Nasdaq boosts severance for top execs

What should any smart executive do when a merger wave is overtaking his industry? Make sure he has a well-packed golden parachute, of course. Consider the Nasdaq Stock Market, which is giving several very senior executives some extra protection against being fired as a result of a takeover.

In a late-March filing with the Securities and Exchange Commission, Nasdaq detailed the new packages, which have been granted to six of its executive vice presidents: listings head Bruce Aust, transactions chief Chris Concannon; strategy and market-data maven Adena Friedman; exchange-traded-fund head John Jacobs; technology czar Steve Randich; and CFO David Warren. Each executive is entitled to receive two years' salary in cash plus 100 percent of his or her "target bonus" for the year in which the termination occurs. The previous packages called for severance of one year's salary. Under an earlier agreement the executive vice presidents' stock-option awards fully vest upon a change-of-control-related firing.

How expensive would the agreements be if triggered? Randich, for one, would receive a $2.16 million payout, based on his $500,000 annual salary, $657,500 bonus last year and option holdings worth $506,250, according to Nasdaq's 2005 proxy statement. Warren would be entitled to $2.06 million, and Jacobs would get $2.02 million. (The other executives' pay is not disclosed.) A Nasdaq spokeswoman, citing company policy regarding compensation matters, declined comment beyond what is disclosed in the filing.

此举正值交易所合并upswing, fueled by announcements late last month that the New York Stock Exchange would acquire Archipelago Holdings and that Nasdaq would buy Instinet Group (see "What Putnam's sellout means," page 7).