NYSE Euronext DEFA14A 2012
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x Filed by a Party other than the Registrant ¨
Check the appropriate box:
April 13, 2012
To Our Valued Stockholders:
Proposal 3, Advisory Vote on Executive Compensation
On behalf of the Board of Directors (Board), the Human Resources and Compensation Committee (HR&CC), all of whose members are independent, are writing to request your support at the Annual Meeting of NYSE Euronext (Annual Meeting) by voting according to the Boards recommendations on all proposals. In particular, we request your support on Proposal 3, or Say-on-Pay.
Certain proxy advisory firms have recommended voting against our Say-on-Pay proposal based, we believe, on their perception that there is a misalignment between our named executives pay and performance. To counter this perception, we would like to provide stockholders with a more comprehensive account of our approach to pay for performance.
We encourage you to vote in favor of this proposal for the reasons set out below.
For the reasons described in this letter, we request that you vote FOR our Say-on-Pay proposal.
Pay for Performance
Our 2011 Core Financial Performance Was Strong
NYSE Euronext achieved strong financial performance in 2011, despite the substantial efforts we dedicated to the proposed business combination with Deutsche Börse (Proposed Combination), which has positioned the Company well for long-term growth and stockholder value creation.
To focus exclusively on the relationship between TSR and CEO compensation, relative to a peer group, would weaken the firm link we maintain between performance and compensation.
The Vast Majority of Our Compensation Is Variable and Performance-Based
Although NYSE Euronext does not follow a formulaic approach to determining individual compensation amounts, our compensation structure for our named executives is designed to incentivize superior performance. The HR&CC thoughtfully, deliberately, responsibly and through a consultative process, exercises discretion to take into account the totality of factors when determining individual compensation amounts.
Our Compensation Should be Evaluated Against a Competitive Peer Group
Certain proxy advisory firms have concluded that our named executives received more pay than the median pay received by the named executives of the companies in the comparison groups constructed by these advisory firms, but that NYSE Euronext performed more poorly than those companies. However, we believe that our 2011 compensation was competitive on a pay for performance basis, taking into account the practices of the peer groups that we consider when designing and determining our compensation.
Recent Compensation Actions
New CEO ContractPerformance-Based Compensation
In March 2012, the Board unanimously approved an amendment to our CEOs employment agreement, which recalibrates his equity incentive compensation to include a performance-based element in the form of PSUs. The amended employment agreement was approved after a thorough process, including several HR&CC and Board meetings, the input of our independent compensation consultant and review of the relevant best practices.
Although the PSU grants are in addition to rather than replacing existing time-based grants, our CEO will only receive this additional value if he delivers the requisite TSR performance, thereby directly creating additional value for stockholders. As there are no guarantees with respect to annual bonus or time-based equity awards, the HR&CC also retains the discretion to adjust those awards from year to year, taking into account the PSU compensation, to deliver an appropriate overall package.
Elimination of Change in Control Tax Gross-Ups
We have taken actions to eliminate or reduce change in control tax gross-ups.
Other Elements of Our Compensation Programs That Reflect Best Practices
Our executive compensation programs incorporate many best practices, including:
We recommend that you vote FOR the approval of Proposal 3
As outlined above, we are strongly committed to maintaining a strong link between compensation and performance. We ask that you seriously and fairly consider the matters set forth in this letter and vote FOR NYSE Euronexts Say-on-Pay proposal regarding our 2011 executive compensation. Even if voting instructions for your proxy have already been given, you may change your vote at any time before the Annual Meeting by providing new voting instructions as described in more detail in the proxy statement or by voting at the Annual Meeting.
The table below shows the significant difference in the peer groups used by NYSE Euronext and the comparison group used by ISS. Only one company, NASDAQ OMX Group, is a common peer.