NYX » Topics » NYSE Euronext 2007 Objectives and Results

This excerpt taken from the NYX DEF 14A filed Apr 2, 2008.

NYSE Euronext 2007 Objectives and Results

2007 was an exceptional year for NYSE Euronext—both in terms of the challenges faced and the strides made in achieving many of the significant goals set by the Board of Directors for the year. The HR&CC’s compensation decisions for 2007 were based on its consideration of our progress in achieving the financial, operational, strategic and related corporate goals and objectives described below. These goals and objectives were developed beginning shortly following the NYSE Group/Euronext business combination transaction and were further developed throughout the year. Management provided the Board of Directors with regular updates on the progress of performance in furtherance of these goals and objectives.

The HR&CC found that the named executives were instrumental in the achievement of the following goals and that their individual efforts contributed strongly to our results this year. We benefited not only from the diverse experience and expertise of these individuals, but also from their direct and forceful advocacy on our behalf. The named executives exceeded targeted performance goals while steering a much larger and more diverse business and simultaneously pursuing further growth globally.

Financial Objectives. For 2007, the HR&CC considered the following financial objectives that the HR&CC has determined were accomplished:



Achieved earnings per share on a pro forma non-GAAP basis of $2.65 compared to earnings per share on a pro forma non-GAAP basis in 2006 of $1.83;



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Achieved higher pre-tax margin on a non-GAAP pro forma basis (excluding Section 31 fees, liquidity payments and routing and clearing fees) growth of 36% in 2007 relative to 28% in 2006;



Succeeded in making NYSE Group compliant with Section 404 of the Sarbanes-Oxley Act of 2002 as of fiscal year-end 2007, achieved significant progress in preparing Euronext for compliance as of fiscal year-end 2008 and expect NYSE Euronext to be fully compliant as of fiscal year-end 2008; and



Developed more efficient tax strategies.

In addition, the HR&CC also established a goal of positive stockholder return for 2007, which was deemed not to have been accomplished.

Operational Objectives. For 2007, the HR&CC evaluated the following operational objectives that the HR&CC has determined have been largely accomplished:



Achieved many of the integration objectives relating to the NYSE Group/Euronext business combination transaction;



Achieved listing targets;



Succeeded in implementing the NYSE Hybrid Market and introducing new products and platforms while maintaining platform performance; though U.S. market share goals were not met, we maintained strong market share in Europe; and



Developed new market data products, pending SEC approval.

Strategic Objectives. For 2007, the HR&CC considered the following strategic goals, all of which the HR&CC has determined have been largely met or exceeded:



Completed the NYSE Group/Euronext business combination transaction;



Continued to build out globally through acquisition of stakes in India’s National Stock Exchange and Bovespa, the owner of Brazil’s largest exchange, entering into an alliance with the Tokyo Stock Exchange and opening a representative office in Beijing;



Continued to explore ways to expand derivatives business;



Continued to develop the technology roadmap for NYSE Euronext, including the successful negotiation of a memorandum of understanding with Atos Origin, an international IT services company, for the insourcing of technology that supports NYSE Euronext in Europe;



Completed integration of NYSE Arca and SIAC technology organizations and continued to integrate their respective technologies and platforms; and



Worked with the NASD to create FINRA, the largest, non-governmental regulatory organization for securities brokers and dealers doing business in the United States, through the consolidation of the member regulation, enforcement and arbitration operations of the NYSE with NASD.

Corporate-related Objectives. In 2007, the HR&CC also focused on the achievement of certain corporate-related goals concerning succession planning and management’s continued commitment to strengthening the leadership position of our marketplace. We also succeeded in creating an international governance structure and strengthened the control process.

Individual Factors. The HR&CC (and the Chairman of the Board of Directors, in the case of Mr. Niederauer and Mr. Théodore) also considered individual factors for each of the named executives based on his or her contributions to achieving the goals outlined by the HR&CC and the factors identified in each executive’s 360-degree annual performance review.



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