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 There is no written agreement that lays out such a timeline. And
Greifeld, 56, who has been the financial market company's CEO for 11
years, could still stay until 2017, when his contract ends, the
sources said.
But one of the sources said that Friedman, 44, left her job as CFO
of private equity firm Carlyle Group LP with the clear impression
that she could become CEO within the next 12 to 18 months if she did
not perform poorly.
While her return, announced last month, was widely seen as
positioning her to succeed Greifeld, the understanding on the
expected timeline has not been reported previously.
Nasdaq declined to comment or make Friedman available for an
interview.
Both Greifeld and the Nasdaq board were involved in hiring back
Friedman, the sources said.
Friedman, who had left for Carlyle three years ago after an 18-year
career at Nasdaq, begins her new job on Monday. She will oversee the
transatlantic exchange group's global corporate, information
services, and technology solutions business lines, accounting for
around 60 percent of Nasdaq's total revenue, which last year was
$3.2 billion.
Succession has been top of mind at Nasdaq over the past few years
but a number of possible internal candidates have not been prepared
to wait for Greifeld to step down, complicating such planning at the
company.
In September, sources told Reuters that the company had put together
a list of external and internal candidates to succeed Greifeld.
External candidates on Nasdaq's list included London Stock Exchange
Group Plc CEO Xavier Rolet, Singapore Exchange Ltd CEO Magnus Bocker,
TMX Group Ltd CEO Tom Kloet, and former CME Group Inc CEO Craig
Donohue.
CEO BOOT CAMP
In November, Eric Noll, who headed trading operations at the
exchange and was seen as the top internal candidate for the job,
left to become CEO of brokerage ConvergEx Group[BNYCG.UL].
One source said so serious was Nasdaq about Noll as a candidate that
it had even put him through CEO boot camp training.
Noll had replaced yet another CEO-hopeful in 2009. Chris Concannon,
who until then had been Greifeld's No. 2, left for trading firm
Virtu Financial, where he is president and chief operating officer.
Friedman's decision to leave New York-based Nasdaq in 2011 was
spurred in part by the career opportunity at Carlyle, but also
because it meant she could spend more time in the Washington DC
area, where her family lives, the sources said.
Carlyle also offered her more money. The cash portion of her
compensation at Carlyle was similar to what she made at Nasdaq, but
the equity portion was higher.
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At the end of last year, Friedman had around $15.7 million worth of
Carlyle stock that had not yet vested. She had to give up unvested
stock when she returned to Nasdaq.
Friedman and Greifeld developed a strong working rapport at Nasdaq,
where Friedman helped orchestrate the takeovers of OMX Group, INET,
and the Philadelphia and Boston Exchanges. The two stayed in contact
after she left Nasdaq, the sources said.
In February last year, Carlyle also approached Nasdaq about taking
the exchange private. Talks broke down over a disagreement on price.
'HERS TO LOSE'
Greifeld was a proponent of Friedman being his chosen successor even
in 2011. But at the time the board was split as to whether she could
lead the company, one of the sources said. She had spent her entire
Wall Street career at Nasdaq, and some directors worried about her
lack of outside experience and her management skills, the source
said.
Now, with the experience from Carlyle under her belt, the board is
ready to give her a shot, the sources said. Three top Nasdaq
executives, John Jacobs, Anna Ewing, and Bruce Aust, will report
directly to her.
One source said, the CEO job is “hers to lose.”
Under Greifeld, Nasdaq has been diversifying away from transaction
businesses, which are challenged after years of soft trading volumes
and competition from upstart trading venues as well as brokerages
that execute stock orders internally in so-called "dark pools."
It is instead investing in providing technology, data, and corporate
services to companies. These more stable sources of income largely
fall under the business lines that Friedman now leads. Co-President
Hans-Ole Jochumsen is in charge of transaction services.
Nasdaq's stock has risen nearly 50 percent since the beginning of
last year, spurred in part by a bull market and takeover
expectations following Intercontinental Exchange Inc's $11 billion
acquisition of NYSE Euronext.
(Editing By Paritosh Bansal and Martin Howell)
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