NASDAQ, INC. NDAQ

Removed from 2025

• While this CD&A primarily covers the compensation of our 2024 NEOs identified to the right, the principles underlying our compensation philosophy extend throughout the organization, support Nasdaq’s growth strategy, and are aligned to create long-term shareholder value.
• Executive Summary 62 Business Performance Highlights 62 Compensation Program Highlights 63 Decision-Making Framework 64 Compensation Philosophy Guiding Principles 64 Say on Pay Results 65 How We Determine Compensation 65 Role of Compensation Consultant 66 Competitive Positioning 66 Executive Compensation Peer Group 67 Tally Sheets 67 What We Pay and Why 68 Elements of Executive Compensation 68 Pay for Performance 69 Compensation Mix 69 2024 Compensation Decisions 69 Base Salary 69 Annual Cash Incentive Compensation 69 Long-Term Incentive Compensation 72 NEO Compensation Summaries 74 Other Aspects of Our Executive Compensation Program 87 General Equity Award Grant Practices 87 Practices Regarding Timing of RSU and PSU Grants 87 Policies and Practices Regarding the Timing of Certain Option-like Instruments 87 Benefits 87 Severance 87 Other 88 Risk Mitigation and Other Pay Practices 88 Risk Assessment of Compensation Program 88 Stock Ownership Guidelines 88 Stock Holding Guidelines 89 Trading Controls and Hedging and Pledging Policies 89 Incentive Recoupment Policies 89 Tax and Accounting Implications of Executive Compensation 90
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• EXECUTIVE COMPENSATION
• In 2024, Nasdaq executed against its strategic priorities, including substantially completing the integration of AxiomSL and Calypso, while continuing to progress as a scalable platform company, deliver strong results, and create shareholder value.
• Our 2024 results demonstrate the strength of our One Nasdaq strategy and our ability to deliver on our long-term objectives.
• ● We achieved record net revenues in 2024 of $4.6 billion, an increase of 19% from 2023.
• Annualized SaaS revenues increased 14% and represented 37% of ARR.
• ● We successfully delivered on our 2024 strategic priorities – Integrate, Innovate, Accelerate – enabling us to capitalize on opportunities for sustainable, scalable, and resilient growth.
• — Integrate – We finished the year ahead of our net expense synergy and deleveraging goals.
• We have fully actioned the $80 million net expense synergies goal that was announced with the acquisition of AxiomSL and Calypso, one year ahead of target.
• — Innovate – We demonstrated our innovation leadership with the launch of AI-powered solutions and product enhancements across our divisions.
• We are continuing to advance our pipeline of new AI capabilities through our software and analytics solutions, with several feature launches planned for 2025.
• — Accelerate – We continued to make progress on our One Nasdaq strategy, completing 17 cross-sell deals since the completion of the Adenza acquisition through December 31, 2024 across solutions such as Nasdaq Surveillance, AxiomSL, and Nasdaq Verafin.
• ● We had an 80% win rate among eligible operating company IPOs in the U.S., and 2024 was our sixth consecutive year as the leading U.S. listing exchange in terms of both number of IPOs and proceeds raised.
• During the third quarter of 2024, we celebrated our 500th listing transfer, bringing the cumulative market capitalization at transfer to nearly $3 trillion.
• ● Our Index business launched a record 116 new products with its clients, more than half of which were international, 27 were within the institutional insurance annuity space, and 30 were in partnership with new Index clients.
• For the year, the Index business had $80 billion of net inflows, including $28 billion in the fourth quarter, and reported its fifth consecutive record quarter in average ETP AUM, reaching $647 billion at quarter end.
• ● Our Market Services division achieved record fourth quarter and full year net revenue, with fourth quarter net revenue benefiting from strength in U.S. cash equities and record U.S. equity derivatives volumes.
• Annual net revenue grew from strong results in U.S. cash equities, and index options revenue more than doubling as compared to 2023.
• ● We increased our dividend by 9% to $0.24 per share during 2024 driven by our strong free cash flow and reiterated our commitment to continue to increase the quarterly dividend payment until 2027.
• Additional 2024 business highlights are described on page 3 of this Proxy Statement.
• Compensation Program Highlights
• Highlights include the following:
• In 2024, excluding Ms. Youngwood (who, pursuant to the terms of her employment offer letter, did not receive an equity award in 2024), 90% of our NEOs’ total direct compensation was performance-based, or “at-risk”, and 68% of our NEOs’ total direct compensation was equity-based compensation.
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• We design our executive compensation program to reward financial performance, operational excellence, effective strategic leadership, and achievement of division and 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, particularly in a tight labor market, and to build an effective leadership team.
• 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.
• Say on Pay Results
• Each year, we carefully consider the results of our Say on Pay advisory vote from the prior year.
• For further information on our shareholder engagement, see “Shareholder Engagement.”
• How We Determine Compensation
• The factors considered include:
• ● performance against annual strategic objectives;
• ● defining and executing our strategy;
• ● leadership; and
• ● the financial performance of the Company.
• Role of Compensation Consultant
• Competitive Positioning
• Historically, Nasdaq used both a primary peer group and an additional technology-focused peer group for informational purposes.
• Following the annual compensation peer group review, the Management Compensation Committee decided to consolidate these peer groups for all NEO benchmarking for 2024.
• We believe using and disclosing a peer group provides valuable input into compensation levels and program design.
• ● Revenue size
• ● Market capitalization size
• ● Financial performance
• ● Direct exchange competitors
• ● Financial services companies
• ● Technology companies
• ● Companies with global complexity
• Financial Exchanges Cboe Global Markets, Inc Intercontinental Exchange, Inc. CME Group Inc. London Stock Exchange Group plc Deutsche Börse AG TMX Group Limited Information Services FactSet Research Systems Inc. S&P Global Inc. Moody’s Corporation Verisk Analytics, Inc. MSCI Inc. Financial Services BGC Group, Inc. Discover Financial Services The Charles Schwab Corporation Transaction Processing Automatic Data Processing, Inc. Mastercard Incorporated Fidelity National Information Services, Inc. PayPal Holdings, Inc. Fiserv, Inc. Visa Inc. Technology and Software Adobe Inc. Intuit Inc. eBay Inc. ServiceNow, Inc. Gen Digital Inc. Workday
• 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.
• 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.
• 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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• Pay for Performance
• Compensation Mix
• The mix of total target direct compensation for our NEOs in 2024 is shown below, excluding Ms. Youngwood, who did not receive an equity grant in 2024.
• Ms. Youngwood’s 2024 compensation is further described below.
• NEOs – 2024 Total Target Direct Compensation Mix
• 2024 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 2024.
• Base Salary
• Annual Cash Incentive Compensation
• The Management Compensation Committee reviews and considers our Chair and CEO’s recommendations and approves the goals for the coming year after identifying the objectives most critical to our future growth and most likely to hold executives accountable for the operations for which they are responsible.
• During 2024, the Management Compensation Committee approved two adjustments to the Company’s financial goals.
• Nasdaq implemented a change to the accounting treatment of the revenues associated with AxiomSL on-premises subscription contracts and began recognizing these subscription-based revenues on a ratable basis over the contract term.
• This change in accounting treatment resulted in a change to the revenues budgeted for 2024.
• To neutralize the impact of the accounting change on our bonus program, the corporate revenue and operating income targets were adjusted, preserving original goal rigor and ensuring consistency with the new methodology.
• Additionally, the Management Compensation Committee adjusted the corporate revenue and operating income goal scoring following a change in the forecasting methodology that had been used to establish the goals for one business unit.
• The result of the adjustment was a decrease in goal attainment for the NEOs.
• Although our ECIP is highly formulaic by design, awards are subject to adjustment at the discretion of the Management Compensation Committee, based on a holistic, qualitative assessment of individual performance delivered as well as ethical and responsible conduct.
• Corporate Objective Threshold (0% payout) Target (100%Payout) Maximum (200% Payout) Nasdaq’s Results for 2024 as Measured for CompensationPurposes Payout Percentage of Target Incentive Award Amount Operating Income (Run Rate)1 $2,278.3M $2,447.3M $2,540.1M $2,465.4M 120% Net Revenues2 $4,283.9M $4,542.1M $4,687.2M $4,585.3M 130% ARR3 $2,505.0M $2,716.0M $2,821.0M $2,716.0M 100%
• 1.
• Operating income (run rate) reflects our non-GAAP operating income adjusted to exclude: the impact of changes in foreign exchange rates; severance; certain divestiture initiatives; and one-time revenues that were not included in the 2024 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.
• Corporate net revenues exclude the impact of changes in foreign exchange rates, certain divestiture initiatives, and one-time revenues that were not included in the 2024 budget.
• 3.
• For additional information regarding certain adjustments made during 2024 to our corporate performance objectives, please see “Executive Compensation - Compensation Discussion and Analysis - Decision-Making Framework - How We Set Performance Targets” on page 70.