Nasdaq OMX Group Inc lured back former Chief Financial Officer Adena Friedman as co-president with the understanding that she will succeed Chief Executive Bob Greifeld, possibly as soon as next year, sources familiar with the matter said.

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.

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.