UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

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INTERCONTINENTAL EXCHANGE, INC.

 

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Intercontinental Exchange, Inc.

Notice of 2021 Annual Meeting and Proxy Statement

 

 

 

 

 

March 26, 2021

Dear Stockholder:

On behalf of the Board of Directors and the management of Intercontinental Exchange, Inc., I am pleased to invite you to the 2021 Annual Meeting of Stockholders. The Annual Meeting will be held via webcast on Friday, May 14, 2021 at 8:30 a.m., Eastern time. There will be no in-person meeting. We believe that in light of the continuing global coronavirus (COVID-19) pandemic conducting a virtual meeting will help ensure the health and safety of our stockholders, employees and other meeting attendees. Stockholders will be able to listen, vote, and submit questions from any remote location with Internet connectivity. Online check-in will begin at 8:15 a.m Eastern time, and you should allow ample time for the check-in procedures. Information on how to participate in this year’s virtual meeting can be found on page 58.

The attached Notice of Annual Meeting and Proxy Statement describe the formal business to be conducted at the Annual Meeting. Our senior officers, as well as representatives from our independent registered public accounting firm, will be available at the virtual meeting to respond to appropriate questions from stockholders.

Again this year, we are delivering proxy materials for the Annual Meeting under the Securities and Exchange Commission’s “Notice and Access” rules. These rules permit us to furnish proxy materials, including the attached Notice of Annual Meeting, Proxy Statement and our 2020 Annual Report, to our stockholders by providing access to such documents on the Internet instead of mailing printed copies. The rules also allow us to help the environment by reducing the consumption of paper, energy and other natural resources and to lower our printing and distribution expenses. Our stockholders will receive a Notice of Internet Availability of Proxy Materials (the “Notice”), which provides instructions on how to access and review all of our proxy materials on the Internet. Our stockholders will not receive printed copies unless they request them. The Notice also explains how you may submit your proxy on the Internet.

Whether or not you plan to participate in the virtual meeting, please complete, sign, date and return your proxy card or vote telephonically or electronically using the telephone and Internet voting procedures described on the proxy card at your earliest convenience.

 

 

 

 

INTERCONTINENTAL EXCHANGE, INC.    •    5660 NEW NORTHSIDE DRIVE, THIRD FLOOR    •     ATLANTA, GEORGIA 30328

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

 

 

 

 

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on May 14, 2021   We are sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders rather than mailing a full paper set of the materials. The Notice contains instructions on how to access our proxy materials on the Internet and how to vote, as well as instructions on obtaining a paper copy of the proxy materials.   For additional information, see Additional Information – Voting Instructions and Frequently Asked Questions below.

To Vote by Internet and to Receive Materials Electronically   Read the Proxy Statement.   Go to the website that appears on your proxy card: www.proxyvote.com.   Enter the control number found on the front of your proxy card and follow the simple instructions. Choose to receive an e-mail notice when proxy statements and annual reports are available for viewing over the Internet. You will cut down on bulky paper mailings, help the environment, and lower expenses paid by Intercontinental Exchange, Inc.

 

 

 

TABLE OF CONTENTS

 

		Page
INTRODUCTION			1
EXECUTIVE SUMMARY			1
Matters to be Voted on at Our Annual Meeting			1
Record Date for Voting and Shares Outstanding			1
Corporate Governance Developments and Highlights			2
Highlights of Our 2020 Performance			3
Compensation Developments and Highlights			4
CORPORATE GOVERNANCE			5
PROPOSAL 1 — ELECTION OF DIRECTORS			5
Board of Directors			5
Nominees for Election as Directors at the 2021 Annual Meeting			5
Directors’ Recommendation			11
STRUCTURE AND ROLE OF OUR BOARD			12
Meetings and Committees of the Board of Directors			12
Independent Non-Employee Directors			14
Requirements for Directors			15
Board Evaluations and Succession Planning			15
Nomination of Directors			15
Board Leadership Structure			16
Board Oversight of Strategy			17
Board Oversight of Risk			17
Board of Directors Governance Guidelines			17
Board Education			18
Stockholder Engagement			18
Stockholder Recommendations for Director Candidates			18
Global Code of Business Conduct and Global Personal Trading Policy			19
Communications with the Board of Directors			20
Political Contributions			20
COMPENSATION MATTERS			21
PROPOSAL 2 — ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION			21
Directors’ Recommendation			21
COMPENSATION DISCUSSION & ANALYSIS			22
Introduction			22
Financial Performance Highlights			23
2020 Executive Compensation			23
Other Compensation and Benefits			30
2020 “Say-on-Pay” Vote Result and Stockholder Engagement			31
Compensation Practices			31
Role of Compensation Consultant			32
Compensation Peer Group			32
Risk Assessment with Respect to Compensation			33
Clawback Policy			33
Termination of Employment and Change of Control Payments			33
Stock Ownership Policy, Retention Recommendations and Anti-Hedging and Anti-Pledging Policy			34
Policy on Deductibility of Compensation			35
EXECUTIVE COMPENSATION			36
2020 Summary Compensation Table			36
2020 All Other Compensation			37
2020 Grants of Plan-Based Awards			38
Outstanding Equity Awards at Fiscal Year-End			39
Option Exercises and Stock Vested During 2020			41
2020 Nonqualified Defined Contribution and Other Deferred Compensation Plans			41
Employment Agreements and Other Factors Affecting 2020 Compensation			41
2020 Payments upon Termination			44
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			45
NON-EMPLOYEE DIRECTOR COMPENSATION			45
Director Compensation Table			47
COMPENSATION COMMITTEE REPORT			49
PAY RATIO			49

 

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		Page
AUDIT MATTERS			50
AUDIT COMMITTEE REPORT			50
PROPOSAL 3 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2021			51
INFORMATION ABOUT OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES			51
Audit and Non-Audit Fees			51
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm			51
OTHER PROPOSALS FOR YOUR CONSIDERATION			52
PROPOSAL 4 — STOCKHOLDER PROPOSAL REGARDING ADOPTION OF A SIMPLE MAJORITY VOTING STANDARD			52
Statement by the Proponent Supporting the Stockholder Proposal			52
Statement by Our Board of Directors Against the Stockholder Proposal			52
Directors’ Recommendation			53
ADDITIONAL INFORMATION			54
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			54
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS			55
Related Party Transactions Approval Policy			55
Relationships with Our Stockholders			56
Private Aircraft Arrangement			56
DELINQUENT SECTION 16(A) REPORTS			57
INSTRUCTIONS FOR ATTENDING THE VIRTUAL ANNUAL MEETING			58
VOTING INSTRUCTIONS AND FREQUENTLY ASKED QUESTIONS			59
INCORPORATION BY REFERENCE			64
STOCKHOLDERS’ PROPOSALS FOR 2022 ANNUAL MEETING			65
Proxy Access			65
OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING			66
EXHIBIT A — CERTAIN DEFINITIONS RELATED TO OUR OWNERSHIP AND VOTING LIMITATIONS			A-1

 

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CORPORATE GOVERNANCE

PROPOSAL 1 — ELECTION OF DIRECTORS

Board of Directors

Under our current Amended and Restated Certificate of Incorporation and our current Amended and Restated Bylaws, our Board of Directors sets the number of directors who may serve on the Board of Directors through resolutions adopted by a majority of the directors then in office. The size of our Board of Directors is currently set at thirteen directors and presently consists of thirteen directors. We have nominated twelve of our current thirteen directors for re-election at the Annual Meeting of Stockholders and plan to reduce our board size to twelve directors after the Annual Meeting of Stockholders due to Mr. Hatfield not standing for re-election. All of our nominees, if elected, will serve for a one-year term expiring at the 2022 Annual Meeting of Stockholders. Each director will hold office until his or her successor is duly elected and qualified or until the director’s earlier resignation or removal.

Each of our directors is elected by majority vote in an uncontested election. A director who fails to receive a majority of “FOR” votes cast by stockholders entitled to vote will be required to tender his or her resignation to our Board of Directors. Our Nominating & Corporate Governance Committee will then act on an expedited basis to determine whether to accept the director’s resignation and will submit such recommendation for prompt consideration by our Board of Directors. Our Board of Directors expects the director whose resignation is under consideration to abstain from participating in any decision regarding that resignation. Our Board of Directors and our Nominating & Corporate Governance Committee may consider any factors they deem relevant in deciding whether to accept a director’s resignation.

Nominees for Election as Directors at the 2021 Annual Meeting

On the recommendation of the Nominating & Corporate Governance Committee, our Board of Directors has nominated the persons named below for election as directors at the Annual Meeting of Stockholders, each to serve for a one-year term expiring at the 2022 Annual Meeting of Stockholders. All of the nominees currently are members of the Board of Directors. Our Board of Directors, upon the recommendation of our Nominating & Corporate Governance Committee, has determined that each of our non-employee directors is independent in accordance with NYSE listing standards and our Board of Directors Governance Guidelines as described below under Corporate Governance — Structure and Role of Our Board — Independent Non-Employee Directors.

Each of the nominees has confirmed that he or she expects to be able to continue to serve as a director until the end of his or her term. If, however, at the time of the Annual Meeting, any of the nominees named below is not available to serve as a director (an event which the Board of Directors does not anticipate), all the proxies granted to vote in favor of such director’s election will be voted for the election of such other person or persons, if any, recommended by the Nominating & Corporate Governance Committee and approved by the Board of Directors. Proxies cannot be voted for a greater number of directors than the twelve nominees named in this Proxy Statement. For a discussion of our policy regarding qualification and nomination of director candidates, see Corporate Governance — Structure and Role of Our Board — Nomination of Directors below.

 

 

 

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Set forth below are the nominees’ names, biographical information, age, summary of qualifications, whether the director is considered independent, the year in which each director joined our Board of Directors and the board committees of the Company on which the director currently serves:

 

Name		Biographical Information
Hon. Sharon Y. Bowen     Age: 64   Independent Director since 2017		Ms. Bowen served as a Commissioner of the United States (the “U.S.”) Commodity Futures Trading Commission (the “CFTC”) from 2014 to 2017. During that time, she was a sponsor of the CFTC Market Risk Advisory Committee. Ms. Bowen was previously confirmed by the U.S. Senate and appointed by President Barack Obama on February 12, 2010 to serve as Vice Chair of the Securities Investor Protection Corporation (the “SIPC”). She assumed the role of Acting Chair of SIPC in March 2012. Prior to her appointment to the CFTC, she was a partner in the New York office of Latham & Watkins LLP. She joined Latham & Watkins LLP as a senior corporate associate in the summer of 1988 and became a partner in January 1991 and continued at Latham & Watkins LLP until 2014. She serves on the subsidiary boards of certain NYSE U.S. regulated exchanges and serves as co-chair of the NYSE Board Advisory Council. In addition, she is a member of certain boards of managers of Bakkt Holdings, LLC (“Bakkt”) and its subsidiaries, that are majority owned subsidiaries of ICE. Ms. Bowen also serves on the board of Neuberger Berman Group LLC. Ms. Bowen earned a Bachelor of Arts degree in Economics from the University of Virginia, a Master of Business Administration from the Kellogg School of Management at Northwestern University and a Juris Doctor from the Northwestern Pritzker School of Law.
Qualifications In light of Ms. Bowen’s regulatory experience from working at the CFTC and SIPC, as well as her legal background and work in the securities industry, our Board, based upon the recommendation of the Nominating & Corporate Governance Committee, has determined that Ms. Bowen should be re-elected to our Board.   Intercontinental Exchange Board Committee(s): Risk Committee

 

Shantella E. Cooper     Age: 53   Independent Director since 2020		Ms. Cooper is the Executive Director of Atlanta Committee for Progress, or ACP, a coalition of leading CEOs focused on critical economic development issues for the City of Atlanta. This unique public-private partnership focuses on priorities for the City of Atlanta in collaboration with the Mayor of Atlanta. Prior to joining ACP in 2019, Ms. Cooper served as Chief Transformation Officer of WestRock Company, a paper and packaging solutions company, from 2016 to 2018. From 2011 to 2016, Ms. Cooper served as Vice President and General Manager of Lockheed Martin Aeronautics Company, an aerospace and defense contractor. During her time at Lockheed Martin, Ms. Cooper served as Vice President of Human Resources as well as Vice President of Business Ethics for the Aeronautics Division. Ms. Cooper currently serves on the Board of Directors of Atlantic Capital Bancshares, Inc. and Veritiv Corporation. In addition, she serves on the Board of Directors of Georgia Power Company, a subsidiary of Southern Company. Ms. Cooper earned Bachelor of Arts degrees in Biology and Religion from Emory University, a Master of Business Administration from Emory University’s Goizueta Business School and an Executive Masters in Global Human Resource Leadership from Rutgers University.
Qualifications In light of Ms. Cooper’s business operations, human resources, transformation experience, and her service on the boards of other public companies, our Board, based upon the recommendation of the Nominating & Corporate Governance Committee, has determined that Ms. Cooper should be re-elected to our Board.   Intercontinental Exchange Board Committee(s): None

 

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Name		Biographical Information
Charles R. Crisp     Age: 73   Independent Director since 2002		Mr. Crisp is the retired President and Chief Executive Officer of Coral Energy, a Shell Oil affiliate responsible for wholesale gas and power activities. He served in this position from 1999 until his retirement in October 2000, and was President and Chief Operating Officer from January 1998 through February 1999. Prior to that, he served as President of the Power Generation Group of Houston Industries from 1996 to 1997, President and Chief Operating Officer of Tejas Gas Corporation from 1988 to 1996, Vice President, Executive Vice President and President at Houston Pipeline Co. from 1985 to 1988, Executive Vice President of Perry Gas Co. Inc. from 1982 to 1985 and before then was with Conoco, Inc., where he held various positions in engineering, operations and management from 1969 to 1982. Mr. Crisp serves as Chair of the Board of Directors of ICE NGX and on the Board of Directors of ICE Futures U.S. and ICE Trade Vault, our subsidiaries. In addition, he serves as a director of EOG Resources, Inc., Targa Resources, Corp., as well as Targa Resources GP, LLC, a subsidiary of Targa Resources, Corp. Prior to the acquisition of AGL Resources, Inc. by Southern Company, he served on the public company board of AGL Resources from 2003 to 2016 and he currently serves on the Southern Company Gas board, a subsidiary of Southern Company. He holds a Bachelor of Science degree in Chemical Engineering from Texas Tech University and completed the Program for Management Development at the Harvard Graduate School of Business.
Qualifications In light of Mr. Crisp’s broad knowledge of the energy markets and related businesses, his service on the boards of other public companies and the experience he has gained and contributions he has made during his tenure as a director of ICE, our Board, based upon the recommendation of the Nominating & Corporate Governance Committee, has determined that Mr. Crisp should be re-elected to our Board.   Intercontinental Exchange Board Committee(s): Audit Committee and Compensation Committee

 

Duriya M. Farooqui     Age: 44   Independent Director since 2017		Ms. Farooqui served as President of Supply Chain Innovation at Georgia Pacific, where she led an innovation organization that brought over 40 companies together to solve supply chain challenges through rapid experimentation, digital technology and collaboration from 2019 to 2020. Ms. Farooqui previously served as Executive Director of Atlanta Committee for Progress, a coalition of leading CEOs focused on critical economic development issues for the City of Atlanta, a role she held from 2016 to 2018. Ms. Farooqui was a principal at Bain & Company from 2014 to 2016. She served the City of Atlanta through several leadership positions including Chief Operating Officer from 2011 to 2013, Deputy Chief Operating Officer from 2010 to 2011 and Director from 2007 to 2009. At the start of her career, she worked with the Center for International Development at Harvard University, The World Bank, and the Center for Global Development. Ms. Farooqui has served on the Board of Directors of InterContinental Hotels Group PLC (IHG) since 2020 and Tribe Capital Growth Corp I since 2021. Ms. Farooqui serves on the subsidiary boards of certain NYSE U.S. regulated exchanges and ICE NGX, all of which are our subsidiaries. In addition, she co-chairs the NYSE Board Advisory Council. Ms. Farooqui holds a Bachelor of Arts degree in Economics and Mathematics from Hampshire College and a Master of Public Administration in International Development from the Kennedy School of Government at Harvard University.
Qualifications In light of Ms. Farooqui’s experience in public service, international policy and economic development, our Board, based upon the recommendation of the Nominating & Corporate Governance Committee, has determined that Ms. Farooqui should be re-elected to our Board.   Intercontinental Exchange Board Committee(s): Audit Committee

 

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Name		Biographical Information
The Right Hon. the Lord Hague of Richmond     Age: 60   Independent Director since 2015		Lord Hague is the Chair of The Royal Foundation of the Duke and Duchess of Cambridge, Chair of the United for Wildlife Taskforce, and Chair for the International Advisory Board at the law firm Linklaters. He also serves as Senior Adviser to global advisory firm Teneo. Lord Hague currently serves as Chair of the Board of Directors of ICE Futures Europe, our subsidiary. He has previously served as an advisor to the JCB Group and Terra Firma Capital Partners. Mr. Hague was a member of the House of Parliament of the United Kingdom (“U.K.”) from 1989 to 2015, serving in various capacities, including Parliamentary Private Secretary to the Chancellor of the Exchequer, Parliamentary Under-Secretary of State at the Department of Social Security, Minister of State, Secretary of State for Wales, Foreign Secretary, First Secretary of State and most recently, Leader of the House of Commons. He is a member of the House of Lords. Prior to joining Parliament, Mr. Hague was a management consultant at McKinsey & Co Inc. and worked for Shell (UK) Limited. Lord Hague frequently carries out speaking engagements on regulatory and political matters. Mr. Hague holds a First-Class Honours degree in Philosophy, Politics, and Economics from Oxford University and a Master of Business Administration with distinction from the Institut Européen d’Administration des Affaires (or INSEAD).
Qualifications In light of Lord Hague’s extensive governmental and political experience in the U.K., his service on the ICE Futures Europe board and the knowledge and experience he provides, our Board, based upon the recommendation of the Nominating & Corporate Governance Committee, has determined that Lord Hague should be re-elected to our Board.   Intercontinental Exchange Board Committee(s): Risk Committee and Compensation Committee

 

Mark F. Mulhern     Age: 61   Independent Director since 2020		Mr. Mulhern is Executive Vice President and Chief Financial Officer of Highwoods Properties, Inc. (“Highwoods”), a publicly traded real estate investment trust. Prior to joining Highwoods in 2014, Mr. Mulhern served as Executive Vice President and Chief Financial Officer of Exco Resources, Inc. (“Exco”). Prior to Exco, he served as Senior Vice President and Chief Financial Officer of Progress Energy, Inc. from 2008 until its merger with Duke Energy Corporation in 2012. Mr. Mulhern joined Progress Energy in 1996 as Vice President and Controller and served in a number of leadership roles. He started his accounting and finance career at Price Waterhouse, now known as PricewaterhouseCoopers. Mr. Mulhern serves on the board of directors of Ellie Mae, Inc., the operating company of ICE Mortgage Technology Holdings, Inc., both of which are our subsidiaries. Mr. Mulhern previously served on Board of Directors of Highwoods from 2012 to 2014 and the Board of Directors of Exco from 2010 to 2013. Mr. Mulhern currently serves on the Board of Directors of Barings BDC, Inc. Mr. Mulhern earned a Bachelor of Business Administration in Accounting from St. Bonaventure University and is a Certified Public Accountant.
Qualifications In light of Mr. Mulhern’s financial leadership experience, knowledge of energy company operations, real estate background and his service as a director for other public companies, our Board, based upon the recommendation of the Nominating & Corporate Governance Committee, has determined that Mr. Mulhern should be re-elected to our Board.   Intercontinental Exchange Board Committee(s): None

 

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Name		Biographical Information
Thomas E. Noonan     Age: 60   Independent Director since 2016		Mr. Noonan is a founding partner of TechOperators LLC, and Chairman of TEN Holdings, LLC. Most recently, he was the General Manager of the Energy Management business of Cisco from 2013 to 2016 following the acquisition of JouleX in 2013, where he was co-founder and CEO. Mr. Noonan founded Actuation Electronics in 1985 and Leapfrog Technologies in 1987 as well as co-founded Endgame Security in 2008, a leading provider of software solutions to the U.S. intelligence community and Department of Defense. Mr. Noonan co-founded Internet Security Systems in 1994, where he served as Chairman, President and Chief Executive Officer prior to its acquisition by IBM in 2006. In 2002, President George W. Bush appointed Mr. Noonan to serve on the National Infrastructure Advisory Council, a White House homeland defense initiative that protects information systems critical to the nation’s infrastructure, where he served through 2020. Mr. Noonan serves as a member of a Bakkt board of managers, a majority owned subsidiary of ICE. Mr. Noonan has served on the Board of Directors of Manhattan Associates since 1999. Mr. Noonan earned a Bachelor of Science degree in Mechanical Engineering from the Georgia Institute of Technology and a CSS in Business Administration and Management from Harvard University.
Qualifications In light of Mr. Noonan’s cybersecurity expertise, successful entrepreneurial background and his business acumen, our Board, based upon the recommendation of the Nominating & Corporate Governance Committee, has determined that Mr. Noonan should be re-elected to our Board.   Intercontinental Exchange Board Committee(s): Risk Committee (Chairperson)

 

Frederic V. Salerno     Age: 77   Independent Director since 2002 and Lead Independent Director		Mr. Salerno is the former Vice Chairman of Verizon Communications, Inc. Before the merger of Bell Atlantic and GTE in 2001, Mr. Salerno was Senior Executive Vice President, Chief Financial Officer and served in the Office of the Chairman of Bell Atlantic from 1997 to 2001. He served as Executive Vice President and Chief Operating Officer of New England Telephone from 1985 to 1987, President and Chief Executive Officer of New York Telephone from 1987 to 1991 and Vice Chairman — Finance and Business Development at NYNEX Corporation from 1991 to 1997 when NYNEX and Bell Atlantic merged. Since 2013, Mr. Salerno has served on the subsidiary boards of certain NYSE U.S. regulated exchanges. Mr. Salerno also serves as a member of a Bakkt board of managers, a majority owned subsidiary of ICE. He served on the boards of directors of CBS Corporation from 2007 to 2016, Viacom from 1996 to 2017 and FCB Financial Holdings, Inc. from 2010 to 2019. He previously served as Lead Director and currently serves as Chairman of the board of directors of Akamai Technologies, Inc. (“Akamai”), where he has been a director since 2002. Mr. Salerno plans to retire from the board of directors of Akamai effective as of June 3, 2021. In addition, he has served on the board of directors of Associated Capital Group since 2017 and Madison Square Garden Entertainment Corp., previously known as The Madison Square Garden Company prior to a spin-off transaction, since 2019. From 1990 to 1996, he served as Chairman of the Board of Trustees of the State University of New York. He has a Bachelor of Science degree in Engineering from Manhattan College and a Master of Business Administration from Adelphi University.
Qualifications In light of Mr. Salerno’s broad knowledge of financial markets and his business acumen, his service on the boards of our subsidiaries and other public companies, and the knowledge and experience he has gained and contributions he has made during his tenure as a director of ICE, our Board, based upon the recommendation of the Nominating & Corporate Governance Committee, has determined that Mr. Salerno should be re-elected to our Board.   Intercontinental Exchange Board Committee(s): Nominating & Corporate Governance Committee (Chairperson)

 

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Name		Biographical Information
Caroline L. Silver     Age: 58   Independent Director since 2020		Ms. Silver served as Managing Director and Partner at Moelis & Company (“Moelis”), an independent advisory firm, from 2009 until January 2020. She currently serves as an advisory partner at Moelis. Before joining Moelis, Ms. Silver served as Vice Chairman of Investment Banking at Merrill Lynch (now Bank of America Merrill Lynch) from 2008 to 2009. Prior to that, Ms. Silver spent 14 years at Morgan Stanley, leading the European financial services investment banking business and was Vice Chairman when she departed in 2008. She started her banking career in the City of London in 1987, working for British merchant bank Morgan Grenfell. Ms. Silver serves on the board of directors of ICE Clear Europe Limited, one of our subsidiaries. Since 2017, Ms. Silver has served as Chair of the Board of Directors of PZ Cussons PLC. In addition, she currently serves on the Board of Directors of BUPA and Meggitt PLC. Ms. Silver currently serves as a Trustee of The Victoria and Albert Museum where she was appointed by the UK Prime Minister. Ms. Silver earned a Bachelor of Arts degree in English Language and Literature from Durham University in the United Kingdom. She is a qualified Chartered Accountant.
Qualifications In light of Ms. Silver’s international investment banking and mergers and acquisitions experience and her business acumen, our Board, based upon the recommendation of the Nominating & Corporate Governance Committee, has determined that Ms. Silver should be re-elected to our Board.   Intercontinental Exchange Board Committee(s): None

 

Jeffrey C. Sprecher     Age: 66   Non-Independent Director since 2000		Mr. Sprecher has been a director and our Chief Executive Officer since our inception and has served as Chairman of our Board of Directors since November 2002. As our Chief Executive Officer, he is responsible for our strategic direction and operational and financial performance. Mr. Sprecher acquired CPEX, our predecessor company, in 1997. Prior to acquiring CPEX, Mr. Sprecher held a number of positions, including President, over a fourteen-year period with Western Power Group, Inc., a developer, owner and operator of large central-station power plants. While with Western Power, he was responsible for a number of significant financings. Mr. Sprecher holds a Bachelor of Science degree in Chemical Engineering from the University of Wisconsin and a Master of Business Administrator from Pepperdine University.
Qualifications In light of Mr. Sprecher’s in-depth knowledge of global markets, his guidance of ICE as Chief Executive Officer since he founded the Company, and his successful execution of key strategic initiatives to grow the Company, our Board, based upon the recommendation of the Nominating & Corporate Governance Committee, has determined that Mr. Sprecher should be re-elected to our Board.   Intercontinental Exchange Board Committee(s): None

 

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Name		Biographical Information
Judith A. Sprieser     Age: 67   Independent Director since 2004		Ms. Sprieser was the Chief Executive Officer of Transora, Inc., a technology software and services company until March 2005. Prior to founding Transora in 2000, she was Executive Vice President of Sara Lee Corporation, having previously served as Sara Lee’s Chief Financial Officer. Ms. Sprieser also serves on the Board of Managers of ICE Clear Credit and ICE Mortgage Services, the governing Board of MERSCORP Holdings, Inc., all of which are our subsidiaries. Ms. Sprieser has been a member of the boards of directors of Allstate Insurance Company since 1999 (currently Lead Director) and Newell Brands Inc. since 2018. Previously, she served on the boards of Reckitt-Benckiser plc from 2003-2018, Royal Ahold N.V. from 2006 to 2015, and Experian plc from 2010 to 2016. She has a Bachelor of Arts degree from Northwestern University and a Master of Business Administration from the Kellogg School of Management at Northwestern University.
Qualifications In light of Ms. Sprieser’s financial expertise and her business acumen, her service as a director for other public companies, and the knowledge and experience she has gained and contributions she has made during her tenure as a director of ICE, our Board, based upon the recommendation of the Nominating & Corporate Governance Committee, has determined that Ms. Sprieser should be re-elected to our Board.   Intercontinental Exchange Board Committee(s): Audit Committee (Chairperson) and Nominating & Corporate Governance Committee

 

Vincent Tese     Age: 78   Independent Director since 2004		Since 2009, Mr. Tese has served as Chair of the Board of ICE Clear Credit and since 2013, has served on the subsidiary boards of certain NYSE U.S. regulated exchanges, all of which are our subsidiaries. Mr. Tese also serves as a member of a Bakkt board of managers, a majority owned subsidiary of ICE. Previously, he served as New York State Superintendent of Banks from 1983 to 1985, Chairman and Chief Executive Officer of the New York Urban Development Corporation from 1985 to 1994, Director of Economic Development for New York State from 1987 to 1994, and Commissioner and Vice Chairman of the Port Authority of New York and New Jersey from 1991 to 1995. He also served as a Partner in the law firm of Tese & Tese from 1973 to 1977. He was a Partner in the Sinclair Group, a commodities company, from 1977 to 1982 and was co-founder of Cross Country Cable TV. Prior to the acquisition of Cablevision Systems Corporation by Altice, he served on the public company board of Cablevision from 1996 to 2016. In addition, he served as Chairman of FCB Financial Holdings, Inc. from 2009 to January 2019 before they were acquired by Synovus Financial Corp. He also served on the Board of Directors of Mack-Cali Realty Corporation from 1997 to 2019. He currently serves as a member of the boards of directors for Madison Square Garden Entertainment Corp. and Madison Square Garden Sports Corp., previously known as The Madison Square Garden Company prior to a spin-off transaction, AMC Networks Inc., and serves as a trustee of New York University School of Law and New York Presbyterian Hospital. He has a Bachelor of Business Administration in accounting from Pace University, a Juris Doctor from Brooklyn Law School and a Master of Laws degree in taxation from New York University School of Law.
Qualifications In light of Mr. Tese’s broad knowledge of trading and financial markets, his legal and business acumen, as well as his board service for our subsidiaries and other public companies, and the knowledge and experience he has gained and contributions he has made during his tenure as a director, our Board, based upon the recommendation of the Nominating & Corporate Governance Committee, has determined that Mr. Tese should be re-elected to our Board.   Intercontinental Exchange Board Committee(s): Audit Committee and Compensation Committee (Chairperson)

Based on the foregoing qualifications, our Nominating & Corporate Governance Committee believes that the director nominees, individually and collectively, have the skills and experience to effectively oversee and guide our business. Each nominee has the integrity, business judgment, collegiality and commitment that are among the essential characteristics for membership on our Board of Directors. They also bring highly developed skills in, among other areas, finance, investing, mergers and acquisitions, accounting, financial market regulation, public policy, risk, cybersecurity, business operations, organizational and human capital management and leadership. In addition, members of our Board have had a great diversity of experiences and bring to our Board a wide variety of views that strengthen their ability to guide ICE. They have had extensive involvement in international business and deep professional experience across a broad range of industries and global markets. Most have relevant direct experience in the oversight of public companies through their service on our Board and those of other public companies, as well as their current and past senior executive positions.

Directors’ Recommendation

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES LISTED ABOVE TO THE BOARD OF DIRECTORS.

 

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STRUCTURE AND ROLE OF OUR BOARD

Meetings and Committees of the Board of Directors

The Board of Directors conducts its business through meetings of the full Board of Directors and through meetings of the committees of the Board of Directors, consisting of an Audit Committee, a Compensation Committee, a Nominating & Corporate Governance Committee and a Risk Committee. The current members of the committees are identified in the table below. In light of changes in the membership of our Board of Directors, we expect to make certain changes to the composition of our committees in 2021.

 

Director		Audit Committee		Compensation Committee		Nominating & Corporate Governance Committee		Risk Committee
Hon. Sharon Y. Bowen								X
Shantella E. Cooper
Charles R. Crisp		X		X
Duriya M. Farooqui		X
Lord Hague				X				X
Hon. Frederick W. Hatfield				X		X
Mark F. Mulhern
Thomas E. Noonan								X(Chair)
Frederic V. Salerno						X(Chair)
Caroline L. Silver
Jeffrey C. Sprecher
Judith A. Sprieser		X(Chair)				X
Vincent Tese		X		X(Chair)

In 2020, our Board of Directors held seven meetings, the Audit Committee held seven meetings, the Compensation Committee held five meetings, the Nominating & Corporate Governance Committee held six meetings and the Risk Committee held four meetings. In addition, our non-management directors met periodically in executive session without management participation, as required by NYSE listing standards. Mr. Salerno has been appointed by the Board of Directors as the non-management lead independent director presiding at these meetings.

As a matter of Board policy, it is expected that each director will be available to attend substantially all of the meetings of the Board of Directors and any committees on which the director serves. Each director attended at least 75% of the aggregate number of meetings of the Board of Directors and meetings of the committees of which he or she is a member held during the portion of the last fiscal year during which he or she was a director or committee member. Further, all director nominees attended 100% of the aggregate number of scheduled Board and committee meetings in 2020 held during the portion of the last fiscal year during which he or she was a director or committee member. As a matter of policy, it is expected that each director standing for re-election and any new director nominees will attend the Annual Meetings of Stockholders. All eleven directors standing for re-election at last year’s annual meeting attended the virtual Annual Meeting in May 2020.

 

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AUDIT COMMITTEE   Members: Judith A. Sprieser*   (Chairperson) Duriya M. Farooqui Charles R. Crisp Vincent Tese* *  Audit Committee Financial Experts		The Audit Committee is comprised solely of directors who meet the independence requirements of the NYSE and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are financially literate, as required by NYSE rules. At least one member of the Audit Committee qualifies as an audit committee financial expert, as defined by the rules and regulations of the SEC. The Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to:   •   the quality and integrity of our financial statements;   •   our compliance with legal and regulatory requirements;   •   our system of internal controls regarding finance, accounting and legal compliance;   •   the independence, qualification and performance of our independent auditors;   •   the performance of our internal audit function; and   •   our auditing, accounting and financial reporting processes.   The Audit Committee is governed by a written Audit Committee Charter, which has been approved by our Board of Directors. The charter is available on our website at www.ir.theice.com under the links “Governance — Governance Overview — Charter of the Audit Committee.” We will also provide a printed copy of the charter to stockholders upon request.

 

COMPENSATION COMMITTEE   Members: Vincent Tese   (Chairperson) Charles R. Crisp Frederick W. Hatfield Lord Hague		The Compensation Committee is comprised solely of directors who meet NYSE independence requirements, the requirements for a “Non-employee Director” under the Exchange Act and the requirements for an “outside director” under Section 162(m) of the Code. The Compensation Committee:   •   reviews and approves corporate goals and objectives relevant to the compensation of our executive officers, including our Chief Executive Officer;   •   evaluates our Chief Executive Officer’s performance and sets his compensation based on this evaluation;   •   approves, in consultation with our Chief Executive Officer, the compensation of our officers who are appointed by our Board of Directors;   •   reviews and approves option grants, bonus payments and stock awards to our officers;   •   exercises general oversight of our benefit plans and evaluates any proposed new retirement or benefit plans;   •   receives regular updates from management on pay parity and progress towards increasing diversity; and   •   reviews and approves severance or similar termination payments to former officers.   The Compensation Committee is governed by a written Compensation Committee Charter approved by our Board of Directors. The charter is available on our website at www.ir.theice.com under the links “Governance — Governance Overview — Charter of the Compensation Committee.” We will also provide a printed copy of the charter to stockholders upon request.

 

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NOMINATING & CORPORATE GOVERNANCE COMMITTEE   Members: Frederic V. Salerno   (Chairperson) Judith A. Sprieser Frederick W. Hatfield		The Nominating & Corporate Governance Committee is comprised solely of directors who meet NYSE independence requirements. The Nominating & Corporate Governance Committee assists the Board of Directors in:   •   identifying and attracting highly qualified individuals to serve as directors and establishing criteria for selecting new board members;   •   evaluating and recommending director nominees for the next annual meeting of stockholders;   •   developing and maintaining a set of corporate governance guidelines;   •   reviewing and approving any related-party transactions and potential conflicts of interest with respect to corporate opportunities;   •   oversight of environmental, social and governance, or ESG, initiatives;   •   devising a code of business conduct and ethics for directors, officers and employees;   •   oversight of political contributions policies and political expenditures; and   •   monitoring the Board of Directors’ independence.   The Nominating & Corporate Governance Committee is governed by a written Nominating & Corporate Governance Committee Charter approved by our Board of Directors. The charter is available on our website at www.ir.theice.com under the links “Governance — Governance Overview — Charter of the Nominating & Governance Committee.” We will also provide a printed copy of the charter to stockholders upon request.

 

RISK COMMITTEE   Members: Thomas E. Noonan   (Chairperson) Sharon Y. Bowen Lord Hague		The Risk Committee is comprised solely of directors who meet NYSE independence requirements. The Risk Committee assists the Board of Directors in fulfilling its oversight of management’s responsibility for ICE’s risk structure and governance in:   •   identifying risks inherent in ICE’s business;   •   developing processes, guidelines, policies and reports for assessing and monitoring risks;   •   overseeing management’s identification and mitigation of cybersecurity and data privacy risk; and   •   organizing and performing ICE’s enterprise risk management function.   The Risk Committee is governed by a written Risk Committee Charter approved by our Board of Directors. The charter is available on our website at www.ir.theice.com under the links “Governance — Governance Overview — Charter of the Risk Committee.” We will also provide a printed copy of the charter to stockholders upon request.

Independent Non-Employee Directors

The Intercontinental Exchange, Inc. Board of Directors Governance Guidelines (the “Governance Guidelines”) were adopted by our Board of Directors. Our Amended and Restated Bylaws and Governance Guidelines, which are described below, provide that a majority of our directors must be “independent directors” and specify independence standards consistent with NYSE listing standards. Assuming the election of the nominees to the Board of Directors, all of our directors holding office, with the exception of Mr. Sprecher, will be independent directors. Our Board of Directors, upon the recommendation of the Nominating & Corporate Governance Committee, has determined that each non-management director and nominee is independent in accordance with NYSE listing standards, our Amended and Restated Bylaws, our Independence Policy of the Board of Directors of Intercontinental Exchange, Inc. (the “Independence Policy”) and our Governance Guidelines, and does not have any relationship that would interfere with the exercise of independent judgment in carrying out his or her responsibilities as a director.

In making their independence determinations, our Board of Directors and the Nominating & Corporate Governance Committee considered transactions, if any, between each non-employee director and ICE and determined that there are no transactions that give rise to any independence issues.

 

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Requirements for Directors

Our Fifth Amended and Restated Certificate of Incorporation provides that no person who is subject to any statutory disqualification (as defined in Section 3(a)(39) of the Exchange Act) may be permitted to serve as a director on our Board of Directors.

Board Evaluations and Succession Planning

Each year, the members of the Board of Directors and each Board committee conduct a confidential oral assessment of their performance with a member of our legal department. As part of the evaluation process, the Board reviews its overall composition, including director tenure, board leadership structure, diversity and individual skill sets, to ensure it serves the best interests of stockholders and positions the company for future success. The results of the oral assessments are then summarized and communicated back to the appropriate chairpersons and our lead independent director. After the evaluations, the Board, committees and management work to improve upon any issues or focus points disclosed during the evaluation process. We believe that conducting these evaluations through a discussion with our Board members leads to more meaningful results that are more likely to result in changes when compared to conducting evaluations through a written process or completion of a questionnaire. As part of the evaluation process, each committee reviews its charter annually.

Our Board is committed to effective board succession planning and refreshment, including having honest and difficult conversations with individual directors as may be deemed necessary. We may have these conversations in connection with ongoing Board self-evaluations, Board refreshment processes, and Nominating & Corporate Governance Committee and Board consideration of the annual slate of Board nominees. As a result of these different processes in the past, directors have decided (for personal or professional reasons) or have been asked (for reasons related to their ongoing contributions to the Board and Company) not to stand for re-election at the next annual meeting of stockholders. It is expected that such refreshment practices will continue in the future.

Nomination of Directors

Our Board of Directors is responsible for approving candidates for board membership and has delegated the screening and recruitment process to the Nominating & Corporate Governance Committee. In furtherance of this process, our Nominating & Corporate Governance Committee and Board of Directors have adopted the Independence Policy and the Nominating & Corporate Governance Committee Charter. The Independence Policy and the Nominating & Corporate Governance Committee Charter do not set specific, minimum qualifications that nominees must meet, but rather specify that each nominee should be evaluated on his or her individual merit taking into account the factors described below.

The Nominating & Corporate Governance Committee seeks to create a Board of Directors that consists of a diverse group of qualified individuals that function effectively as a group. Qualified candidates for director are those who, in the judgment of the Nominating & Corporate Governance Committee, possess strong personal attributes and relevant business experience to assure effective service on our Board of Directors. Personal attributes considered by the Nominating & Corporate Governance Committee when evaluating a board candidate include leadership, integrity, ethics, contributing nature, independence, interpersonal skills and effectiveness. Experience and qualifications considered by the Nominating & Corporate Governance Committee when evaluating a board candidate include financial acumen, general business experience, industry knowledge, diversity, special business experience and expertise in an area relevant to ICE and the interplay of the individual’s experience with the experience of other members of the Board of Directors. When the Nominating & Corporate Governance Committee reviews a potential new candidate, the Nominating & Corporate Governance Committee looks specifically at the candidate’s qualifications in light of the needs of our Board of Directors and ICE at that time given the then current make-up of our Board of Directors. In the past, the Nominating & Corporate Governance Committee has identified the skill sets needed for new board candidates based on, among other things, the skill set of a departing director, an area of expertise identified through our director evaluation process or expertise needed in connection with the Company’s mergers and acquisitions activities.

Diversity is an important factor in our consideration of potential and incumbent directors. Our Nominating & Corporate Governance Committee considers a number of demographics including, but not limited to, race, gender, ethnicity, culture and nationality in seeking to develop a board that, as a whole, reflects diverse viewpoints, backgrounds, skills, experiences and expertise. When the Nominating & Corporate Governance Committee has conducted recent searches for new directors, including through the use of a third-party recruiting firm, it has focused on pools of qualified directors that have also added additional diversity to the ICE Board and subsidiary boards, when the director candidates’ skill sets qualify them to also serve on a subsidiary board of directors. The Nominating & Corporate Governance Committee considers the same factors in determining whether to re-nominate an incumbent director. Diversity is also considered as part of the annual Board evaluation.

We believe that ICE benefits from having directors with diverse viewpoints, backgrounds, experiences, skill sets and other demographics. As noted above, one of the factors that the Nominating & Corporate Governance Committee considers in identifying and evaluating a potential nominee is the extent to which the nominee would add to the diversity of our Board, and the Nominating & Corporate Governance

 

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Committee assesses the composition of our Board and how a nominee would enhance that diversity. The Nominating & Corporate Governance Committee uses a variety of methods to identify and evaluate nominees for director. The Nominating & Corporate Governance Committee periodically assesses the appropriate size of the Board of Directors and whether any vacancies on the Board of Directors are expected. In the event that vacancies are anticipated or otherwise arise, the Nominating & Corporate Governance Committee will seek to identify director candidates, subject to the restrictions described below, based on input provided by a number of sources, including: (i) Nominating & Corporate Governance Committee members; (ii) other directors; (iii) management; and (iv) our stockholders. The Nominating & Corporate Governance Committee also has the authority to consult with or retain advisors or search firms to assist in the identification of qualified director candidates and used a search firm over the last year to assist in the Board’s desire to increase diversity on the Board of Directors.

Once director candidates have been identified, the Nominating & Corporate Governance Committee will evaluate each candidate in light of his or her qualifications and credentials, and any additional factors that the Nominating & Corporate Governance Committee deems necessary or appropriate, including those set forth above. Qualified prospective candidates will be interviewed by our Chairman and Chief Executive Officer and at least one member of the Nominating & Corporate Governance Committee. The full Board of Directors will be kept informed of the candidate’s progress. Using input from such interviews and other information obtained by it, the Nominating & Corporate Governance Committee will evaluate whether a prospective candidate is qualified to serve as a director and, if so qualified, will seek the approval of the full Board of Directors for the nomination of the candidate or the election of such candidate to fill a vacancy on the Board of Directors.

Existing directors who are being considered for re-nomination will be re-evaluated by the Nominating & Corporate Governance Committee based on each director’s satisfaction of the qualifications described above and his or her prior performance as a director. All candidates submitted by stockholders will be evaluated in the same manner as candidates recommended from other sources, provided that the procedures set forth below under Corporate Governance — Structure and Role of Our Board — Stockholder Recommendations for Director Candidates have been followed.

Additionally, our Board of Directors shall nominate for election or re-election as directors only candidates who agree to tender, promptly following the annual meeting at which they are elected or re-elected as a director, irrevocable resignations that will be effective upon (i) the failure to receive the required vote at the next annual meeting at which they stand for re-election and (ii) acceptance by our Board of Directors of such resignation. Our Board of Directors shall fill director vacancies and newly created directorships only with candidates who agree to tender promptly following their appointment to the Board of Directors the same form of resignation tendered by other directors in accordance with the Governance Guidelines promulgated by our Board of Directors.

All of the current nominees for directors recommended for election by the stockholders at the 2021 Annual Meeting are current members of the Board of Directors. Based on the Nominating & Corporate Governance Committee’s evaluation of each nominee’s satisfaction of the qualifications described above and their past performance as directors, the Nominating & Corporate Governance Committee has decided to recommend the nominees for re-election and the Board of Directors has approved such recommendation. For the reasons specified in the profile of each director identified above under Corporate Governance — Proposal 1 — Election of Directors — Nominees for Election as Directors at the 2021 Annual Meeting, our Board has concluded that each director nominee should be re-elected to our Board of Directors. The Nominating & Corporate Governance Committee has not received any nominations from stockholders for the 2021 Annual Meeting.

Board Leadership Structure

Our Governance Guidelines provide for (i) the role of the Chairman of the Board and Chief Executive Officer to be combined, (ii) a lead independent director and (iii) strong active independent directors. Under our Amended and Restated Bylaws and Governance Guidelines, the Chairman of the Board, or our lead independent director if the Chairman is unavailable, presides over meetings of the Board of Directors, presides over meetings of stockholders, consults and advises the Board of Directors and its committees on our business and affairs, and performs such other duties as may be assigned by the Board. The Chairman of the Board, in consultation with the lead independent director, establishes the agenda for Board of Director meetings and facilitates constructive and useful communication between management and the Board of Directors. Under our Amended and Restated Bylaws and Governance Guidelines, the lead independent director presides over meetings of the Board of Directors at which the Chairman is not present, including executive sessions of the non-management directors. The lead independent director, in consultation with the Chairman and other Company representatives, reviews and establishes an agenda for Board of Director meetings and, in consultation with the Chairman, facilitates and encourages constructive and useful communication between management and the Board of Directors. We provide agendas to our lead independent director in advance of meetings and solicit input from the lead independent director regarding topics of discussion and agenda items. Our independent directors have elected Mr. Salerno as the lead independent director for 2021, a position he has held since 2008. As lead independent director, Mr. Salerno presides at all executive sessions of the non-management directors.

 

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Our Chief Executive Officer is in charge of our business affairs, subject to the overall direction and supervision of the Board of Directors and its committees and subject to such powers as reserved by the Board of Directors. Mr. Sprecher serves as both Chairman of the Board and Chief Executive Officer, and he is the only member of our management team that serves on the Board of Directors. Our Board of Directors believes that this leadership structure — a combined Chairman of the Board and Chief Executive Officer, a lead independent director, active and strong non-employee directors, and committees led and comprised of independent directors — is the most effective structure for us.

Our Board of Directors believes that the Chief Executive Officer is in the best position to most effectively serve as the Chairman of the Board for many reasons as he is closest to many facets of our business, including his frequent contact with our customers, regulators and stockholders. In addition, his direct involvement in the strategic and day-to-day management of our business ensures timely communication with the Board of Directors on critical business matters, which is important given the complexity and global nature of our business. Further, much of our business is conducted through our operating subsidiaries, which are overseen by their own boards of directors on which Mr. Sprecher or another senior officer serves. Serving in multiple roles allows Mr. Sprecher to be a primary point of contact for these boards of directors and facilitates effective communication regarding our strategic goals, key issues and topics of importance. The Board of Directors believes this structure has functioned well, produced strong financial and operating results, and effectively balances a highly capable management team with appropriate safeguards and oversight by non-employee directors.

Board Oversight of Strategy

Our Board of Directors is responsible for overseeing the Company’s strategy, and the Board of Directors has in-depth experience in the area of strategy development and insights into the most important issues facing the Company. Overseeing the strategic course of the Company involves a high level of constructive engagement between management and the Board of Directors. Our entire Board of Directors regularly discusses the key priorities of the Company, taking into consideration and adjusting the Company’s long-term strategy with global economic, geopolitical and financial market trends, as well as changes in legislation and regulatory initiatives. Throughout the year and at almost every meeting of the Board of Directors, the Board receives information and updates from management and actively engages with senior leaders with respect to the Company’s strategy, including the strategic plans for its products and services, and the competitive environment in our industry. ICE’s independent directors also hold executive sessions without Company management present, at which strategic decisions and directions are discussed.

Board Oversight of Risk

Our Board of Directors is responsible for overseeing ICE’s risk management process, which includes management of general risks as well as particular risks, such as those relating to cybersecurity, facing our business. The Board of Directors addresses risk management at both the full Board and committee levels. With the assistance of our Audit and Risk Committees, the Board oversees that our assets are properly safeguarded, appropriate financial and other controls are maintained, and our business is conducted prudently and in compliance with applicable laws and regulations and our corporate governance guidelines. The Risk Committee receives presentations on at least a quarterly basis from senior members of the enterprise risk management team and members of senior management on the Company’s operational, business and cybersecurity risks and the chairperson of the Risk Committee provides reports to the full Board of Directors following such presentations. In this regard, our Board of Directors seeks to understand and oversee critical business risks and does not view the risks facing our business in isolation. While risks are considered in business decision-making and as part of our overall business strategy, the Board of Directors recognizes that it is neither possible nor prudent to eliminate all business risk. Our Board of Directors believes that purposeful and appropriate risk-taking is essential for our business to be competitive on a global basis, to continue to grow and diversify, and to achieve our overall business objectives.

While the Board of Directors oversees ICE’s risk management practices and the performance of the enterprise risk management function, our management team is charged with managing risks. We have adopted internal processes and controls, and have governance committees in place, to identify and manage operational and financial risks, including cybersecurity risks. The Board of Directors, the Audit Committee and the Risk Committee monitor and evaluate the effectiveness of our internal controls and risk management program. Management communicates routinely with the Audit Committee and the Risk Committee on the risks identified and how they are being managed.

Directors may, and often do, communicate directly with senior management on any areas of our business for which they would like additional information.

Board of Directors Governance Guidelines

We have adopted the Governance Guidelines that guide the Board of Directors on matters of corporate governance, including:

 

•

composition of the Board of Directors;

 

•

duties and responsibilities of the Board of Directors and the Lead Independent Director;

 

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•

committees of the Board of Directors;

 

•

leadership, functioning and evaluation of the Board of Directors;

 

•

director independence, orientation, compensation, education and access to management;

 

•

access to independent advisors by our Board of Directors;

 

•

number of public company boards that our directors can serve on; and

 

•

director compliance with the Global Code of Business Conduct.

The Governance Guidelines also provide that non-management directors meet in executive sessions without the participation of management at all regularly scheduled meetings of the Board of Directors as deemed necessary and at any other time as necessary to fulfill the Board of Directors’ responsibilities. In addition, the Governance Guidelines also state that if all non-management directors are not independent directors, then the independent directors will meet at least once annually. Our Governance Guidelines require that our directors limit their other directorships of public companies to five. Further, our Governance Guidelines require that employee directors tender their resignation from the Board of Directors coincident with their termination, resignation or retirement as employees.

A copy of the Governance Guidelines is available on our website at www.ir.theice.com under the links “Governance — Governance Overview — Board of Directors Corporate Governance Guidelines.” We will provide a printed copy of the Governance Guidelines to stockholders upon request.

Board Education

For new directors, we provide onboarding materials that are helpful in educating the Board member about our business and operations and our policies and charters. We also have one-on-one meetings with the new director and each of our Chief Financial Officer, a member of the legal department and a member of the compliance team to review information in an informal setting where the director can ask questions in a private session. Our new directors typically serve on the Board for up to six to twelve months before joining any committees of the Board of Directors.

We also conduct at least one annual continuing education session with our full Board of Directors. In recent years, we have had experts present to our Board of Directors on various topics and trends, including a detailed review of ICE’s investor relations activities, ICE’s ESG initiatives and ESG ratings, the mergers and acquisitions landscape in our industry, our Major Incident Response Plan, use of capital, regulatory changes due to leadership changes and Brexit. We also conduct internal training for our directors with respect to business lines or products that may be new or different or areas of emphasis within our operations. Finally, we conduct cybersecurity training sessions for our Board members at least annually.

Stockholder Engagement

We value the views of our stockholders and other stakeholders, and the input that we receive from them is an important part of our corporate governance practices. Through such engagement, we seek to ensure that we are responsive to the priorities of our stockholders and other stakeholders. Throughout 2020, our Chief Executive Officer, Chief Financial Officer, President and other members of the management team met with a significant number of our stockholders and other stakeholders to discuss our strategy, financial and operating performance, capital allocation, environmental and social initiatives, human capital management, Company culture, corporate governance and executive compensation practices and to solicit feedback on these and a variety of other topics.

Over the past few years, we have proactively reached out to our largest stockholders to hold governance engagement meetings. In 2020, we reached out to stockholders representing about 45% of our outstanding shares and also held meetings with approximately 10 of our largest stockholders to obtain their views on our performance, board composition, board diversity and refreshment, corporate governance practices, executive compensation program and ESG topics. Following these meetings, the Nominating & Corporate Governance Committee and Compensation Committee, as appropriate, were provided with a report on these engagement meetings with our top stockholders and were provided with the opportunity to discuss and ask questions about investor feedback.

Stockholder Recommendations for Director Candidates

The Nominating & Corporate Governance Committee considers nominees recommended by stockholders as candidates for election to the Board of Directors. A stockholder wishing to nominate a candidate for election to the Board of Directors at an annual meeting, other than through proxy access provisions in our Amended and Restated Bylaws, is required to give written notice to our Corporate Secretary of his or her intention to make a nomination. Pursuant to our Amended and Restated Bylaws, the notice of nomination must be received

 

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not less than 90 days nor more than 120 days prior to the first anniversary date of the annual meeting for the preceding year; provided, however, that if and only if the annual meeting is not scheduled to be held within a period that commences 30 days before and ends 30 days after such anniversary date, the stockholder notice must be given by the later of the close of business on the date 90 days prior to such annual meeting date or the close of business on the tenth day following the date on which the annual meeting is publicly announced or disclosed. Please see Additional Information — Stockholders’ Proposals for 2022 Annual Meeting below for additional information.

To recommend a nominee, a stockholder should write to the Corporate Secretary, c/o Intercontinental Exchange, Inc., 5660 New Northside Drive, Third Floor, Atlanta, Georgia 30328. Any such recommendation must include:

 

•

a statement in writing setting forth the name of the person or persons to be nominated;

 

•

the number and class of all shares of each class of our stock owned of record and beneficially by each such person, as reported to such stockholder by such person;

 

•

the information regarding each such person required by paragraphs (a), (e) and (f) of Item 401 of Regulation S-K adopted by the SEC, as amended from time to time;

 

•

each such person’s signed consent to serve as a director if elected;

 

•

a statement whether such person, if elected, intends to tender promptly following such person’s election or re-election, an irrevocable resignation effective upon their failure to receive the required vote for re-election at the next meeting for their re-election;

 

•

such stockholder’s name and address;

 

•

in the case of a nominee holder, evidence establishing such nominee holder’s indirect ownership of stock and entitlement to vote such stock for the election of directors at the annual meeting; and

 

•

information disclosing all ownership interests in ICE, including derivatives, hedged positions and other economic and voting interests, as specified in items (v) through (xiii) under Additional Information — Stockholders’ Proposals for 2022 Annual Meeting below.

Qualified stockholders can nominate candidates for election to the Board of Directors if such stockholders comply with the requirements contained in our Amended and Restated Bylaws within the designated time periods. Under the proxy access provisions of our Amended and Restated Bylaws, any stockholder (or group of up to 20 stockholders) owning 3% or more of ICE’s Common Stock continuously for at least three years may nominate up to two individuals or 20% of our Board of Directors, whichever is greater, as director candidates for election to the Board of Directors, and require us to include such nominees in our annual meeting proxy statement if the stockholders and nominees satisfy the requirements contained in our Amended and Restated Bylaws. To nominate a nominee pursuant to the Amended and Restated Bylaws, a stockholder or group of stockholders must meet the qualifications required by the Amended and Restated Bylaws and submit to the Corporate Secretary, c/o Intercontinental Exchange, Inc., 5660 New Northside Drive, Third Floor, Atlanta, Georgia 30328:

 

•

a Schedule 14N (or any successor form) relating to the nominee, completed and filed with the SEC by the nominating stockholder, in accordance with the applicable rules;

 

•

a written notice in a form deemed satisfactory by the Board of Directors, of the nomination of such nominee that includes additional information, agreements, representations and warranties as outlined in our Amended and Restated Bylaws;

 

•

an executed agreement, in a form deemed satisfactory by the Board of Directors, pursuant to which the nominating stockholder agrees to certain requirements included in our Amended and Restated Bylaws; and

 

•

an executed agreement, in a form deemed satisfactory by the Board of Directors, by the nominee.

Global Code of Business Conduct and Global Personal Trading Policy

We have adopted the Global Code of Business Conduct, which applies to all of our directors, officers and employees. The Global Code of Business Conduct meets the requirements of a “code of ethics” as defined by Item 406 of Regulation S-K, and applies to our Chief Executive Officer, Chief Financial Officer (who is our Principal Financial Officer) and our Principal Accounting Officer, as well as all other employees, as indicated above. The Global Code of Business Conduct also meets the requirements of a code of conduct under NYSE listing standards. The Global Code of Business Conduct, which includes information regarding our hotline for receiving concerns regarding our financial statements or accounting matters, as well as conflicts of interest and code violations, is available on our website at www.ir.theice.com under the links “Governance — Governance Overview — Global Code of Business Conduct.” We also disclose amendments to the Global Code of Business Conduct that are required to be disclosed on our website. We will provide a printed copy of the Global Code of Business Conduct to stockholders upon request.

 

2021 Proxy Statement  INTERCONTINENTAL EXCHANGE  19

STRUCTURE AND ROLE OF OUR BOARD

 

 

 

In addition, we have trading policies that apply to all employees and directors, which prohibit, among other things, entering into hedging transactions relating to our stock. Specifically, employees and directors are prohibited from (i) engaging in short sales and buying or selling puts or calls or any derivative securities of our stock and (ii) holding our stock in a margin account or pledging our stock as collateral for a loan.

Communications with the Board of Directors

We have established a process for interested parties to communicate with members of the Board of Directors. If you have any concern, question or complaint regarding any accounting, auditing or internal controls matter, or any issues arising under our Global Code of Business Conduct, or other matters that you wish to communicate to our Board of Directors or non-management directors, send these matters in writing to:

 

Corporate Secretary Intercontinental Exchange, Inc. 5660 New Northside Drive Third Floor Atlanta, GA 30328

You may submit your concern anonymously or confidentially by postal mail. You may also indicate whether you are a stockholder, customer, supplier, or other interested party. Communications are distributed to the Board of Directors, or to any individual directors as appropriate, depending on the facts and circumstances outlined in the communication. Information about our Board of Directors communications policy can be found on our website at www.ir.theice.com under the links “Governance — Governance Overview — Board Communication Policy.”

Political Contributions

Our policies prohibit the use of corporate funds to make contributions to any candidates, political committees or other entities organized primarily for political activities under section 527 of the Internal Revenue Code or under 501(c)(4) of the Internal Revenue Code, or to any political party that would use the money to support any candidates. Our prohibition on corporate contributions and expenditures extend to the use of Company assets and facilities. Our policies also prohibit direct independent expenditures as defined by the Federal Election Commission (“FEC”). In general, ICE will not offer a candidate the unrestricted use of telephones, office space, staff support, or other Company assets to “facilitate” or support the candidate’s political activities without receiving advance payment from the benefiting campaign. We encourage our employees to participate in the political process as they choose, in the spirit of active citizenship. In doing so, our employees must remain attentive to the rules prohibiting the use of Company resources to support federal candidates and committees. From a governance perspective, our Nominating & Corporate Governance Committee has oversight of our policies on political contributions and any political expenditures by the Company.

We have a political action committee (the “ICE-PAC”) in the U.S., which is supported entirely by voluntary employee and director contributions. The primary purpose of the ICE-PAC is to complement and support the governmental affairs initiatives of ICE. The goal of the ICE-PAC is to support candidates for office who are supportive of programs and legislation of importance and beneficial to ICE. The ICE-PAC will solicit contributions from executives, directors and employees of ICE and their families. An employee, director or their family member must be a U.S. citizen to contribute to the ICE-PAC. Under federal law the maximum contribution that an individual may make to the ICE-PAC is $5,000 per year. A statement of organization for the ICE-PAC was filed with the FEC in January 2008 and all expenditures of the PAC are publicly available at www.FEC.gov. funds. In January 2021, the Company suspended contributions from the ICE-PAC to conduct a review of the program.

 

20  INTERCONTINENTAL EXCHANGE  2021 Proxy Statement

 

 

 

COMPENSATION MATTERS

PROPOSAL 2 — ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION

In accordance with the requirements of Section 14A of the Exchange Act, we are asking stockholders to approve an advisory resolution on ICE’s executive compensation as reported in this Proxy Statement. As this is an advisory vote, the result will not be binding, although our Compensation Committee will consider the outcome of the vote when evaluating the effectiveness of our compensation principles and practices.

We urge stockholders to read Compensation Matters — Compensation Discussion & Analysis below, which describes how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and related compensation tables and narrative below which provide detailed information on the compensation of our NEOs. Our Board of Directors and our Compensation Committee believe that the policies and procedures articulated in Compensation Matters — Compensation Discussion & Analysis are effective in achieving our goals and that the compensation of our NEOs reported in this Proxy Statement has supported and contributed to ICE’s success.

We are asking stockholders to approve the following advisory resolution at the 2021 Annual Meeting:

RESOLVED, that the holders of Common Stock approve, on an advisory basis, the compensation of our named executive officers as disclosed in the Proxy Statement pursuant to Item 402 of Regulation S-K, including the “Compensation Discussion & Analysis,” the compensation tables and related disclosure.

Directors’ Recommendation

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

 

2021 Proxy Statement  INTERCONTINENTAL EXCHANGE  21

 

 

 

COMPENSATION DISCUSSION & ANALYSIS

INTRODUCTION

In this section, we discuss our executive compensation program as it relates to our NEOs:

 

Name		Position
Jeffrey C. Sprecher		Chairman and Chief Executive Officer
Scott A. Hill		Chief Financial Officer
Benjamin R. Jackson		President, Intercontinental Exchange
David S. Goone		Chief Strategy Officer
Lynn C. Martin		President, Fixed Income & Data Services

We are a provider of marketplace infrastructure, data services and technology solutions to a broad range of customers including financial institutions, corporations and government entities. These products, which span major asset classes including futures, equities, fixed income and U.S. residential mortgages, provide our customers with access to mission critical workflow tools that are designed to increase asset class transparency and workflow efficiency.

 

•

In our Exchanges segment, we operate regulated marketplaces for the listing, trading and clearing of a broad array of derivatives contracts and financial securities.

 

•

In our Fixed Income and Data Services segment, we provide fixed income pricing, reference data, indices and execution services as well as global credit default swap, or CDS, clearing and multi-asset class data delivery solutions.

 

•

In our Mortgage Technology segment, we provide an end-to-end technology platform that offers customers comprehensive, digital workflow tools that aim to address the inefficiencies that exist in the U.S. residential mortgage market.

Our executive compensation philosophy is to link compensation with individual achievement, company performance, and stockholder value creation. This philosophy manifests itself in the following four primary objectives:

 

•

attract, retain and reward executive officers capable of achieving our business objectives;

 

•

offer competitive compensation opportunities that reward individual contribution and company performance;

 

•

align the interests of executive officers and stockholders over the long-term; and

 

•

pay total compensation that is commensurate with the performance achieved and value created for stockholders.

Our executive compensation program offers three distinct direct compensation elements that are consistent with the objectives outlined above:

 

•

Base salary: A cash base salary enables us to recruit and retain qualified executives by providing regular, stable compensation for their service during the year. We offer base salaries that are competitive with our peers and commensurate with the industry, the experience of the executive and the scope of the role.

 

•

Annual bonus: Our cash bonus plan is designed to reward the achievement of our annual performance targets, which align with our strategic business priorities. These targets are based primarily on objective and quantitative components, but also include qualitative components for measuring both corporate and individual achievement relative to pre-established objectives.

 

•

Equity compensation: We use multiple equity vehicles, including stock options and PSUs for our officers, to deliver long-term incentive compensation in a manner that aligns employee interests with the interests of our stockholders, and serves as a retention tool through multi-year vesting schedules.

 

22  INTERCONTINENTAL EXCHANGE  2021 Proxy Statement

COMPENSATION DISCUSSION & ANALYSIS

 

 

 

Financial Performance Highlights

ICE continued to deliver strong annual operating results as evidenced by the following 2020 performance highlights:

 

•

Fifteenth consecutive year of record revenues, including record financial results each year as a public company;

 

•

Record 2020 net revenues of $6.0 billion; 2020 GAAP diluted earnings per share (“EPS”) of $3.77 and 2020 adjusted diluted EPS of $4.51, up 16% year-over-year;1

 

•

Returned nearly $2 billion to stockholders through dividends and share repurchases in 2020, and increased first quarter 2021 quarterly dividend by 10% relative to 2020;

 

•

Expanded our mortgage network with the $11.4 billion strategic acquisition of Ellie Mae completed in September 2020;

 

•

Three-year TSR of 70% (based on stock price increase from $70.52 on December 28, 2017 to $115.29 on December 31, 2020, plus quarterly dividend payments); and

 

•

Expanded and strengthened markets served and range of data and risk management services through organic growth and strategic acquisitions.

2020 Executive Compensation

2020 Target Direct Compensation

The Compensation Committee, with the help of its independent compensation consultant, reviews the target direct compensation for our NEOs each year. We have historically aimed to set targets for each element of total direct compensation between the median and 75^th percentile of our peer group, depending upon factors including the NEO’s experience in his or her respective position, individual performance and impact on the organization, company performance, retention objectives and internal pay equity considerations. The Compensation Committee considers each NEO’s total compensation package when making changes to the individual elements that comprise the NEO’s compensation. For example, if the Compensation Committee makes a change to an officer’s base salary, the Compensation Committee reviews the change in light of the other elements of compensation, including the annual bonus and equity compensation.

 

1

Net revenue figures represent total revenues less transaction-based expenses. Adjusted diluted EPS is a non-GAAP metric. Please refer to the section titled “Non-GAAP Measures” in ICE’s 2020 Annual Report on Form 10-K filed with the SEC on February 4, 2021 for the equivalent GAAP term and reconciliation to the GAAP term.

 

2021 Proxy Statement  INTERCONTINENTAL EXCHANGE  23

COMPENSATION DISCUSSION & ANALYSIS

 

 

 

For 2020, target compensation levels for each of our NEOs were informed by reviews completed in 2019 and 2020. Based on those reviews, the Compensation Committee made changes to base salaries and target equity incentives for Mr. Jackson and Ms. Martin in connection with the expansion in scope of their roles. The table below sets forth the target direct compensation for our NEOs and its positioning relative to peers.

 

								Target Total Direct  Compensation
Name and Position		Base Salary as of June 1, 2020 ($) (1)		2020 Target Annual Bonus (% of Base Salary)(2)		Target Equity Compensation ($) (3)		($)		Positioning Relative to  Peers (Percentile)
Jeffrey C. Sprecher Chairman and Chief Executive Officer		$1,050,000		250%		$10,750,000		$14,425,000		50th
Scott A. Hill Chief Financial Officer		$725,000		175%		$3,350,000		$5,343,750		50th to 75th
Benjamin R. Jackson President, Intercontinental Exchange		$725,000		200%		$3,750,000		$5,925,000		50th to 75th
David S. Goone Chief Strategy Officer		$675,000		175%		$2,750,000		$4,606,250		50th to 75th
Lynn C. Martin President, Fixed Income & Data Services		$700,000		150%		$2,750,000		$4,500,000		50th to 75th

 

(1)

For Messrs. Sprecher, Hill and Goone, the Compensation Committee determined that no adjustments would be made to base salary. The Committee increased Mr. Jackson’s salary from $675,000 to $725,000 and Ms. Martin’s salary from $675,000 to $700,000, both in connection with growth in the scope of their roles.

 

(2)

For Messrs. Sprecher, Hill and Goone, the Compensation Committee determined that there would be no changes to target annual bonus amounts for 2020. For Mr. Jackson, the committee increased his target from 175% to 200% of base salary and for Ms. Martin, the Committee increased her bonus target from 125% to 150% of salary, both in connection with growth in the scope of their roles.

 

(3)

For Messrs. Sprecher, Hill and Goone, the Compensation Committee determine there would be no changes to target equity compensation. For Mr. Jackson the Committee increased his target equity compensation from $2,750,000 to $3,750,000 and for Ms. Martin the Committee increased her target equity compensation from $2,000,000 to $2,750,000, both in connection with growth in the scope of their roles. Those changes were effective with the February 2021 annual grant.

 

24  INTERCONTINENTAL EXCHANGE  2021 Proxy Statement

COMPENSATION DISCUSSION & ANALYSIS

 

 

 

Annual Bonus

Our NEOs participate in our stockholder approved Executive Bonus Plan. Annual bonuses are earned between 0% and 200% of target based on performance measures established at the beginning of each year. Any potential payments are limited according to the terms of the Executive Bonus Plan. Furthermore, the impact of mid-year merger and acquisition activity is excluded from results and cannot be used to meet quantitative financial performance targets established at the beginning of the year.

At the beginning of each year, the Compensation Committee and, as it relates to financial and strategic metrics, the Board of Directors approves company and individual goals for the year. From these goals, management business objectives (“MBOs”) are established that serve as the performance measures for the annual bonus. At the end of each year, the Compensation Committee evaluates the Executive Bonus Plan funding and awards annual bonus payments to the NEOs based on company and individual achievement of the pre-established MBOs. The Compensation Committee also determines the overall bonus pool available for our broad-based employee annual bonus plan, based on the same MBO achievement criteria.

 

MBOs for our executive officers, including our NEOs, are made up of financial measures (90%) and non-financial measures (10%). For purposes of 2020 annual bonuses, the financial measures consisted of revenue performance (weighted 30% of the total annual bonus) and adjusted net income performance (weighted 60% of the total annual bonus). The Compensation Committee and management believe that revenue is the right measure for annual performance given our focus on growth. Adjusted net income, which is weighted more heavily, was chosen as it is tied to our overall profitability. The non-financial performance measures included items such as product launches, strategic management of M&A activity, key technology initiatives, and leadership development. Determining achievement of the non-financial measures involves a subjective assessment of corporate and individual performance by the Compensation Committee. The Compensation Committee believes that it is appropriate to use some subjective assessments (within the context of the objective EBITDA-based funding formula and maximum bonus amounts) as part of the annual bonus determination in light of ICE’s growth, its rapidly evolving industry, the existence of few direct peer companies and the challenges inherent in establishing objective and strictly budget-based goals in a dynamic environment.

The Compensation Committee strives to set the performance targets for the annual bonus plan at levels that are challenging but achievable and incorporates a significant degree of “stretch” to encourage and reward outstanding corporate performance. The payouts are leveraged to provide higher payments in years of exceptional performance and lower payments in years where performance is below the target level. For 2020 our target goals for revenue and adjusted net income represented an approximately 6% and 5% increase, respectively, over 2019 actual results, which the Compensation Committee believes were properly challenging given the economic and competitive conditions facing ICE.

 

2021 Proxy Statement  INTERCONTINENTAL EXCHANGE  25

COMPENSATION DISCUSSION & ANALYSIS

 

 

 

In December 2020 and February 2021, the Compensation Committee reviewed ICE’s performance and determined that the 2020 financial performance MBOs were achieved as follows:

 

Financial Metric		2020 Goal		2020 Actual*		2020 Actual Compared to 2020 Goal
Net Revenues (weighted 30%)		$5,505 Million		$5,685 Million		103%
Adj. Consolidated Net Income Attributable to ICE (weighted 60%)		$2,307 Million		$2,341 Million		102%

*

The 2020 actual adjusted consolidated net income attributable to ICE is equal to the adjusted consolidated net income attributable to ICE, excluding the results of Ellie Mae, included in ICE’s most recent Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 4, 2021.

The above weighted financial performance achievement yields achievement of approximately 103% of the 2020 financial performance MBOs, which accounts for 90% of the overall annual bonus determination.

In determining achievement of the 2020 non-financial performance MBOs, the Compensation Committee considered the following individual contributions:

 

•

Mr. Sprecher: leadership on continued growth and development of data services business; expansion of offerings with continued investment in ICE Mortgage Technology business through acquisition of Ellie Mae and integration of Ellie Mae, MERS and Simplifile to ICE Mortgage Technology segment; strategic foresight and market leadership; significant work with global regulators, lawmakers and investors; leadership on digital asset matters, including the Bakkt merger with VPC Impact Acquisition Holdings; and leadership on human capital management matters including talent assessment, leadership development, succession planning and diversity initiatives.

 

•

Mr. Hill: leadership in reorganizing the business, budgeting, forecasting and scenario planning processes, as well as risk assessments; leadership on enterprise risk management framework and continued strengthening of overall controls posture and performance; significant work with institutional investors, rating agencies and analysts; meaningful progress on key sustainability issues that impact our stakeholders, and leadership on human capital management matters including employee engagement, succession planning and diversity initiatives.

 

•

Mr. Jackson: leadership in advancing the Company’s mortgage technology offering, including the acquisition of Ellie Mae and integration of Simplifile, MERS and Ellie Mae to form ICE Mortgage Technology; leadership across ICE’s global futures businesses, including the continued development of ICE Futures Abu Dhabi. System reliability, performance and scale enhancements across all of ICE’s technology platforms; leadership on enterprise risk management framework; continued leadership in the identification and mitigation of key risks and uncertainties related to projects and daily operations; leadership on the continued development and execution of the Company’s cybersecurity strategy; and significant work with investors.

 

•

Mr. Goone: strategic oversight and board leadership for key investments and relationships (e.g., The Depository Trust & Clearing Corporation and The Options Clearing Corporation), continued leadership on product development and market structure matters; and leadership on ICE Benchmark Administration’s continued evolution and growth, including in reference rates SONIA and SOFR.

 

•

Ms. Martin: leadership in integrating fixed income with data services into a new segment; compounding growth across data services business lines, including Pricing & Analytics and Desktops & Connectivity; significant work with investors.

Based on these factors and accomplishments, the Compensation Committee determined that the NEOs achieved their 2020 non-financial performance MBOs, which accounts for 10% of the overall annual bonus determination, at target (100%). Upon evaluating both the financial and non-financial performance, the Compensation Committee determined the final overall 2020 annual bonus achievement to be 103% of target.

 

26  INTERCONTINENTAL EXCHANGE  2021 Proxy Statement

COMPENSATION DISCUSSION & ANALYSIS

 

 

 

Based on the performance and considerations described above, the following annual bonus awards for fiscal year 2020 were approved by the Compensation Committee:

 

Name and Position		2020 Annual Bonus
Jeffrey C. Sprecher Chairman and Chief Executive Officer		$2,703,750 (103% of target)
Scott A. Hill Chief Financial Officer		$1,306,813 (103% of target)
Benjamin R. Jackson President, Intercontinental Exchange		$1,493,500 (103% of target)
David S. Goone Chief Strategy Officer		$1,216,688 (103% of target)
Lynn C. Martin President, Fixed Income & Data Services		$1,081,500 (103% of target)

All annual bonus awards for the NEOs were paid in cash in February 2021 and are included in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table.

As noted above, the Compensation Committee seeks to set annual bonus performance targets at levels that incorporate a significant degree of “stretch”. Based on our history of achievement under the annual bonus plan, we believe that we have succeeded in setting targets that represent stretch but achievable goals. As illustrated by the below chart, we have performed close to the target level in each of the last five years notwithstanding the fact that we experienced a significant amount of growth during the five-year period, which further illustrates the stretch built into each year’s target goals.

 

Overall Bonus Achievement Versus Goal as a % of Target
2020		2019		2018		2017		2016
103%		98%		102%		100%		100%

2021 Annual Bonus Award Structure

For purposes of the 2021 Annual Incentive Plan, the Company will utilize the same financial measures and weightings as used in 2020. With regard to specific performance goals for 2021, we note that because the Company does not provide detailed revenue or earnings guidance, the specific 2021 financial goals are not detailed in this filing. We will publish the 2021 targets and the corresponding achievement in our 2022 Proxy Statement filing. Please refer to our Investor Relations website at www.ir.theice.com for publicly available information related to our financial performance.

Equity Compensation

The Compensation Committee believes that equity awards are an effective vehicle to align the interests of executive officers with those of our stockholders, serve as a retention tool through multi-year vesting schedules and discourage employees from taking inappropriate business risks. ICE is sensitive to the concerns of its stockholders regarding the potential dilutive impact of equity awards, and also takes into account the relevant accounting and tax impact of all potential forms of equity awards in designing its grants. Additionally, when determining the form in which to deliver equity compensation, the Compensation Committee seeks to maintain a focus on both growth and financial performance.

 

2021 Proxy Statement  INTERCONTINENTAL EXCHANGE  27

COMPENSATION DISCUSSION & ANALYSIS

 

 

 

For purposes of the 2020 equity award, the Compensation Committee determined it was appropriate to continue to award equity compensation in the form of EBITDA-based PSUs, TSR-based PSUs and stock options. The portion of the award delivered by 3-year cliff vesting TSR-PSUs was 30% of the total award, the portion of the award delivered via EBITDA-PSUs was 50% of the total award and the remaining 20% of the award was delivered in the form of stock options.

 

 

Stock Options

We chose stock options as a means of linking a portion of the long-term incentive (LTI) awards for our most senior executives directly to our Company’s stock price growth and performance. For the 2020 award, the Compensation Committee determined the options would vest ratably over a period of three years following the grant date. The Compensation Committee believes the use of stock options is appropriate given the Company’s continued positioning as a growth company.

TSR-based PSUs

We introduced TSR-based PSUs in 2017 as a means of creating an even greater link between long-term stockholder value creation and executive rewards, granting 20% of LTI to our NEOs through this vehicle in both 2017 and 2018. In 2019, we increased the weighting of TSR-based PSUs to 30% (from 20%), and decreased the weighting of EBITDA-based PSUs to 50% (from 60%), of each NEOs target annual award value to place additional emphasis on multi-year performance and maintained that weighting for delivery of 2020 awards. As illustrated below, the number of shares ultimately earned under these PSUs will vary based on the Company’s cumulative TSR performance over the three-year period relative to that of the S&P 500.

 

		Threshold Performance		Target Performance		Maximum Performance
Company 3-Year TSR relative to S&P 500 3-Year TSR		25th percentile		50th percentile		75th percentile
PSUs earned (as % of target)		50%		100%		200%

The 2020 TSR-based PSU awards will cliff vest in February 2023 upon the Compensation Committee’s determination of performance achievement. For TSR-PSU grants for which the performance period has completed, results are noted below.

 

		2018 award		2017 award
Performance Period		1/1/2018 - 12/31/2020		1/1/2017 - 12/31/2019
Company Actual 3-Year TSR relative to S&P 500 3-Year TSR		78th percentile		69th percentile
PSUs earned (as % of target)		200.0%		175.2%

EBITDA-based PSUs

We chose EBITDA-based PSUs as a means of rewarding senior executives for delivering on important pre-established financial performance goals. The Compensation Committee continues to believe that EBITDA is a very strong indicator of Company performance

 

28  INTERCONTINENTAL EXCHANGE  2021 Proxy Statement

COMPENSATION DISCUSSION & ANALYSIS

 

 

 

and stockholder value and is the most prominent measure evaluated when determining the financial impact of actual and potential acquisitions. The Compensation Committee determined that a one-year performance period was appropriate again in 2020 for this portion of the long-term incentive awards because of the Company’s continued growth trajectory due, in part, to our acquisitive nature. The Compensation Committee determined that as a growth company that is continually developing new products and services and entering new markets, the one-year measure provides the Compensation Committee the opportunity to reset targeted EBITDA performance each year to account for the impact and financial expectations of new products, services, markets and acquisitions. Because EBITDA has been utilized as a consistent measure for these types of awards, the Compensation Committee has the opportunity to ensure the year-over-year targets have a sufficient degree of “stretch”.

The EBITDA-based PSUs were subject to ICE’s 2020 EBITDA performance as well as a stock market condition that could have reduced the number of shares that were earned above target based on ICE’s 2020 TSR as compared to the S&P 500 index. The number of shares that could have been earned based on ICE’s 2020 EBITDA performance ranged from zero for performance below the threshold performance, 50% of the target award for performance at the threshold (85% of the EBITDA goal), 100% of the target award for performance at the target (100% of the EBITDA goal) and 200% of the target award for performance at the maximum (113% of the EBITDA goal) performance level. EBITDA results excluded the impact of mid-year M&A activity, which could not be used to meet EBITDA performance targets. In the event ICE achieved above-target EBITDA performance, the stock market condition would have reduced the number of shares earned above target by 10 percentage points if ICE’s 2020 TSR was below the S&P 500 index’s 2020 TSR by 10% or less, or reduced such shares by 20 percentage points if ICE’s 2020 TSR was below the S&P 500 index’s 2020 TSR by more than 10%. The table below illustrates the number of PSUs earned based on EBITDA performance and the impact of the stock market condition. Earned awards vest in three equal annual installments beginning in February 2021.

 

						Threshold Performance (85% of goal)		Target Performance (100% of goal)		Maximum Performance (113% of goal)
2020 Consolidated EBITDA						$3,008 Million		$3,539 Million		$3,999 Million
				Greater than or equal to S&P 500 Index 2020 TSR		50%		100%		200%
				Below S&P 500 Index 2020 TSR by 10% or less						190%
				Below S&P 500 Index 2020 TSR by greater than 10%						180%

The following equity awards were granted to the NEOs on February 7, 2020:

 

Name and Position		Stock Options* (#)		TSR-Based PSUs (# at target)		EBITDA-Based PSUs (# at target)
Jeffrey C. Sprecher Chairman and Chief Executive Officer		129,105		34,815		58,026
Scott A. Hill Chief Financial Officer		40,232		10,849		18,082
Benjamin R. Jackson President, Intercontinental Exchange		33,026		8,906		14,844
David S. Goone Chief Strategy Officer		33,026		8,906		14,844
Lynn C. Martin President, Fixed Income & Data Services		24,019		6,477		10,795

*	The stock options were granted with a strike price of $92.63, which was the closing price of our Common Stock on the grant date, February 7, 2020.

At a meeting in early February 2021, the Compensation Committee determined that ICE’s EBITDA performance for 2020 was approximately 103.6% of target, as illustrated below.

 

Financial Metric		2020 Goal		2020 Actual*		2020 Actual Compared to 2020 Goal
Consolidated EBITDA		$3,539 Million		$3,668 Million		103.6%

*

The 2020 actual consolidated EBITDA is equal to earnings before interest, taxes, depreciation, and amortization adjusted for the non-GAAP measures described in ICE’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC on February 4, 2021, excluding the results of Ellie Mae.

 

2021 Proxy Statement  INTERCONTINENTAL EXCHANGE  29

COMPENSATION DISCUSSION & ANALYSIS

 

 

 

Because ICE’s 2020 EBITDA performance was above target, the award would be subject to a haircut were ICE’s 2020 TSR below that of the S&P 500. ICE’s TSR performance was above that of the S&P 500, accordingly, each NEO earned 127.7% of EBITDA-based PSUs set forth in the table above. The first tranche (1/3) of shares earned pursuant to 2020 EBITDA-based PSUs vested on February 16, 2021. Subject to continued employment, the second and third tranches of shares earned are scheduled to vest in equal portions in February 2022 and February 2023. We do not pay any dividends or dividend equivalents on unearned PSUs.

As with the annual bonus, the Compensation Committee seeks to set equity compensation performance goals at levels that incorporate a significant degree of “stretch”. Based on our history of achievement with respect to EBITDA-based PSUs, we believe that we have succeeded in setting targets that challenge our NEOs, and reward exceptional performance. As illustrated by the below chart, we have performed close to the target level in each of the last five years notwithstanding the fact that we experienced a significant amount of growth during the five-year period, which further illustrates the “stretch” built into each year’s target goals.

 

		2020		2019		2018		2017		2016
Overall EBITDA Achievement as a % of Target		103.6%		98.2%		101.6%		100.0%		101.5%
TSR Adjustment (if EBITDA Performance is Above Target)		None   (ICE TSR Exceeded S&P 500 TSR)		Not Applicable		None   (ICE TSR Exceeded S&P 500 TSR)		Not Applicable		None   (ICE TSR Exceeded S&P 500 TSR)
Resulting % of Target Shares Earned		127.7%		94.0%		112.3%		100.0%		111.5%

Equity awards for all officers are approved by the Compensation Committee. ICE management is not authorized to approve equity awards for officer-level employees and does not have the discretion or authority to govern the timing of equity awards. In 2020, no equity awards for officers were approved outside of a Compensation Committee meeting. ICE uses the closing price of its Common Stock on the NYSE on the grant date for purposes of establishing the strike price of stock options and for accounting purposes of other equity awards. ICE has not issued stock options with an exercise price below the fair market value of its Common Stock on the grant date.

2021 Equity Award Structure

As noted above, beginning in 2017, the Company introduced the TSR-based PSU award as 20% of that year’s overall equity award, and reduced the portion delivered by the EBITDA-based PSU award (with its one-year performance period), in order to introduce a longer performance period to the Company’s equity awards. The same mix was utilized for the 2018 equity award.

In 2019, the portion of the award delivered via TSR-based PSUs was increased to 30% and the use of EBITDA-based PSUs was decreased again. The same mix was utilized for the 2020 equity award.

In 2021, the Compensation Committee determined it would be appropriate to continue to increase the emphasis on a multi-year performance measure by increasing the weighting of the TSR-based PSU award to 40% of the total equity award, and to reduce the use of EBITDA-based PSUs again such that our overall equity award granted to our NEOs in early February 2021 was 40% TSR-based PSUs, 40% EBITDA-based PSUs and 20% through stock options.

With regard to the specific performance goals for purposes of the 2021 EBITDA-based PSU award, we note that because the Company does not provide detailed revenue or earnings guidance, the specific 2021 EBITDA goal is not detailed in this filing. As we have done in this filing with respect to the 2020 award, we will publish the 2021 EBITDA target for our 2021 PSU awards and the corresponding achievement in our 2022 Proxy Statement filing.

Please refer to our Investor Relations website at www.ir.theice.com for publicly available information related to our financial performance.

Other Compensation and Benefits

Perquisites

ICE provides medical insurance, life and disability insurance and other benefits to executives that are generally available to other employees. For certain grandfathered U.S. executive officers, including Messrs. Sprecher, Hill, Jackson and Goone. ICE provides an enhanced term life insurance benefit (calculated at five times salary less $100,000) and a supplemental disability insurance benefit that is designed to approximate the total benefit level (60% of eligible compensation) that cannot be provided pursuant to the limits in our group disability plans ($10,000 per month). Our contributions to these benefits programs are included in the 2020 All Other Compensation section of the Summary Compensation Table below.

Our Compensation Committee has approved a Corporate Aircraft Policy, as modified in February 2019, which, among other things, includes the authorization of up to $75,000 of incremental cost per year to ICE for personal use of company-owned or leased aircraft by

 

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Mr. Sprecher and $50,000 by Messrs. Hill, Goone, Jackson and Ms. Martin. In 2020, Mr. Sprecher did have personal use of the aircraft and reimbursed the Company for the full value of this usage as permitted by the Corporate Aircraft Policy. The amount reimbursed by Mr. Sprecher equaled the incremental costs to the Company for such flights as computed from data from an independent third-party. Mr. Goone did not use any of the amount allocated to him under the Corporate Aircraft Policy. Ms. Martin is newly eligible under the policy, which covers our NEO’s, in 2021. Mr. Hill had $50,000 and Mr. Jackson had $46,966 of unreimbursed cost for personal use of company-owned aircraft, which is reported in the 2020 Summary Compensation Table and the 2020 All Other Compensation Table.

There were no other perquisites provided to any of our executive officers in 2020 that would require disclosure in the Summary Compensation Table.

Retirement Plans

We provide retirement benefits to U.S. corporate officers through a 401(k) retirement plan on the same terms and conditions as those offered to all ICE employees. Generally, in 2020, we provided an immediately vested matching contribution of 100% of the first 6% of employee deferrals of eligible compensation to all participants in the plan, subject to Internal Revenue Service limits ($280,000 per individual in 2019). We do not offer an active defined benefit pension plan or any other form of active supplemental executive retirement plan.

2020 “Say-on-Pay” Vote Result and Stockholder Engagement

At our 2020 Annual Meeting of Stockholders held on May 15, 2020, approximately 92% of stockholders voted to approve the non-binding advisory vote on executive compensation. In addition to seeking stockholder feedback through our “say-on-pay” votes, we held meetings with some of our largest stockholders to obtain their views on our executive compensation program and governance matters as described above under Structure and Role of Our Board -- Stockholder Engagement. The Compensation Committee will continue to review our executive compensation program as well as consider stockholder input and consider the outcome of our “say-on-pay” votes when making future compensation decisions for our NEOs.

Compensation Practices

We do not maintain formal targets for the allocation of total compensation through each compensation element. We do strive to maintain a low fixed-cost compensation structure (i.e., base salary, benefits and perquisites) and to deliver the majority of value through variable pay elements (i.e., annual bonus and performance-based equity compensation). We have maintained this “pay for performance” orientation since our founding and believe it is an important element of our entrepreneurial culture.

Based on a review by Compensation Advisory Partners, the Compensation Committee’s independent compensation consultant, our mix of compensation continues to emphasize variable incentive compensation, rather than fixed compensation, to a degree that is consistent with our peers. This focus on variable incentive compensation is consistent with the Compensation Committee’s emphasis on performance-based awards for officers and our compensation philosophy.

We believe that our mix of cash/non-cash and short-term/long-term incentives provides an appropriate balance between our longer-term business objectives and shorter-term retention and competitive needs. We also believe that providing the majority of our NEOs’ compensation in the form of long-term incentive awards, when combined with our clawback policy and stock ownership requirements, each discussed below, has the additional benefit of discouraging employees from taking inappropriate risks.

Compensation Committee Role

Our Compensation Committee is responsible for designing, administering and implementing our executive compensation programs. The Compensation Committee is composed of four directors and each of the four directors is a “non-employee director,” as defined in Rule 16b-3 promulgated under the Exchange Act, and an “outside director,” as defined pursuant to Section 162(m) of the Code. The Compensation Committee determines the type and level of compensation for executive officers (generally defined as Section 16 officers under the Exchange Act, but the Compensation Committee has historically included all corporate officers under this definition), reviews the performance of the Chief Executive Officer, and oversees the administration of ICE’s Executive Bonus Plan, ICE’s broad-based employee annual bonus plan and all of ICE’s equity compensation plans. The Compensation Committee Charter, which is periodically reviewed and revised by the Compensation Committee and the Board of Directors, outlines the specific responsibilities of the Compensation Committee.

Our Annual Review Process

The Compensation Committee reviews our executive compensation programs and practices each year with the help of its independent compensation consultant, Compensation Advisory Partners. Reviews were completed in both 2019 and 2020 that informed decision-making for 2020 compensation levels. Generally, the 2019 review informed decision-making regarding the target value for 2020 equity

 

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awards granted in February 2020, and the 2020 review informed decision making regarding 2020 salary adjustments as well as target 2020 annual incentive opportunities. The next review will be completed in 2021.

In setting target direct compensation levels for each NEO, the Compensation Committee reviews an analysis of individual compensation levels prepared by Compensation Advisory Partners that reports compensation paid to the NEO and compares base salary, total cash compensation (base salary plus annual bonus) and total direct compensation (total cash compensation plus equity compensation) against relevant market data, including peer group data.

For Mr. Sprecher, our Chief Executive Officer, the Compensation Committee determines individual performance and conducts an annual review of his salary, bonuses and equity awards. For other NEOs, Mr. Sprecher provides input to the Compensation Committee regarding his views on the performance of these other officers during the Compensation Committee’s annual review of salary, bonuses and equity awards.

In addition to examining market data on individual positions, the Compensation Committee also focuses on the “total cost of management,” which is an aggregation of total direct annual compensation for the NEOs, excluding any special one-time awards. Based on the analysis prepared in 2020 by Compensation Advisory Partners, our “total cost of management” is between median and the 75^th percentile of the peer group.

Role of Compensation Consultant

During 2020, the Compensation Committee retained Compensation Advisory Partners, to advise the Compensation Committee on executive compensation matters. The information provided by Compensation Advisory Partners in 2020 included: competitive salary, bonus and equity data for certain positions within ICE and a benchmarking analysis against our peers. In addition, Compensation Advisory Partners helped analyze our bonus and equity programs, provided advice regarding the selection of our peer group, provided updates to the Compensation Committee on trends and regulatory developments, analyzed director compensation and assisted in the review of our compensation plans to determine if the arrangements incented inappropriate risk taking.

The NEOs have not participated in the selection of Compensation Advisory Partners or any other compensation consultant in connection with advice regarding executive and director compensation matters. A representative from the compensation consultant attends most Compensation Committee meetings and is available between meetings as a resource for the Compensation Committee and management. The Compensation Committee determines in its sole discretion which compensation consultant to retain for various services, and the consultant reports directly to the Compensation Committee. Use of a particular consulting firm by the Compensation Committee does not preclude management from hiring the same consulting firm. In 2020, Compensation Advisory Partners did not provide any other services to ICE. In compliance with the SEC and NYSE requirements regarding the independence of compensation consultants, Compensation Advisory Partners provided the Compensation Committee with a letter addressing each of the six independence factors. The Compensation Committee concluded that their responses affirm the independence of the firm and its partners, consultants, and employees who service the Compensation Committee on executive compensation matters and governance issues.

Compensation Peer Group

The Compensation Committee utilizes a peer group to assess ICE’s executive compensation program. ICE’s peer group includes comparable financial exchanges, financial services data providers, technology companies and other related companies based on metrics such as revenue and market capitalization. The peer group is reviewed annually by the Compensation Committee, with assistance and recommendations from its independent compensation consultant, and adjustments are made that may be deemed appropriate. The Compensation Committee reviews annually the executive pay practices of these peer companies as reported in industry surveys, public filings and reports from compensation consulting firms. This information is considered when making recommendations for ICE’s compensation programs and practices.

The 2020 peer group was substantially similar to the 2019 peer group, with the following changes:

 

•

Visa was removed from the peer group due to its size

 

•

Global Payments was added to the peer group as it competes with ICE for talent given its industry focus and location

 

•

MSCI was added to the peer group because of its industry relevance

 

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The 2020 peer group consists of the following companies:

 

CME Group, Inc.		IHS Markit		Northern Trust Corp.
Deutsche Börse AG		London Stock Exchange		S&P Global Inc.
Fidelity National Information Services Inc.		Mastercard, Inc.		Salesforce.com Inc.
Fiserv Inc.		Moody’s Corp.		State Street Corp.
Hong Kong Exchanges and Clearing Limited		MSCI Inc.		TD Ameritrade Holding Corp.
Global Payments Inc.		Nasdaq Inc.

Risk Assessment with Respect to Compensation

The Compensation Committee, with the assistance of its independent compensation consultant and management, has completed a review of compensation policies and programs, including those not applicable to NEOs, and does not believe there are circumstances where the risks arising from these policies or programs are reasonably likely to have a material adverse effect on ICE. The review examined the balance of fixed and variable elements of compensation, mix of cash and non-cash components and focus on both annual and longer-term operational and financial performance alignment with stockholder interests. Moreover, our compensation program is designed with certain structural features that align our NEOs’ financial incentives with those of our stockholders and mitigate inappropriate risk-taking by our executives, including our NEOs, such as a clawback policy, stock ownership requirements, and a total compensation mix weighted in favor of long-term, equity-based awards. The Compensation Committee continues to monitor the risk exposure of our compensation policies and programs.

Clawback Policy

We have adopted a compensation recoupment, or “clawback” policy, to permit ICE to seek recovery of performance-based incentive awards in the event of certain financial statement restatements. The clawback policy states:

It is ICE’s policy that if ICE’s financial statements are required to be restated due to intentional misconduct and/or fraud, the Compensation Committee will, when deemed appropriate in its discretion, direct that ICE seek to recover all or a portion of any affected award made to officers who have engaged in the intentional misconduct and/or fraud that caused the need for the restatement with respect to any fiscal period of ICE. An “affected award” includes any cash or equity-based bonus or incentive compensation payment awarded or given to the employee after the effective date of this policy, and the net proceeds of any stock options exercised after the effective date of this policy, that were advantaged by the filing of the financial statements that were required to be restated.

The amount to be recovered from such individual shall be the estimated amount up to which the affected award exceeded the amount that would have been paid to (or received by) the employee had ICE’s financial statements been properly stated. The Compensation Committee has the authority to determine an appropriate recovery amount, if any, under the circumstances, and whether to initiate or continue pursuing a recovery, based upon factors consistent with the Compensation Committee’s exercise of its fiduciary duties and the Compensation Committee’s good faith reliance upon information, opinions or advice from professional advisors, consultants or experts.

When the clawback provision under the Dodd-Frank Wall Street Reform and Consumer Protection Act is finalized and adopted, we will update our policy, as necessary.

As further referenced under “Employment Agreements and Other Factors Affecting 2020 Compensation - Termination for Cause or Executive Resignation Other than for Good Reason” - when executives are otherwise terminated for Cause all outstanding unvested equity is forfeited upon termination.

Termination of Employment and Change of Control Payments

We have entered into employment agreements with each of our NEOs that provide benefits upon certain employment terminations, including certain terminations in connection with a “Change in Control” of ICE. The terms of these employment agreements are discussed

 

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in more detail below under the heading “Employment Agreements and Other Factors Affecting 2020 Compensation”. The Compensation Committee believes that employment agreements with termination and certain Change in Control protections are appropriate and necessary to attract and retain executive level talent and to mitigate uncertainty and distraction of our management team in the event that the employment of any of our NEOs terminates. The Compensation Committee intends that the terms of NEO employment agreements be consistent with market practice, as adjusted for our business considerations, and periodically reviews the terms of our NEOs’ employment agreements compared to market practice. The employment agreements with our NEOs do not include any Code Section 280G “golden parachute” excise tax gross-up provisions.

The Change in Control protections for NEOs require a “double-trigger” before a payment is provided, meaning that in the context of a Change in Control of the Company, the executive officer’s employment must be involuntarily terminated before any severance is paid. The Compensation Committee opted for “double-trigger” arrangements, rather than providing for payments solely on the basis of a Change in Control, because the Compensation Committee believes this to be more consistent with the purpose of encouraging the continued employment of our NEOs following a Change in Control and with market practice. Furthermore, the Change in Control provisions provide significant retention value with respect to our NEOs.

Stock Ownership Policy, Retention Recommendations and Anti-Hedging and Anti-Pledging Policy

Stock Ownership Policy

The Compensation Committee believes that it is in the best interests of stockholders for ICE’s executives and directors to own a significant amount of ICE Common Stock because a meaningful direct ownership stake by our executives and directors demonstrates to our other investors and stockholders a strong alignment of interests and commitment to ICE’s success, and also provides a structural mechanism to discourage our executives from taking inappropriate business risks. Accordingly, ICE’s Stock Ownership Policy is applicable to ICE officers (including all of the NEOs, but excluding officers for whom a significant portion of their compensation is commission-based or who work in a jurisdiction where ICE does not typically grant equity awards) and directors, and requires the following level of ownership (expressed as a multiple of base salary for executives and a multiple of annual cash retainer for directors):

 

Position		Ownership Multiple Policy Requirement		Average Stock Ownership Multiple*
Chief Executive Officer		10 times base salary		495 times (Sprecher)
ICE President		4 times base salary		16 times (Jackson)
C-Level Executives and Senior Vice Presidents		2 times base salary		31 times (Hill/Goone/Martin)
Vice Presidents and any other corporate officers		1 times base salary		All in compliance
Members of the Board of Directors of ICE		5 times annual cash retainer		All in compliance

*	As defined in the Stock Ownership Policy and summarized below as of the December 31, 2020. New officers and directors have five and three years, respectively, to comply with ownership requirements.

In establishing the ownership multiple, the Compensation Committee considered information about ownership multiples at its peer companies, recommendations from its independent compensation consultant and third-party groups such as Institutional Shareholder Services, or ISS, and its independent compensation consultant. “Ownership,” for purposes of this Stock Ownership Policy, includes: (i) shares of ICE Common Stock that are owned outright (including those held by a spouse or dependent children), (ii) vested “in-the-money” stock options and (iii) unvested restricted stock and restricted stock units that are not subject to any performance-based vesting metric. All unvested stock options, “underwater” stock options and unearned performance-based equity awards (including EBITDA-based PSUs and TSR-based PSUs) do not count towards the ownership targets. A newly appointed corporate officer, or newly elected director, will have five and three years, respectively, from his or her date of hire or appointment as an officer or director to comply with this Stock Ownership Policy. The Compensation Committee will monitor the ownership levels of such executives and directors during this transition period.

The Compensation Committee monitors the stock ownership levels of our officers and directors on at least an annual basis. In the event of a corporate officer or director’s noncompliance with ICE’s stock ownership policy, the Compensation Committee will review the facts and circumstances regarding the noncompliance and will use its discretion in determining the appropriate corrective actions and/or penalties. Such corrective actions and penalties include, but are not limited to, instructing the officer or director to buy shares of our Common Stock in the open market to comply with the Stock Ownership Policy, reducing or eliminating future equity grants to the officer or director until they comply with the Stock Ownership Policy or issuing a warning to the officer or director. To date, there have been no instances of noncompliance with the Stock Ownership Policy.

 

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Retention Recommendations

To facilitate meeting the minimum holding requirements as specified in this Stock Ownership Policy in a timely fashion, the Compensation Committee recommends that all corporate officers and directors retain a minimum of 50% of the net value of shares obtained pursuant to each stock option exercise and the vesting of stock units for all future grants of stock options or restricted stock until such corporate officer or director has satisfied the minimum stock ownership targets for his or her position.

Anti-Hedging and Anti-Pledging Policy

All employees, including executive officers and directors are subject to our Global Personal Trading Policy under which they are prohibited from hedging and pledging our Common Stock. Specifically, the following activities are prohibited under the policy:

 

•

Engaging in any speculative or hedging transaction, including short sales, in our Common Stock.

 

•

Buying or selling puts, calls, options, warrants, prepaid forward contracts, equity swaps, collars, exchange traded funds or similar instruments on our Common Stock or derivatives of our Common Stock.

 

•

Holding our Common Stock in margin accounts or pledging our Common Stock as collateral.

Policy on Deductibility of Compensation

Section 162(m) of the Code generally provides that publicly held companies may not deduct compensation paid to certain of its executive officers to the extent that such compensation exceeds $1 million per officer in a calendar year. Prior to federal tax reform legislation enacted in 2017, Section 162(m) of the Code included an exception to this $1 million limit for compensation that was considered “performance-based compensation” within the meaning of the Code. The new tax legislation removed the exception for “performance-based compensation” (unless the compensation qualifies for transition relief) for taxable years beginning after December 31, 2017. The Compensation Committee continues to consider the tax consequences when determining named executive officer compensation, including in light of changes to Section 162(m), and sets executive compensation in accordance with our compensation philosophies. The Compensation Committee believes that retaining and motivating our employees with a competitive compensation program that is aligned with our strategic business objectives is in the best interest of our stockholders, and accordingly retains discretion to award compensation that exceeds deductibility limitations if it deems appropriate in the circumstances.

 

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EXECUTIVE COMPENSATION

2020 Summary Compensation Table

The following table presents information relating to the compensation earned by the NEOs for the fiscal years ended December 31, 2020, 2019 and 2018.

 

Name and Principal Position		Year		Salary ($)		Bonus ($)		Stock Awards ($) (1)		Stock Option Awards ($) (2)		Non-Equity Incentive Plan Compensation ($) (3)		All Other Compensation ($) (4)		Total ($)
Jeffrey C. Sprecher		2020		1,050,000		-		8,599,862		2,149,998		2,703,750		32,649		14,536,259
Chairman and Chief Executive Officer		2019		1,050,000		-		8,599,987		2,149,643		2,572,500		36,778		14,408,908
		2018		1,050,000		-		8,599,919		2,149,506		2,677,500		36,478		14,513,403
Scott A. Hill		2020		725,000		-		2,679,879		669,988		1,306,813		76,676		5,458,356
Chief Financial Officer		2019		725,000		-		2,679,918		669,881		1,243,375		76,376		5,394,550
		2018		725,000		-		2,680,000		669,838		1,294,125		26,076		5,395,039
Benjamin R. Jackson		2020		700,000				2,199,963		549,985		1,493,500		68,567		5,012,015
President, Intercontinental Exchange		2019		675,000		-		2,199,958		549,900		1,157,625		52,278		4,634,761
		2018		675,000		-		2,199,878		549,861		1,204,875		20,189		4,649,803
David S. Goone		2020		675,000		-		2,199,963		549,985		1,216,688		29,427		4,671,063
Chief Strategy Officer		2019		675,000		-		2,199,958		549,900		1,157,625		29,127		4,611,610
		2018		675,000		-		2,199,878		549,861		1,204,875		28,827		4,658,441
Lynn C. Martin		2020		687,500		-		1,599,905		399,991		1,081,500		17,100		3,785,996
President, Fixed Income & Data Services

 

(1)

The amounts in this column represent the aggregate grant date fair value of all restricted stock unit grants in the calendar year, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification 718, or ASC Topic 718 on the grant date, which is equal to our closing price on the grant date times the number of PSUs projected to be earned based on the probable outcome of the performance conditions to which the awards are subject. Amounts shown are for PSUs that were granted in February 2020, February 2019, and February 2018. If the maximum level of performance were achieved for the PSUs granted in February 2020, the reported amounts would equal $17,199,724, $5,359,758, $4,399,926, $4,399,926, and $3,199,810 for each of Messrs. Sprecher, Hill, Jackson, Goone, and Ms. Martin, respectively.

 

(2)

The amounts in this column represent the aggregate grant date fair value of all stock option grants in the calendar year. Additional details of the 2020 stock option awards are included in the 2020 Direct Compensation—Equity Compensation section of the Compensation Discussion & Analysis and footnote 1 of the 2020 Grants of Plan-Based Awards Table. These values were calculated in accordance with ASC Topic 718 on the date of grant using the following assumptions: risk-free interest rate 1.46%; expected life 5.82 years; expected volatility 19.94%; and expected dividend yield 1.3%, as further described in Note 11 to our Consolidated Financial Statements for 2020 (filed with our Annual Report on Form 10-K). The values for our February 2019 awards were calculated using the following assumptions: a risk-free interest rate 2.49%; expected life 5.9 years; expected volatility 20%; and expected dividend yield 1.44%. The values for our February 2018 awards were calculated using the following assumptions: risk-free interest rate 2.67%; expected life 6 years; expected volatility 20%; and expected dividend yield 1.43%.

 

(3)

The amounts in this column represent fiscal year 2018 through 2020 cash bonus awards that were paid in February of the following calendar year (i.e., February 2019, February 2020 and February 2021, respectively). For 2020, the NEOs were paid the amounts reported under “Non-Equity Incentive Plan Compensation” column pursuant to our Executive Bonus Plan.

 

(4)	The amounts in this column represent the items in the 2020 All Other Compensation Table below.

 

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2020 All Other Compensation

The following table provides details regarding the perquisites received by each of the NEOs, as well as the other elements of compensation listed in the “All Other Compensation” column of the Summary Compensation Table, for the fiscal year ended December 31, 2020.

 

Name		401(k) Matching Contributions ($)(1)		Life Insurance Premiums ($)(2)		Disability Insurance Premiums ($)(3)		Other Amounts ($) (4)		Total ($)
Jeffrey C. Sprecher		17,100		11,120		4,429		-		32,649
Scott A. Hill		17,100		1,632		7,944		50,000		76,676
Benjamin R. Jackson		17,100		1,732		2,769		46,966		68,567
David S. Goone		17,100		3,150		9,177		-		29,427
Lynn C. Martin		17,100		-		-		-		17,100

 

(1)

The amounts in this column represent fiscal year 2020 matching contributions under our 401(k) and Profit-Sharing Plan (the “401(k) Plan”). The matching formula is 100% of the first 6% of the eligible employee’s compensation contributed to the 401(k) Plan, subject to plan and statutory limits. Each NEO participates under the same terms and conditions as all other eligible employees.

 

(2)	The amounts in this column represent fiscal year 2020 payments of term life insurance policy premiums.

 

(3)	The amounts in this column represent fiscal year 2020 payments of supplemental disability insurance policy premiums.

 

(4)

The amounts listed for Mr. Hill and Mr. Jackson reflect the incremental cost of their personal use of the corporate aircraft during 2020, calculated based on the variable operating costs to ICE for each flight hour attributed to personal use (as well as any flight hours attributable to empty pick-up or return flights), including fuel costs, parts and maintenance costs; landing and parking fees; on-board catering costs; and crew expenses. These per hour costs were determined by using industry-standard cost-estimating guides. Since our aircraft is used primarily for business travel, we do not include the fixed costs that do not change based on usage, such as crew salaries, pilot training, depreciation, hangar rent and insurance. In addition to the incremental cost of personal aircraft use reported above, we also impute taxable income to the eligible named executive officers for any personal aircraft use in accordance with IRS regulations and ICE does not provide tax reimbursements, or “gross-ups,” on those amounts.

 

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2020 Grants of Plan-Based Awards

The following table presents information relating to plan-based awards granted to the NEOs in fiscal year 2020. References in the table to “2017 OIP” refer to the 2017 Omnibus Employee Incentive Plan and “EBP” refer to the Executive Bonus Plan.

 

		Grant Date and Approval Date								Estimated Future Payouts Under Non-Equity Incentive Plan Awards						Estimated Future Payouts Under Equity Incentive Plan Awards						All Other Option Awards: Number of Securities Underlying Options (#)		Exercise or Base Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock and Option  Awards ($)
Name										Threshold ($)		Target ($)		Max ($)		Threshold (#)		Target (#)		Max (#)
Jeffrey C. Sprecher
2017 OIP			2/8/2020				(1	)														129,105		92.63		2,149,998
2017 OIP			2/8/2020				(2	)								29,013		58,026		116,052						5,374,948
2017 OIP			2/7/2020				(3	)								17,407		34,815		69,630						3,224,913
EBP							(4	)		N/A		2,625,000		5,250,000
Scott A. Hill
2017 OIP			2/8/2020				(1	)														40,232		92.63		669,988
2017 OIP			2/8/2020				(2	)								9,041		18,082		36,164						1,674,936
2017 OIP			2/7/2020				(3	)								5,424		10,849		21,698						1,004,943
EBP							(4	)		N/A		1,268,750		2,537,500
Benjamin R. Jackson
2017 OIP			2/8/2020				(1	)														33,026		92.63		549,985
2017 OIP			2/8/2020				(2	)								7,422		14,844		29,688						1,375,000
2017 OIP			2/7/2020				(3	)								4,453		8,906		17,812						824,963
EBP							(4	)		N/A		1,450,000		2,900,000
David S. Goone
2017 OIP			2/8/2020				(1	)														33,026		92.63		549,985
2017 OIP			2/8/2020				(2	)								7,422		14,844		29,688						1,375,000
2017 OIP			2/7/2020				(3	)								4,453		8,906		17,812						824,963
EBP							(4	)		N/A		1,181,250		2,362,500
Lynn C. Martin
2017 OIP			2/8/2020				(1	)														24,019		92.63		399,991
2017 OIP			2/8/2020				(2	)								5,397		10,795		21,590						999,941
2017 OIP			2/7/2020				(3	)								3,238		6,477		12,954						599,965
EBP							(4	)		N/A		1,050,000		2,100,000

 

(1)	Represents stock options granted on February 7, 2020. The grant date fair value of these awards was calculated in accordance with ASC Topic 718 on the date of grant. Please see footnote 2 of our Summary Compensation Table for additional discussion of these grants.

 

(2)

Represents EBIDTA-based PSUs granted on February 7, 2020 with a three-year vesting schedule (33.3% vesting on February 16, 2021, upon approval of 2020 actual performance compared to the targets, and 33.3% on each of February 16, 2022 and 2023 subject to continued employment). The number of shares issued is determined based on the accomplishment of a 2020 EBITDA target as well as the company’s TSR relative to the S&P 500 index. Please see the 2020 Executive Compensation—Equity Compensation section in the Compensation Discussion & Analysis for additional discussion of this grant. The grant date fair value of this award was calculated in accordance with ASC Topic 718, and such accounting is further described in Note 11 to our Consolidated Financial Statements for 2020 (filed with our Annual Report on Form 10-K). The actual EBIDTA-based PSUs earned based on 2020 performance were 127.7% of the target amounts noted in the above table.

 

(3)

Represents TSR-based PSUs granted on February 7, 2020 with a three-year cliff vesting schedule (100% vesting on February 7, 2023, upon approval of actual performance compared to the targets). The number of shares issued is determined based on the company’s actual TSR performance compared to the companies in the S&P 500 Index over the three-year performance period January 1, 2020 through December 31, 2022. Please see the 2020 Executive Compensation—Equity Compensation section in the Compensation Discussion & Analysis for additional discussion of this grant. The grant date fair value of this award was calculated in accordance with ASC Topic 718.

 

(4)

Represents full-year target and maximum annual bonus payout levels. Bonus targets as a percentage of salary for 2020 were as follows: 250% of salary for Mr. Sprecher, 200% of salary for Mr. Jackson, 175% of salary for Mr. Hill and Mr. Goone, and 150% of salary for Ms. Martin. Actual awards granted in any given year may range from no payout to bonus payments up to 200% of the established target levels. However, any bonus payment must be in accordance with the terms of the Executive Bonus Plan. For fiscal year 2020, the Compensation Committee authorized cash payments at 103% of target based on our financial performance under the plan. These payments are reflected under the “Non-Equity Incentive Plan Compensation” column of our Summary Compensation Table.

 

38  INTERCONTINENTAL EXCHANGE  2021 Proxy Statement

EXECUTIVE COMPENSATION

 

 

 

Outstanding Equity Awards at Fiscal Year-End

The following table presents information relating to outstanding equity awards held by the NEOs for the fiscal year ended December 31, 2020, based on the price of our Common Stock on the NYSE at the time of closing on December 31, 2020, which was $115.29. References in the table to “2009 OIP” refer to the 2009 Omnibus Incentive Plan, “2013 OIP” refer to the 2013 Omnibus Employee Incentive Plan, and “2017 OIP” refer to the 2017 Omnibus Employee Incentive Plan. All values in the table reflect the 5-for-1 split of our Common Stock which occurred on November 3, 2016.

 

				Option Awards																Stock Awards
Name		Grant Date		Number of Securities Underlying Unexercised Options (# Exercisable) (1)				Number of Securities Underlying Unexercised Options (# Unexercisable) (1)				Option Exercise Price ($)				Option Expiration Date				Number of Shares or Units of Stock That Have Not Vested (#)				Market Value of Shares or Units of Stock That Have Not Vested ($)(2)				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2)
Jeffrey C. Sprecher
2009 OIP		1/17/2012			110,865				-				22.43				1/17/2022
2009 OIP		1/11/2013			157,745				-				25.87				1/11/2023
2013 OIP		1/17/2014			193,455				-				41.37				1/17/2024
2013 OIP		1/20/2015			213,725				-				41.59				1/20/2025
2013 OIP		1/14/2016			177,160				-				50.01				1/14/2026
2013 OIP		1/18/2017			204,957				-				57.31				1/18/2027
2017 OIP		2/8/2018			102,527				51,264				67.00				2/8/2028
2017 OIP		2/8/2019			46,386				92,772				76.16				2/8/2029
2017 OIP		2/7/2020							129,105				92.63				2/7/2030
2017 OIP		2/8/2018 (3)																			36,040				4,155,052
2017 OIP		2/8/2019 (4)																			44,226				5,098,816
2017 OIP		2/7/2020 (5)																			74,099				8,542,874
2017 OIP		2/8/2018 (6)																											64,178				7,399,082
2017 OIP		2/8/2019 (7)																											42,345				4,881,955
2017 OIP		2/7/2020 (8)																											34,815				4,013,821
Scott A. Hill
2013 OIP		1/20/2015			89,085				-				41.59				1/20/2025
2013 OIP		1/14/2016			73,930				-				50.01				1/14/2026
2013 OIP		1/18/2017			62,119				-				57.31				1/18/2027
2017 OIP		2/8/2018			31,950				15,975				67.00				2/8/2028
2017 OIP		2/8/2019			14,455				28,910				76.16				2/8/2029
2017 OIP		2/7/2020							40,232				92.63				2/7/2030
2017 OIP		2/8/2018 (3)																			11,231				1,294,822
2017 OIP		2/8/2019 (4)																			13,782				1,588,927
2017 OIP		2/7/2020 (5)																			23,090				2,662,046
2017 OIP		2/8/2018 (6)																											20,000				2,305,800
2017 OIP		2/8/2019 (7)																											13,195				1,521,252
2017 OIP		2/7/2020 (8)																											10,849				1,250,781

 

2021 Proxy Statement  INTERCONTINENTAL EXCHANGE  39