Increases to CEO Compensation Might Be Put On Hold For Now at Nasdaq, Inc. (NASDAQ:NDAQ)

By
Simply Wall St
Published
June 08, 2021
NasdaqGS:NDAQ
Source: Shutterstock

Under the guidance of CEO Adena Friedman, Nasdaq, Inc. (NASDAQ:NDAQ) has performed reasonably well recently. As shareholders go into the upcoming AGM on 15 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Nasdaq

How Does Total Compensation For Adena Friedman Compare With Other Companies In The Industry?

According to our data, Nasdaq, Inc. has a market capitalization of US$28b, and paid its CEO total annual compensation worth US$16m over the year to December 2020. We note that's an increase of 14% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$12m. Accordingly, our analysis reveals that Nasdaq, Inc. pays Adena Friedman north of the industry median. Furthermore, Adena Friedman directly owns US$20m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$1.2m US$1.0m 7%
Other US$15m US$13m 93%
Total CompensationUS$16m US$14m100%

On an industry level, roughly 13% of total compensation represents salary and 87% is other remuneration. Nasdaq sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
NasdaqGS:NDAQ CEO Compensation June 8th 2021

A Look at Nasdaq, Inc.'s Growth Numbers

Over the past three years, Nasdaq, Inc. has seen its earnings per share (EPS) grow by 12% per year. It achieved revenue growth of 30% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Nasdaq, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Nasdaq, Inc. for providing a total return of 87% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Nasdaq that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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