NASDAQ INC
For the period ended Jun 11, 2024. Filed Apr 26, 2024.
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Jun 11, 2024 · Filed Apr 26, 2024
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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
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Filed by a party other than the Registrant
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Check the appropriate box:
| ☐ | Preliminary Proxy Statement |
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| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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| ☒ | Definitive Proxy Statement |
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| ☐ | Definitive Additional Materials |
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| ☐ | Soliciting Material Pursuant to § 240.14a-12 |
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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 all boxes that apply):
| ☒ | No fee required |
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| ☐ | Fee paid previously with preliminary materials |
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| ☐ | 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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Proxy
Statement
April 26, 2024
Select ESG Awards and Recognition
Member of Dow Jones Sustainability Indices Powered by the S&P Global CSA
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Dear Fellow Shareholders,
| Despite heightened complexity and the persistent unpredictability over the last few years, the Nasdaq team continued to execute with precision across our entire business, delivering another successful year of outstanding accomplishments. The following 2023 highlights reflect the strength and resilience of our business, as well as our calculated investments to drive the future, and—importantly—our relentless focus on expanding our capabilities and generating value for you. Strategic and Financial Highlights • Completed the transformative acquisition of Adenza, a provider of mission-critical risk management, regulatory reporting, and capital markets software to the financial services industry, on November 1, 2023. • Delivered record net revenues1 of $3.9 billion, including crossing the $1 billion mark in net revenues for the first time in a single quarter, achieving revenues of $1.1 billion in the fourth quarter. • Returned over $700 million to our shareholders through quarterly dividends and share repurchases. • Achieved a breakthrough year in moving Verafin upmarket, signing three Tier 1 banks and four Tier 2 banks during the year, while continuing to expand our footprint across small to medium-sized banks, resulting in 237 overall new clients added in 2023. | Nasdaq’s acquisition of Adenza is an important strategic milestone, further advancing Nasdaq’s transformation towards becoming the trusted fabric of the world’s financial system. |
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| • Generated $31 billion in net inflows to exchange traded products tracking Nasdaq indices, ending the year with $473 billion in assets under management. • Accelerated our efforts to modernize markets with the successful migration of our second U.S. options market to the Amazon Web Services cloud infrastructure. • Maintained U.S. listings leadership, marking Nasdaq’s fifth consecutive year as the leading U.S. listing exchange in terms of both number of IPOs and proceeds raised. In total, we were pleased to welcome 103 U.S. operating company IPOs that raised more than $11 billion in proceeds. Enhanced Value Creation Nasdaq’s acquisition of Adenza is an important strategic milestone, further advancing Nasdaq’s transformation towards becoming the trusted fabric of the world’s financial system. The Board carefully evaluated the benefits of the transaction, which was Nasdaq’s largest ever acquisition, and unanimously concluded that Adenza’s leading risk management and regulatory solutions would strengthen Nasdaq’s range of product and service offerings, deepen and expand client relationships, and create long-term value for our shareholders. The Board recognizes the importance of successfully integrating Adenza and is fully committed to the oversight of Nasdaq’s progress in expanding its growth opportunities, unlocking synergies, and reducing operating leverage. | |
| 1 | Represents revenues less transaction-based expenses. |
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Board Refreshment
| To ensure our effective oversight, we continuously seek new and fresh perspectives on the Board. We strive to align the right combination of backgrounds and skill sets with the expertise necessary to guide the Company into the future. In June 2023, we welcomed Jeffery W. Yabuki, former CEO of Fiserv, a world-leading enterprise software company serving the global banking and payment systems. We are benefiting tremendously from his years of experience and deep expertise as an enterprise software executive in the financial sector. In connection with the Adenza transaction, we were excited to welcome Holden Spaht, Managing Partner at Thoma Bravo, to the Board in November 2023. Mr. Spaht brings vast technology and software company experience and his perspective as both a large shareholder of Nasdaq and as a fintech-focused private equity investor is invaluable. In this Proxy Statement, you will also see that Steven D. Black has decided not to stand for re-election. We thank Mr. Black, a valued friend and colleague, for his remarkable 13 years of service on our Board. We are grateful for his commitment, counsel, and contributions throughout his many roles, most recently as Chair of the Management Compensation Committee and as a member of the Nominating & ESG Committee. We are pleased to announce the nomination of Kathryn A. Koch to join our Board. Ms. Koch is the President and CEO of TCW, a leading global asset management firm. Her extensive background in investment management, capital markets, and client relationships adds an optimal combination of leadership capabilities and skills vital to the future of Nasdaq. | The independent directors unanimously share in our Chair and CEO Adena T. Friedman’s vision, optimism, and pursuit of building— rewriting—a better future. |
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| Risk Oversight and Strategic Resilience Under the leadership of the Audit & Risk Committee, the Board remained focused on its oversight of Nasdaq’s risk framework as a vital component of ensuring the long-term viability of Nasdaq’s business operations. In 2023, the Audit & Risk Committee monitored risks associated with the evolving cybersecurity threat landscape and developing technologies, including artificial intelligence, which has the potential to transform our industry. We believe our continued success, and our ability to secure a future of resilient growth, lie in the Company’s ability to protect itself from an ever-evolving threat landscape while simultaneously embracing the newest technologies to fuel our growth. Rewriting Tomorrow True resilience depends on our ability to anticipate change, question today, and rewrite tomorrow. Disruption is part of Nasdaq’s DNA. We have dared to ask big questions, and we will continue to do so. Can markets be more accessible? Can we empower investors to invest in tomorrow’s economy? Can we bring innovation to solve regulatory challenges? Can we stop financial crime before it happens? Can we change the world? The independent directors unanimously share in our Chair and CEO Adena T. Friedman’s vision, optimism, and pursuit of building—rewriting—a better future. We are confident and incredibly motivated by what lies ahead. Thank you for your investment and trust in Nasdaq and for the opportunity to serve as your Board. | |
| Adena T. Friedman | Michael R. Splinter | |
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| Chair and CEO | Lead Independent Director | |
| Melissa M. Arnoldi | Thomas A. Kloet | Toni Townes-Whitley |
| Charlene T. Begley | Holden Spaht | Jeffery W. Yabuki |
| Steven D. Black | Johan Torgeby | Alfred W. Zollar |
| Essa Kazim | ||
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| Nasdaq achieved strong operational performance in 2023 as we continued to execute on our strategic pivot to become the trusted fabric of the world’s financial system. This journey, which we embarked on in 2017, has enabled Nasdaq to become a scaled technology partner to the world’s financial system, providing mission-critical capabilities to help solve our clients’ most pressing and complex challenges. In 2023, Nasdaq was defined by significant strategic milestones, headlined by our acquisition of Adenza in November, a truly transformative transaction for our Company. Importantly, we completed the acquisition of Adenza while simultaneously maintaining our exceptional financial profile and delivering broad-based growth across our business. Today, Nasdaq is a financial technology powerhouse with world-leading platforms that enhance the liquidity, transparency, and integrity of the world’s economy. On behalf of the entire Nasdaq team, I am excited to share how we plan to continue to execute on our strategy to deliver our next phase of scalable, profitable, and durable growth for our clients and shareholders. | Today, Nasdaq is a financial technology powerhouse with world-leading platforms that enhance the liquidity, transparency, and integrity of the world’s economy. |
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Evolving Our Divisional Structure
We have evolved our divisional structure to align our business more closely to our clients’ needs and the megatrends that are shaping our industry. This structure segments Nasdaq’s businesses into three divisions and formalizes our focus on the foundational pillars of the global financial ecosystem: liquidity, transparency, and integrity.
| • | The Capital Access Platforms division supports our transparency pillar, expanding connections between the corporate and investor communities to reduce complexity and drive strategic investments. Our world-leading listing venue and our innovative solutions create more seamless access to capital and investment strategies by providing objective data and analytics, as well as growth-oriented index products that focus on the future of the world’s economy. |
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| • | The Financial Technology division advances our liquidity and integrity pillars. These businesses power our efforts to drive the modernization of markets, build advanced risk management and regulatory reporting capabilities, and protect the world’s financial transactions with advanced anti-financial crime solutions, all in the effort to strengthen and reinforce trust in the global financial system. |
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| • | The Market Services division focuses on our liquidity pillar. Through our foundational trading exchanges, we continue to deliver demand-driven innovations that ensure our financial markets are global engines for liquidity. |
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With our divisional structure and focus on these three foundational pillars solidified, our acquisition of Adenza bolsters our technology platform and positions us as an even more comprehensive partner to banks, brokers, financial market infrastructure providers, and investment managers around the world.
We are encouraged by the pace of the Adenza integration and the constructive conversations we are having with our clients. In fact, Adenza has already accelerated our growth story by expanding Nasdaq’s total pro forma revenue, Solutions revenue, andnon-GAAP operating margin.
Driving Strong Operational and Financial Performance
In what continued to be a dynamic operating environment, Nasdaq delivered another year of strong operational performance in 2023.
We launched new, innovative products to help our clients better navigate the rapidly evolving investment and sustainability landscape. Our marketplace technology footprint continued to expand, particularly in the Latin America and Asia Pacific regions, as we partnered with local exchanges to upgrade and enhance their market infrastructure. In our Financial Crime Management Technology business, we achieved a major milestone by signing our first Tier 1 banks to Verafin, while continuing to realize strong growth among small to medium-sized banks.
Our operating performance fueled a strong year of financial results. For the full year, Nasdaq achieved $3.9 billion in net revenues, representing year-over-year growth of 9%, or 5% organically,1 and $2.1 billion innon-GAAP 2 operating income, representing 5% organic growth.1 Importantly, we achieved this strong revenue growth and business expansion while maintaining a 52%non-GAAP operating margin, excluding Adenza.
| 1 | Excluding impacts of changes in foreign exchange rates and the Adenza acquisition. |
| 2 | Refer to Annex A of this Proxy Statement for a reconciliation of GAAP to non-GAAP measures. |
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Delivering Our Next Phase of Scalable, Profitable, and Durable Growth
Nasdaq stands as a trusted partner to our clients and to the industry. We are a modern technology provider that takes a client-first and tech-enabled approach to developing and delivering solutions that help our clients manage complexities across the capital markets and financial system globally.
As we focus on continuing our momentum throughout 2024, we will be guided by three strategic priorities.
| • | Integrate: Successfully integrate Adenza into Nasdaq, unlock synergies, and drive operating leverage. Notably, we expect to action approximately 70% of the targeted $80 million in net expense synergies by the end of 2024, with a portion realized in 2024 and fully recognized in 2025. |
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| • | Innovate: Build upon our technology foundation by investing in artificial intelligence opportunities across our products and our employees. We are focused on making generative artificial intelligence tools available to 100% of our employees by the end of the year aligned around five structural themes: coding, content, data, workflow automation, and algorithmic intelligence. |
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| • | Accelerate: Accelerate the impact of our divisional structure and unlock new growth opportunities that will drive our business into the future. Our mission-critical and complementary solutions will be at the forefront of our One Nasdaq strategy, with a goal of at least $100 million in incremental revenue through cross-sell opportunities in the Financial Technology division expected to be achieved by the end of 2027 and fully recognized in 2028. |
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We are well on our journey to becoming the trusted fabric of the world’s financial system, and we look forward to continuing to deliver value to our clients that drives growth for our business and our shareholders.
Sincerely,
Adena T. Friedman
Chair and CEO
Nasdaq, Inc.
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Board of Directors (From left to right)*
| Johan Torgeby | Michael R. Splinter |
|---|---|
| Steven D. Black | Holden Spaht |
| Melissa M. Arnoldi | Toni Townes-Whitley |
| Alfred W. Zollar | Thomas A. Kloet |
| Essa Kazim | Charlene T. Begley |
| Adena T. Friedman | Jeffery W. Yabuki |
*Members of the Board as of April 26, 2024
Executive Officers
| Adena T. Friedman | Bradley J. Peterson |
|---|---|
| Chair and CEO | EVP and CIO/CTO |
| Brendan Brothers | Jeremy Skule |
| EVP and Head of Financial Crime Management Technology | EVP and Chief Strategy Officer |
| Tal Cohen | Bryan E. Smith |
| President | EVP and Chief People Officer |
| Michelle L. Daly | Sarah Youngwood |
| SVP and Controller and Principal Accounting Officer | EVP and CFO |
| P.C. Nelson Griggs | John A. Zecca |
| President | EVP and Chief Legal, Risk and Regulatory Officer |
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Acronyms and Certain Defined Terms
| ARR | Annualized Recurring Revenue |
|---|---|
| CEO | Chief Executive Officer |
| CFO | Chief Financial Officer |
| CIO | Chief Information Officer |
| COBRA | Consolidated Omnibus Budget Reconciliation Act |
| CTO | Chief Technology Officer |
| DEI | Diversity, Equity, and Inclusion |
| 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 |
| EVP | Executive Vice President |
| Exchange Act | Securities Exchange Act of 1934, as amended |
| 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, 2023, as filed with the SEC on February 21, 2024 |
| GAAP | U.S. Generally Accepted Accounting Principles |
| GHG | Greenhouse Gas |
| IPO | Initial Public Offering |
| M&A | Mergers and Acquisitions |
| MIP | Verafin Holdings Inc. Amended and Restated Management Incentive Plan |
| NEO | Named Executive Officer |
| P&L | Profit & Loss |
| 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 |
| S&P | Standard & Poor’s |
| SEC | U.S. Securities and Exchange Commission |
| SVP | Senior Vice President |
| TCFD | Taskforce on Climate-related Financial Disclosures |
| TSR | Total Shareholder Return |
| VP | Vice President |
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The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.