AGM 2021

May 14, 2021

Good morning, and welcome to ICE's 2021 Annual Meeting of Stockholders. Please note, this event is being recorded and will be available for replay on the Investor Relations section of the company's website in the coming days. I would now like to introduce Jeff Sprecher, ICE's Founder, Chairman and Chief Executive Officer. Please go ahead. Good morning. I'm Jeff Schrecker, and it's my pleasure to welcome you to our 2021 Annual Meeting. As we previously announced, We're hosting this year's meeting as a virtual only meeting due to the ongoing coronavirus pandemic. We have stockholders and guests attending the meeting via the web in the quarter that we provide and as a result, I'm reading from a script. After the announcement of the voting results and the adjournment of the meeting, We'll begin our general question and answer session. While this meeting is largely procedural, I do want to take a moment before the formal portion of the meeting to update you on our business and to highlight our focus on earnings. 2020 was the strongest year in ICE's history, marking our 15th year of adjusted earnings per share growth, driven by record revenues of $6,000,000,000 a 16% increase versus the prior year. This success is a testament to the dedication and extraordinary resourcefulness of my ICE colleagues as we continue to navigate the unprecedented COVID-nineteen pandemic. And it's a testament to our customers who put their trust in our people and our technology to manage their risk across asset classes and around the world. In our Exchanges segment, which includes our futures network as well as the New York Stock Exchange. Net revenues increased 10% year over year to a record $3,600,000,000 In our Fixed Income and Data Services segment, we generated total revenues of $1,800,000,000 These results were driven by our fixed income data and analytics business, which grew 5% year over year to over $1,000,000,000 In our Mortgage Technology segment, we completed our $11,000,000,000 acquisition of Ellie Mae in early September, a strategic acquisition that positions us as a leading provider of digital solutions to the U. S. Residential mortgage industry, and it represents a $10,000,000,000 addressable market. Turning now to 2021. In the Q1, we once again grew revenues, grew adjusted operating income and grew adjusted earnings per share, delivering the best quarter in our company's history. And remarkably we did this against last year's highly volatile and therefore high transaction revenue environment that was dominated by COVID-nineteen. As we look to the balance of the year, we remain focused on innovating across asset classes to drive greater efficiency and transparency for our customers and in turn deliver value to our stockholders. I'd like to thank the Intercontinental Exchange Board of Directors for their dedication and their hard work throughout the year. Their expertise and efforts have produced strong results and an excellent track record of corporate governance. I would also like to thank Brett Hatfield, who is not standing for reelection as a director, Warren in this new role. Finally and importantly, I want to thank our stockholders for your continued confidence. We appreciate the dialogue that we have with you and we strive to earn your continued support every day by delivering best in class results. To the other directors of ICE who are attending this meeting virtually, They are Sharon Bowen, Shan Cooper, Charlie Crisp, Doria Farooqi, Lord William Hague, Fred Hatfield, Mark Mulhern, Tom Noonan, Fred Salerno, Caroline Silver, along with representatives of I would now like to appoint Octavia Spencer as Secretary of the meeting to record the proceedings. Sid Rodrigue of Broadridge has been appointed as the Inspector of Elections for this meeting to among other things Ascertain the number of shares of ICE's common stock outstanding and the voting power of each, determine the shares represented at the meeting and the validity of the proxies and Count all the votes and ballots and certify the number of shares represented at the meeting and the vote for each of the proposals. The Inspector of Elections has taken and signed an oath to faithfully execute his duties with strict impartiality and according to the best of his ability. Octavia Spencer will now say a few words about our 2021 annual meeting procedures. Thank you, Mr. Chairman. To conduct this meeting in an orderly fashion, we respectfully direct your attention to the rules of conduct that are accessible on the web portal. Any stockholder or proxy holder wishing to address the meeting should at the appropriate time enter their question on the web portal. We thank you in advance for helping us conduct the 2021 Annual Meeting in an orderly fashion. Only stockholders of record as of March 16, and 2021 are entitled to vote at this meeting. The only securities that can be voted at this meeting are shares of ICE's common stock, which will vote together as a single class on the matters presented to stockholders at this meeting. The voting requirements for each of the items on the agenda and are described in the proxy statement. I will now read our forward looking statement disclosure. The matters discussed at this meeting may include and will provide certain forward looking statements that represent ICE's expectations or beliefs. These statements involve substantial risks and uncertainties that may be beyond our control. Our actual results could differ materially from those projected in these forward looking statements. Additional information concerning factors that could cause actual results to be materially different is contained in the Risk Factors section and we will be conducting a replay of our Annual Report on Form 10 ks and elsewhere in ICE's filings with the Securities and Exchange Commission. We encourage you to read those materials. Thank you, Octavia. We will now proceed with the formal items of business. The record date stockholder list will be available for inspection throughout the meeting on the web portal. In addition, copies of the notice of annual meeting and proxy Statements relating to this meeting are also available on the web portal. Each of you should have had the opportunity to vote your shares by proxy ahead of this meeting. If you've already voted by proxy, you don't need to vote at this meeting unless you wish to change your vote. Ms. Spencer will now review The share information. I have the following information regarding the number of shares to be voted today. As of the record date March 16, 2021, there were 562,712,000 59 shares of ICE's common stock outstanding and entitled to vote at this annual meeting. Such shares constitute all of the shares of ISIS Capital stock entitled to vote at the meeting and record holders of such shares and are entitled to one vote for each share held as of the record date. The presence via the web portal or represented by proxy Of the holders of a majority of the shares of ICE's common stock outstanding and entitled to vote at the meeting are required for a quorum. We are informed by the Inspector of Elections that they are represented by proxy at the meeting with regard to each of the proposals at least 501,170,027 shares, which is at least 89% of the total number of shares outstanding and entitled to vote. The proxies may be voted by Scott Hill, by Andrew Certikowski or Octavia Spencer. Based on this information, a quorum is present and we can proceed with the business of the meeting as set forth in the notice of Annual Meeting and proxy statement. The notice of Annual Meeting and proxy statement notes Four items of business to be voted on by the stockholders. It is now 8:40 am Eastern Time on May 14, 2021, and I now formally declare the polls open for voting on the proposals as described in the proxy statement. The Board of Directors recommends that you vote for proposals 1, 23 and against proposal 4. Please note that will give stockholders an opportunity to ask questions via the web portal on each of these proposals after all four proposals have been presented. The first item on the agenda is the election of Sharon Bowen, Shentela Cooper, Charles Crisp, Duria Farooqi, Lord William Hague, Mark Mulhern, Thomas Noonan, Fred Salerno, Caroline Silver, myself, Jeffrey Sprecher, Judith Freiser and Vincent Pizzi to serve as Directors of InterContinental Exchange Incorporated. If elected, they will serve a 1 year term expiring at the in 2022 Annual Meeting of Stockholders or until his or her earlier resignation or removal. You can find more information about each of the director nominees in the proxy statement. The second item on the agenda is the advisory vote on our executive compensation as set forth in the proxy statement. The 3rd item on our agenda is the ratification of the appointment of as our independent for fiscal year 2021. As set forth in the proxy statement, the Audit Committee of our Board of Directors has appointed as our independent registered public accounting firm for the fiscal year ended December 31, 2021. And the audit committee also recommends that you ratify this appointment. The 4th and final item on our agenda is a stockholder proposal regarding the adoption of a simple majority voting standard. The stockholder proponents supporting statement and the statement of our Board of Directors against the proposal is set forth in the proxy statement. As required by the Securities and Exchange Commission, the proponent of the stockholder Our proposal or its representative will present the proposal. We will allow 3 minutes for this presentation. Ms. Spencer, is the stockholder proponent John Chevedden Are representative Mr. Chevedden at the meeting today? Yes, he is. Operator, please open up the line for Mr. Chevedden. Hello, this is John Chevedden. Can you hear me okay? Yes, we can hear you, Mr. Chevedden. You can proceed with your presentation. Proposal 4, a civil majority vote. Cheryl has requested our Board take each step and necessary so that each voting requirement in our discussion and bylaws that is explicit or implicit Due to default to state laws, it calls for a greater than civil majority vote to be replaced by requirements for a majority of the votes cast for and against such proposals are simple majority. If necessary, this means the closest standard to majority of the service has sworn and gives us proposals. There's a whole lot of background noise here. Shareholders are willing to pay a premium for Shares of companies that have excellent corporate governance, super majority voting requirements like our 67% Supermajority requirement have been found to be one of 6 entrenching mechanisms that are negatively related to company performance according to What Matters in Corporate Governance by Lucian Bebchuk of the Harvard Law School. Still majority requirements are used to block initiatives and supported by most shareholders, but opposed by a status quo management. Our 67% super majority rule means that 80% of the shares The typical vote at our annual meeting would have to approve certain modernization steps for our company. This proposal topic won from 74% to 88% support at Weyerhaeuser Alcoa, Waste Management, Goldman Sachs and First Energy. These votes would have been higher than 74% to 88% if more shareholders had access to independent proxy voting advice. Church and Dwight shareholders gave 99% support to our 2020 proposal on the same topic and ConocoPhillips shareholders gave 99% support to this proposal topic on Tuesday. In anticipation of impressive shareholders' support for this An enlightened governance committee and an enlightened Board of Directors could have expedited adoption of this proposal by giving shareholders an opportunity to vote on a management version of this proposal at this annual meeting. Hence, adoption could have taken place now instead of later. It is unfortunate that Chair of the Governance Committee, Mr. Frederick Salerno, who is possibly the person most responsible for the management opposition to this Governance improvement proposal was rejected by 92,000,000 shares at our 2020 Annual Meeting. Plus after $92,000,000 against votes, Mr. Salerno was then elected Lead Director by our Board. Management promotes the fallacy that shareholders should be distracted from improving our corporate governance with this proposal simply because we have the average governance that a lot of other companies have. The poor attitude of management is that since we are average, we do not need to improve. Thank you, Mr. Chevedden. So if any stockholder would like to ask a question regarding any of the proposals, please submit your questions through the web portal now. Please note that only questions with respect to these 4 proposals will be considered at this time, and If you're voting on the proposals at the meeting, please do so now through the web portal. Stockholders who have sent in their proxies or and recorded for the company's press release or voted via telephone or Internet and do not want to change their vote do not need to take any further action. Any stockholder who has not yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions there. Again, stockholders who have sent in proxies or voted by telephone or Internet and who do not want to change their vote do not need to take any further action. Okay. This now concludes and will be voting on the proposals on the agenda. It is now 8:47 am Eastern Time on May 14, 2021, and the polls on each of the matters are now officially closed. We'll now tally the results of the voting. I'll pause now while the tally is conducted. Now that all the proposals have been presented as Proxy representing shares at the meeting, I hereby vote the shares that I represent through proxy and authorize the delivery of a ballot and corresponding proxies to the Inspector of Elections, so that the shares represented thereby shall be voted in accordance therewith with respect to Proposal 1 through Proposal 4. We will now announce for the preliminary results of the voting. Ms. Spenser, do you have the vote totals on the proposals? Yes. Before reading the preliminary vote totals, I would like to say that we have a sworn affidavit of distribution from Broadridge Financial Solutions Inc. The affidavit states that Broadridge calls the mailing of the information relating to the Annual Meeting on March 26, 2021. The information was delivered to the stockholders of record as of the close of business on March 16, 2021. The preliminary voting results are as follows. Each director nominee received more votes cast for such nominees election and therefore Sharon Bowen, Chantella Cooper, Charles Chris, Doria Farooqi, Lord Hague of Richmond, Mark Mulhern, Thomas Noonan, Frederick Salerno, Caroline Silver, Jeffrey Sprecher, Judith Spreiser and Vincent Tisi are duly elected as Directors of the company. 422,000,711,910 shares were voted in favor of the second item on the agenda, which is the affirmative vote of the majority of votes cast for or against the advisory resolution on our executive compensation. So the advisory resolution on executive compensation is approved. 494,000,000 179,406 shares were voted in favor of the 3rd item on the agenda, which is the affirmative vote of the majority of votes cast for or against the proposal to ratify the appointment of as independent registered public accounting firm for the fiscal year ending December 31, 2021, so that appointment of is ratified and 437,100,000 and 313 shares were voted in favor of the 4th item on the agenda, which is the affirmative vote of the majority of votes Due to the level of support for the stockholder proposal, ICE management and the Board will move forward with amending the charter in response to this proposal. Amendments to the ICE Charter will be subject to the approval of the company's stockholders at our next Annual Meeting of Stockholders. Also as the owner of National Securities Exchanges, including the New York Stock Exchange. We are required to obtain approval from the Securities and Exchange Commission for amendments to our charter. The final vote results will be filed with the Securities and Exchange Commission on a current report on Form 8 ks in the next few days. The certificate and report of the Inspector of Elections, which contains the vote totals, will be filed with the minutes of this meeting. We would now like to adjourn the formal portion of this meeting. I move that the meeting be adjourned. I second the motion. All in favor, say aye. Aye. Any opposed say no. The Annual Stockholders' Meeting is now adjourned and that concludes the announced items for the meeting as specified in the notice of annual meeting and proxy statement. I'm now going to open the meeting up for questions from our stockholders. In doing so, I'll ask that you reference the rules of conduct provided today. If we're unable to address your question at the meeting today, We'll follow-up with you after the meeting. If you have questions for the company, please submit them through the web portal now. So the first question that's come in is, what is your dividend policy going forward in terms of a goal of percent increase each year? I think the answer is that the Board determines the dividend from time to time and has a philosophy that the dividend should grow as the company grows. And Since 2013, we've grown the dividend at an average annual rate of about 12%. And that's been as a result of the fact that we've been able to grow revenues and earnings every year since the company has gone public. So I think you'll continue to see that philosophy, as opposed to a specific target. You're going to see us Sort of fundamentally grow the dividend as we continue to grow earnings. The next question is, can you give us a couple of examples of Product innovations, that's a good question. I think the company has been incredibly entrepreneurial since its formation. But in the last year, you've seen us working on 2 really interesting Initiatives that I think can significantly contribute to the growth of the company. The first is we launched the new futures exchange in Abu Dhabi called ICE Futures Abu Dhabi, which is our first major foray in doing business in the Middle East. And the launch of that product has been very, very successful. It's young, but successful. And so we have good hopes for that business. We've also been working on in the U. S. Residential mortgage space, digitizing the closing of residential mortgages and removing the paper That's involved in a mortgage process, including the mortgage note itself through something that we call an eNote. And that will hopefully in a world to actually consummate a mortgage without leaving their home. And we think that's a really exciting interesting opportunity that will streamline and speed up the process of entering into a residential mortgage. We received a couple of questions, so we'll Consolidate them here, on equity market structure and the role of the New York Stock Exchange, particularly With the growth of dark pools and how we think about fair and orderly markets. It's a good question. I mean to say that the New York Stock Exchange really performed flawlessly over the COVID crisis. We saw not only The temporary closure of our New York trading floor, but a massive increase in share trading that happened to manage risk and partly due to the dislocation of people around the world. And the company really has performed well. We're proud to say that we've been able to safely reopen the floor and we believe that the market makers on that floor really contribute to price formation and the data now that we've been able to collect by virtue of having the floor closed for an extended period of time and then having it obviously open for many years. We can see that that floor really contributes to price formation and listed companies on the New York Stock Exchange have better price formation, but then growing, but the whole market has been growing and we continue to work with the regulators and with our customers to try to find a balance that will allow the best capital markets in the world, which I really do believe that we have in the United States. And We're committed to transparency and fair and orderly markets and so are global regulators. So We sit in a very good spot in terms of our advocacy. The next question is management considering acquisitions? The answer is yes. We've done dozens and dozens of deals over the my tenure as Chief Executive and the growth of the company. And so We have a relatively formal process internally where we lay out goals for the company and then think about whether we should build or by or some hybrid method of getting to where we want to go. And so acquisitions It's always a part of that thinking. And we're very, very disciplined when it comes to doing acquisitions. We actually I prefer flat management structures here and more hands on managerial style. And so we don't really want to grow Big just to be big, we really want to grow earnings per share, which is if you listen to Our quarterly earnings report, you'll see that I always end on a final slide that shows our earnings per share because that's really how we think about the business. And so to the extent that acquisitions can help us get there and move us against our plan. We think strongly about them. And we'll take our final question now. Can you talk about any cost efficiencies you were able to capture in 20 It's a good question. We think of ourselves as a growth company. As I just mentioned, We really want to grow earnings per share. And as asked earlier in the question and answer session, to the That we grow earnings per share, we also want to grow the dividend. And so that's really the mindset of the Board and management. And so we think of top line growth and we're willing to invest in that top line growth in, As I said in the previous answers through acquisitions and through organic investments, in the company's things like investing in the ICE Futures, Abi Dabi exchange where things like investing in our e closing solution for residential mortgages. So we don't focus specifically on EPS growth through cost cutting. But As I also mentioned, we like to run an efficient flat organization with a lot of collaboration and that just lends itself to cost management. And so we're constantly internally looking at all of our initiatives and wondering whether or not we're doing that in the most efficient manner and whether we should deploy our assets elsewhere. So you do see an ongoing Evolution inside the company to keep costs down and that's why generally speaking we've had very, very, very low cost growth notwithstanding the fact that we Continue to invest in new initiatives. And I think I'll end on the fact Like I end every one of the earnings calls that we've been a public company and that's been through Wars through recessions, through boom and bust cycles in global economies and that is the mindset of this management team and Board. And let me just thank you for all your continued support. And at this time, I'm going to ask our host, Marcus, to close the event. Thank you. The Annual General Meeting for ICE has now come to an end. Thank you for attending. You may now leave.