A recent SEC filing by Nasdaq Inc (NASDAQ:NDAQ) reveals that the company and Adena T. Friedman, the President and Chief Executive Officer of Nasdaq, entered into a new employment agreement, effective as of January 1, 2022 (the “Agreement”), relating to the continuation of her role as President and Chief Executive Officer of Nasdaq.
The term of the Agreement is January 1, 2022 to January 1, 2027. The Agreement provides that Ms. Friedman will receive:
- an annual base salary of no less than $1,250,000;
- annual incentive compensation that is targeted at not less than $3,000,000 based on the achievement of one or more performance goals established for the year by the Management Compensation Committee; and
- based on the Management Compensation Committee’s evaluation of Nasdaq and Ms. Friedman’s performance, peer group market data and internal equity, and consistent with past practices with respect to the combined aggregate value of grants, equity awards in the form of options, restricted share units and/or performance share units (“PSUs”).
In addition, the Management Compensation Committee approved a one-time grant of non-qualified stock options for Ms. Friedman, valued at $10,000,000, to be granted January 3, 2022 pursuant to Nasdaq’s Equity Incentive Plan. The option award will vest five years after the grant date, with 50% of such award vesting contingent upon the achievement of the applicable performance conditions established by the Management Compensation Committee.
If Ms. Friedman’s employment is terminated without cause by Nasdaq, or for good reason by Ms. Friedman, which occurs prior to a Change in Control (as such term is defined in the Agreement) or at least two years after a Change in Control, she will be entitled to the following payments and benefits:
- a cash payment equal to the sum of: (i) two times the prior year’s annual base salary, (ii) two times the Target Bonus and (iii) any pro rata Target Bonus with respect to the calendar year in which the termination occurs to the extent that performance goals are satisfied;
- continued vesting for 12 months of outstanding PSUs, restricted stock units and options, with any performance based vesting based on actual performance goals during the respective performance periods; and
- a taxable monthly cash payment equal to the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) premium for the highest level of coverage available under Nasdaq’s group health plans, reduced by the monthly amount that Ms. Friedman would pay for such coverage if she was an active employee (“COBRA Premiums”), until the earlier of 24 months and the date Ms. Friedman is eligible for coverage under the health care plans of a subsequent employer.