Here’s why shareholders may want to be cautious with the increase in the CEO compensation package of Nasdaq, Inc. (NASDAQ: NDAQ)
CEO Adena Friedman has done a decent job of delivering relatively good performance to Nasdaq, Inc. (NASDAQ: NDAQ) recently. In view of this performance, the compensation of the CEO will probably not be the main objective of the shareholders on the occasion of the General Meeting of June 15, 2021. However, some shareholders may still hesitate to be too generous with the compensation of the CEO .
Comparison of Nasdaq, Inc. CEO Compensation with Industry
Our data indicates that Nasdaq, Inc. has a market capitalization of US $ 28 billion and that the CEO’s total annual compensation was reported at US $ 16 million for the year through December 2020. These include an increase of 14% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is smaller, at US $ 1.2 million.
Compared to other companies in the industry with market capitalizations exceeding US $ 8.0 billion, the reported median total CEO compensation was US $ 12 million. This suggests that Adena Friedman is paid more than the industry median. Additionally, Adena Friedman directly owns $ 20 million in company stock, which means they are deeply invested in the company’s success.
|Salary||US $ 1.2 million||US $ 1.0 million||7%|
|Other||$ 15 million||US $ 13 million||93%|
|Total compensation||US $ 16 million||$ 14 million||100%|
In terms of industry, salary made up around 13% of total compensation for all the companies we analyzed, while other compensation made up 87% of the pie. In the case of the Nasdaq, non-salary compensation represents a larger share of total compensation, compared to the industry as a whole. If non-salary compensation dominates total salary, it is an indicator that the executive salary is linked to the performance of the company.
NasdaqGS: NDAQ CEO compensation June 8, 2021
Growth of Nasdaq, Inc.
Nasdaq, Inc.’s earnings per share (EPS) have grown 12% per year over the past three years. Last year, its turnover increased by 30%.
Shareholders would be happy to know that the company has improved over the past few years. The combination of strong revenue growth and improving EPS over the medium term is certainly indicative of the kind of growth we like to see. Historical performance can sometimes be a good indicator of what happens next, but if you want to take a look at the future of the business, this might be of interest to you. free viewing analyst forecasts.
Was Nasdaq, Inc. a Good Investment?
We believe the 87% three-year total shareholder return would leave most Nasdaq, Inc. shareholders smiling. So they might not be affected at all if the CEO were to be paid more than is normal for companies of the same size.
Given that the overall performance of the company has been reasonable, the CEO compensation policy might not be the focus of shareholders at the next AGM. However, any decision to increase CEO compensation could face some objections from shareholders as the CEO is already paid more than the industry average.
CEO pay can have a huge impact on performance, but it’s only one element. We did our research and spotted 3 warning signs for the Nasdaq that investors should consider moving forward.
Shift gears from the Nasdaq, if you’re looking for a crisp balance sheet and premium returns, this free List of high yield, low leverage companies is a great place to look.
This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.