 

Audit & Risk Committee

 

Key Objectives:

 

·  Oversees Nasdaq’s financial reporting process and reviews the disclosures in the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and quarterly earnings releases.

 

·  Appoints, retains, approves the compensation of and oversees the independent registered public accounting firm.

 

·  Assists the Board by reviewing and discussing the quality and integrity of accounting, auditing and financial reporting practices at Nasdaq, including assessing the staffing of employees in these functions.

 

·  Assists the Board by reviewing the adequacy and effectiveness of internal controls.

 

·  Reviews and approves or ratifies all related party transactions, as further described below under “Certain Relationships and Related Transactions.”

 

·  Assists the Board in reviewing and discussing Nasdaq’s regulatory and compliance programs, ERM structure and process, Global Employee Ethics Program, SpeakUp! Program and confidential whistleblower process.

 

·  Assists the Board in reviewing and discussing the adequacy and effectiveness of Nasdaq’s cyber, privacy and technology controls.

 

·  Assists the Board in its oversight of the Internal Audit function, including approval of the Internal Audit Plan.

 

·  Reviews and recommends to the Board for approval the Company’s regular dividend payments.

 

2021 Highlights:

 

·  Conducted the annual review of the independent auditor relationship and recommended the retention of Ernst & Young LLP as the Company’s independent auditor. For further information on the Audit & Risk Committee’s review of the independent auditor relationship, see “Audit & Risk – Audit & Risk Committee Responsibilities – Annual Evaluation and 2022 Selection of Independent Auditors.”

 

·  Approved Nasdaq’s policy on the use of non-GAAP measures and reviewed non-GAAP disclosures, impairment assessments and the impact or potential impact of changes in various accounting standards.

 

·  Approved the revised Supplier Code of Ethics and received an update on third

 

 

 

 

 

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  party risk management.

 

·   Reviewed the sanctions and anti-money laundering compliance programs.

 

·   Monitored the progression of the Market Technology business’s clearing projects.

 

·   Discussed Nasdaq’s tax profile and tax planning in connection with the Verafin acquisition.

 

·   Received reports on information security topics, including the software supply chain, the protection of market systems, IT asset management (including end-of-life governance and management) and vulnerability management.

Risk Oversight Role:

 

·   Approves the Risk Appetite and reviews the ERM program, including policy, structure, and process.

 

·   Receives regular updates from the Chief Risk Officer on risk matters.

Independence:

 

·   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 accordance with the listing rules of The Nasdaq Stock Market.

 

·   The Board determined that Mr. Kloet and Ms. Begley are “audit committee financial experts” within the meaning of SEC regulations and each also meets the “financial sophistication” standard of The Nasdaq Stock Market.

 

  

 

 

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Finance Committee

 

Key Objectives:

 

·  Reviews and recommends, for approval by the Board, the capital plan of the Company, including the plan for repurchasing shares of the Company’s common stock and the proposed dividend plan.

 

·  Reviews and recommends, for approval by the Board, significant mergers, acquisitions and business divestitures.

 

·  Reviews and recommends, for approval by the Board, significant capital market transactions and other financing arrangements.

 

·  Reviews and recommends, for approval by the Board, significant capital expenditures, lease commitments and asset disposals, excluding those included in the approved annual budget.

 

2021 Highlights:

 

·  Conducted a comprehensive review of the capital plan for Board approval.

 

·  Reviewed and recommended Board approval of Nasdaq’s entry into a multi-year partnership with AWS to build the next generation of cloud-enabled infrastructure for the world’s financial markets.

 

·  Reviewed and recommended Board approval of the divestiture of Nasdaq’s U.S. Fixed Income business and an accelerated stock repurchase agreement to offset longer-term dilution related to the issuance of shares in connection with the divestiture.

 

·  Advised the Board on the 10% increase in Nasdaq’s quarterly dividend payment from $0.49 to $0.54 per share.

 

·  Received regular reports on the M&A environment and Nasdaq’s pipeline of potential strategic transactions.

 

·  Reviewed and recommended, for Board approval, a debt refinancing transaction which reduced our annual interest expense.

 

·  Received an update on Nasdaq’s minority investment activities through the Nasdaq Ventures portfolio.

 

Risk Oversight Role:

 

·  Monitors operational and strategic risks related to Nasdaq’s financial affairs, including capital structure and liquidity risks.

 

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LOGO     

 

LOGO

  

Management Compensation Committee

 

Key Objectives:

 

·  Establishes and annually reviews the executive compensation philosophy and strategy.

 

·  Reviews and approves the executive compensation and benefit programs applicable to Nasdaq’s executive officers, including the base salary, incentive compensation and equity awards. Any executive compensation program changes solely applicable to the President and CEO and CFO are submitted to the Board for final approval.

 

·  Reviews and approves the performance goals for executive officers. For the President and CEO and CFO, these items are referred to the Board for final approval.

 

·  Reviews and approves the base salary and incentive compensation for those non-executive officers with target total cash compensation in excess of $1,000,000 or an equity award valued in excess of $1,000,000.

 

·  Evaluates the performance of the President and CEO, together with the Nominating & ESG Committee.

 

·  Reviews the succession and development plans for executive officers and other key talent.

 

·  Establishes and annually monitors compliance with the mandatory stock ownership guidelines.

 

·  Reviews the results of any shareholder advisory votes on executive compensation and any other feedback that may be garnered through the Company’s ongoing shareholder engagement.

 

2021 Highlights:

 

·  Reviewed, negotiated and recommended Board approval of the new employment agreement with Nasdaq’s President and CEO, Adena T. Friedman.

 

·  Provided feedback on Nasdaq’s pay equity analysis.

 

·  Considered the effectiveness of the annual and long-term incentive plans to continue to support Nasdaq’s strategy and compensation structure.

 

·  Reviewed the succession and development plans for all EVPs and SVPs.

 

Risk Oversight Role:

 

·  Evaluates the effect the compensation structure may have on risk-related decisions.

 

Independence:

 

·  Each member of the Management Compensation Committee is independent and meets the additional eligibility requirements set forth in the listing rules of The Nasdaq Stock Market.

 

 

  

 

 

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Nominating & ESG Committee

 

Key Objectives:

 

·  Determines the skills and qualifications necessary for the Board, develops criteria for selecting potential directors and manages the Board refreshment process.

 

·  Identifies, reviews, evaluates and nominates candidates for annual elections to the Board.

 

·  Leads the annual assessment of effectiveness of the Board, Committees and individual directors.

 

·  Together with the Management Compensation Committee, leads the annual performance assessment of the President and CEO.

 

·  Identifies and considers emerging corporate governance issues and trends.

 

·  Reviews feedback from engagement sessions with investors and determines follow-up actions and plans.

 

·  Monitors Company compliance with corporate governance requirements and policies.

 

·  Reviews and recommends the Board and Committee membership and leadership structure.

 

·  Reviews and recommends to the Board candidates for election as officers with the rank of EVP or above.

 

·  Oversees environmental and social matters as they pertain to the Company’s business and long-term strategy and identifies and brings to the attention of the Board current and emerging environmental and social trends and issues that may affect the business operations, performance and public image of Nasdaq.

 

·  Provides oversight for Nasdaq’s environmental and social policies, practices, initiatives and reporting, including those related to environmental sustainability, social and ethical issues, human capital management, responsible sourcing and strengthening community.

 

·  Reviews the Annual Sustainability Report.

 

2021 Highlights:

 

·  Received tutorials on ESG topics, including Nasdaq’s ESG materiality assessment, Nasdaq’s Purpose Initiative and Nasdaq’s Supplier Risk Management and Diversity Programs.

 

·  Monitored the achievement of Nasdaq’s corporate ESG goals.

 

·  Focused on Nasdaq’s ongoing Board refreshment, including recommending and nominating Toni Townes-Whitley to the Board in September 2021.

 

·  Considered shareholder feedback from engagement sessions, the 2021 Annual Meeting of Shareholders and publicly available sources.

 

Risk Oversight Role:

 

·  Oversees risks related to the Company’s ESG issues, trends and policies.

 

·  Monitors the independence of the Board.

 

Independence:

 

·  Each member of the Nominating & ESG Committee is independent, as required by the listing rules of The Nasdaq Stock Market.

 

 

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Director Compensation

Our Board Compensation Policy establishes the compensation of our non-employee directors. Every two years, the Management Compensation Committee reviews the Director Compensation Policy, considers a competitive market analysis of director compensation data and recommends changes, if any, to the policy to the Board for approval.

The following table reflects the compensation elements for non-employee directors for the current compensation year, which began immediately following the 2021 Annual Meeting of Shareholders and ends with the 2022 Annual Meeting.

Compensation Policy for Non-Employee Directors

 

 

  Item   June 2021 - June 2022        

  Annual Retainer for Board Members (Other than the Chair)

  $75,000

  Annual Retainer for Board Chair

  $240,000

  Annual Equity Award for All Board Members (Grant Date Market Value)

  $260,000

  Annual Audit & Risk Committee Chair Compensation

  $40,000

  Annual Management Compensation Committee Chair Compensation

  $30,000

  Annual Finance and Nominating & ESG Committee Chair Compensation

  $20,000

  Annual Audit & Risk Committee Member Compensation

  $20,000

Annual Management Compensation and Nominating & ESG Committee Member Compensation

  $10,000

  Annual Finance Committee Member Compensation

  $5,000

 

  

 

 

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Each non-employee director may elect to receive the annual retainer in cash (payable in equal semi-annual installments) or equity. Each non-employee director also may elect to receive Committee Chair and/or Committee member fees in cash (payable in equal semi-annual installments) or equity.

The annual equity award and any equity elected as part of the annual retainer or for Committee Chair and/or Committee member fees are awarded automatically on the date of the Annual Meeting of Shareholders immediately following election and appointment to the Board.

All equity paid to Board members consists of RSUs that vest in full one year from the date of grant. The number of RSUs to be awarded is calculated based on the closing market price of our common stock on the date of the Annual Meeting. Directors that are appointed to the Board after the annual meeting receive a pro-rata equity award. Unvested equity is forfeited in certain circumstances upon termination of the director’s service on the Board.

Directors are reimbursed for business expenses and reasonable travel expenses for attending Board and Committee meetings. Non-employee directors do not receive our retirement, health or life insurance benefits. We provide each non-employee director with director and officer liability insurance coverage, as well as business accident travel insurance for and only when traveling on behalf of Nasdaq.

Stock Ownership Guidelines

Under our stock ownership guidelines, the Chairman of the Board must maintain a minimum ownership level in Nasdaq common stock of six times the annual equity award for Board members. Other non-employee directors must maintain a minimum ownership level of two times the annual equity award.

Shares owned outright, through shared ownership and in the form of vested and unvested restricted stock, are taken into consideration in determining compliance with these stock ownership guidelines. Exceptions to this policy may be necessary or appropriate in individual situations and the Chairman of the Board may approve such exceptions from time to time. New directors have four years after their initial election to the Board to obtain the minimum ownership level. All of the directors were in compliance with the guidelines as of December 31, 2021.

 

  

 

 

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Director Compensation Table

The table below summarizes the compensation paid by Nasdaq to our non-employee directors for services rendered during the fiscal year ended December 31, 2021.

 

 

  Name1   

Fees Earned

or Paid in

Cash ($)2

  

Stock

Awards

($)3,4,5

    

Option

Awards

($)

  

Non-Equity

Incentive Plan

Compensation

($)

  

Change

in Pension

Value and

Nonqualified

Deferred

Compensation

Earnings ($)

  

All Other

Compensation

($)

   Total ($)

  Melissa M. Arnoldi

      $ 345,669                  $345,669    

  Charlene T. Begley

   $115,000    $ 256,812                  $371,812    

  Steven D. Black

      $ 370,235                  $370,235    

  Essa Kazim

      $ 335,738                  $335,738    

  Thomas A. Kloet6

   $155,000    $ 370,235               $15,000    $540,235    

  John D. Rainey

      $ 370,235                  $370,235    

  Michael R. Splinter

      $ 513,625                  $513,625    

  Toni Townes-Whitley

   $19,911    $ 183,000                  $202,911    

  Jacob Wallenberg

      $ 340,616                  $340,616    

  Alfred W. Zollar

      $ 355,426                  $355,426    

 

 

 

1.

Adena T. Friedman is not included in this table as she is an employee of Nasdaq and thus received no compensation for her service as a director. For information on the compensation received by Ms. Friedman as an employee of the Company, see “Executive Compensation.”

 

2.

The differences in fees earned or paid in cash reported in this column largely reflect differences in each individual director’s election to receive the annual retainer and Committee service fees in cash or RSUs. These elections are made at the beginning of the Board compensation year and apply throughout the year. In addition, the difference in fees earned or paid also reflects individual Committee service.

 

3.

The amounts reported in this column reflect the grant date fair value of the stock awards 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. The differences in the amounts reported among non-employee directors primarily reflect differences in each individual director’s election to receive the annual retainer and Committee service fees in cash or RSUs.

 

4.

These stock awards, which were awarded on June 15, 2021 to all the non-employee directors elected to the Board on that date, represent the annual equity award and any portion of annual retainer or Committee service fees that the director elected to receive in equity. Each non-employee director received the annual equity award, which consisted of 1,474 RSUs with a grant date fair value of $256,812. Mr. Splinter elected to receive his Chairman retainer in equity so he received an additional 1,361 RSUs with a grant date fair value of $237,125. Directors Arnoldi, Black, Kazim, Kloet, Rainey, Wallenberg and Zollar elected to receive all of their annual retainers in equity, so they each re-ceived an additional 425 RSUs with a grant date fair value of $74,047. In addition, individual directors received the following amounts for Committee service fees: Ms. Arnoldi (85 RSUs with a grant date fair value $14,809); Mr. Black (226 RSUs with a grant date fair value of $39,376); H.E. Kazim (28 RSUs with a grant date fair value of $4,878); Mr. Kloet (226 RSUs with a grant date fair value of $39,376); Mr. Rainey (226 RSUs with a grant date fair value of $39,376); Mr. Splinter (113 RSUs with a grant date fair value of $19,688); Mr. Wallenberg (56 RSUs with a grant date fair value of $9,757) and Mr. Zollar (141 RSUs with a grant date fair value of $24,566). On September 29, 2021, Ms. Townes-Whitley was appointed to the Board and received a pro-rata annual equity award of 951 RSUs with a grant date fair value of $183,000.

 

5.

The aggregate numbers of unvested RSUs and vested shares under the Equity Plan beneficially owned by each non-employee director as of December 31, 2021 are summarized in the following table. All unvested RSUs will vest on June 15, 2022.

 

 

 

  Director    Number of Unvested RSUs    Number of Vested Shares                                            

 

  Melissa M. Arnoldi

   1,984    8,584

 

  Charlene T. Begley

   1,474    8,987

 

  Steven D. Black

   2,125    42,258

 

  Essa Kazim

   1,927    39,111

 

  Thomas A. Kloet

   2,125    20,778

 

  John D. Rainey

   2,125    12,765

 

  Michael R. Splinter

   2,948    62,923

 

  Toni Townes-Whitley

   951   

 

  Jacob Wallenberg

   1,955    7,241

 

  Alfred W. Zollar

   2,040    6,551

 

6.

Fees Earned or Paid in Cash to Mr. Kloet include fees of $155,000 for his service as Chairman 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 for Mr. Kloet represents fees for tax advisory services in connection with the compensation for service to our exchange subsidiaries.

 

  

 

 

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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 directors, management and shareholders 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

 

·  Board of Directors Duties & Obligations

 

·  Code of Conduct for the Board of Directors

 

·  Amended and Restated Certificate of Incorporation

 

·  By-Laws

 

·  Committee Charters

 

·  Procedures for Communicating with the Board of Directors

 

Corporate Governance Practice Highlights

 

Board Composition

 

All director nominees are independent, except for our CEO

 

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

 

Philosophy of continuous Board refreshment to ensure a mix of skills, experience, tenure and diversity

 

Board Structure and Processes

 

Separation of the roles of Chairman of the Board and President and CEO of Nasdaq

 

Directors have the opportunity to meet in Executive Session without management present at every Board and Committee meeting

 

Three-tiered annual Board assessment, consisting of full Board evaluation, Committee evaluations and individual director assessments

 

Ongoing Board review of strategic planning and capital allocation for long-term value creation

 

Nominating & ESG Committee oversight of environmental, social and human capital management policies, practices, initiatives and reporting

    

Comprehensive risk oversight by the full Board under Audit & Risk Committee leadership

 

Director stock ownership guidelines require equity ownership of at least 2x the annual equity award (for the Chairman, 6x)

 

Shareholder Rights

 

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

 

Robust shareholder engagement program throughout the year

 

LOGO

 

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.

 

  

 

 

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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.

 

  

 

 

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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; and ongoing prevention and mitigation efforts for such threats.

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.

 

  

 

 

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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 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 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 management risk 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 management risk 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.

 

  

 

 

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LOGO

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.

 

  

 

 

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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 10 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.

 

  

 

 

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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.

 

  

 

 

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LOGO   

 

 

Communicating with the Board

 

Shareholders and other interested parties may contact the Board, the Chairman or other individual Directors 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 57 or visit ir.nasdaq.com.


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LOGO

 

  

 


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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.

 

LOGO

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

 

·   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.

 

·   In 2021, we continued our net carbon neutral program for the fourth consecutive year. The key focuses of the program are to:

 

  ¾   reduce the energy consumption, corresponding greenhouse gas emissions and waste generation of our global operations through thoughtful sustainable initiatives and strategies.

 

  ¾   proactively procure renewable energy for our office space and data center portfolio.

 

  ¾   purchase Renewable 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 removing the release of Greenhouse gases from the atmosphere).

 

  ¾   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).

 

  ¾   engage a third party to verify and certify our carbon footprint data for accuracy and industry best practices.

 

·   We signed the Science Based Targets initiative commitment letter in 2021 and this year we will submit our net zero short-term and long-term targets for our Scope 1, Scope 2 and material Scope 3 emission categories.

 

  

 

 

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·   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.

 

·   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 behaviors to focus on sustainability and employee wellness through the creation of a knowledge-based series of “The Global Green Team recommends” articles and documents.

Decarbonizing Our Supply Chain

 

·   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 a number of indexes that integrate ESG criteria into the index methodology. We achieve this in a variety of ways, with some indexes designed purely as ESG 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.

 

·   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.
 

 

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·   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.

 

·   In 2021, we acquired a majority stake in Puro.earth, a leading marketplace that offers industrial carbon removal instruments that are verifiable and tradable through an open, online platform.

Serving as an ESG Thought Leader for the Capital Markets and the Public

 

·   The Nasdaq ESG Reporting Guide (now in its second edition) serves as a baseline template for Nasdaq listed companies and reinforces the business case for voluntary disclosure. We voluntarily report many of the metrics outlined in the ESG Guide.

 

·   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:

 

  ¾   the UN Sustainable Stock Exchanges Initiative (founding member);

 

  ¾   the WFE Sustainability Working Group (founder, chair twice);

 

  ¾   the UN Global Compact (former U.S. Network Board Member);

 

  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

 

  

 

 

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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 it relates 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:

 

·   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.

 

  

 

 

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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 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.

 

·   Although the ongoing pandemic limited our in-person events, we held several virtual conferences, open to our listed company clients and the public, during 2021 highlighting diversity and inclusion, including a program hosted by GLOBE with the founder of a venture capital firm dedicated to minimizing funding disparities 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; and a conference on expanding access to capital in the Latinx community, hosted by ¡Adelante Nasdaq!.

 

·   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.

 

  

 

 

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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;

 

·   new family care resources and benefits, including back-up childcare, caregiver support, and subsidized distance-learning enrichment programs;

 

·   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:

 

·   Executive & Board Leadership: Our Executive Leadership Team maintains oversight of Nasdaq’s Global Employee Ethics Program through committees, including a Compliance Council co-chaired by the Chief Legal, Risk and Regulatory Officer. Further oversight is provided through the Group Risk Management Committee, which is responsible for overseeing risks across Nasdaq.

 

  

 

 

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·   Policies & 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, regulatory transparency, whistleblowing responsibilities and protections, antitrust laws, anti-bribery and corruption controls, 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: We undertake regular compliance testing and monitor for identified risk areas, conduct periodic audits and assessments, and respond to situations where potential non-compliance is detected or reported.

 

·   Outreach & 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.

 

·   Monitoring, Audit, & 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 and disclosure to regulatory bodies when appropriate. 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, 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.

 

·   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 their 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 programs for accident prevention and minimizing exposure to health risks.

 

  

 

 

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·   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, 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 regulations and with all required benefits. They must be compensated in compliance with local laws for overtime hours worked. Suppliers must comply with all labor laws and employ only workers who meet applicable minimum age and other requirements in the jurisdiction for the services being performed.

 

·   Acceptable Living Conditions: Where the supplier is providing housing for workers, such housing should be clean and safe, and provide reasonable living space.

 

·   Corporal Punishment and Disciplinary Practices: Suppliers must provide a non-violent, safe work environment, free 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 Impact

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 is Nasdaq’s signature engagement program, helping to connect employees with the causes, charities, and communities that they support. The Goodworks program empowered our employee volunteers to participate in 100 individual and team events. Nasdaq employee donors generated more than $650,000 in impact for more than 650 charitable and community recipients.

 

·   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.

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.

 

  

 

 

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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.

 

         
           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.

 

       
   LOGO    LOGO   LOGO    LOGO
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.

 

  

 

 

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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

 

·   Employee Handbooks

 

·   Nasdaq Code of Ethics

 

·   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

 

·   Nasdaq ESG FAQ

 

  

 

 

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LOGO

 

  

 


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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 performance and consists largely of equity-based compensation. 86% of our NEOs’ total direct compensation was performance-based or “at-risk” in 2021. 62% 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, 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. The resulting payouts to NEOs ranged from 180% to 195% 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, 2019 through December 31, 2021, Nasdaq’s cumulative TSR was 149%, which was at the 87th 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.

 

    

 

 

 

 

 

 

  

 

 

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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 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.

 

 

 

  Our NEOs

    
  Adena T. Friedman  

LOGO

 

   President and CEO
  Ann M. Dennison  

LOGO

 

   EVP and CFO1
  Lauren B. Dillard  

LOGO

 

   Former EVP, Investment Intelligence2
  P.C. Nelson Griggs  

LOGO

 

   EVP, Corporate Platforms
  Bradley J. Peterson  

LOGO

 

   EVP and CIO/CTO
  Michael Ptasznik  

LOGO

 

   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

 

        66
  Decision-Making Framework    Key Governance Features of Executive Compensation Program    66
   Total Rewards Philosophy    67
   Say on Pay Results    68
   How We Determine Compensation    68
   Role of Compensation Consultant    68
   Competitive Positioning    68
    

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    72
   Long-Term Incentive Compensation    75
    

NEO Compensation Summaries

 

   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

 

  

 

 

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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 2021 were $3.4 billion, an increase of 18% over 2020.

 

·   This strong revenue performance allowed us to continue to reinvest in our business and our people, increase our quarterly dividend from $0.49 to $0.54 per share and further execute our share repurchase plan.

 

·   We returned $1.3 billion to shareholders through our share repurchase program and quarterly dividends in 2021, in addition to an aggregate of $2.3 billion over the last three years.

Additional 2021 business highlights are described on page 1 of this Proxy Statement.

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.

 

 

   What We DO       What We DON’T Do
   LOGO    Pay for performance: 100% of annual
incentives and 80% of long-term incentive
grants are performance-based
   LOGO    Overweight non-performance-based
long-term incentives
   LOGO    Maintain a long-standing incentive “clawback”
policy
   LOGO    Pay tax gross-ups on severance
arrangements and perquisites
   LOGO    Provide change in control protection that
requires a “double trigger” (i.e., both a change
in control of the Company and a qualifying loss
of employment)
   LOGO    Permit re-pricing of underwater stock
options without shareholder approval
   LOGO    Conduct a comprehensive annual risk
assessment of our compensation program
   LOGO    Accrue or pay dividends on unearned or
unvested equity awards
   LOGO    Conduct an annual executive talent review and
discussion on succession planning
   LOGO    Allow hedging or pledging of Nasdaq
stock
   LOGO    Maintain robust stock ownership guidelines    LOGO    Provide ongoing supplemental executive
retirement plans; all defined benefit
pension plans have been frozen
   LOGO    Provide only limited perquisites, which
provide nominal additional assistance to allow
executives to focus on their duties
   LOGO    Provide uncapped award opportunities

 

  

 

 

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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.

 

 

LOGO

 

 

 

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.

 

 

 

  

 

 

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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.

 

  

 

 

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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

 

·   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 Segment

Primary Peer Group (for Benchmarking President and CEO and other NEOs’ compensation)(1)

 

Consumer
Finance
   Data Processing
& Outsourced
Services
   Financial
Exchanges
& Data
   Investment
Banking &
Brokerage
   Research &
Consulting
Services
Discover Financial
Services
  

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

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.

 

  

 

 

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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.

 

  

 

 

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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 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 72
  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.

 

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 75
  BENEFITS   Retirement, Health and
Welfare
 

401(k) plan with Company match

 

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 89
  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 89
  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 89
  OTHER   Limited Perquisites   Limited additional benefits provided to certain executives   

Provide nominal additional assistancethat allows executives to focus on their duties

 

   Page 90

 

  

 

 

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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

 

 

LOGO

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

 

  

 

 

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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

 

·   operating income (on a run rate basis), which measures business efficiency and profitability;

 

·   net revenues, which measure the ability to drive revenue growth;

Business Unit Financial Objectives

 

·   defined business unit-specific goals that contribute to the Company’s revenue growth and profitability;

Strategic Objectives

 

·   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 extent to which employees feel passionate about their jobs, are committed to the organization and put discretionary effort into their work, based on their responses to employee surveys. Employee engagement is one important measure of progress toward our social objectives, as part of our broader ESG focus.

 

  

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.

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,

 

  

 

 

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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

Objective

   Threshold
(0% payout)        
   Target
(100% Payout)        
   Maximum
(200% Payout)        
   Nasdaq’s
Results for 2021
as Measured for
Compensation        
Purposes
   Payout
Percentage        
of Target
Incentive
Award Amount

Operating

   $1,326.0M            $1,401.0M -            $1,458.0M            $1,848.6M            200%        

Income

      $1,421.0M         

(Run Rate)1

              
           

Net Revenues2

   $2,723.0M    $2,811.0M -    $2,898.0M    $3,339.5M    200%        
          $2,843.0M               

 

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; severance; and benefits from certain initiatives that were not initially included in the 2021 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 acquisitions and divestitures.

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.

 

  

 

 

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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.

 

  

 

 

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Global Exchange Peer Companies Used for Three-Year PSUs1

 

 

LOGO

 

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    Resulting Shares Earned
  TSR Versus the Relevant Group     

  >= 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 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.

 

  

 

 

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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               

 

  

 

 

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NEO Compensation Summaries

 

LOGO

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.

 

  

 

 

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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

 

1

Ms. Friedman was awarded a target amount of 53,032 PSUs, and 13,258 RSUs, on April 1, 2021 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.

 

 

  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

 

  

 

 

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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

 

  

 

 

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LOGO

2021 Performance Highlights

 

  ·   Drove Nasdaq’s financial stewardship efforts, which resulted in record performance for 2021, including net revenues of $3.4 billion, an increase of 18% over 2020. In addition, Solutions Segments revenues increased 21%, mostly due to organic growth.

 

  ·   Executed consistent capital planning, which enabled the Company to return approximately $1.3 billion of cash to shareholders in 2021, including $943 million in share repurchases and $350 million in dividends. Completed the Company’s first accelerated share repurchase program.

 

  ·   Strengthened the Company’s balance sheet by refinancing and retiring the outstanding 1.75% senior notes due 2023 and issuing 615 million of 0.900% Senior Notes due 2033.

 

  ·   Navigated the Company’s finances during 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.

 

  ·   Enhanced the Company’s ESG practices and disclosures and expanded reporting to include TCFD and SASB standards, driving material improvement in scores/ratings from leading ESG research providers including Sustainalytics, ISS and CDP.

2021 Compensation Elements

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.

 

  

 

 

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     Type of Compensation   2021 Annualized
         Amounts

  Base Salary

   Fixed   $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

 

1

Ms. Dennison was awarded a target amount of 6,363 PSUs, and 1,590 RSUs, on April 1, 2021 with the terms and conditions described in the “Long-Term Incentive Compensation” section above.

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.

 

 

  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.

 

 

  Target PSUs

  

Actual Performance as a

  

PSUs

  Awarded in 2019

  

Percent of Target

  

Earned

  3,393

   200%    6,786

 

  

 

 

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LOGO

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.

 

  

 

 

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     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

 

1

Ms. Dillard was awarded a target amount of 8,485 PSUs, and 2,121 RSUs, on April 1, 2021 with the terms and conditions described in the “Long-Term Incentive Compensation” section above.

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

 

  

 

 

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LOGO

2021 Performance Highlights

 

 

Corporate Platforms segment achieved an 18% revenue increase year-over-year.

 

 

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.

 

 

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.

 

 

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.

 

 

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.

 

       
     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

 

 

 

  1

Mr. Griggs was awarded a target amount of 8,485 PSUs, and 2,121 RSUs, on April 1, 2021 with the terms and conditions described in the “Long-Term Incentive Compensation” section above.

 

  

 

 

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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

 

  

 

 

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LOGO

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.

 

 

Completed the technical launch of Fusion for the Nordic Equity Derivatives Market, our second market on our new Fusion platform.

 

 

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.

 

 

Developed the trading application services framework for our exchanges and delivered enhanced Nasdaq Financial Framework clearing applications.

 

 

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.

 

       
     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

 

 

 

  1

Mr. Peterson was awarded a target amount of 10,076 PSUs, and 2,519 RSUs, on April 1, 2021 with the terms and conditions described in the “Long-Term Incentive Compensation” section above.

 

  

 

 

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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

 

  

 

 

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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”).

 

  

 

 

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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;

 

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

President and CEO

   6x base salary

CFO

   4x base salary

EVPs

   3x base salary

 

  

 

 

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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.

 

  

 

 

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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

 

LOGO

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.

 

  

 

 

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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

  

 

  

 

$23,407

  

 

$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.

The amount reported in this column reflects a one-time, cash sign-on bonus for Ms. Dillard, who began employment as EVP, Investment Intelligence on June 17, 2019.

 

2.

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.

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.

The amounts reported in this column reflect the cash awards made to the NEOs under the ECIP or other performance-based incentive compensation programs.

 

  

 

 

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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. 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% 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, retirement at age 62 (which is the earliest age at which a participant may retire and receive unreduced benefits under the plans) and other assumptions used as described in Note 10 to the Company’s audited financial statements for the fiscal 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.

 

5.

The following table sets forth the 2021 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, lease, tolls, fuel, parking, maintenance and other related expenses.

 

             

Name

  

Contribution to the

401(k) Plan ($)