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Shareholders May Not Be So Generous With Nasdaq, Inc.'s (NASDAQ:NDAQ) CEO Compensation And Here's Why

Under the guidance of CEO Adena Friedman, Nasdaq, Inc. (NASDAQ:NDAQ) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 15 June 2021. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Nasdaq

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

At the time of writing, our data shows that Nasdaq, Inc. has a market capitalization of US$28b, and reported total annual CEO compensation of US$16m for the year to December 2020. We note that's an increase of 14% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$12m. Accordingly, our analysis reveals that Nasdaq, Inc. pays Adena Friedman north of the industry median. What's more, Adena Friedman holds US$20m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2020

2019

Proportion (2020)

Salary

US$1.2m

US$1.0m

7%

Other

US$15m

US$13m

93%

Total Compensation

US$16m

US$14m

100%

On an industry level, around 13% of total compensation represents salary and 87% is other remuneration. In Nasdaq's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Nasdaq, Inc.'s Growth

Nasdaq, Inc. has seen its earnings per share (EPS) increase by 12% a year over the past three years. 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. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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?

Boasting a total shareholder return of 87% over three years, Nasdaq, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed 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 it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Nasdaq that you should be aware of before investing.

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.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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