2015-11-11T11:50:08-06:00 2014-12-31 ERNST & YOUNG US LLP TWO NORTH CENTRAL AVENUE STE 2300 PHOENIX AZ 85004 990 2014-01-01 530088710 FINANCIAL INDUSTRY REGULATORY AUTHORITY INC % MARCIA E ASQUITH FINA 2027288949 1735 K STREET NW WASHINGTON DC 200061506 ROBERT A RENNER , VICE PRESIDENT 2015-11-10 BRENDA D GRIESEMER P00264669 6023223000 2014 2016-02-25 16:41:14Z RICHARD G KETCHUM 1735 K STREET NW WASHINGTON DC 200061506 3321374423 false X WWW.FINRA.ORG X 1936 DE FINRA IS DEDICATED TO INVESTOR PROTECTION AND MARKET INTEGRITY THROUGH AND MARKET INTEGRITY THROUGH EFFECTIVE AND EFFICIENT REGULATION OF THE SECURITIES INDUSTRY. 24 23 1079 1 15097141 0 0 478422829 568641919 65607553 29991302 120041827 108750667 664072209 707383888 6010732 1750923 0 0 235429316 224493649 0 0 0 541983499 666946728 783423547 893191300 -119351338 -185807412 2208535467 2344683770 423659180 444214113 1784876287 1900469657 X FINRA IS DEDICATED TO INVESTOR PROTECTION AND MARKET INTEGRITY THROUGH EFFECTIVE AND EFFICIENT REGULATION OF THE SECURITIES INDUSTRY. false false SEE SCHEDULE O false false false true false false false false false true true false false false true false true false false false false false false false false false true false true false false false false false false false false false false false true true true false true 217 0 true 1079 true true true false false false false false X 24 23 true false false false true true true true true false false true true true true true true true true false CA X MARCIA E ASQUITH 2027288949 1735 K STREET NW WASHINGTON DC 200061506 X RICHARD G KETCHUM CHAIRMAN & CEO 60.0 0.0 X X 2812798 0 81030 CHARLES A BOWSHER BOARD MEMBER 2.0 0.0 X 61965 0 0 JOHN J BRENNAN BOARD MEMBER 4.0 0.0 X 113511 0 0 JAMES E BURTON BOARD MEMBER 4.0 0.0 X 110688 0 0 KEVIN CARRENO BOARD MEMBER 2.0 0.0 X 80223 0 0 MARK S CASADY BOARD MEMBER 3.0 0.0 X 80504 0 0 MARK W CRESAP BOARD MEMBER 2.0 0.0 X 40110 0 0 CAROL ANTHONY JOHN DAVIDSON BOARD MEMBER 2.0 0.0 X 83830 0 0 JOHN F X DOLAN BOARD MEMBER 2.0 0.0 X 61209 0 0 W DENNIS FERGUSON BOARD MEMBER 3.0 0.0 X 82667 0 0 HARVEY J GOLDSCHMID BOARD MEMBER 3.0 0.0 X 66280 0 0 GREGORY J FLEMING BOARD MEMBER 2.0 0.0 X 0 0 0 WILLIAM H HEYMAN BOARD MEMBER 3.0 0.0 X 90577 0 0 ROBERT KEENAN BOARD MEMBER 2.0 0.0 X 80345 0 0 ROCHELLE LAZARUS BOARD MEMBER 2.0 0.0 X 80491 0 0 JOSHUA S LEVINE BOARD MEMBER 2.0 0.0 X 0 0 0 BRIGITTE C MADRIAN BOARD MEMBER 2.0 0.0 X 80150 0 0 JOSEPH M MECANE BOARD MEMBER 2.0 0.0 X 0 0 0 KEN NORENSBERG BOARD MEMBER 2.0 0.0 X 60834 0 0 RICHARD S PECHTER BOARD MEMBER 2.0 0.0 X 87771 0 0 JOHN W SCHMIDLIN BOARD MEMBER 2.0 0.0 X 80785 0 0 ROBERT W SCULLY BOARD MEMBER 2.0 0.0 X 0 0 0 LESLIE F SEIDMAN BOARD MEMBER 2.0 0.0 X 60260 0 0 JOEL SELIGMAN BOARD MEMBER 2.0 0.0 X 80498 0 0 GARY H STERN BOARD MEMBER 2.0 0.0 X 41018 0 0 KURT P STOCKER BOARD MEMBER 2.0 0.0 X 63335 0 0 LUIS M VICEIRA BOARD MEMBER 2.0 0.0 X 80260 0 0 ELISSE B WALTER BOARD MEMBER 2.0 0.0 X 40220 0 0 SETH H WAUGH BOARD MEMBER 2.0 0.0 X 80168 0 0 JAMES D WEDDLE BOARD MEMBER 2.0 0.0 X 87933 0 0 SUSAN WOLBURGH-JENAH BOARD MEMBER 2.0 0.0 X 40220 0 0 TODD T DIGANCI EXECUTIVE VP AND CFO 60.0 0.0 X 1221511 0 67258 MARCIA E ASQUITH SENIOR VP AND CORP SECRETARY 60.0 0.0 X 552315 0 102098 F GREGORY AHERN EXECUTIVE VICE PRESIDENT 60.0 0.0 X 962714 0 65010 ROBERT L D COLBY EVP AND CHIEF LEGAL OFFICER 60.0 0.0 X 1012305 0 155561 CARLO DI FLORIO EXECUTIVE VICE PRESIDENT 60.0 0.0 X 874639 0 179321 LINDA D FIENBERG PRESIDENT - DISPUTE RESOLUTION 60.0 0.0 X 0 1672888 521695 STEVEN A JOACHIM EXECUTIVE VICE PRESIDENT 60.0 0.0 X 850371 0 108355 TRACY B JOHNSON SENIOR VICE PRESIDENT 60.0 0.0 X 582548 0 92142 STEVEN J RANDICH EXECUTIVE VP AND CIO 60.0 0.0 X 1023308 0 178805 STEPHEN M SCHOENEMEN SENIOR VICE PRESIDENT 60.0 0.0 X 590767 0 128467 THOMAS M SELMAN EXECUTIVE VICE PRESIDENT 60.0 0.0 X 0 718424 71202 JONATHAN S SOKOBIN SENIOR VICE PRESIDENT 60.0 0.0 X 411125 0 102440 ROBERT L GATRELL SENIOR VICE PRESIDENT 60.0 0.0 X 609460 0 42186 CATHY MATTAX SENIOR VICE PRESIDENT 60.0 0.0 X 841300 0 64221 GREGORY B RAYMOND SENIOR VICE PRESIDENT 60.0 0.0 X 1261401 0 73772 KAREN J SANCILIO SENIOR VICE PRESIDENT 60.0 0.0 X 631781 0 174095 ROBERT L WOOD SENIOR VICE PRESIDENT 60.0 0.0 X 777177 0 62803 MARTIN P COLBURN EXECUTIVE VICE PRESIDENT 0.0 0.0 X 141556 0 0 17072928 2391312 2270461 600 true true false NASDAQ OMX GROUP 9513 KEY WEST AVENUE ROCKVILLE MD 20850 TECH. 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CONSULTING 4232560 DELOITTE TOUCHE LLP 2 WORLD FINANCIAL CENTER NEW YORK NY 10281 CONSULTING 3049446 THE CONSORTIUM INC 4922 FAIRMONT AVENUE BETHESDA MD 20814 TECH CONSULTING 3020705 121 0 ACTIVITY ASSESSMENT 900099 472014688 472014688 USER FEES 900099 378 378 TRANSPARENCY SERVICE FEES 900099 67873179 67873179 CONTRACT SERVICE FEES 900099 28657136 13521143 15135993 ALL OTHER PROGRAM SERVICE REVENUE 900099 96538 96538 568641919 25641391 -38852 25680243 0 1464091 1464091 0 0 0 2618327446 13000 2613953235 37300 4374211 -24300 4349911 4349911 0 0 0 SUBSIDIARY OVERHEAD ALLOCATION 900099 107286576 107286576 707383888 553505926 15097141 31494245 1750923 0 0 0 14477243 0 158612400 27197299 15968795 8237912 4382804 2569839 1155028 835402 0 1998862 10476035 33368 9826794 119320460 0 6355767 5419544 0 695657 219461 0 24727285 2274630 ACTIVITY ASSESSMENT 472014570 TEMPORARY HELP 1152749 TAXES 1629483 BANK SERVICE FEES 922996 935994 893191300 128269777 115207635 222998774 345540409 0 0 92482304 112282687 0 0 0 0 0 0 0 0 16970389 18555040 305673867 195446554 128926387 110227313 738977254 828559872 799684864 737266014 0 0 25831317 23458692 54394401 53586108 2208535467 2344683770 392888537 417575483 0 0 30770643 26638630 0 0 0 0 0 0 0 0 0 0 0 0 423659180 444214113 X 169005778 169005778 0 0 1615870509 1731463879 1784876287 1900469657 2208535467 2344683770 X -185807412 441186 1998862 298960734 X false true X true false false false false 870000 870000 870000 16435481 16435481 61799343 22647341 39152002 102067960 68853935 33214025 86571774 71335259 15236515 38799308 32610018 6189290 110227313 PRIVATE INVESTMENTS 736287211 F MARKETABLE ALTERNATIVE INVESTM 678803 F INVESTMENT IN NSCC 300000 C 737266014 0 0 X SCHEDULE D, PART X, LINE 2 ASC 740 FOOTNOTE FROM CONSOLIDATED AUDITED FINANCIAL STATEMENTS U.S. GAAP PROVIDES A TWO-STEP APPROACH FOR EVALUATING TAX POSITIONS. RECOGNITION (STEP 1) OCCURS WHEN AN ENTITY CONCLUDES THAT A TAX POSITION, BASED SOLELY ON ITS TECHNICAL MERITS, IS MORE LIKELY THAN NOT TO BE SUSTAINED UPON EXAMINATION. IN STEP 2 (MEASUREMENT), THE TAX BENEFIT IS MEASURED AS THE LARGEST AMOUNT OF BENEFIT, DETERMINED ON A CUMULATIVE PROBABILITY BASIS, THAT IS MORE LIKELY THAN NOT TO BE REALIZED UPON ULTIMATE SETTLEMENT. DURING THE YEARS FROM 2011 TO 2014, WHICH REPRESENT THE YEARS MANAGEMENT CONSIDERS TO BE OPEN FOR EXAMINATION BY TAXING AUTHORITIES, MANAGEMENT DID NOT IDENTIFY THE EXISTENCE OF ANY UNCERTAIN TAX POSITIONS. ACCORDINGLY, ALL TAX POSITIONS ARE RECOGNIZED AND MEASURED AT THEIR FULL BENEFIT IN THE CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS. HOWEVER, IN FUTURE YEARS, FINRA MAY RECOGNIZE AN UNCERTAIN TAX POSITION IF TOTAL CUMULATIVE NOL USAGE EXCEEDS THE AMOUNT RESULTING FROM PRE-NAHO LOSSES. true FINRA INVESTOR EDUCATION FOUNDATION 1735 K STREET NW WASHINGTON DC 20006 200863779 501(C)(4) 1750923 CONTRIBUTION 1 Form 990, Schedule I DURING 2014, FINRA, INC. MADE AN UNRESTRICTED CONTRIBUTION OF $1.7 MILLION OF DISGORGEMENTS RESULTING FROM REGULATORY FINES. THESE DISGORGEMENTS WERE EARMARKED BY FINRA, FOR THE FINRA INVESTOR EDUCATION FOUNDATION (THE FOUNDATION), A WHOLLY-OWNED SUBSIDIARY, FOR PROGRAMS AND PROJECTS CONSISTENT WITH THE FOUNDATION'S MISSION. THE FOUNDATION IS A TAX-EXEMPT ORGANIZATION UNDER SECTION 501(C)(4) AND ITS MISSION IS TO PROVIDE UNDERSERVED AMERICANS WITH THE KNOWLEDGE, SKILLS AND TOOLS NECESSARY FOR FINANCIAL SUCCESS THROUGHOUT LIFE. THE CONTRIBUTION WAS REVIEWED AND APPROVED BY THE FINANCE AND OPERATIONS COMMITTEE OF FINRA, INC.'S BOARD PRIOR TO PAYMENT. THE FINRA INVESTOR EDUCATION FOUNDATION BOARD IS RESPONSIBLE FOR APPROVING AND MONITORING GRANTS. SEE THE FOUNDATION'S FORM 990 FOR ADDITIONAL DETAILS ON THE GRANT APPROVAL AND MONITORING PROCESS. X X X X X true true X X X X X true true false RICHARD G KETCHUM CHAIRMAN & CEO 978762 0 1500000 0 334036 0 61388 0 19642 0 2893828 0 0 0 TODD T DIGANCI EXECUTIVE VP AND CFO 519039 0 680000 0 22472 0 40686 0 26572 0 1288769 0 0 0 MARCIA E ASQUITH SENIOR VP AND CORP SECRETARY 249420 0 280000 0 22895 0 78270 0 23828 0 654413 0 0 0 F GREGORY AHERN EXECUTIVE VICE PRESIDENT 391368 0 400000 0 171346 0 33050 0 31960 0 1027724 0 69334 0 MARTIN P COLBURN EXECUTIVE VICE PRESIDENT 0 0 0 0 141556 0 0 0 0 0 141556 0 0 0 ROBERT L D COLBY EVP AND CHIEF LEGAL OFFICER 479574 0 510000 0 22731 0 139355 0 16206 0 1167866 0 0 0 CARLO DI FLORIO EXECUTIVE VICE PRESIDENT 428278 0 435000 0 11361 0 123105 0 56216 0 1053960 0 0 0 LINDA D FIENBERG PRESIDENT - DISPUTE RESOLUTION 0 412315 0 360000 0 900573 0 502177 0 19518 0 2194583 0 0 STEVEN A JOACHIM EXECUTIVE VICE PRESIDENT 370774 0 450000 0 29597 0 64761 0 43594 0 958726 0 0 0 TRACY B JOHNSON SENIOR VICE PRESIDENT 302918 0 260500 0 19130 0 79898 0 12244 0 674690 0 0 0 STEVEN J RANDICH EXECUTIVE VP AND CIO 476800 0 525000 0 21508 0 141002 0 37803 0 1202113 0 0 0 STEPHEN M SCHOENEMEN SENIOR VICE PRESIDENT 318826 0 250000 0 21941 0 97805 0 30662 0 719234 0 0 0 THOMAS M SELMAN EXECUTIVE VICE PRESIDENT 0 336325 0 360000 0 22099 0 43398 0 27804 0 789626 0 0 JONATHAN S SOKOBIN SENIOR VICE PRESIDENT 251776 0 115000 0 44349 0 65847 0 36593 0 513565 0 0 0 ROBERT L GATRELL SENIOR VICE PRESIDENT 255887 0 210000 0 143573 0 38630 0 3556 0 651646 0 0 0 CATHY MATTAX SENIOR VICE PRESIDENT 19679 0 162000 0 659621 0 62219 0 2002 0 905521 0 0 0 GREGORY B RAYMOND SENIOR VICE PRESIDENT 304738 0 281300 0 675363 0 40164 0 33608 0 1335173 0 226585 0 KAREN J SANCILIO SENIOR VICE PRESIDENT 195071 0 230000 0 206710 0 158543 0 16120 0 806444 0 44835 0 ROBERT L WOOD SENIOR VICE PRESIDENT 296921 0 281500 0 198756 0 32353 0 30450 0 839980 0 97979 0 SUPPLEMENTAL COMPENSATION INFORMATION FOR THE HIGHEST COMPENSATED EXECUTIVES, BASE SALARY AND INCENTIVE COMPENSATION (EARNED IN THE PRIOR YEAR) REPORTED IN COLUMNS B(i) AND B(ii) ARE INDEPENDENTLY DETERMINED AND APPROVED BY THE MANAGEMENT COMPENSATION COMMITTEE OF THE BOARD OF GOVERNORS. OTHER REPORTABLE COMPENSATION (COLUMN B(iii)) IS LARGELY COMPOSED OF RETIREMENT VESTING AND/OR PAYOUT EVENTS FROM NON-QUALIFIED PLANS, AS WELL AS SEVERANCE OR SEPARATION PAYMENTS, IF APPLICABLE. FOR FURTHER DETAILS REGARDING EXECUTIVE COMPENSATION, PLEASE REFER TO SCHEDULE O. SCHEDULE J, PART I, LINE 1 FIRST CLASS OR CHARTER TRAVEL: THE NEXT CABIN ABOVE ECONOMY IS ALLOWED FOR INTERNATIONAL TRAVEL TO AND FROM THE U.S WHERE THE FLIGHT TIME IS OVER 6 HOURS DIRECT. IT IS ALSO ALLOWED FOR ALL TRAVEL FROM THE U.S. MAINLAND TO HAWAII AND FOR DIRECT FLIGHTS WITHIN EUROPE THAT ARE OVER FIVE HOURS IN DURATION. OTHERWISE, ECONOMY CLASS IS REQUIRED. REIMBURSEMENT TO BOARD MEMBERS FOR FIRST CLASS TRAVEL EXPENSES INCURRED WHILE ATTENDING BOARD AND CORPORATE COMMITTEE MEETINGS ON BEHALF OF FINRA, FINRA REGULATION, AND FINRA DISPUTE RESOLUTION IS PERMITTED. TRAVEL FOR COMPANIONS: IN LIEU OF A WEEKEND FLIGHT HOME, EMPLOYEES WHO ARE ON EXTENDED STAY (I.E., AN OUT-OF-TOWN HOTEL STAY OF SIX CONSECUTIVE NIGHTS OR LONGER), AND WHERE A DIRECT FLIGHT IS TWO OR MORE HOURS FROM HOME, WILL HAVE THE OPTION TO INVITE A COMPANION TO THEIR WORK DESTINATION OR TRAVEL TO AN ALTERNATE LOCATION. HOWEVER, EMPLOYEES WILL ONLY BE REIMBURSED UP TO THE COST OF WHAT A COACH CLASS TICKET WOULD HAVE BEEN FOR THE EMPLOYEE TO TRAVEL HOME FOR THE WEEKEND. THE REIMBURSEMENT AMOUNT WILL BE A TAXABLE FRINGE BENEFIT TO THE EMPLOYEE, AND THE EMPLOYEE IS RESPONSIBLE FOR ALL TAXES. COMPANION WEEKEND TRAVEL MUST BE APPROVED BY THE EMPLOYEE'S SENIOR VICE PRESIDENT AND THE MANAGER OF CORPORATE TRAVEL SERVICES BEFORE THE TRIP. COMPANION MEALS, GROUND TRANSPORTATION AND AIRPORT PARKING ARE AT THE EMPLOYEE'S EXPENSE AND CANNOT BE CHARGED TO THE CORPORATE CREDIT CARD OR SUBMITTED FOR REIMBURSEMENT. WHEN COMPANIONS ARE INVITED ON BEHALF OF FINRA, FINRA REGULATION, AND FINRA DISPUTE RESOLUTION TO BOARD MEETINGS, THEIR AIRFARE IS REIMBURSABLE. HEALTH AND CLUB DUES: AS PART OF ITS WELLNESS PROGRAM, FINRA OFFERS SUBSIDIZED GYM MEMBERSHIPS TO EMPLOYEES OF FINRA AND SUBSIDIARIES AT CERTAIN LOCATIONS. ALSO, THE CEO'S CONTRACT PROVIDES FOR UP TO A MAXIMUM AMOUNT OF $20,000 EACH CALENDAR YEAR FOR ADMISSION FEES, DUES AND HOUSE CHARGES OF ONE CLUB IN EACH OF THE NEW YORK CITY AND WASHINGTON, D.C. METROPOLITAN AREAS TO BE USED FOR BUSINESS PURPOSES. EXECUTIVE HEALTH PLAN: THE EXECUTIVE HEALTH PLAN IS AVAILABLE TO FINRA STAFF AT A LEVEL OF EXECUTIVE VICE PRESIDENT AND ABOVE AND OTHER EMPLOYEES AS DESIGNATED BY THE CEO. THE EXECUTIVE HEALTH PLAN COVERS PROCEDURES RELATED TO THE DIAGNOSIS AND PREVENTION OF A MEDICAL CONDITION(S). THE FINRA EXECUTIVE HEALTH PLAN PROVIDES FOR ONE ASSESSMENT PER YEAR. TAX INDEMNIFICATION: GIFTS TO EMPLOYEES ARE CONSIDERED TAXABLE COMPENSATION UNDER THE IRS CODE. THE FAIR MARKET VALUE OF THE GIFT TO THE EMPLOYEE WILL BE INCLUDED AS WAGES ON THE EMPLOYEE'S W-2. IN GENERAL, IT IS FINRA'S PRACTICE TO "GROSS UP," OR ADJUST THE WAGES AND TAXES SO THAT THE TAX EFFECT OF RECEIVING A GIFT IS NEUTRAL TO THE EMPLOYEE. IT IS ALSO FINRA'S PRACTICE TO "GROSS-UP" EMPLOYEE RELOCATION EXPENSES, AS WELL AS FOOD AND LODGING EXPENSES INCURRED AS PART OF THE EXECUTIVE HEALTH PLAN. PERSONAL SERVICES: THE CEO'S CONTRACT PROVIDES FOR A CAR AND DRIVER IN BOTH NEW YORK CITY, NEW YORK AND WASHINGTON, D.C. TO BE USED FOR BUSINESS PURPOSES. THESE SERVICES, WHICH ARE USED PRINCIPALLY BY THE CEO, ARE USED BY OTHER FINRA EMPLOYEES FOR BUSINESS PURPOSES WHEN AVAILABLE. THE CEO'S CONTRACT ALSO PROVIDES FOR COSTS INCURRED RELATED TO PERSONAL FINANCIAL AND TAX COUNSELING, UP TO $20,000 PER CALENDAR YEAR, AS WELL AS SPOUSAL TRAVEL FOR CERTAIN BUSINESS-RELATED EVENTS. SUPPLEMENTAL COMPENSATION INFORMATION 4A) IN CONNECTION WITH MARTIN P. COLBURN'S SEPARATION FROM FINRA, HE WAS PAID $141,556 IN 2014. IN CONNECTION WITH LINDA D. FIENBERG'S SEPARATION FROM FINRA, SHE WAS PAID $26,521 IN 2014. IN CONNECTION WITH CATHY MATTAX'S SEPARATION FROM FINRA, SHE WAS PAID $124,100 IN 2014. IN CONNECTION WITH KAREN J. SANCILIO'S SEPARATION FROM FINRA, SHE WAS PAID $65,077 IN 2014. 4B) FINRA OFFERS TWO NON-QUALIFIED SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS. ANNUAL INCREASES IN BENEFIT VALUE, CLIFF VESTING EVENTS, AND PAYOUT DIFFERENTIALS ARE TAXABLE IN THE YEAR IN WHICH THEY OCCUR AND ARE REPORTED IN COLUMN B(iii) OF SCHEDULE J, PART II. UNVESTED BENEFIT AND CONTRIBUTION ACCRUALS ARE TAX DEFERRED AND ARE REPORTED IN COLUMN C OF SCHEDULE J, PART II. 1) FINRA'S SUPPLEMENTAL DEFINED BENEFIT PLAN IS A NON-QUALIFIED DEFINED BENEFIT PLAN THAT IS PROVIDED TO MEMBERS OF A SELECT GROUP OF MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES SUCH AS THOSE DESCRIBED UNDER 201(2), 301(A)(3), AND 401(A)(1) OF ERISA. IT IS A FINRA FUNDED PLAN IN WHICH PARTICIPANTS TYPICALLY HAVE A TAXABLE ONE-TIME CLIFF VESTING EVENT AT A SPECIFIED MILESTONE BASED ON BOTH AGE AND YEARS OF SERVICE. THIS PLAN WAS CLOSED TO NEW ENTRANTS AS OF 12/31/05. PARTICIPANTS IN THE NON-QUALIFIED DEFINED BENEFIT PLAN THAT HAD A CLIFF VESTING EVENT IN 2014 INCLUDE: GREGORY B. RAYMOND - $671,730 THE AMOUNTS BELOW REPRESENT THE ACCUMULATED BENEFITS RECOGNIZED IN THE CURRENT YEAR FOR FEDERAL INCOME TAX PURPOSES UPON THE INDIVIDUALS' SEPARATION FROM FINRA AND THE PLAN. THE BENEFITS WERE EARNED WITHIN THE NON-QUALIFIED DEFINED BENEFIT PLAN OVER THE DURATION OF THE INDIVIDUALS' YEARS OF SERVICE TO FINRA. THESE AMOUNTS VARY BY INDIVIDUAL BASED ON YEARS OF SERVICE (RANGING FROM 10-30 PLUS YEARS), COMPENSATION LEVELS AND PAY GRADE, AGE AT SEPARATION, AND PREVIOUS VESTING EVENTS. LINDA D. FIENBERG - $570,200 CATHY MATTAX - $505,133 2) FINRA'S SUPPLEMENTAL DEFINED CONTRIBUTION PLAN IS A NON-QUALIFIED PLAN THAT IS OPEN TO VICE PRESIDENTS AND ABOVE WITH AN ANNUAL BASE PAY ABOVE THE QUALIFIED LIMIT. IT IS ONLY OPEN TO THOSE NOT PARTICIPATING IN THE CLOSED NON-QUALIFIED DEFINED BENEFIT PLAN DESCRIBED ABOVE. IT IS A FINRA FUNDED PLAN WITH A 3 YEAR VESTING CYCLE WITH ANNUAL VESTING BEGINNING AT AGE 62. PARTICIPANTS IN THE SUPPLEMENTAL NON-QUALIFIED DEFINED CONTRIBUTION PLAN WITH CONTRIBUTIONS VESTING IN 2014 INCLUDE: F. GREGORY AHERN - $159,200 RICHARD G. KETCHUM - $300,020 ROBERT L. GATRELL - $142,249 KAREN J. SANCILIO - $98,340 ROBERT L. WOOD - $179,346 VOLUNTARY COMPENSATION DISCLOSURES: GREGORY J. FLEMING WAS A VOLUNTEER BOARD MEMBER IN 2014 AND DID NOT RECEIVE COMPENSATION FOR HIS SERVICES. VOLUNTARY DISCLOSURE FOR FINANCIAL INFORMATION THE FINANCIAL INFORMATION INCLUDED IN THE FORM 990 IS PRESENTED ON A STAND-ALONE BASIS WITH ALL SIGNIFICANT INTERCOMPANY RECEIVABLE AND PAYABLE AMOUNTS ELIMINATED AND DOES NOT REPRESENT THE CONSOLIDATED RESULTS FOR FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. (FINRA) AND ITS SUBSIDIARIES. THE 2014 FORM 990 SHOULD BE READ IN CONNECTION WITH THE 2014 FINRA ANNUAL FINANCIAL REPORT WHICH IS AVAILABLE AT WWW.FINRA.ORG/ABOUT/ANNUAL-REPORT-FINANCIALS. SEE ALSO SEPARATE 2014 FORM 990'S FOR RELATED ENTITIES, INCLUDING FINRA DISPUTE RESOLUTION, INC., FINRA REGULATION, INC., AND FINRA INVESTOR EDUCATION FOUNDATION. FORM 990, PART III, LINE 4 FINRA IS THE LARGEST INDEPENDENT REGULATOR FOR ALL SECURITIES FIRMS DOING BUSINESS IN THE UNITED STATES. FINRA IS DEDICATED TO INVESTOR PROTECTION AND MARKET INTEGRITY THROUGH EFFECTIVE AND EFFICIENT REGULATION AND COMPLEMENTARY COMPLIANCE AND TECHNOLOGY-BASED SERVICES. FINRA TOUCHES VIRTUALLY EVERY ASPECT OF THE SECURITIES BUSINESS - FROM REGISTERING AND EDUCATING ALL INDUSTRY PARTICIPANTS TO EXAMINING SECURITIES FIRMS, WRITING RULES, ENFORCING THOSE RULES AND THE FEDERAL SECURITIES LAWS, AND INFORMING AND EDUCATING THE INVESTING PUBLIC. IN ADDITION, FINRA PROVIDES SURVEILLANCE AND OTHER REGULATORY SERVICES FOR EQUITIES AND OPTIONS MARKETS, AS WELL AS TRADE REPORTING AND OTHER INDUSTRY UTILITIES. FINRA ALSO ADMINISTERS THE LARGETS DISPUTE RESOLUTION FORUM FOR INVESTORS AND FIRMS. FORM 990, PART VI, LINE 6 FINRA IS ORGANIZED AS A NONSTOCK, NOT-FOR-PROFIT, MEMBERSHIP CORPORATION. NO REVENUES OR EARNINGS MAY BE USED FOR THE BENEFIT OF ANY INDIVIDUAL OR MEMBER. ANY REGISTERED BROKER, DEALER, MUNICIPAL SECURITIES BROKER OR DEALER, OR GOVERNMENT SECURITIES BROKER OR DEALER IS ELIGIBLE FOR MEMBERSHIP IN THE CORPORATION, EXCEPT FOR THOSE WHO FAIL OR CEASE TO SATISFY THE CORPORATION'S QUALIFICATION REQUIREMENTS, OR BECOME DISQUALIFIED, OR FAIL TO FILE CERTAIN FORMS AS THE CORPORATION PRESCRIBES. THE MEMBERS OF THE CORPORATION GENERALLY HAVE NO VOTING RIGHTS, OTHER THAN TO VOTE ON (1) AMENDMENTS TO THE BY-LAWS OF THE CORPORATION, (2) BUSINESS RAISED DURING THE ANNUAL OR SPECIAL MEETINGS OF MEMBERS, (3) THE ELECTION OF THE SMALL FIRM, MID-SIZED FIRM AND LARGE FIRM GOVERNORS, OR (4) OTHERWISE PROVIDED BY THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE OR FINRA'S RESTATED CERTIFICATE OF INCORPORATION. FORM 990, PART VI, LINE 7A SMALL FIRM MEMBERS ARE ENTITLED TO VOTE FOR THE ELECTION OF SMALL FIRM GOVERNORS, MID-SIZE FIRM MEMBERS ARE ENTITLED TO VOTE FOR THE ELECTION OF MID-SIZE FIRM GOVERNORS, AND LARGE FIRM MEMBERS ARE ENTITLED TO VOTE FOR THE ELECTION OF LARGE FIRM GOVERNORS, IN ACCORDANCE WITH THE PROCEDURES FOR SUCH A VOTE AS PROVIDED IN THE CORPORATION'S BY-LAWS. FORM 990, PART VI, LINE 7B THE CORPORATION'S MEMBERS ARE ENTITLED TO VOTE ON ANY AMENDMENT TO THE BY-LAWS OF THE CORPORATION, IN ACCORDANCE WITH THE PROCEDURES FOR SUCH A VOTE AS PROVIDED IN THE CORPORATION'S BY-LAWS. FORM 990, PART VI, LINE 11B THE FORM 990 WAS REVIEWED BY SENIOR MANAGEMENT AT VARIOUS STEPS THROUGHOUT THE PREPARATION CYCLE. THE AUDIT AND MANAGEMENT COMPENSATION COMMITTEES REVIEWED AND APPROVED THE ORGANIZATION'S 2014 FORM 990 ON NOVEMBER 3, 2015. THE BOARD WAS PROVIDED ACCESS TO THE FINAL FORM 990 FOR REVIEW (VIA A WEBSITE FOR BOARD MEMBERS ONLY) PRIOR TO FILING. FORM 990, PART VI, LINE 12C THE ORGANIZATION HAS WRITTEN CONFLICT OF INTEREST POLICIES FOR BOARD MEMBERS AND EMPLOYEES. THE WRITTEN CONFLICT OF INTEREST POLICY FOR BOARD MEMBERS REQUIRES INITIAL DISCLOSURE OF INTERESTS THAT COULD GIVE RISE TO CONFLICTS AS WELL AS ANNUAL DISCLOSURE BY THE SAME BOARD MEMBERS. ADDITIONALLY, THE WRITTEN POLICY CONTAINS AN ONGOING OBLIGATION OF BOARD MEMBERS TO DISCLOSE POTENTIAL CONFLICTS OF INTEREST AS THEY ARISE. FINRA'S CODE OF CONDUCT APPLIES TO ALL EMPLOYEES OF FINRA AND DEFINES THE EXPECTATION OF EVERYONE WHO ACTS ON FINRA'S BEHALF. THE CODE INCLUDES A WRITTEN CONFLICT OF INTEREST POLICY THAT PRECLUDES EMPLOYEES FROM HAVING A DIRECT OR INDIRECT INTEREST IN OR RELATIONSHIP WITH ANY ORGANIZATION WHERE THESE INTERESTS COULD CONCEIVABLY: A)HINDER FINRA'S OBJECTIVITY, INDEPENDENCE OR JUDGMENT OR CONDUCT IN CARRYING OUT FINRA'S RESPONSIBILITIES OR B) CREATE THE APPEARANCE OF A CONFLICT. EMPLOYEES HAVE AN ONGOING RESPONSIBILITY TO REPORT CONFLICTS UNDER THE CODE AND MUST CERTIFY COMPLIANCE WITH THE CODE OF CONDUCT WITHIN 30 DAYS OF HIRE AND ANNUALLY THEREAFTER. EMPLOYEES ARE REGULARLY REMINDED OF THE RESOURCES THAT ARE AVAILABLE WHEN THEY ARE UNSURE WHAT TO DO. IN ADDITION TO TALKING TO DEPARTMENTAL MANAGEMENT, EMPLOYEES CAN DISCUSS CONFLICT-RELATED CONCERNS WITH FINRA'S OFFICE OF GENERAL COUNSEL. IF THEY ARE UNCOMFORTABLE DISCLOSING AN ISSUE AND DISCLOSING THEIR IDENTITY, THEY CAN USE FINRA'S 24-HOUR ETHICSPOINT HOTLINE TO POSE QUESTIONS OR REPORT CONCERNS. FINRA'S WHISTLEBLOWER POLICY FORBIDS RETALIATION AGAINST EMPLOYEES WHO REPORT SUSPECTED MISCONDUCT IN GOOD FAITH, EVEN IF THE REPORT ULTIMATELY PROVES TO BE ERRONEOUS. FORM 990, PART VI, LINES 15A AND 15B THE MANAGEMENT COMPENSATION COMMITTEE OF THE FINRA BOARD OF GOVERNORS (THE "COMMITTEE") IS RESPONSIBLE FOR SETTING PAY FOR EXECUTIVES OF FINRA AND SUBSIDIARIES WHOSE TOTAL COMPENSATION, INCLUDING INCENTIVE COMPENSATION, MAY EXCEED $1 MILLION. THE COMMITTEE IS COMPRISED OF FOUR NON-EMPLOYEE, NON-SECURITIES INDUSTRY MEMBERS OF THE BOARD OF GOVERNORS. THE COMMITTEE MET ON JANUARY 30, 2014 AND FEBRUARY 12, 2014 TO ESTABLISH INCENTIVE COMPENSATION ATTRIBUTABLE TO THE PERFORMANCE OF SERVICES DURING CALENDAR YEAR 2013 AND TO ESTABLISH BASE SALARIES FOR CALENDAR YEAR 2014. AS A GENERAL POLICY, FINRA HAS DETERMINED ITS COMPETITIVE COMPENSATION POSITIONING SHOULD BE CONSIDERED AGAINST A BROAD SECTION OF FINANCIAL SERVICES/CAPITAL MARKET COMPANIES, AS THIS SECTOR IS THE MOST LIKELY FROM WHICH WE RECRUIT TALENT AND THAT WOULD RECRUIT TALENT AWAY FROM THE COMPANY. WE ALSO BENCHMARK AGAINST GENERAL INDUSTRY POSITIONS AND LAW DEPARTMENTS FOR JOBS THAT ARE NOT UNIQUE TO THE FINANCIAL SERVICES INDUSTRY. THE COMMITTEE ENGAGED MERCER, INC. ("MERCER"), A THIRD-PARTY COMPENSATION CONSULTANT, TO PREPARE A COMPENSATION STUDY FOR REVIEW AT THESE MEETINGS. IN DETERMINING A BENCHMARKING STRATEGY FOR KEY EXECUTIVES, FINANCIAL SERVICES ORGANIZATIONS (BROKER-DEALERS, INVESTMENT BANKS, FEDERAL RESERVE BANKS, COMMERCIAL BANKS, INSURANCE COMPANIES, EXCHANGES AND REGULATORS) WERE DETERMINED TO BE THE MOST RELEVANT GROUPS FOR COMPARISON PURPOSES. THE COMMITTEE AND MERCER ENGAGED IN SUBSTANTIAL RESEARCH AND CONSIDERATION OF THE FUNCTIONS AND OPERATIONS OF SEVERAL POTENTIAL COMPARATORS AS WELL AS GENERAL COMPETITIVE CONDITIONS. IN DETERMINING SPECIFIC SALARY AND INCENTIVE COMPENSATION LEVELS FOR OFFICERS AND KEY EMPLOYEES, MANAGEMENT AND THE COMMITTEE CONSIDER: 1) OPERATIONAL RESULTS 2) STRATEGIC INITIATIVES 3) FINANCIAL HEALTH/RESULTS 4) INDIVIDUAL PERFORMANCE 5) COMPETITIVE COMPENSATION LEVELS AS PREPARED BY MERCER, INC., A THIRD-PARTY COMPENSATION CONSULTANT THE COMMITTEE'S MINUTES OF THE JANUARY 30, 2014 AND FEBRUARY 12, 2014 MEETINGS WERE REVIEWED AND APPROVED AS ACCURATE AND COMPLETE FOLLOWING THE COMMITTEE'S APPROVAL OF THE SENIOR EXECUTIVE COMPENSATION PACKAGES. THE FULL BOARD FURTHER APPROVED THE 2013 INCENTIVE COMPENSATION OF THE CEO AT ITS MEETING ON FEBRUARY 12, 2014. ALL COMPENSATION COMMITTEE MEMBERS VOTED FOR THE PROPOSED LEVEL OF EXECUTIVE COMPENSATION. FORM 990, PART VI, LINE 19 THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS AND THE FINRA CONSOLIDATED AUDITED FINANCIAL STATEMENTS AVAILABLE UPON REQUEST. FORM 990, PART VII, COLUMN B ESTIMATED AVERAGE HOURS PER WEEK THE OFFICERS / KEY EMPLOYEES LISTED IN FORM 990, PART VII, DEVOTE AN AVERAGE TOTAL OF 60 HOURS PER WEEK TO THE FILING ORGANIZATION AND ANY OR ALL OF THE FOLLOWING RELATED ORGANIZATIONS: FINRA REGULATION, INC., FINRA DISPUTE RESOLUTION, INC. AND FINRA INVESTOR EDUCATION FOUNDATION. FORM 990, PART XI, LINE 9 OTHER CHANGES IN NET ASSETS OR FUND BALANCES PRIMARILY RELATE TO ANY OR ALL OF THE FOLLOWING: CHANGES IN NET INCOME/(LOSS), UNRECOGNIZED EMPLOYEE BENEFIT PLAN AMOUNTS AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS. FOR ADDITIONAL INFORMATION PLEASE SEE THE 2014 FINRA ANNUAL FINANCIAL REPORT WHICH IS AVAILABLE AT WWW.FINRA.ORG/ABOUT/ANNUAL-REPORTS-FINANCIALS. FORM 990, PART VI, LINE 2 BUSINESS AND FAMILY RELATIONSHIPS DURING TAX YEAR 2014, OR PORTION THEREOF: BOARD MEMBERS WILLIAM H. HEYMAN AND GREGORY J. FLEMING HAD A BUSINESS RELATIONSHIP. MR. HEYMAN WAS VICE CHAIRMAN AND CHIEF INVESTMENT OFFICER OF TRAVELERS. MR. FLEMING WAS AN EVP OF MORGAN STANLEY. TRAVELERS IS A CLIENT OF MORGAN STANLEY. BOARD MEMBERS JOHN J. BRENNAN AND MARK S. CASADY HAD A BUSINESS RELATIONSHIP. MR. CASADY WAS CHAIRMAN AND CEO OF LPL FINANCIAL AND MR. BRENNAN SERVED AS A BOARD MEMBER OF LPL. BOARD MEMBERS JOHN J. BRENNAN AND CAROL ANTHONY (JOHN) DAVIDSON HAD A BUSINESS RELATIONSHIP AS THEY SERVED TOGETHER AS TRUSTEES OF THE FINANCIAL ACCOUNTING FOUNDATION. ROBERT L. D. COLBY AND GARY H. STERN HAD A BUSINESS RELATIONSHIP AS THEY SERVED TOGETHER ON THE BOARD OF THE DEPOSITORY TRUST AND CLEARING CORPORATION. JOHN J. BRENNAN AND ROCHELLE LAZARUS HAD A BUSINESS RELATIONSHIP AS THEY SERVED TOGETHER ON THE BOARD OF GENERAL ELECTRIC. JOEL SELIGMAN AND CAROL ANTHONY (JOHN) DAVIDSON HAD A BUSINESS RELATIONSHIP AS THEY SERVED TOGETHER ON THE BOARD OF THE UNIVERSITY OF ROCHESTER. 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