exchanges

Jilted NYSE execs could score $95 million

April 1, 2011: 11:00 AM ET

NYSE chief Duncan Niederauer and his top aides could soon be crying all the way to the bank.

Niederauer (right) will walk away with $34 million in change-of-control payments should the Nasdaq (NDAQ) and the Intercontinental Exchange (ICE) succeed in wresting Niederauer's NYSE Group (NYX) from the arms of its chosen suitor, Germany's Deutsche Boerse.

Good walking away money

His top five lieutenants will make $61 million if they depart under a Nasdaq takeover – including a $17 million check for general counsel John Halvey.

The payments are outlined in proxy materials the NYSE filed this month in the wake of its agreement to be acquired by Deutsche Borse for $10 billion in stock. Nasdaq and ICE said Friday they will offer $11.3 billion in stock and cash to undo that merger and replace it with one that would create a giant exchange company based in New York, not overseas.

The sum due Niederauer comprises $12 million in severance pay, $11.2 million in immediate vesting of restricted stock awards, $6.2 million in excise tax protection and a $4.8 million bonus (that's two years' worth, for those keeping score at home).

He gets that sum in case his employment is terminated because control of the company changes. He gets all but the excise tax break if he leaves of his own accord or is fired by the NYSE without cause.

Getting a $34 million check can't be a bad feeling, but it can't be a bonanza Niederauer is looking forward to. He spent February stumping for the Deutsche takeover, not altogether effectively, before a skeptical public and a posturing Congress. He warned those who focused on planned job cuts that doing so was "a negative, pessimistic way of looking at this merger."

Of course, Niederauer has millions of reasons to be more optimistic. He made $25 million running the NYSE over the past three years, and the Big Board said in February that Niederauer was in the process of negotiating a new compensation agreement that would no doubt give him a long overdue raise should the Deutsche deal survive.

But it's not easy to make the political case for selling a 200-year-old New York company to an overseas buyer at a time when U.S. competitiveness is being widely questioned. Niederauer probably hasn't helped his case by admitting that stock trading, the NYSE business that people identify with, is "challenged" economically.

The failure of the NYSE and Deutsche Boerse to come up with a name for the merged entity showed the deal Niederauer wanted was never going to be easy, and the Nasdaq-ICE bid only adds to that discomfort.

There are ample signs Friday NYSE shareholders aren't all that attached to the Deutsche deal: Despite the NYSE's warning that shareholders shouldn't act on the Nasdaq bid without first getting word of the NYSE board's response, NYSE shares are up 11%.

Like stock trading on the exchange floor, Niederauer's reign as CEO looks headed for the history books. Not that you'll be able to tell to look at his wallet.

Also on Fortune.com:

Follow me on Twitter @ColinCBarr.

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