This excerpt taken from the NDAQ DEF 14A filed Apr 3, 2009.
Determining Executive Compensation
Our CEOs compensation is set according to his amended and restated employment agreement, which was effective January 1, 2007 (the 2007 employment agreement). Our CEO and NASDAQ OMXs human resources department develop compensation proposals for each other named executive officer. As part of this process, our CEO meets individually with each executive to discuss his or her performance against pre-established objectives during the previous year, as well as performance objectives for the coming year. This meeting gives each executive an opportunity to present his or her perspective of his or her performance and potential objectives and challenges for the upcoming year. Our CEO presents the results of the meetings with each executive to the management compensation committee for their review and consideration as part of the committees deliberation process. In making compensation decisions, the committee also reviews a peer group analysis, which is discussed further below, and tally sheets that detail the various elements of compensation, including equity compensation and retirement benefits, for each executive. The committee uses these tally sheets to evaluate the appropriateness of the total compensation package and to compare each executives total compensation opportunity with his or her actual payout.
To determine the amounts and mix of compensation elements, the management compensation committee considers the following.
The committee considers all of these issues in structuring compensation packages to reward the individual executive. Each individual component of compensation is considered independently and is not based on a formula; however, each component is intended to be complementary to the overall compensation package awarded to the executive.