NASDAQ OMX Group (NDAQ)

Competitive Market Analysis

To evaluate the external competitiveness of our executive compensation program, the management compensation committee compares certain elements of the program to similar elements used by peer companies. Due to the global expansion of NASDAQ OMX in 2008, the committee reviewed and reconstituted the peer group that it had used previously to better reflect the characteristics of our current organization. The committee believed that the prior peer group did not adequately capture the full range of competition for NASDAQ OMX executive talent, especially in the technology and financial services industries, or appropriately reflect the size and global scope of NASDAQ OMX.

At the committee’s request, NASDAQ OMX’s human resources department engaged Hewitt Associates (Hewitt) to assist in the review and revision of the peer group in mid-2008. To begin its analysis, Hewitt identified a broad group of potential peer companies, including companies with similar Standard Industry Classification codes, analyst-identified competitors, companies that identify NASDAQ OMX as a peer and other global, diversified technology and financials services companies. Hewitt then reduced this group to 39 companies, based on their size and type of business operations, with median revenues comparable to those of NASDAQ OMX after the business combination.

After review and discussion, the committee decided to establish two distinct peer groups for competitive market analysis of the compensation program for our named executive officers. The primary peer group is an industry-specific group that includes our direct business competitors. The primary peer group consists of the following 13 companies.

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Since the primary peer group consists of a small group of companies for which information may not always be available, the committee believed it would be useful to establish a secondary peer group consisting of a broader group of companies. The secondary peer group includes most of the companies in the primary peer group, as well as several additional global, diversified technology and financial services companies. The secondary peer group consists of the following 31 companies.

Peer group data serves as only one reference point that the committee considers in evaluating our executive compensation program. The committee uses this data to see how various elements of our executive compensation program compare to other companies. However, the committee does not set the compensation of our executives based on this data or target NASDAQ OMX’s executive compensation to a specific percentile of the compensation set by our competitors. Instead, the comparison is conducted solely to ensure that the compensation is competitive to the market, as represented by the peer groups. In addition, NASDAQ OMX faces competition from private firms, such as small trading firms and private equity funds, for which public data is not available. Therefore, each executive is evaluated individually based on skills, knowledge, performance and, in the committee’s business judgment, the value he or she brings to the organization and NASDAQ OMX’s retention risk.

Competitive Market Analysis

To evaluate the external competitiveness of the cash component of our executive’s compensation (base salary and annual incentive award opportunity) for 2007, the management compensation committee reviewed data from proxy statements filed in 2006 by a group of peer companies prior to approving salary and target annual cash incentive opportunity amounts in December 2006. This peer group of companies, selected by the

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human resources department based on Standard Industry Classification (SIC), geography, size and financial performance criteria, consisted of the following companies:

The peer group data served as only one reference point that the committee considered in evaluating the cash component of executive compensation.

Nasdaq’s human resources department retained Hewitt Associates to assist it in recommending a broad-based equity award to Nasdaq employees, including the named executive officers other than the CEO, which was approved by the management compensation committee in December 2007. This continued work previously performed by Hewitt in advising Nasdaq on revisions to its equity program in 2006. As part of this assignment, Hewitt compared total “overhang” of outstanding awards (a measure of potential dilution to stockholders) and “run rates” (a measure of the rate of share use) among a group of comparable companies. Nasdaq’s human resources department provided Hewitt with a list of industry peer companies from which Hewitt used the following companies for which relevant data was available.

In addition, Hewitt used survey data from companies in the financial industry to advise Nasdaq on other elements of the broad-based equity award such as vesting schedules and industry practices with respect to awards as a percentage of base salary. This is discussed in more detail in the “Long-Term Stock-Based Compensation” section of this compensation discussion and analysis. Hewitt did not make recommendations as to individual award amounts.

The management compensation committee used this competitive market data on cash and equity compensation to see how various elements of our executive pay levels compare to other companies. However, the committee does not rigidly set the compensation of our executives based on this data or target Nasdaq’s executive compensation to a specific percentile of those of its competitors. Instead, the comparison is conducted solely to ensure that the compensation is competitive to the market, as represented by the peer group. In addition, Nasdaq faces competition from private firms, such as small trading firms and private equity funds, for which public data is not available. Therefore, each executive is evaluated individually based on skills, knowledge, performance and, in the committee’s business judgment, the value he or she brings to the organization and Nasdaq’s retention risk.