8-KLeadership Changes

NASDAQ, INC. 8-K Report, Executive Changes (Nov 24, 2021)

Filed November 24, 2021For Securities:NDAQ

Summary

This SEC 8-K filing from Nasdaq, Inc. (NDAQ) announces a new five-year employment agreement for President and CEO Adena T. Friedman, effective January 1, 2022, through January 1, 2027. The agreement outlines her compensation structure, including a base salary of at least $1,250,000, a target annual incentive bonus of at least $3,000,000, and equity awards. Notably, Ms. Friedman will receive a one-time, $10 million stock option grant upon commencement, with specific vesting conditions tied to performance and tenure. The filing also details the terms for termination payments and benefits under various scenarios, including "double trigger" provisions related to a change of control. These provisions aim to provide Ms. Friedman with financial security and ensure continued leadership stability. The new agreement supersedes her previous employment contract from 2016 and includes standard restrictive covenants such as confidentiality and non-solicitation.

Key Highlights

  • 1New 5-year employment agreement for CEO Adena T. Friedman, effective Jan 1, 2022 - Jan 1, 2027.
  • 2Minimum annual base salary set at $1,250,000.
  • 3Target annual incentive compensation (bonus) of at least $3,000,000 based on performance goals.
  • 4Significant one-time grant of non-qualified stock options valued at $10,000,000, with vesting tied to performance and tenure.
  • 5Termination provisions include multi-year base salary and bonus payouts for termination without cause or for good reason, especially in connection with a change of control ('double trigger').
  • 6Post-termination benefits include extended vesting of equity awards and continued health insurance premium coverage.
  • 7Agreement includes a two-year non-compete clause following termination.

Frequently Asked Questions

The new employment agreement for Adena T. Friedman is effective from January 1, 2022, and runs through January 1, 2027, a term of five years.

The agreement guarantees a minimum annual base salary of $1,250,000 and a target annual incentive compensation of at least $3,000,000, contingent upon performance goals. She also receives equity awards and a significant one-time stock option grant.

In the event of termination without cause or by Ms. Friedman for good reason (outside of a change of control), she is entitled to two times her prior year's base salary and target bonus, plus a pro-rata bonus. If this occurs within two years of a change of control ('double trigger'), she receives similar cash severance, accelerated vesting of all outstanding equity awards, and continued health insurance premiums for up to 24 months.

Yes, the agreement includes a two-year prohibition on Ms. Friedman rendering services to a competing entity following the termination of her employment. This is part of the 'Continuing Obligations Agreement' which also includes confidentiality and inventions assignment provisions.