Académique Documents
Professionnel Documents
Culture Documents
PreliminaryProxyStatement
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
DefinitiveProxyStatement
DefinitiveAdditionalMaterials
SolicitingMaterialunder240.14a-12
MOODYS CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
PaymentofFilingFee(Checktheappropriatebox):
x
Nofeerequired.
FeecomputedontablebelowperExchangeActRules14a-6(i)(1)and0-11.
(1)
Titleofeachclassofsecuritiestowhichtransactionapplies:
(2)
(3)
(4)
(5)
Proposedmaximumaggregatevalueoftransaction:
PerunitpriceorotherunderlyingvalueoftransactioncomputedpursuanttoExchangeActRule0-11(Setforththeamountonwhichthefilingfeeis
calculatedandstatehowitwasdetermined):
Aggregatenumberofsecuritiestowhichtransactionapplies:
Totalfeepaid:
Feepaidpreviouslywithwrittenpreliminarymaterials.
CheckboxifanypartofthefeeisoffsetasprovidedbyExchangeActRule0-11(a)(2)andidentifythefilingforwhichtheoffsettingfeewaspaid
previously.Identifythepreviousfilingbyregistrationstatementnumber,ortheFormorScheduleandthedateofitsfiling.
(1)
AmountPreviouslyPaid:
(2)
(3)
(4)
FilingParty:
FormScheduleorRegistrationStatementNo.:
DateFiled:
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March2,2016
DearStockholder:
Youarecordiallyinvitedtoattendthe2016AnnualMeetingofStockholdersofMoodysCorporationtobeheldonTuesday,April12,2016,at9:30a.m.
EDTattheCompanysofficesat7WorldTradeCenterat250GreenwichStreet,NewYork,NewYork.
TheNoticeofAnnualMeetingandProxyStatementaccompanyingthisletterdescribethebusinesstobeacteduponatthemeeting.TheAnnualReportfor
theyearendedDecember31,2015isalsoenclosed.
OnMarch2,2016,wemailedtomanyofourstockholdersaNoticeofInternetAvailabilityofProxyMaterials(theNotice)containinginstructionsonhow
toaccessour2016ProxyStatementand2015AnnualReportandvoteonline.TheNoticeincludedinstructionsonhowtorequestapaperore-mailcopyofthe
proxymaterials,includingtheNoticeofAnnualMeeting,ProxyStatement,AnnualReport,andproxycardorvotinginstructioncard.Stockholderswhorequested
papercopiesoftheproxymaterialsorpreviouslyelectedtoreceivetheproxymaterialselectronicallydidnotreceiveaNoticeandwillreceivetheproxymaterials
intheformatrequested.
Yourvoteisimportant.Whetherornotyouplantoattendtheannualmeeting,weencourageyoutoreviewtheproxymaterialsandhopeyouwillvoteas
soonaspossible.YoumayvotebyproxyovertheInternetorbytelephonebyusingtheinstructionsprovidedintheNotice.Alternatively,ifyourequestedand
receivedpapercopiesoftheproxymaterialsbymail,youcanalsovotebymailbyfollowingtheinstructionsontheproxycardorvotinginstructioncard.Voting
overtheInternet,bytelephoneorbywrittenproxyorvotinginstructioncardwillensureyourrepresentationattheannualmeetingregardlessofwhetheryouattend
inperson.InstructionsregardingthethreemethodsofvotingarecontainedintheNoticeorproxycardorvotinginstructioncard.
Sincerely,
HenryA.McKinnell,Jr.
Chairman
of
the
Board
RaymondW.McDaniel,Jr.
President
and
Chief
Executive
Officer
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MOODYS CORPORATION
7 World Trade Center
250 Greenwich Street
New York, New York 10007
NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS
ToOurStockholders:
The2016AnnualMeetingofStockholdersofMoodysCorporationwillbeheldonTuesday,April12,2016,at9:30a.m.EDTattheCompanysofficesat7
WorldTradeCenterat250GreenwichStreet,NewYork,NewYork,forthefollowingpurposes,allasmorefullydescribedintheaccompanyingProxyStatement:
1.
ToelecttheninedirectorsnamedintheProxyStatementtoserveaone-yearterm;
2.
ToratifytheappointmentofKPMGLLPastheindependentregisteredpublicaccountingfirmoftheCompanyfortheyear2016;
3.
Tovoteonanadvisoryresolutionapprovingexecutivecompensation;and
4.
Totransactsuchotherbusinessasmayproperlycomebeforethemeeting.
TheBoardofDirectorsoftheCompanyhasfixedthecloseofbusinessonFebruary17,2016astherecorddateforthedeterminationofstockholdersentitled
tonoticeof,andtovoteat,themeeting.
ByOrderoftheBoardofDirectors,
JaneB.Clark
Corporate
Secretary
March2,2016
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CORPORATE GOVERNANCE
BoardMeetingsandCommittees
RecommendationofDirectorCandidates
BoardLeadershipStructure
CodesofBusinessConductandEthics
DirectorIndependence
TheBoardsRoleintheOversightofCompanyRisk
ExecutiveSessions
CommunicationswithDirectors
SuccessionPlanning
Anti-HedgingandAnti-PledgingPolicy
Rule10b5-1TradingPlans
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COMPENSATION OF DIRECTORS
StockOwnershipGuidelinesforNon-ManagementDirectors
1998Non-EmployeeDirectorsStockIncentivePlan
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OTHER BUSINESS
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PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
OF MOODYS CORPORATION
General
ThisProxyStatementisbeingfurnishedtotheholdersofthecommonstock,parvalue$0.01pershare(theCommonStock),ofMoodysCorporation
(MoodysortheCompany)inconnectionwiththesolicitationofproxiesbytheBoardofDirectorsoftheCompany(theBoardofDirectorsortheBoard)
foruseinvotingattheAnnualMeetingofStockholdersoranyadjournmentorpostponementthereof(theAnnualMeeting).TheAnnualMeetingwillbeheldon
Tuesday,April12,2016,at9:30a.m.EDTattheCompanysprincipalexecutiveofficeslocatedat7WorldTradeCenterat250GreenwichStreet,NewYork,New
York10007.ToobtaindirectionstoattendtheAnnualMeetingandvoteinperson,pleasecontacttheCompanysInvestorRelationsDepartmentbysendinganemailtoir@moodys.com
.ThisProxyStatementandtheaccompanyingproxycardarefirstbeingmadeavailabletostockholdersonoraboutMarch2,2016.The
Companystelephonenumberis(212)553-0300.
Annual Meeting Admission
StockholderswillneedanadmissiontickettoentertheAnnualMeeting.Forstockholdersofrecord,anadmissionticketisavailableovertheInternet,or,if
yourequestedpapercopies,youwillreceiveaprintedproxycardandaprintedadmissionticket.IfyouplantoattendtheAnnualMeetinginperson,pleaseretain
andbringtheadmissionticket.
Ifyouarethebeneficialownerofyourshares(meaningthatyoursharesareheldinthenameofabank,brokerorothernominee)andyouplantoattendthe
AnnualMeetinginperson,youmayobtainanadmissionticketinadvancebysendingawrittenrequest,alongwithproofofshareownershipsuchasabankor
brokerageaccountstatement,totheCorporateSecretaryoftheCompanyat7WorldTradeCenterat250GreenwichStreet,NewYork,NewYork10007.An
admissionticketisalsoavailableovertheInternet.Stockholderswhodonothaveadmissionticketswillbeadmittedfollowingverificationofownershipatthe
door.
Internet Availability of Proxy Materials
UnderU.S.SecuritiesandExchangeCommission(theSEC)rules,wearefurnishingproxymaterialstoourstockholdersprimarilyviatheInternet,instead
ofmailingprintedcopiesofthosematerialstostockholders.OnMarch2,2016,wemailedtoourstockholders(otherthanthosewhopreviouslyrequestede-mailor
paperdelivery)aNoticeofInternetAvailabilityofProxyMaterials(theNotice)containinginstructionsonhowtoaccessandreviewourproxymaterials,
includingthisProxyStatementandtheCompanysAnnualReport.Thesematerialsareavailableat:https://materials.proxyvote.com/615369.TheNoticealso
instructsyouonhowtoaccessyourproxycardtovotethroughtheInternetorbytelephone.
Thisprocessisdesignedtoexpeditestockholdersreceiptofproxymaterials,lowerthecostoftheAnnualMeeting,andhelpconservenaturalresources.If
youreceivedaNoticebymail,youwillnotreceiveaprintedcopyoftheproxymaterialsunlessyourequestone.Ifyouwouldprefertoreceiveprintedproxy
materials,pleasefollowtheinstructionsincludedintheNotice.Ifyouhavepreviouslyelectedtoreceiveourproxymaterialselectronically,youwillcontinueto
receivethesematerialsviae-mailunlessyouelectotherwise.
Record Date
TheBoardofDirectorshasfixedthecloseofbusinessonFebruary17,2016astherecorddate(theRecordDate)forthedeterminationofstockholders
entitledtonoticeof,andtovoteat,theAnnualMeeting.AsofthecloseofbusinessontheRecordDate,therewere194,882,530sharesofCommonStock
outstanding.EachholderofCommonStockentitledtovoteattheAnnualMeetingwillbeentitledtoonevotepershare.
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How to Vote
InadditiontovotinginpersonattheAnnualMeeting,stockholdersofrecordcanvotebyproxybyfollowingtheinstructionsintheNoticeandusingthe
Internetorbycallingthetoll-freetelephonenumberthatisavailableontheInternet.Alternatively,stockholdersofrecordwhorequestedapapercopyoftheproxy
materialscanvotebyproxybymailingtheirsignedproxycards.ThetelephoneandInternetvotingproceduresaredesignedtoauthenticatestockholdersidentities,
toallowstockholderstogivetheirvotinginstructionsandtoconfirmthatstockholdersinstructionshavebeenrecordedproperly.
Ifyoursharesareheldinthenameofabank,brokerorothernominee,youmayreceiveaNoticefromthatfirmcontaininginstructionsthatyoumustfollow
inorderforyoursharestobevoted.CertaininstitutionsoffertelephoneandInternetvoting.Ifyoureceivedtheproxymaterialsinpaperform,thematerialsinclude
avotinginstructioncardsoyoucaninstructtheholderofrecordonhowtovoteyourshares.IfyouwishtovoteinpersonattheAnnualMeeting,youmustobtaina
legalproxyfromthebank,brokerorothernomineethatholdsyourshares.
Special Voting Procedures for Certain Current and Former Employees
ManycurrentandformeremployeesoftheCompanyhavesharebalancesintheMoodysCommonStockFundoftheMoodysCorporationProfit
ParticipationPlan(theProfitParticipationPlan).Thevotingproceduresdescribedabovedonotapplytothesesharebalances.Instead,anyproxygivenbysuch
anemployeeorformeremployeewillserveasavotinginstructionforthetrusteeoftheProfitParticipationPlan,aswellasaproxyforanysharesregisteredinthat
personsownname(includingsharesacquiredundertheMoodysCorporationEmployeeStockPurchasePlanand/orpursuanttorestrictedstockawards).Toallow
sufficienttimeforvotingbythetrustee,ProfitParticipationPlanvotinginstructionsmustbereceivedbyApril8,2015.Ifvotinginstructionshavenotbeen
receivedbythatdate,orproperlycompletedandexecutedvotinginstructionsarenotprovided,thetrusteewillvotethoseProfitParticipationPlansharesinthe
sameproportionastheProfitParticipationPlansharesforwhichithasreceivedinstructions,exceptasotherwiserequiredbylaw.
Quorum and Voting Requirements
TheholdersofamajorityoftheoutstandingsharesofCommonStockentitledtovoteattheAnnualMeeting,whetherpresentinpersonorrepresentedby
proxy,willconstituteaquorumforthetransactionofbusinessattheAnnualMeeting.IfaquorumisnotpresentattheAnnualMeeting,thestockholderspresent
mayadjourntheAnnualMeetingfromtimetotime,withoutnotice,otherthanbyannouncementatthemeeting,untilaquorumispresentorrepresented.Atany
suchadjournedmeetingatwhichaquorumispresentorrepresented,anybusinessmaybetransactedthatmighthavebeentransactedattheoriginalmeeting.
Abstentionsandbrokernon-voteswillbecountedforpurposesofdeterminingwhetheraquorumispresentattheAnnualMeeting.Abrokernon-voteoccurs
whenanominee(suchasabank,brokerorothernominee)holdingsharesforabeneficialownerdoesnotvoteonaparticularproposalbecausethenomineedoes
nothavediscretionaryvotingpowerforthatparticularmatterandhasnotreceivedinstructionsfromthebeneficialowner.
Director
Elections.
PursuanttotheCompanysby-laws,thenomineesfordirectorarerequiredtoreceiveamajorityofthevotescastwithrespecttosuch
nomineesinordertobeelectedattheAnnualMeeting.Amajorityofthevotescastmeansthatthenumberofsharesvotedforadirectormustexceedthenumber
ofvotescastagainstthatdirector.Abstentionshavenoeffectontheelectionofdirectors.Brokersdonothavediscretionaryauthoritytovotesharesinthe
electionofdirectorswithoutinstructionsfromthebeneficialowner.Accordingly,sharesresultinginbrokernon-votes,ifany,arenotvotescastandwillhaveno
effectontheoutcomeofdirectorelections.InaccordancewiththeCompanysDirectorResignationPolicy,eachdirectorsubjecttoelectionattheAnnualMeeting
wasrequiredtosubmitacontingentresignationwhichtheBoardofDirectorswillconsider,followingareviewandrecommendationfromtheGovernanceand
CompensationCommittee,intheeventthatthedirectorfailstoreceiveamajorityofthevotescast.
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Ratification
of
the
Appointment
of
the
Independent
Registered
Public
Accounting
Firm.
Theaffirmativevoteofthemajorityofthesharespresentinperson
orrepresentedbyproxyandentitledtovoteattheAnnualMeetingisrequiredtoratifytheappointmentofKPMGLLPastheindependentregisteredpublic
accountingfirmoftheCompanyfortheyearendingDecember31,2016.Ifastockholderabstainsfromvotingordirectsthestockholdersproxytoabstainfrom
votingonthismatter,theabstentionhasthesameeffectasavoteagainstthematter.Brokershavediscretionaryauthoritytovotesharesonthismatteriftheydonot
receiveinstructionsfromthebeneficialowner.
Advisory
Resolution
Approving
Executive
Compensation.
Theaffirmativevoteofthemajorityofthesharespresentinpersonorrepresentedbyproxyand
entitledtovoteattheAnnualMeetingisrequiredfortheadvisoryresolutionapprovingexecutivecompensation.Ifastockholderabstainsfromvotingordirectsthe
stockholdersproxytoabstainfromvotingonthismatter,theabstentionhasthesameeffectasavoteagainstthematter.Brokersdonothavediscretionary
authoritytovotesharesonthismatterwithoutinstructionsfromthebeneficialowner.Accordingly,sharesresultinginbrokernon-votes,ifany,arenotentitledto
voteonthematterandwillhavenoeffectontheoutcomeofthevote.
Proxies
TheproxyprovidesthatyoumayspecifythatyoursharesofCommonStockbevotedFor,AgainstorAbstainfromvotingwithrespecttothedirector
nomineesandtheotherproposals.TheBoardofDirectorsrecommendsthatyouvoteForthedirectornomineesnamedinthisProxyStatement,Forthe
ratificationoftheselectionoftheindependentregisteredpublicaccountingfirmandFortheadvisoryresolutionapprovingexecutivecompensation.Allsharesof
CommonStockrepresentedbyproperlyexecutedproxiesreceivedpriortoorattheAnnualMeetingandnotrevokedwillbevotedinaccordancewiththe
instructionsindicatedinsuchproxies.Properlyexecutedproxiesthatdonotcontainvotinginstructionswillbevotedinaccordancewiththerecommendationsof
theBoardofDirectors,exceptasnotedabovewithrespecttosharesheldintheProfitParticipationPlan.
ItisnotexpectedthatanymatterotherthanthosereferredtohereinwillbebroughtbeforetheAnnualMeeting.If,however,othermattersareproperly
presented,thepersonsnamedasproxieswillvoteinaccordancewiththeirbestjudgmentwithrespecttosuchmatters.
AnystockholderofrecordwhovotesbytelephoneortheInternetorwhoexecutesandreturnsaproxymayrevokesuchproxyorchangesuchvoteatany
timebeforeitisvotedattheAnnualMeetingby(i)filingwiththeCorporateSecretaryoftheCompanyat7WorldTradeCenterat250GreenwichStreet,New
York,NewYork10007,writtennoticeofsuchrevocation,(ii)castinganewvotebytelephoneortheInternetorbysubmittinganotherproxythatisproperlysigned
andbearsalaterdateor(iii)attendingtheAnnualMeetingandvotinginperson.Astockholderwhosesharesareownedbeneficiallythroughabank,brokeror
othernomineeshouldcontactthatentitytochangeorrevokeapreviouslygivenproxy.
ProxiesarebeingsolicitedherebyonbehalfoftheBoardofDirectors.ThecostoftheproxysolicitationwillbebornebytheCompany,although
stockholderswhovotebytelephoneortheInternetmayincurtelephoneorInternetaccesscharges.Inadditiontosolicitationbymail,directors,officersand
employeesoftheCompanymaysolicitproxiespersonallyorbytelephone,telecopy,e-mailorotherwise.Suchdirectors,officersandemployeeswillnotbe
specificallycompensatedforsuchservices.TheCompanyhasretainedGeorgesonShareholderCommunicationsInc.toassistwiththesolicitationofproxiesfora
feenottoexceedapproximately$15,000,plusreimbursementforout-of-pocketexpenses.Arrangementsmayalsobemadewithcustodians,nomineesand
fiduciariestoforwardproxysolicitationmaterialstothebeneficialownersofsharesofCommonStockheldofrecordbysuchcustodians,nomineesandfiduciaries,
andtheCompanymayreimbursesuchcustodians,nomineesandfiduciariesfortheirreasonableout-of-pocketexpensesincurredinconnectiontherewith.
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DirectorsareencouragedtoattendtheAnnualMeeting.AlloftheindividualsservingasdirectorsatthetimeoftheCompanys2015annualmeeting
attendedthemeeting.
Recommendation of Director Candidates
TheGovernanceandCompensationCommitteeconsidersandmakesrecommendationstotheBoardregardingthesize,structure,compositionand
functioningoftheBoardandisresponsibleforoverseeingtheprocessesfortheselectionandnominationofdirectorcandidates,andfordeveloping,recommending
totheBoardforapproval,andperiodicallyreviewingBoardmembershipcriteria.TheGovernanceandCompensationCommitteewillconsiderdirectorcandidates
recommendedbystockholdersoftheCompany.InconsideringacandidateforBoardmembership,whetherproposedbystockholdersorotherwise,theGovernance
andCompensationCommitteeexaminesthecandidatesbusinessexperience,qualifications,attributesandskillsrelevanttothemanagementandoversightofthe
Companysbusiness,independence,theabilitytorepresentdiversestockholderinterests,judgment,integrity,theabilitytocommitsufficienttimeandattentionto
Boardactivities,andtheabsenceofanypotentialconflictswiththeCompanysbusinessandinterests.TheGovernanceandCompensationCommitteealsoseeks
diverseoccupationalandpersonalbackgroundsfortheBoard.SeeQualificationsandSkillsofDirectorsonpage16foradditionalinformationontheCompanys
directors.TohaveacandidateconsideredbytheGovernanceandCompensationCommittee,astockholdermustsubmittherecommendationinwritingandmust
includethefollowinginformation:
ThenameofthestockholderandevidenceofthestockholdersownershipofCompanystock,includingthenumberofsharesownedandthelengthof
timeofownership;and
Thenameofthecandidate,thecandidatesresumeoralistingofhisqualificationstobeadirectoroftheCompany,andthecandidatesconsenttobe
namedasadirectorifselectedbytheGovernanceandCompensationCommitteeandnominatedbytheBoard.
ThestockholderrecommendationandinformationdescribedabovemustbesenttotheCorporateSecretaryoftheCompanyat7WorldTradeCenterat250
GreenwichStreet,NewYork,NewYork10007,andmustbereceivedbytheCorporateSecretarynotlessthan120dayspriortotheanniversarydateofthe
Companysmostrecentannualmeetingofstockholders.FortheCompanys2017annualmeeting,thisdeadlineisDecember13,2016.
TheGovernanceandCompensationCommitteeidentifiespotentialnomineesbyaskingcurrentdirectorsandexecutiveofficerstonotifytheCommitteeif
theybecomeawareofpersons,meetingthecriteriadescribedabove,whomightbeavailabletoserveontheBoard.Asdescribedabove,theCommitteewillalso
considercandidatesrecommendedbystockholdersonthesamebasisasthoserecommendedbycurrentdirectorsandexecutives.TheGovernanceand
CompensationCommitteealso,fromtimetotime,mayengagefirmsthatspecializeinidentifyingdirectorcandidatesfortheCommitteesconsideration.
OnceapersonhasbeenidentifiedbyorfortheGovernanceandCompensationCommitteeasapotentialcandidate,theCommitteemaycollectandreview
publiclyavailableinformationregardingthepersontoassesswhetherthepersonshouldbeconsideredfurther.IftheGovernanceandCompensationCommittee
determinesthatthecandidatewarrantsfurtherconsideration,thechairmanoranothermemberoftheCommitteecontactstheperson.Generally,iftheperson
expressesawillingnesstobeconsideredandtoserveontheBoard,theGovernanceandCompensationCommitteerequestsinformationfromthecandidate,reviews
thecandidatesaccomplishmentsandqualifications,includinginlightofanyothercandidateswhomtheCommitteemightbeconsidering,andconductsoneor
moreinterviewswiththecandidate.Incertaininstances,Committeemembersmaycontactoneormorereferencesprovidedbythecandidateormaycontactother
membersofthebusinesscommunityorotherpersonsthatmayhavegreaterfirst-handknowledgeofthecandidatesaccomplishments.
Board Leadership Structure
TheCompanysCorporateGovernancePrinciplespermittherolesofChairmanandChiefExecutiveOfficertobefilledbyasinglepersonordifferent
individuals.ThisflexibilityallowstheBoardtoreviewthestructureof
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theBoardperiodicallyanddeterminewhetherornottoseparatethetworolesbasedupontheCompanysneedsandcircumstancesfromtimetotime.
Dr.McKinnellservesasChairmanoftheBoardandMr.McDanielservesasPresidentandChiefExecutiveOfficerofMoodysCorporation.In2011and
2012,theBoarddiscussedwhethertoseparatetheroles,takingintoaccountnumerousconsiderationsthatbearupontheissue,includingstockholderssupportat
theCompanys2011annualmeetingofastockholderproposalrecommendingthat,wheneverpossible,theCompanyschairmanbeindependent.Inlightofthese
considerations,theBoarddeterminedtoappointanindependentChairmanoftheBoard.TheBoardbelievesthatstrong,independentBoardleadershipisacritical
aspectofeffectivecorporategovernance.TheroleandresponsibilitiesoftheChairmanoftheBoardaredetailedintheCompanysCorporateGovernance
Principles.
Codes of Business Conduct and Ethics
TheCompanyhasadoptedacodeofethicsthatappliestoitsChiefExecutiveOfficer,ChiefFinancialOfficerandController,orpersonsperformingsimilar
functions.TheCompanyhasalsoadoptedacodeofbusinessconductandethicsthatappliestotheCompanysdirectors,officersandemployees.Acurrentcopyof
eachofthesecodesisavailableontheCompanyswebsiteatwww.moodys.com
undertheheadingsAboutMoodysInvestorRelationsInvestorRelations
HomeCorporateGovernanceOtherGovernanceDocuments.Acopyofeachisalsoavailableinprinttostockholdersuponrequest,addressedtotheCorporate
SecretaryoftheCompanyat7WorldTradeCenterat250GreenwichStreet,NewYork,NewYork10007.TheCompanyintendstosatisfydisclosurerequirements
regardinganyamendmentsto,orwaiversfrom,thecodesofethicsbypostingsuchinformationontheCompanyswebsiteatwww.moodys.com
undertheheadings
AboutMoodysInvestorRelationsInvestorRelationsHomeCorporateGovernanceOtherGovernanceDocuments.
Director Independence
Toassistitinmakingdeterminationsofadirectorsindependence,theBoardhasadoptedindependencestandardswhicharesetforthbelowandarealso
includedintheCompanysCorporateGovernancePrinciples.TheBoardhasdeterminedthatMr.Anderson,Mr.Bermudez,Dr.Duffie,Ms.Hill,Mr.Kist,
Dr.McKinnell,Ms.Seidman,Mr.VanSaunandMr.Wulff,andthusamajorityofthedirectorsontheBoard,areindependentunderthesestandards.Thestandards
adoptedbytheBoardincorporatethedirectorindependencecriteriaincludedintheNewYorkStockExchange(theNYSE)listingstandards,aswellasadditional
criteriaestablishedbytheBoard.BoththeAuditCommitteeandtheGovernanceandCompensationCommitteearecomposedentirelyofindependentdirectors.In
accordancewithNYSErequirementsandtheindependencestandardsadoptedbytheBoard,allmembersoftheAuditCommitteeandtheGovernanceand
CompensationCommitteemeetadditionalheightenedindependencestandardsapplicabletoauditcommitteeandcompensationcommitteemembers.
AnindependentdirectorisadirectorwhomtheBoardhasdeterminedhasnomaterialrelationshipwiththeCompanyoranyofitsconsolidated
subsidiaries(forpurposesofthissection,collectivelyreferredtoastheCompany),eitherdirectly,orasapartner,stockholderorofficerofanorganizationthat
hasarelationshipwiththeCompany.Forpurposesofthisdefinition,theBoardhasdeterminedthatadirectorisnotindependentif:
1.
thedirectoris,orinthepastthreeyearshasbeen,anemployeeoftheCompany,oranimmediatefamilymemberofthedirectoris,orinthepastthree
yearshasbeen,anexecutiveofficeroftheCompany;
2.
(a)thedirector,oranimmediatefamilymemberofthedirector,isacurrentpartneroftheCompanysoutsideauditor;(b)thedirectorisacurrent
employeeoftheCompanysoutsideauditor;(c)amemberofthedirectorsimmediatefamilyisacurrentemployeeoftheCompanysoutsideauditor
andpersonallyworksontheCompanysaudit;or(d)thedirectororanimmediatefamilymemberofthedirectorwasinthepastthreeyearsapartner
oremployeeoftheCompanysoutsideauditorandpersonallyworkedontheCompanysauditwithinthattime;
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3.
thedirector,oramemberofthedirectorsimmediatefamily,isorinthepastthreeyearshasbeen,anexecutiveofficerofanothercompanywhereany
oftheCompanyspresentexecutiveofficersservesorservedonthecompensationcommitteeatthesametime;
4.
thedirector,oramemberofthedirectorsimmediatefamily,hasreceived,duringany12-monthperiodinthepastthreeyears,anydirect
compensationfromtheCompanyinexcessof$120,000,otherthancompensationforBoardservice,compensationreceivedbythedirectors
immediatefamilymemberforserviceasanemployee(otherthananexecutiveofficer)oftheCompany,andpensionorotherformsofdeferred
compensationforpriorservicewiththeCompany;
5.
thedirectorisacurrentexecutiveofficeroremployee,oramemberofthedirectorsimmediatefamilyisacurrentexecutiveofficerofanother
companythatmakespaymentstoorreceivespaymentsfromtheCompany,orduringanyofthelastthreefiscalyears,hasmadepaymentstoor
receivedpaymentsfromtheCompany,forpropertyorservicesinanamountthat,inanysinglefiscalyear,exceededthegreaterof$1millionor2%of
theothercompanysconsolidatedgrossrevenues;or
6.
thedirector,orthedirectorsspouse,isanexecutiveofficerofanon-profitorganizationtowhichtheCompanyortheCompanyfoundationmakes,or
inthepastthreeyearshasmade,contributionsthat,inanysinglefiscalyear,exceededthegreaterof$1millionor2%ofthenon-profitorganizations
consolidatedgrossrevenues.(AmountsthattheCompanyfoundationcontributesundermatchinggiftsprogramsarenotincludedinthecontributions
calculatedforpurposesofthisstandard.)
Animmediatefamilymemberincludesadirectorsspouse,parents,children,siblings,mother-andfather-in-law,sons-anddaughters-in-law,brothers-and
sisters-in-law,andanyone(otherthanadomesticemployee)whosharesthedirectorshome.
Inaddition,adirectorisnotconsideredindependentforpurposesofservingontheAuditCommittee,andmaynotserveontheAuditCommittee,ifthe
director:(a)accepts,directlyorindirectly,fromMoodysCorporationoranyofitssubsidiaries,anyconsulting,advisory,orothercompensatoryfee,otherthan
Boardandcommitteefeesandfixedamountsofcompensationunderaretirementplan(includingdeferredcompensation)forpriorservicewithMoodys
Corporation;or(b)isanaffiliatedpersonofMoodysCorporationoranyofitssubsidiaries;eachasdeterminedinaccordancewithSECregulations.
Furthermore,indeterminingwhetheradirectorisconsideredindependentforpurposesofservingontheGovernanceandCompensationCommittee,the
BoardmustconsiderallfactorsspecificallyrelevanttodeterminingwhetherthedirectorhasarelationshipwiththeCompanythatismaterialtothatdirectors
abilitytobeindependentfrommanagementinconnectionwiththedutiesofacompensationcommitteemember,including,butnotlimitedto:(a)thesourceofthe
directorscompensation,includinganyconsulting,advisoryorothercompensatoryfeepaidbytheCompanytothedirector;and(b)whetherthedirectoris
affiliatedwithMoodysCorporation,anyofitssubsidiariesoranaffiliateofanysubsidiary;eachasdeterminedinaccordancewithSECregulations.
Inassessingindependence,theBoardtookintoaccountthatMr.Anderson,Mr.Bermudez,Dr.Duffie,Ms.Hill,Mr.Kist,Ms.Seidman,Mr.VanSaunand
Mr.Wulffeachservedduring2015,orcurrentlyserves,asdirectors,employees,facultymembersortrusteesofentitiesthatareratedorhaveissuedsecuritiesrated
byMIS,aslistedintheCompanysDirectorandShareholderAffiliationPolicypostedontheCompanyswebsiteundertheheadingsAboutMoodysInvestor
RelationsCorporateGovernanceOtherGovernanceDocuments,andthatassociatedfeesfromeachsuchentityaccountedforlessthan1%oftheCompanys
2015revenue.Inaddition,theBoardtookintoaccountthattheCompanyfromtimetotimeengagesinbusinesswithentitieswhereoneofourdirectorsortheir
immediatefamilymembersareemployed.In2015,paymentsthattheCompanymadetosuchbusinessesaccountedforlessthan1%oftheannualrevenuesofthe
Companyandeachoftheotherentities.TheBoardfoundnothingintherelationshipstobecontrarytothestandardsfordeterminingindependenceascontainedin
theNYSEsrequirementsandtheCompanysCorporate
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GovernancePrinciples.AcopyofthesestandardsisfoundinAttachmentAtotheCompanysCorporateGovernancePrinciplesontheCompanyswebsiteat
www.moodys.comundertheheadingsAboutMoodysInvestorRelationsInvestorRelationsHomeCorporateGovernanceOtherGovernanceDocuments.
The Boards Role in the Oversight of Company Risk
TheBoardofDirectorsoverseestheCompanysenterprise-wideapproachtothemajorrisksfacingtheCompanyand,withtheassistanceoftheAudit
CommitteeandtheGovernanceandCompensationCommittee,overseestheCompanyspoliciesforassessingandmanagingitsexposuretorisk.TheBoard
periodicallyreviewstheserisksandtheCompanysriskmanagementprocesses,includinginconnectionwithitsreviewoftheCompanysstrategy.TheBoards
responsibilitiesincludereviewingtheCompanyspracticeswithrespecttoriskassessmentandriskmanagementandreviewingcontingentliabilitiesandrisksthat
maybematerialtotheCompany.TheAuditCommitteereviewstheCompanyspolicieswithrespecttoriskassessmentandriskmanagement,financialand
compliancerisks,includingrisksrelatingtointernalcontrolsandcyberrisksandmajorlegislativeandregulatorydevelopmentswhichcouldmateriallyimpactthe
Company.TheGovernanceandCompensationCommitteeoverseesmanagementsassessmentofwhethertheCompanyscompensationstructure,policiesand
programscreaterisksthatarereasonablylikelytohaveamaterialadverseeffectontheCompanyandreviewstheresultsofthisassessment.
UndertheoversightoftheBoardanditscommittees,theChiefExecutiveOfficerhasestablishedanEnterprise-WideRiskCommittee,comprisedofthe
ChiefExecutiveOfficerandhisdirectreports,whichincludetheChiefRiskOfficer.TheEnterpriseRiskCommitteereviewstheworkoftheEnterpriseRisk
FunctionwhichismanagedbytheChiefRiskOfficerwiththeassistanceoftheHeadofCorporatePlanningandTreasuryandtheHeadoftheInternalAudit
Function.TheChiefRiskOfficerchairsasubcommitteeconsistingofseniorexecutivesfromeachoftheCompanysmajorbusinessunitsandsupportfunctions,
whoperiodicallyreportonrisksandtheirmitigationswithintheirareasofresponsibility.Amongotherthings,theEnterpriseRiskFunctionisresponsiblefor
identifyingandmonitoringimportantexistingandemergingriskstotheachievementoftheCompanysstrategicandoperativeobjectives;formulatingappropriate
policesandmonitoringandreportingframeworkstosupporteffectivemanagementofimportantrisks;reviewingandevaluatingtheeffectivenessofmanagement
processesandactionplanstoaddresssuchrisks;advisingonandrecommendingtoexecutivemanagementanysignificantactionsorinitiativesthattheybelieveare
necessarytoeffectivelymanagerisk;andensuringthatactivitiesofdiscreteriskmanagementdisciplineswithintheCompanyareappropriatelycoordinated.The
ChiefRiskOfficerpresentedtheEnterpriseRiskCommitteesanalysistotheBoardattwomeetingsin2015.Additionally,theAuditCommitteeandthe
GovernanceandCompensationCommitteeeachreviewedriskswithintheirareasofresponsibilityatseparatemeetingsin2015.
Significantriskissuesevaluatedbyand/ormajorchangesproposedbytheEnterprise-WideRiskCommitteeandtheChiefRiskOfficerarediscussedat
variousBoardmeetingsthroughouttheyear.
Executive Sessions
TheindependentdirectorsroutinelymeetinexecutivesessionatregularlyscheduledBoardmeetings.Dr.McKinnell,theindependentChairmanofthe
Board,establishestheagendaforandpresidesatthesesessionsandhastheauthoritytocalladditionalsessionsasappropriate.
Communications with Directors
TheBoardofDirectorshasestablishedaprocesstoreceivecommunicationsfromstockholdersandotherinterestedparties.Stockholdersandotherinterested
partiesmaycommunicatewiththeBoardofDirectorsorwithallnon-managementdirectorsasagroup,orwithaspecificdirectorordirectors(includingthe
ChairmanoftheBoard),bywritingtothemc/otheCorporateSecretaryoftheCompanyat7WorldTradeCenterat250GreenwichStreet,NewYork,NewYork
10007.
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AllcommunicationsreceivedassetforthintheprecedingparagraphwillbeopenedbytheCorporateSecretaryintheofficeoftheCompanysGeneral
CounselforthesolepurposeofdeterminingwhetherthecontentsrepresentamessagetotheCompanysdirectors.Anycontentsthatarenotinthenatureof
advertising,promotionsofaproductorservice,orpatentlyoffensivematerialwillbeforwardedpromptlytotheaddressee.
Succession Planning
TheBoardandtheGovernanceandCompensationCommitteereviewsuccessionplanningannuallyinconjunctionwiththeBoardsreviewofstrategic
planning.
Anti-Hedging and Anti-Pledging Policy; Short Sales and Other Speculative Trades
AllexecutiveofficersanddirectorsaresubjecttoasecuritiestradingpolicyunderwhichtheyareprohibitedfromhedgingandpledgingMoodyssecurities,
includinganypubliclytradedsecuritiesofaMoodyssubsidiary.Specifically,thefollowingactivitiesareprohibitedunderthepolicy:
makingshortsalesofMoodyssecurities.Ashortsalehasoccurrediftheseller:(i)doesnotownthesecuritiessold;or(ii)doesownthesecurities
sold,butdoesnotdeliverortransmitthemwithinthecustomarysettlementperiod.
engaginginspeculativetransactionsorenteringintoanytransaction(includingpurchasingforwardcontracts,equityswaps,putsorcalls)thatare
designedtooffsetanydecreaseinthemarketvalueoforareotherwisebasedonthepriceofMoodyssecurities.
holdingMoodyssecuritiesinmarginaccountsorpledgingMoodyssecuritiesascollateralforaloan,providedthatthisdoesnotprohibitbrokerassistedexerciseorsettlementofequityawardsgrantedbyMoodysthatmayinvolveanextensionofcreditonlyuntilthesaleissettled.
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Infulfillingtheresponsibilitiesunderitscharter,thereareanumberofspecificresponsibilitiesthattheAuditCommitteeperforms:
Discusseswith,andreceivesregularstatusreportsfrom,theIndependentAuditorsandtheheadoftheinternalauditfunctionontheoverallscopeand
plansfortheiraudits,includingtheirscopeandplansforevaluatingtheeffectivenessofinternalcontroloverfinancialreporting.Alsoreceivesregular
updatesontheCompanysinternalcontroloverfinancialreporting,anddiscusseswithmanagementandtheIndependentAuditorstheirevaluations
andconclusionswithrespecttointernalcontroloverfinancialreporting.
MeetswiththeIndependentAuditorsandtheheadoftheinternalauditfunction,withandwithoutmanagementpresent,todiscusstheresultsoftheir
respectiveaudits,inadditiontoholdingmeetingswithmembersofmanagement,includingthegeneralcounsel.
ReviewsanddiscusseswithmanagementandtheIndependentAuditorstheCompanysearningspressreleasesandtheCompanysperiodicfilings
madewiththeSEC.
ReviewstheCompanysfinancialandcompliancerisks,including,butnotlimitedto,risksrelatingtointernalcontrolsandcyberrisksandoversees
informationtechnologyprojectsrelatedtotheCompanysfinancialreportingprocesses.
ReceivesperiodicreportsontheeffectivenessoftheCompanyscomplianceprogramandregularstatusreportsoncomplianceissues,including
reportsrequiredbytheAuditCommitteespolicyforthereceiptandtreatmentofanycomplaintsreceivedbytheCompanyregardingaccounting,
internalcontrol,auditingandfederalsecuritieslawmatters.
Reviewsitscharterannuallyandconductsanannualself-evaluationtoassessitsperformance.
TheAuditCommitteealsohastheauthoritytoengageitsownoutsideadvisors,includingexpertsinparticularareasofaccounting,asitdetermines
appropriate.
TheAuditCommitteeisdirectlyresponsiblefortheappointment,compensation,retentionandoversightoftheIndependentAuditorsand,assuch,the
IndependentAuditorsreportdirectlytotheAuditCommittee.KPMGLLPhasservedastheCompanysindependentauditorsince2008,andwasselectedatthe
conclusionofacompetitiveprocessthattheAuditCommitteeconductedtoreviewtheselectionoftheCompanysindependentregisteredpublicaccountingfirm.
TheAuditCommitteehasestablishedapolicysettingforththerequirementsforthepre-approvalofauditandpermissiblenon-auditservicestobeprovided
bytheindependentregisteredpublicaccountingfirm.Underthepolicy,theAuditCommitteepre-approvestheannualauditengagementtermsandfees,aswellas
anyotherauditservicesandspecifiedcategoriesofnon-auditservices,subjecttocertainpre-approvedfeelevels.Inaddition,pursuanttothepolicy,theAudit
CommitteeauthorizeditsChairmantopre-approveotherauditandpermissiblenon-auditservicesin2015upto$50,000perengagementandamaximumof
$250,000peryear.ThepolicyrequiresthattheAuditCommitteeChairmanreportanypre-approvaldecisionstothefullAuditCommitteeatitsnextscheduled
meeting.FortheyearendedDecember31,2015,theAuditCommitteeortheChairmanpre-approvedalloftheservicesprovidedbytheCompanysindependent
registeredpublicaccountingfirm,whicharedescribedonpage22.TheAuditCommitteealsoisresponsibleforoverseeingtheauditfeenegotiationassociatedwith
theretentionofKPMGtoperformtheannualauditengagement.
ThemembersoftheAuditCommitteeareMr.Anderson(Chairman),Mr.Bermudez,Dr.Duffie,Ms.Hill,Mr.Kist,Dr.McKinnell,Ms.Seidman,Mr.Van
SaunandMr.Wulff,eachofwhomisindependentunderNYSEandSECrulesandundertheCompanysCorporateGovernancePrinciples.TheBoardofDirectors
hasdeterminedthateachofMr.Anderson,Mr.Bermudez,Mr.Kist,Dr.McKinnell,Ms.SeidmanandMr.Wulffisanauditcommitteefinancialexpertunderthe
SECsrules.TheAuditCommitteeheldninemeetingsduring2015.
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advisoryresolutionapprovingexecutivecompensation.TheCommitteealsooverseestheevaluationofseniormanagement(includingbyreviewingandapproving
performancegoalsfortheCompanysCEOandotherexecutiveofficers,andbyevaluatingtheirperformanceagainstapprovedgoals,which,withrespecttothe
CEO,theCommitteedoesinconsultationwiththeChairmanoftheBoard)andoverseesandmakesthefinaldecisionsregardingcompensationarrangementsfor
theCEOandforcertainotherexecutiveofficers.TheCEOmakesrecommendationstotheCommitteeregardingtheamountandformofexecutivecompensation
(exceptwithrespecttohiscompensation).Foradescriptionofthisprocess,seetheCompensationDiscussionandAnalysis(theCompensationDiscussionand
AnalysisorCD&A),beginningonpage27.TheCommitteeannuallyreviewsthecompensationofdirectorsforserviceontheBoardanditscommitteesand
recommendschangesincompensationtotheBoard.TheCommitteeadministersandmakesrecommendationstotheBoardwithrespecttotheCompanysincentive
compensationandequity-basedcompensationplansthataresubjecttoBoardapproval,includingtheCompanyskeyemployeesstockincentiveplans.The
Committeehasauthoritytoestablish,amendandterminatetheCompanysemployeebenefitplans,programsandpractices,andmonitorstheinvestment
performanceoftheassetsheldbytheplans,andtheCommitteemaydelegatetomanagementtheresponsibilitiesithaswithrespecttotheCompanysemployee
benefitplans,programsandpracticesastheCommitteedeemsappropriate.TheCommitteemakesthefinaldecisionsregardingnamedexecutiveofficer
compensation.
TheCommitteeisempoweredtoretain,attheCompanysexpense,suchconsultants,counselorotheroutsideadvisorsasitdeterminesappropriatetoassistit
intheperformanceofitsfunctions.In2015,theCommitteeretainedtheservicesofMeridianCompensationPartnersLLC,anindependentcompensation
consultingcompany,toprovideadviceandinformationaboutexecutiveanddirectorcompensation,includingthecompetitivenessofpaylevels,executive
compensationdesignandgovernanceissues,andmarkettrends,aswellastechnicalandcomplianceconsiderations.Meridianreportsdirectlyandsolelytothe
Committee.MeridianexclusivelyprovidesexecutiveanddirectorcompensationconsultingservicesanddoesnotprovideanyotherservicestotheCompany.The
CommitteeregularlyreviewsthecurrentengagementsandtheobjectivityandindependenceoftheadvicethatMeridianprovidestotheCommitteeonexecutive
anddirectorcompensation.TheCommitteeconsideredthesixspecificindependencefactorsadoptedbytheSECandtheNYSEunderDodd-Frankandother
factorsitdeemedrelevant,andtheCommitteefoundnoconflictsofinterestorotherfactorsthatwouldadverselyimpactMeridiansindependence.
During2015,managementcontinuedtoengageAonHewittasmanagementscompensationconsultant.AonHewittworkedwiththeChiefHuman
ResourcesOfficerandherstafftodevelopmarketdataregardingMoodysexecutivecompensationprograms.TheCommitteetakesintoaccountthatAonHewitt
providesexecutivecompensation-relatedservicestomanagementwhenitevaluatestheinformationandanalysesprovidedbyAonHewitt.
ThemembersoftheGovernanceandCompensationCommitteeareMr.Wulff(Chairman),Mr.Anderson,Mr.Bermudez,Dr.Duffie,Ms.Hill,Mr.Kist,
Dr.McKinnell,Ms.SeidmanandMr.VanSaun,eachofwhomisindependentunderNYSErulesandundertheCompanysCorporateGovernancePrinciples.The
GovernanceandCompensationCommitteemetsixtimesduring2015.
REPORT OF THE GOVERNANCE AND COMPENSATION COMMITTEE
TheGovernanceandCompensationCommittee,whichiscomposedsolelyofindependentmembersoftheBoardofDirectors,assiststheBoardinfulfilling
itsoversightresponsibilityrelatingto,amongotherthings,establishingandreviewingcompensationoftheCompanysexecutiveofficers.Inthiscontext,the
GovernanceandCompensationCommitteereviewedanddiscussedwithmanagementtheCompanysCompensationDiscussionandAnalysis,beginningonpage
27.Followingthereviewsanddiscussionsreferredtoabove,the
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GovernanceandCompensationCommitteerecommendedtotheBoardthattheCompensationDiscussionandAnalysisbeincludedinthisproxystatement.
The Governance and Compensation Committee
JohnK.Wulff,Chairman
BasilL.Anderson
JorgeA.Bermudez
DarrellDuffie
KathrynM.Hill
EwaldKist
HenryA.McKinnell,Jr.
LeslieF.Seidman
RELATIONSHIP OF COMPENSATION PRACTICES TO RISK MANAGEMENT
WhenstructuringitsoverallcompensationpracticesforemployeesoftheCompanygenerally,considerationisgivenastowhetherthestructurecreates
incentivesforrisk-takingbehaviorandthereforeimpactstheCompanysriskmanagementpractices.Attentionisgiventotheelementsandthemixofpayaswell
asseeingthatemployeesawardsalignwithstockholdersvalue.
InordertoassesswhethertheCompanyscompensationpracticesandprogramscreaterisksthatarereasonablylikelytohaveamaterialadverseeffecton
theCompany,managementestablishedacompensationriskcommitteeledbytheChiefHumanResourcesOfficertoassesstheriskrelatedtotheCompanys
compensationplans,practicesandprograms.Aspartofthisannualreview,thecompensationriskcommitteeassessedthefollowingitems:(i)therelative
proportionofvariabletofixedcomponentsofcompensation,(ii)themixofperformanceperiods(short-term,medium-termandlong-term),(iii)themixofpayment
mechanisms(cash,options,restrictedstock,performanceshares),(iv)theperformancemetricsused,linkingthecreationofvalueandearningsqualityand
sustainability,(v)theprocessofsettinggoals,degreeofdifficulty,spreadsbetweenthresholds,targetsandmaximumpayouts,(vi)themaximumpayoutlevelsand
caps,(vii)theclawbackpolicy,(viii)theretirementprogramdesignand(ix)theequityownershipandequityownershipguidelines.Theseitemswereassessedin
thecontextofthemostsignificantriskscurrentlyfacingtheCompany,todetermineifthecompensationplans,practicesandprogramsincentivizeemployeesto
takeunduerisks.Thecommitteethentookintoaccountcontrolsandproceduresthatoperatetomonitorandmitigateagainstrisk.TheChiefHumanResources
OfficerpresentedthecompensationriskcommitteesconclusionstotheGovernanceandCompensationCommittee.Theseconclusionswerealsoreviewedbyand
theGovernanceandCompensationCommitteesindependentcompensationconsultant,MeridianCompensationPartnersLLC.
TheGovernanceandCompensationCommitteereviewedtheseconclusionsthroughariskassessmentlens.Asaresultofthesereviews,theCompanydoes
notbelievethattheCompanyscompensationpracticesandprogramscreaterisksthatarereasonablylikelytohaveamaterialadverseeffectontheCompany,nor
doesitbelievethatthepracticesandprogramsaredesignedtopromoterisktaking.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TheAuditCommitteeischargedwithmonitoringandreviewingissuesinvolvingpotentialconflictsofinterest,andreviewingandapprovingallrelated
persontransactions,asdefinedinapplicableSECrules.UnderSECrules,relatedpersonsincludeanydirector,executiveofficer,anynomineefordirector,any
personowning5%ormoreoftheCompanysCommonStock,andanyimmediatefamilymembersofsuchpersons.Inaddition,undertheCompanysCodeof
BusinessConductandCodeofEthics,specialrulesapplytoexecutiveofficersand
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directorswhoengageinconductthatcreatesanactual,apparentorpotentialconflictofinterest.Beforeengaginginsuchconduct,suchexecutiveofficersand
directorsmustmakefulldisclosureofallthefactsandcircumstancestotheCompanysGeneralCounselandtheChairmanoftheAuditCommittee,andobtainthe
priorwrittenapprovaloftheAuditCommittee.Allconductisreviewedinamannersoasto(i)maintaintheCompanyscredibilityinthemarket,(ii)maintainthe
independenceoftheCompanysemployeesand(iii)seethatallbusinessdecisionsaremadesolelyonthebasisofthebestinterestsoftheCompanyandnotfor
personalbenefit.
COMPENSATION OF DIRECTORS
Thefollowingtablesetsforth,forthefiscalyearendedDecember31,2015,thetotalcompensationofthenon-managementmembersoftheCompanys
BoardofDirectors.
Name
Year
Fees
Earned
or Paid in
Cash
($)(1)
Stock
Awards
($)(2)
Option
Award
($)
Non-Equity
Incentive Plan
Compensation
($)
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings ($)
All Other
Compensation
($)(3)
Total
($)
BasilAnderson
$264,954
2015 $110,000 $154,954
JorgeBermudez
244,954
2015 90,000 154,954
DarrellDuffie
264,954
2015 110,000 154,954
KathrynHill
244,954
2015 90,000 154,954
EwaldKist
$
20,000 264,954
2015 90,000 154,954
HenryMcKinnell,Jr.
345,037
2015 140,000 205,037
LeslieSeidman
244,954
2015 90,000 154,954
JohnWulff
264,954
2015 110,000 154,954
(1) In2015,theCompanysnon-managementdirectorsreceivedanannualcashretainerof$90,000,payableinquarterlyinstallments.TheChairmenofthe
AuditCommittee,theGovernanceandCompensationCommitteeandtheMISCommitteereceivedanadditionalannualcashfeeof$20,000,alsopayablein
quarterlyinstallments.TheChairmanoftheBoardreceivedanadditionalannualcashfeeof$50,000.Mr.Kistreceivedaninternationaltravelfeeof$20,000
payableinquarterlyinstallments.Therewerenoseparatemeetingfeespaidin2015.
Anon-managementdirectormayelecttodeferreceiptofalloraportionofhisannualcashretaineruntilafterterminationofserviceontheCompanys
BoardofDirectors.DeferredamountsarecreditedtoanaccountandreceivetherateofreturnearnedbyoneormoreinvestmentoptionsintheMoodys
CorporationProfitParticipationPlanasselectedbythedirector.UponachangeincontroloftheCompany,alumpsumpaymentwillbemadetoeach
directoroftheamountcreditedtothedirectorsdeferredaccountonthedateofthechangeincontrol,andthetotalamountcreditedtoeachdirectors
deferredaccountfromthedateofthechangeincontroluntilthedatesuchdirectorceasestobeadirector,willbepaidinalumpsumatthattime.
(2)
OnFebruary11,2015,thenon-managementdirectors,exceptDr.McKinnell,receivedagrantof$154,954worthofrestrictedstockissuedfromthe1998
MoodysCorporationNon-EmployeeDirectorsStockIncentivePlan(the1998DirectorsPlan)whichwasequalto1,581restrictedsharesofCommon
Stock.AlsoonFebruary11,2015,Dr.McKinnellreceivedagrantof$205,037worthofrestrictedstockissuedfromthe1998DirectorsPlanwhichwas
equalto2,092restrictedsharesofCommonStock.TheGovernanceandCompensationCommitteeauthorizedthegrantofrestrictedstockawardsfor
February11,2015onDecember15,2014,andthegrantwassubsequentlyapprovedbytheBoardonDecember16,2014.Thegrantofrestrictedstock
awardswaseffectiveonFebruary11,2015,thethirdtradingdayfollowingthedateofthepublicdisseminationoftheCompanysfinancialresultsfor2014.
Ineachcase,thenumberofrestrictedsharesofCommonStockbasedontheawardvaluehasbeencomputedinaccordancewithFASBASCTopic718.
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TheaggregatenumberofstockawardsoutstandingasofDecember31,2015foreachindividualwhoservedasanon-managementdirectoroftheCompany
during2015wasasfollows:
Name
BasilAnderson
JorgeBermudez
DarrellDuffie
KathrynHill
EwaldKist
HenryMcKinnell,Jr.
LeslieSeidman
JohnWulff
(3)
Number of Shares
Underlying Options
Number of
Shares of Unvested
Restricted Stock
1,581
1,581
1,581
1,581
1,581
2,092
1,581
1,581
Fornon-managementdirectorswhoresideoutsideofNorthAmerica,thereisanadditionalinternationaltravelallowanceof$20,000.Perquisitesandother
personalbenefitsprovidedtoeachindividualwhoservedasanon-managementdirectorin2015were,intheaggregate,lessthan$10,000perdirector.Each
non-managementdirectorisreimbursedfortravel,mealsandhotelexpensesincurredinconnectionwithattendingmeetingsoftheCompanysBoardof
Directorsoritscommittees.ForthemeetingsheldattheCompanysexecutiveoffices,theCompanypaysfortravelforeachnon-managementdirectorand
oneguestofeachdirector,aswellasfortheiraccommodations,meals,Company-arrangedactivitiesandotherincidentalexpenses.
Theguidelinesareintendedtosatisfyanindividualsneedforportfoliodiversification,whileensuringanownershiplevelsufficienttoassure
stockholdersoftheircommitmenttovaluecreation.
Non-managementdirectorsareexpected,withinfiveyears,toacquireandholdsharesoftheCompanysCommonStockequalinvaluetofivetimes
theannualcashretainer.
RestrictedsharesandsharesownedbyimmediatefamilymembersorthroughtheCompanystax-qualifiedsavingsandretirementplanscounttoward
satisfyingtheguidelines.
Stockoptions,whethervestedorunvested,donotcounttowardsatisfyingtheguidelines.
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businessexperience,
qualifications,attributesandskillsrelevanttothemanagementandoversightoftheCompanysbusiness,
independence,
theabilitytorepresentdiversestockholderinterests,
judgmentandintegrity,
theabilitytocommitsufficienttimeandattentiontoBoardactivities,and
theabsenceofanypotentialconflictswiththeCompanysbusinessandinterests.
Inaddition,theBoardandtheGovernanceandCompensationCommitteeannuallyevaluatethecompositionoftheBoardtoassesstheskillsandexperience
thatarecurrentlyrepresentedontheBoard,aswellastheskillsandexperiencethattheBoardwillfindvaluableinthefuture,giventheCompanyscurrent
situationandstrategicplans.TheBoardandtheGovernanceandCompensationCommitteeseekavarietyofoccupationalandpersonalbackgroundsontheBoard
inordertoobtainarangeofviewpointsandperspectivesandtoenhancethediversityoftheBoard.TheCommitteealsoconsidersthespecialrequirementsof
MoodysInvestorsServiceand
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itsroleinthesecuritiesmarkets.Asanexample,theCommitteehasdeterminedthatindividualswhobyprofessionactivelymanagesecuritiesportfolioscould
encounterconflictsofinterestsorgiverisetotheappearanceofconflicts.
ThisannualevaluationoftheBoardscompositionenablestheBoardandtheGovernanceandCompensationCommitteetoupdatetheskillsandexperience
theyseekintheBoardasawhole,andinindividualdirectors,astheCompanysneedsevolveandchangeovertimeandtoassesstheeffectivenessofeffortsat
pursuingdiversity.Inidentifyingdirectorcandidatesfromtimetotime,theBoardandtheGovernanceandCompensationCommitteemayidentifyspecificskills
andexperiencethattheybelievetheCompanyshouldseekinordertoconstituteabalancedandeffectiveboard.
Inconsideringandnominatingincumbentdirectorsforre-electiontotheBoard,theBoardandtheGovernanceandCompensationCommitteehave
consideredavarietyoffactors.Theseincludethenomineesindependence,financialliteracy,personalandprofessionalaccomplishments,experienceinlightofthe
needsoftheCompanyandpastperformanceontheBoard.WithrespecttotheCompanysincumbentdirectorsstandingforre-election,theBoardhasdetermined
thattheyhavethefollowingskillsandqualificationsthatsupporttheirserviceontheBoard:
(i)
Mr.Andersonhasoveradecadeofexperienceasanexecutiveofficer,includingasachieffinancialofficer,ofseveralpubliccompanieswherehe
heldsignificantpolicymakingpositions.HealsohasexperienceasanoperatingexecutiveinchargeofaninternationalbusinessbasedinParis,
France.Inaddition,Mr.AndersonservesasadirectorwithseveralNYSEorNASDAQlistedcompanies.Asaresultofthesepositions,hebrings
totheBoardexpertiseasastrategist,managementandoperationsexperience,andaperspectiveoninternationalbusinessoperationsandcorporate
governanceinthepubliccompanycontext;
(ii)
Mr.Bermudezbringsahistoryofexecutiveexperienceatamajorinternationalfinancialservicescompany.Astheheadofriskforamajorglobal
financialinstitution,hewasinvolvedinthedebtrestructuringofvarioussovereignsaroundtheworld.Healsomanagedaglobalbusinesswitha
presenceinover100countries.Asaresult,Mr.Bermudezbringsadeepunderstandingofcreditriskandyearsoffinancialexpertise,aswellasrisk
managementexperiencetotheBoard;
(iii)
Dr.DuffiehassignificantexpertiseinanumberofareasthataredirectlyrelevanttotheCompanyscorebusinessoperationsandhasexperienceas
aconsultanttofinancialservicesfirms.Heisarecognizedexpertinthebehaviorandperformanceofglobalcreditandsecuritiesmarketsandhis
opinionsregardingfinancialregulatoryreformhavebeensolicitedbyvariousarmsoftheU.S.government,includingtheSenateBanking
Committee,theU.S.TreasuryDepartment,theHouseFinancialServicesCommittee,theBoardofGovernorsoftheFederalReserveSystem,the
U.S.CommodityFuturesTradingCommission,theSEC,thePresidentsNationalEconomicCouncilandtheNewYorkFederalReserveBank.He
alsohasauthoredabookonover-the-countermarkets,twobooksoncreditrisk,andonebookonbankfailuresandhaspublishednumerous
academicresearchpublications,articlesandpapersonassetandcreditvaluationandperformance.ThisworkallowsDr.Duffietoprovideinsight
intovariousaspectsoftheCompanysbusinessoperations,theexpandingnatureoftheworkofMoodysAnalyticsandMISandpolicyissues
relatedtothefinancialservicesindustry;
(iv)
Ms.Hillhassignificantexperienceinbusinessmanagementandleadingengineeringandoperationsorganizations.SheservedasSeniorVice
President,ExecutiveAdvisorofCiscoSystemsInc.fromDecember2011toMarch2013.ShepreviouslyservedasCiscosSeniorVicePresident,
DevelopmentStrategy&Operationsfrom2009toDecember2011,andpriortothat,asSeniorVicePresidentofCiscoSystemsAccess
NetworkingandServicesGroup,wheresheledtheAccessRouting,EthernetSwitching,Security,WirelessandSmallBusinesstechnologygroups.
ShebringsextensiveleadershipexperienceandastrongbackgroundininformationtechnologyandbusinessoperationstotheBoard;
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(v)
Mr.KistservedasChairmanoftheExecutiveBoardofamajorforeignfinancialservicescompanyforanumberofyearsandheldvarious
executiveofficerpositions,includingpresidentandvicechairman,atamajorinternationalbank.Accordingly,Mr.KistbringstotheBoard
financialexpertiseandknowledgeoftherangeofissuesfacingalargecompanyoperatinginaregulatedindustryandaperspectiveonrunninga
companywithinternationaloperations;
(vi)
Mr.McDaniel,whoisbothPresidentandChiefExecutiveOfficeroftheCompany,beganhiscareerattheCompanyservingasaratingsanalyst
andhasservedinnumerouscapacitiesattheCompanyoverthepastthreedecades.Asaresult,hebringstotheBoardadeepunderstandingofthe
CompanysbusinessandoperationsaswellasahistoricalperspectiveontheCompanysstrategy.Since2005,hehasalsoservedasadirectorof
JohnWiley&Sons,Inc.,whichdevelops,publishesandsellsproductsinprintandelectronicmediafortheeducational,professional,scientific,
technical,medicalandconsumermarketsworldwide.Thishashelpedtoprovideperspectiveonpubliccompanygovernanceissues;
(vii)
Dr.McKinnellservedforfiveyearsasthechiefexecutiveofficerofapublicpharmaceuticalcompanywithworldwideoperations,andpriortothat
position,servedaspresident,chiefoperatingofficer,chieffinancialofficerandexecutivevicepresident.Asaresultofthesepositions,
Dr.McKinnellbringstotheBoardfinancialexpertise,globalmanagementexperienceandleadershipskills.Inaddition,becausethepharmaceutical
business,liketheCompanys,operatesinahighlyregulatedindustry,Dr.McKinnellbringstotheBoardanappreciationofwhatacomplex
regulatoryenvironmentmeansfortheCompanysoperations.Dr.McKinnellhasalsoservedasadirectorofseveralpubliccompanies,contributing
tohisperspectiveoncorporategovernancematters;
(viii)
Ms.SeidmanbringsregulatoryandfinancialexpertisetotheBoard.ShecurrentlyservesasaPublicGovernoroftheFinancialIndustryRegulatory
Authority(FINRA).SheservedastheChairmanoftheFinancialAccountingStandardsBoardandservedasanexecutiveatamajorbankandasan
auditorforamajoraccountingfirm.Asaresultofthesepositions,Ms.SeidmanbringstotheBoardsignificantknowledgeofglobalaccountingand
financialreportingmattersinadditiontoregulatoryandseniormanagementexperience;and
(ix)
Mr.VanSaunhasservedfortwoyearsasthechiefexecutiveofficerandchairmanofaU.S.bank.Hehasextensiveexecutiveexperiencehaving
formerlyheldseveraladditionalseniormanagementpositionsatbanks.Asaresultofholdingthesepositions,Mr.VanSaunbringsfinancial
expertise,managementexperienceandexperiencemanagingabusinessinahighlyregulatedindustrybothinsidetheU.S.andinEurope.Hehas
alsoservedasadirectorofseveralcompaniescontributingtohisappreciationofcorporategovernancematters.
The Board of Directors recommends a vote FOR the election as directors of each of the nominees listed below.
Theprincipaloccupationandcertainotherinformation(includingageasofthedateofthisProxyStatement)aboutthenomineesaresetforthbelow.
DIRECTOR NOMINEES
BasilL.Anderson
DirectorsinceApril2004
BasilL.Anderson,age70,isChairmanoftheAuditCommitteeandisamemberoftheExecutiveandGovernanceandCompensationCommitteesofthe
BoardofDirectors.Mr.AndersonservedasViceChairmanofStaples,Inc.,anofficeproductscompany,fromSeptember2001untilhisretirementinMarch2006.
PriortojoiningStaples,Mr.AndersonservedasExecutiveVicePresidentandChiefFinancialOfficerofCampbellSoupCompanyfromApril1996toFebruary
2001.PriortojoiningCampbellSoup,Mr.AndersonwaswithScottPaperCompanywhereheservedinavarietyofcapacitiesbeginningin1975,includingVice
PresidentandChief
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FinancialOfficerfromDecember1993toDecember1995.Mr.AndersoncurrentlyisadirectorofStaples,Inc.(1997-present),BectonDickinson(2004-present)
andHasbro,Inc.(2002-present).
JorgeA.Bermudez
DirectorsinceApril2011
JorgeA.Bermudez,age64,isamemberoftheAuditandGovernanceandCompensationCommitteesoftheBoardofDirectors.HeservedasChiefRisk
OfficerofCitigroup,Inc.,aglobalfinancialservicescompany,fromNovember2007toMarch2008.BeforeservingasChiefRiskOfficer,Mr.Bermudezwas
ChiefExecutiveOfficerofCitigroupsCommercialBusinessGroupinNorthAmericaandCitibankTexasfrom2005to2007.HeservedasSeniorAdvisor,
CitigroupInternationalfrom2004to2006,asChiefExecutiveOfficerofCitigroupLatinAmericafrom2002to2004,ChiefExecutiveOfficer,eBusiness,Global
CashManagementandTradefrom1998to2002andHeadofCitibankCorporateandInvestmentBank,SouthAmericafrom1996to1998.Mr.Bermudezjoined
Citigroupin1975andheldleadershippositionsinotherdivisions,includingequityinvestments,creditpolicyandcorporatebankingfrom1984to1996.
Mr.BermudezcurrentlyisadirectoroftheElectricReliabilityCouncilofTexas(2010-present),theFederalReserveBankofDallas(2012-present)andamember
oftheTexasA&MFoundationBoardofTrustees(2014-present).HeservedasadirectorofCitibankN.A.from2005to2008,theFederalReserveBankofDallas,
HoustonBranchfrom2009to2011,theAssociationofFormerStudents,TexasA&MUniversityfrom2006to2012,theAmericanInstituteofArchitectsforthe
entiretyof2015andasChairmanoftheCommunityFoundationofBrazosValleyfromJuly2013toJuly2014.
DarrellDuffie,Ph.D.
DirectorsinceOctober2008
DarrellDuffie,Ph.D.,age61,isamemberoftheAudit,GovernanceandCompensationandExecutiveCommitteesoftheBoardofDirectors.HeistheDean
WitterDistinguishedProfessorofFinanceatStanfordUniversityGraduateSchoolofBusinessandhasbeenonthefinancefacultyatStanfordsincereceivinghis
Ph.D.fromStanfordin1984.Hehasauthoredbooksandresearcharticlesontopicsinfinanceandrelatedfields.Dr.DuffieisamemberoftheBoardofThePacific
InstituteofMathematicalSciencesandisaFellowandmemberoftheCounciloftheEconometricSocietyandaFellowoftheAmericanAcademyofArts&
Sciences.HeisChairmanoftheMarketParticipantsGrouponReferenceRateReform.Dr.DuffieservedasatrusteeofiSharesTrustandadirectorofiShares,Inc.
from2008to2011andwasPresidentoftheAmericanFinanceAssociationin2009.
KathrynM.Hill
DirectorsinceOctober2011
KathrynM.Hill,age59,isamemberoftheAuditandGovernanceandCompensationCommitteesoftheBoardofDirectors.Ms.Hillhasover30yearsof
experienceinbusinessmanagementandleadingengineeringandoperationsorganizations.Ms.HillservedinanumberofpositionsatCiscoSystems,Inc.from
1997to2013,including,amongothers,ExecutiveAdvisorfrom2011to2013,SeniorVicePresident,DevelopmentStrategyandOperationsfrom2009to2011,
SeniorVicePresident,AccessNetworkingandServicesGroupfrom2008to2009andSeniorVicePresident,EthernetSystemsandWirelessTechnologyGroup
from2005to2008.Ciscodesigns,manufacturesandsellsInternetProtocol(IP)-basednetworkingandotherproductsrelatedtothecommunicationsand
informationtechnologyindustryandprovidesservicesassociatedwiththeseproducts.PriortoCisco,Ms.Hillhadanumberofengineeringrolesatvarious
technologycompanies.Ms.HillisamemberoftheBoardofTrusteesfortheAnitaBorgInstituteforWomenandTechnology.Ms.Hillcurrentlyservesasa
directorofNetApp,Inc.(2013-present)andCelaneseCorporation(July2015-present).
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EwaldKist
DirectorsinceJuly2004
EwaldKist,age72,isamemberoftheAuditandGovernanceandCompensationCommitteesoftheBoardofDirectors.Mr.KistwasChairmanofING
GroepN.V.(INGGroup),afinancialservicescompany,from2000untilhisretirementinJune2004.BeforeservingasChairmanofINGGroup,Mr.Kistwas
ViceChairmanfrom1999to2000andservedasamemberoftheExecutiveBoardfrom1993to1999.PriortothemergerofNationaleNederlandenandNMB
PostbankGrouptoformINGGroupin1992,Mr.KistservedinavarietyofcapacitiesatNationaleNederlandenbeginningin1969,includingChairmanfrom1991
to1992,GeneralManagementtheNetherlandsfrom1989to1991andPresidentNationaleNederlandenU.S.Corporationfrom1986to1989.Mr.Kistcurrently
isadirectorofRoyalDSMN.V.(2004-present),andRoyalPhilipsElectronics(2004-present).HeservedasadirectorofDutchNationalBankfrom2004until
2012.
RaymondW.McDaniel,Jr.
DirectorsinceApril2003
RaymondW.McDaniel,Jr.,age58,hasservedasthePresidentandChiefExecutiveOfficeroftheCompanysinceApril2012,andservedastheChairman
andChiefExecutiveOfficerfromApril2005untilApril2012.HecurrentlyservesontheExecutiveCommitteeoftheBoardofDirectors.Mr.McDanielservedas
theCompanysPresidentfromOctober2004untilApril2005andtheCompanysChiefOperatingOfficerfromJanuary2004untilApril2005.Hehasservedas
ChiefExecutiveOfficerofMoodysInvestorsService,Inc.,asubsidiaryoftheCompany,sinceOctober2007.HeheldtheadditionaltitlesofPresidentfrom
November2001toAugust2007andDecember2008toNovember2010andChairmanfromOctober2007untilJune2015.Mr.McDanielservedastheCompanys
ExecutiveVicePresidentfromApril2003toJanuary2004,andasSeniorVicePresident,GlobalRatingsandResearchfromNovember2000untilApril2003.He
servedasSeniorManagingDirector,GlobalRatingsandResearch,ofMoodysInvestorsServicefromNovember2000untilNovember2001andasManaging
Director,Internationalfrom1996toNovember2000.Mr.McDanielcurrentlyisaDirectorofJohnWiley&Sons,Inc.(2005-present)andamemberoftheBoard
ofTrusteesofMuhlenbergCollege(2015-present).
HenryA.McKinnell,Jr.,Ph.D.
DirectorsinceOctober1997
HenryA.McKinnell,Jr.,age73,isChairmanoftheBoardofDirectorsandChairmanoftheExecutiveCommitteeandservesasamemberoftheAuditand
GovernanceandCompensationCommittees.Dr.McKinnellservedastheChiefExecutiveOfficerofOptimerPharmaceuticals,Inc.fromFebruary2013until
October31,2013.HeservedasChairmanoftheBoardofPfizerInc.,apharmaceuticalcompany,fromMay2001untilhisretirementinDecember2006andChief
ExecutiveOfficerfromJanuary2001toJuly2006.HeservedasPresidentofPfizerInc.fromMay1999toMay2001,andasPresidentofPfizerPharmaceuticals
GroupfromJanuary1997toApril2001.Dr.McKinnellservedasChiefOperatingOfficerofPfizerInc.fromMay1999toDecember2000andasExecutiveVice
Presidentfrom1992to1999.Dr.McKinnellisalsotheChairmanoftheBoardofAccordiaGlobalHealthFoundation(memberoftheboardfromSeptember2003present).HeisChairmanEmeritusoftheConnecticutScienceCenterandisamemberoftheAcademicAllianceforAIDSCareandPreventioninAfrica.
Dr.McKinnelljoinedtheBoardofEmmausLifeSciences,Inc.inMay2010andservedasChairmanfromMay2011untilSeptember2015.HeservedasChairman
ofOptimerPharmaceuticals,Inc.until2013anddirectorofAngiotechPharmaceuticals,Inc.until2011,PfizerInc.andExxonMobilCorporationuntil2007and
JohnWiley&Sonsuntil2005.
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LeslieF.Seidman
DirectorsinceDecember2013
LeslieF.Seidman,age53,isamemberoftheAuditandGovernanceandCompensationCommitteesoftheBoardofDirectors.SheisExecutiveDirectorof
theCenterforExcellenceinFinancialReportingatPaceUniversitysLubinSchoolofBusinessandaPublicGovernorfortheFinancialIndustryRegulatory
Authority(FINRA).SheservedastheChairmanoftheFinancialAccountingStandardsBoard(FASB)fromDecember2010toJune30,2013.Ms.Seidmanwas
firstappointedtotheFASBasamemberinJuly2003andwasreappointedtoasecondterminJuly2006.SheservedasActingChairmanfromOctober1,2010to
December2010.From2000to2003,Ms.SeidmanwasthefounderandmanagingmemberofLeslieF.SeidmanConsulting,LLC,afinancialreportingconsulting
firmthatservedglobalfinancialinstitutions,lawfirmsandaccountingfirms.From1994to1999,Ms.SeidmanservedontheFASBstaffinvariouscapacities
includingasAssistantDirectorofResearchandTechnicalActivities.From1987to1996,Ms.SeidmanservedasVicePresident,AccountingPolicyandinother
rolesatJ.P.Morgan&Company,Inc.(nowJPMorganChase&Co.)andfrom1984to1987,Ms.SeidmanservedasanauditorforArthurYoung&Co.(now
Ernst&Young,LLP).Ms.SeidmanisamembertheFinancialExecutivesInternationalandtheInstituteofManagementAccountants.
BruceVanSaun
DirectorsinceMarch2016
BruceVanSaun,age58,isamemberoftheAuditandGovernanceandCompensationCommitteesoftheBoardofDirectors.HehasservedasChairmanof
theBoardandChiefExecutiveOfficerofCitizensFinancialGroup,Inc.,aretailandcommercialbank,sinceOctober2013.FromOctober2009throughSeptember
2013,Mr.VanSaunservedastheRBSGroupFinanceDirectorandamemberoftheboardofdirectorsofTheRoyalBankofScotlandGroupplc(RBS),aglobal
bankingandfinancialservicesgroupandtheformerparentcompanyofCitizensFinancialGroup,Inc.From1997to2008,Mr.VanSaunheldanumberofsenior
positionswithBankofNewYorkandlaterBankofNewYorkMellon,includingViceChairmanandChiefFinancialOfficer.Earlierinhiscareer,heheldsenior
positionswithDeutscheBank,WassersteinPerellaGroupandKidderPeabody&Co.Inaddition,Mr.VanSaunhasservedasadirectoronthefranchiseboardof
LloydsofLondonsinceSeptember2012withatermexpiringonMay31,2016.HehaspreviouslyservedontheboardsofTheRoyalBankofScotlandplcand
NationalWestminsterBank,plc,eachanRBSaffiliate,fromOctober2009toSeptember2013,DirectLineInsuranceGroupplcfromApril2012toOctober2013
andWorldPay(ShipMidcoLimited)fromJuly2011toOctober2013.
ITEM 2RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
TheAuditCommitteeevaluatestheselectionoftheCompanysindependentauditoreachyear,andhasappointedKPMGLLPastheCompanys
independentregisteredpublicaccountingfirmtoaudittheconsolidatedfinancialstatementsoftheCompanyfortheyearendingDecember31,2016.KPMGLLP
auditedtheconsolidatedfinancialstatementsoftheCompanyfortheyearendedDecember31,2015.IndeterminingwhethertoreappointKPMGasthe
Companysindependentauditor,theAuditCommitteetookintoconsiderationanumberoffactors,including:KPMGsperformanceonprioraudits,andthequality
andefficiencyoftheservicesprovidedbyKPMG;anassessmentofthefirmsprofessionalqualifications,resourcesandexpertise;KPMGsknowledgeofthe
Companysbusinessandindustry;thequalityoftheAuditCommitteesongoingcommunicationswithKPMGandofthefirmsrelationshipwiththeAudit
CommitteeandCompanymanagement;KPMGsindependence;theappropriatenessofKPMGsfees;thelengthoftimethefirmhasservedinthisrole;theimpact
ofchangingauditors;anddataonauditqualityandperformance,includingrecentPCAOBreportsonKPMGLLPandpeerfirms.Consideredtogether,these
factorsenabletheAuditCommitteetoevaluatewhethertheselectionofKPMGLLPastheCompanysindependentauditor,andtheretentionofKPMGLLPto
performotherservices,willcontributetoandenhanceauditquality.Basedonitsevaluation,theAudit
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CommitteebelievesthatthecontinuedretentionofKPMGLLPtoserveastheCompanysindependentregisteredpublicaccountingfirmisinthebestinterestof
ourstockholders.
Asamatterofgoodcorporategovernance,theAuditCommitteehasrequestedtheBoardofDirectorstosubmittheselectionofKPMGLLPasthe
Companysindependentregisteredpublicaccountingfirmfor2016tostockholdersforratification.IftheappointmentofKPMGLLPisnotratifiedby
stockholders,theAuditCommitteewillre-evaluateitsselectionandwilldeterminewhethertomaintainKPMGLLPastheCompanysindependentregistered
publicaccountingfirmortoappointanotherindependentregisteredpublicaccountingfirm.ArepresentativeofKPMGLLPisexpectedtobepresentattheAnnual
Meeting.Suchrepresentativewillhavetheopportunitytomakeastatementifhesodesiresandisexpectedtobeavailabletorespondtoappropriatequestions.
The Board of Directors recommends a vote FOR ratification of the appointment of KPMG LLP as the Companys independent registered public
accounting firm for 2016.
PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees
Theaggregatefeesforprofessionalservicesrenderedfor(i)theintegratedauditoftheCompanysannualfinancialstatementsfortheyearsended
December31,2015and2014,(ii)thereviewofthefinancialstatementsincludedintheCompanysReportsonForms10-Qand8-K,and(iii)statutoryauditsof
subsidiaries,wereapproximately$3.0and$3.1millionin2015and2014,respectively.Thesefeesincludedamountsaccruedbutnotbilledof$2.0millionand$2.2
millionintheyearsendedDecember31,2015and2014,respectively.
Audit-Related Fees
Theaggregatefeesbilledforaudit-relatedservicesrenderedtotheCompanywereapproximately$0.1millioninbothoftheyearsendedDecember31,2015
and2014.Suchservicesincludedemployeebenefitplanaudits.
Tax Fees
TheaggregatefeesbilledforprofessionalservicesrenderedfortaxservicesrenderedbytheauditorsfortheyearsendedDecember31,2015and2014were
approximately$0and$0,respectively.
All Other Fees
TheaggregatefeesbilledforallotherservicesrenderedtotheCompanybyKPMGLLPfortheyearsendedDecember31,2015and2014were
approximately$0and$0,respectively.
ITEM 3ADVISORY RESOLUTION APPROVING EXECUTIVE COMPENSATION
WeareaskingstockholderstovoteonanadvisoryresolutionapprovingthecompensationoftheCompanysexecutiveswhoarenamedintheSummary
CompensationTablewhichappearsonpage48(referredtoastheNamedExecutiveOfficersorNEOs)inthisProxyStatement.Asdescribedinthe
CompensationDiscussionandAnalysissectionofthisProxyStatement,thegoaloftheGovernanceandCompensationCommittee(theCommittee)insetting
executivecompensationistoprovideacompetitivetotalcompensationpackagethatassistsintheretentionoftheCompanysexecutivesandmotivatesthemto
performatasuperiorlevelwhileencouragingbehaviorthatisinthelong-termbestinterestsoftheCompanyanditsstockholders.Consistentwith
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thisphilosophy,asignificantportionofthetotalcompensationopportunityforeachofMoodysexecutivesisperformance-based,andultimatelydependentupon
theCompanysachievementofspecifiedgoalsthatarebothfinancialandoperating(non-financial)innature,andalignedwithshareholdervaluecreation.
Moodysachievedrevenueandearningspersharegrowthforthesixthconsecutiveyeardespitedifficultmarketconditions.TheCompanysfull-year2015
resultsreflectedpositivefinancialperformanceinMoodysInvestorsService(MIS),withrevenueincreasing3%fromthepriorperiod,andgrowthinMoodys
Analytics(MA)withrevenueup8%fromfull-year2014.Theserevenueresultswereachievedinspiteoftheunfavorableimpactofforeignexchangerates.The
CompanyconfrontedobstaclesasworldwideeconomicandpoliticalconditionsandchangesinmonetaryandfiscalpoliciesimpactedthecreditmarketsandMIS
andothercreditratingagenciescontinuedtobethesubjectofheightenedscrutinyandincreasedregulation.
TheCompanyoperatesundergovernancestandardsthatitbelievesbestserveitsstockholders,whilealsoincorporatingcertainbestpracticesin
governanceandexecutivecompensation,includingthefollowing:
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aredesignedtooffsetanydecreaseinthemarketvalueoforareotherwisebasedonthepriceofMoodyssecurities;(iii)holdingMoodyssecuritiesin
marginaccounts;and(iv)pledgingMoodyssecuritiesascollateralforaloan.
WeurgestockholderstoreadtheCD&Abeginningonpage27ofthisProxyStatement,whichdescribesinmoredetailhowourexecutivecompensation
policiesandproceduresoperateandaredesignedtoachieveourcompensationobjectives,aswellastheSummaryCompensationTableandrelatedcompensation
tablesandnarrative,beginningonpage48,whichprovidedetailedinformationonthecompensationofourNamedExecutiveOfficers.TheCommitteeandthe
BoardofDirectorsbelievethatthepoliciesandproceduresarticulatedintheCD&AareeffectiveinachievingourgoalsandthatthecompensationofourNamed
ExecutiveOfficersreportedinthisProxyStatementhassupportedandcontributedtotheCompanyssuccess.
InaccordancewithSection14AoftheExchangeAct,andasamatterofgoodcorporategovernance,theBoardisaskingstockholderstovoteatthe2016
AnnualMeetingofStockholdersonthefollowingadvisoryresolutionapprovingexecutivecompensation:
RESOLVED,thatthestockholdersofMoodysCorporation(theCompany)approve,onanadvisorybasis,thecompensationoftheCompanys
NamedExecutiveOfficersdisclosedintheCompensationDiscussionandAnalysis,theSummaryCompensationTableandtherelatedcompensationtables
andnarrativeintheProxyStatementfortheCompanys2016AnnualMeetingofStockholders.
Thisadvisoryresolution,commonlyreferredtoasasay-on-payresolution,isnon-bindingontheBoard.Althoughnon-binding,theBoardandthe
CommitteewillreviewandconsiderthevotingresultswhenevaluatingtheCompanysexecutivecompensationprogram.
AfterconsiderationofthevoteofstockholdersattheCompanys2011annualmeetingofstockholdersandotherfactors,theBoarddeterminedtoholdavote
onanadvisoryresolutionapprovingexecutivecompensationannually,althoughitmaydeterminetovarythepracticebasedonfactorssuchasdiscussionswith
stockholders.Accordingly,unlesstheBoardmodifiesitspolicyonthefrequencyoffuturesay-on-payadvisoryvotes,thenextvoteonanadvisoryresolution
approvingexecutivecompensationwillbeheldattheCompanys2017annualmeetingofstockholders.
The Board of Directors recommends a vote FOR the advisory resolution approving executive compensation.
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Name
Aggregate Amount of
Shares Beneficially
Owned(1)
Stock Units(2)
Percentage of
Shares
Outstanding(3)
MarkE.Almeida
391,217
BasilL.Anderson
36,342
11,683
JorgeA.Bermudez
12,594
DarrellDuffie
21,100
JohnJ.Goggins
252,577
KathrynM.Hill
10,531
LindaS.Huber
355,123
EwaldKist
27,683
MichelMadelain
252,838
RaymondW.McDaniel,Jr.
977,871(5)
HenryA.McKinnell,Jr.
117,820
1,778
LeslieF.Seidman
3,469
BruceVanSaun
(6)
JohnK.Wulff
36,342
1,094
Allcurrentdirectorsandexecutiveofficersasagroup(19)persons)
2,895,601
14,555
1.48%
BerkshireHathaway,Inc.
24,669,778(7)(8)
12.58%
WarrenE.Buffett,NationalIndemnityCompany,
GEICOCorporation,GovernmentEmployeesInsurance
Company,3555FarnamStreet,Omaha,Nebraska68131
TheVanguardGroup
14,325,948(9)
7.31%
100VanguardBlvd.,Malvern,Pennsylvania19355
BlackRockInc.
12,136,406(10)
6.19%
55East52ndStreet,NewYork,NewYork10022
*
Representslessthan1%oftheoutstandingCommonStock.
(1) IncludesthemaximumnumberofsharesofCommonStockthatmaybeacquiredwithin60daysofDecember31,2015,upontheexerciseofvestedstock
optionsasfollows:Mr.Almeida258,030;Mr.Goggins206,738;Ms.Huber305,176;Mr.Madelain184,021;Mr.McDaniel754,705;andall
currentdirectorsandexecutiveofficersasagroup1,960,827.Alsoincludesthefollowingsharesofrestrictedstockoverwhichnon-managementdirectors
hadvoting(butnotdispositive)powerasof
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December31,2015:Mr.Anderson1,581;Mr.Bermudez1,581;Dr.Duffie1,581;Ms.Hill1,581;Mr.Kist1,581;Dr.McKinnell2,092;
Ms.Seidman1,581;andMr.Wulff1,581;andallcurrentdirectorsandexecutiveofficersasagroup46,126.Pleasenotethatshareswhichveston
March1,2016havebeenincludedinthesefigures.
(2)
Consistsofstockunits(payabletonon-managementdirectorsafterretirement),thevalueofwhichismeasuredbythepriceoftheCommonStock,received
undervariousnon-managementdirectorcompensationarrangementsoftheCompanyanditspredecessor.Theseunitsdonotconfervotingrightsandarenot
consideredbeneficiallyownedsharesofCommonStockunderSECrules.Additionalstockunitsaccrueovertimetoreflectthedeemedreinvestmentof
dividends.
(3)
PercentagesarebaseduponthenumberofsharesoutstandingasofDecember31,2015and,whereapplicable,thenumberofsharesofCommonStockthat
theindividualbeneficialownerhadarighttoacquirewithin60daysofsuchdate.
(4)
Thisamountincludes500sharesheldinacharitableaccountbyMr.Almeida.
(5)
Thisamountincludes2,000sharesofCommonStockownedbyMr.McDanielsspouse.
(6)
JoinedtheBoardofDirectorsinMarch2016.
(7)
AssetforthinAmendmentNo.3totheSchedule13GjointlyfiledwiththeSEConFebruary14,2014byWarrenE.Buffett,BerkshireHathawayInc.,
NationalIndemnityCompany,GEICOCorporationandGovernmentEmployeesInsuranceCompany,(a)eachofMr.Buffett,BerkshireHathawayInc.and
NationalIndemnityCompanyhadsharedvotingpowerandshareddispositivepowerwithrespectto24,669,778sharesreportedinsuchAmendmentNo.3to
theSchedule13Gand(b)eachofGEICOCorporationandGovernmentEmployeesInsuranceCompanyhadsharedvotingpowerandshareddispositive
powerwithrespectto11,973,928ofsuch24,669,778shares.BasedonthenumberofCompanysharesoutstandingasofFebruary17,2016,therecorddate,
thepercentageofCompanysharesbeneficiallyownedis12.66%.
(8)
ThisaddressislistedinAmendmentNo.3totheSchedule13GjointlyfiledwiththeSEConFebruary14,2014astheaddressofeachofMr.Buffettand
BerkshireHathawayInc.TheaddressofNationalIndemnityCompanyislistedas3024HarneyStreet,Omaha,Nebraska68131;andtheaddressofGEICO
CorporationandGovernmentEmployeesInsuranceCompanyislistedas1GEICOPlaza,Washington,D.C.20076.
(9)
AssetforthinAmendmentNo.3totheSchedule13GfiledwiththeSEConFebruary10,2016byTheVanguardGroup.TheVanguardGrouphadsole
votingpowerwithrespectto322,100shares,sharedvotingpowerwithrespectto18,000shares,soledispositivepowerwithrespectto13,979,155sharesand
shareddispositivepowerwithrespectto346,793oftheir14,325,948sharesasofDecember31,2015.
(10) AssetforthinAmendmentNo.2totheSchedule13GfiledwiththeSEConFebruary10,2016byBlackRockInc.BlackRockInc.hadsolevotingpowerof
10,232,375sharesandsoledispositivepowerwithrespectto12,136,406oftheir12,136,406sharesasofDecember31,2015.
Section 16(a) Beneficial Ownership Reporting Compliance
Section16(a)oftheExchangeActrequirestheCompanysdirectors,executiveofficersandpersonswhobeneficiallyownmorethan10%ofaregistered
classoftheCompanysequitysecuritiestofilewiththeSECreportsonForms3,4and5concerningtheirownershipof,andtransactionsin,theCommonStock
andotherequitysecuritiesoftheCompany.Asapracticalmatter,theCompanyassistsitsdirectorsandexecutivesbymonitoringtransactionsandcompletingand
filingreportsontheirbehalf.
BasedsolelyontheCompanysreviewofcopiesofsuchreportsfurnishedtotheCompanyandwrittenrepresentationsthatnootherreportsarerequired,the
Companybelievesthatallofitsexecutiveofficers,directorsandthosegreater-than-10%stockholdersthatfiledanyreportsfortheyearendedDecember31,2015
reportedalltransactionsonatimelybasis.
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2015revenueof$3.5billionup5%from2014;up9%onaconstantcurrencybasis.
2015operatingincomeof$1.5billionincreased2%from$1.4billionfor2014.
2015GAAPearningspershareof$4.63versus$4.61in2014;2015non-GAAPearningspershareof$4.60up9%from2014.
achievedapproximately100%oftheCompanysthree-yearprofitabilityperformancetarget.
TheseoperatingandfinancialperformanceachievementsformedthebasisfortheCommitteesawarddeterminations.
FortheNEOs(allofwhomwereNEOsin2014aswell),cashincentiveawardsrangedfromapproximately87.4%oftargetto133.2%oftarget.This
levelofpayoutreflectsMoodysstrongbusinessperformanceandresultsoutlinedabove.
Thegrantdatefairvalueofthelong-termequityincentiveawardgrantedtotheCEOinFebruary2015wasapproximately22%higherthanthe2014
grantdateawardvalue.ThegrantsawardedtotheNEOgroup(excludingtheCEO)inFebruary2015increasedonaveragebyapproximately12%
fromthevalueoftheFebruary2014awards.ThisincreasereflectedtheCompanys2014performance,andtobringlong-termincentivelevelsand
totalcompensationclosertomarket.
TheperformancesharecycleendedDecember31,2015resultedinapayoutof93.4%oftargetforMIS,97.5%oftargetforMAand96.2%oftarget
forMoodysSharedServices(MSS)ofperformancesharesgrantedforthe2013-2015performancecycle.
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G OVERNANCE H IGHLIGHTS
TheCompanyoperatesundergovernancestandardsthatitbelievesbestserveitsstockholders,whilealsoincorporatingcertainbestpracticesin
governanceandexecutivecompensation,includingthefollowing:
What We Do
What We Dont Do
Link asubstantialpartofeachexecutivesrealizedcompensationtotheachievementoftheCompanysfinancialandoperatingobjectivesandtothe
individualsperformance.
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Align executivesrewardswithchangesinthevalueofstockholdersinvestments.
awardingtheNEOsannualcashincentivecompensationthatisbasedontheCompanysperformanceagainstfinancialobjectives
specifiedatthebeginningoftheperformanceyearandanevaluationofindividual,qualitativeandlargelyoperational(non-financial)
accomplishmentsandperformanceduringthatyear;
usingCompanyperformance(whichfor2015wasbasedontheCompanysoperatingincome,businessunitoperatingincomeandEPS)
todeterminetheoverallfundingoftheannualcashincentivecompensationpoolthatwillbedistributedtotheNEOs;
establishingthetargetedlong-termequityawardmixfortheCEOandallNEOsat40%optionsand60%performanceshares,inorder
totierealizablecompensationdirectlytopre-establishedperformancegoalsandfutureincreasesinshareholdervalue;
providinglong-termequity-basedincentivesintheformofperformancesharesthatwillbeearnedfollowingthecompletionofathreeyearperformanceperiodonlyifcertainperformancegoalsareachievedorexceededandstockoptionsthatwilldelivervaluetothe
executivesonlyifshareholdervalueincreasesfromthedatetheawardsaregranted;and
basingthresholdsfor2015-2017performancesharesontheCompanysEBITDA(includingfutureacquisitions,ifany),MISsratings
accuracyperformanceandMAssalesoverthethree-yearperiod(includingsalesfromentitiesacquiredinfutureacquisitions,ifany).
TheweightsofthesemetricsvarydependingoneachNEOsroleandresponsibilities.
Element
Base
Salary
Form
Cash
Basesalaryisintendedtoprovidealevelofpaythatisappropriategivenprofessional
status,jobcontent,marketvalue,accomplishmentsandinternalequity.
MoodysgenerallytargetsbasesalariesforeachNEOatthemedianofsalariesof
executivesinsimilarpositionswithinthepeergroupand/orthebroaderfinancialservices
market,buthasdiscretiontopayaboveorbelowthetargetedamountbasedonfactorssuch
asexperience,performanceandretention.Moodysbelievesitisimportanttoexercise
discretionandjudgmentindeterminingbasesalarylevelsinordertoattractandretain
superiortalentandtorewardofficerswithagreaterscopeofresponsibilitiesordeeper
experiencethantheirpeerswithinthepeergroupand/orthebroaderfinancialservices
market.
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Element
Form
Annual
Cash
Incentives
Cash
Annualcashincentivesareintendedtorewardperformanceandassistinmotivationand
retentionofmanagement.
Individualtargetamountsaresetattheapproximatemedianbaseduponacompetitivereview
againstthepeergroupand/orthebroaderfinancialservicesmarket,aswellasinternalpay
equity.
AwardpayoutsarefinalizedattheCommitteesFebruarymeetingfollowingtheperformance
yearinquestiontoreflectboththeCompanysfinancialperformanceandtheoutcomeofa
reviewofeachNEOsperformanceagainsthisorherannualobjectives;actualpayoutsare
typicallymadeatthebeginningofMarchfollowingtheperformanceyearinquestion.
Awardscustomarilyaremadeunderthe2004MoodysCorporationCoveredEmployeeCash
IncentivePlan,asamended(the2004Plan)(whichstockholdersre-approvedatthe2015
AnnualMeeting),althoughtheCommitteeretainstherighttopaydiscretionarycash
incentivesoutsideofthe2004Planwhencircumstanceswarrant.
Long-Term
Incentive
Compensation
Performance
Sharesand
Stock
Options
TohelpbalancetheneedtomotivatetheNEOstodrivelong-termstockholdervalue,manage
thenumberofsharesusedtodeliverequityawards,andallowtheCompanytomeasureand
rewardabroadersetoflong-termgoals,theCommitteedeliversequityincentive
compensationinpartthroughstockoptionsandinpartthroughperformance-basedshares,in
eachcaseasmeasuredbygrantdatevalue.
Theaggregategrantdatevalueoflong-termequityincentivecompensationawardsgenerally
istargetedattheapproximatemedianofexecutivesinthepeergroupand/orthebroader
financialservicesmarket,althoughtheCommitteeretainsdiscretiontoadjustawardsbased
ontheCompanysperformance,theNEOsroleinthatperformance,theneedforretentionof
thatNEO,andCompanyaffordability.
Stockoptionshaveastrikepriceofnolessthan100%oftheaverageofthehighandthelow
marketpriceofourcommonstockonthedateofgrantandvestbasedoncontinuedservice
overfouryearsinannual25%increments,whichmeansthatexecutives:(i)willrealizevalue
fromtheirawardsonlyifthemarketpriceoftheCompanysstockappreciatesabovethe
optionsexercisepriceaftertheoptionshavevested,and(ii)willbemotivatedtoremainwith
theCompanyduetothemulti-yearvestingschedule.Stockoptionsexpiretenyearsafter
grantdate.
30
Table of Contents
Element
Form
Performanceshareswillbeearnedfollowingthecompletionofathree-yearperformance
periodonlyifpre-establishedperformancegoalsaremetorexceeded.Forthe2015-2017
performanceperiod,theseperformancethresholdsarebasedontheCompanysaggregate
EBITDA(includingfutureacquisitions,ifany),MISsratingsaccuracyperformance,and
MAsaggregatesalesoverthethree-yearperiod(includingsalesfromentitiesacquiredin
futureacquisitions,ifany).TheweightsofthesemetricsvarydependingoneachNEOsrole
andresponsibilities.
In2015,equityawardgrantsweremadethreebusinessdaysafterthereleaseofthe
Companysyear-endearnings.
Thenumberofperformancesharestreatedasvestedandthecorrespondingnumberofshares
actuallyissuedtoanemployeeaspayoutattheendofthethreeyearperformanceperiodmay
belessthanthenumberdeterminedbytheperformancegoalformulaatthediscretionofthe
Committee.
Perquisites
Limited
Broad-based
andnon-tax
qualified
plans
MoodysdoesnotprovideanyNEOperquisitesorotherpersonalbenefitswithan
incrementalcostgreaterthan$10,000,otherthanamodestcarallowanceprovidedto
Mr.Madelain(asisthepracticeintheUKforcorporateofficers).
Retirement
Benefits
TheprimarypurposeoftheDCPistoallowcertainemployeestomakepre-taxdeferralsinto
anonqualifiedplanandtoreceivethemaximumcompanymatchoncompensationwithout
regardtoIRSlimitsthatapplytotheProfitParticipationPlan.TheCompanymatchonly
appliestodeferralsinexcessoftheIRSlimitoncompensationthatcanbetakenintoaccount
underatax-qualifieddefinedcontributionplan.Inaddition,theCompanywillcredittothe
DCPemployercontributionsthatwouldhavebeenmadetotheProfitParticipationPlanbut
fortheapplicationoftheIRStotalcontributionlimit.
AdditionalinformationregardingtheDCPisfoundonpage57.
Mr.MadelainparticipatesinMoodysUKGroupPersonalPensionPlan,whichisadefined
contributionplan,describedonpage56.
31
Table of Contents
Element
Form
MoredetailsregardingtheRetirementAccount,thePBEPandtheSEBPareprovidedinthe
narrativefollowingthePensionBenefitsTablefor2015onpage54.
32
Table of Contents
(1)
Name
13%
22%
21%
23%
27%
RaymondW.McDaniel
LindaS.Huber
MichelMadelain
MarkE.Almeida
JohnJ.Goggins
20%
25%
26%
27%
23%
67%
53%
53%
50%
50%
% that is
At Risk(2)
87%
78%
79%
77%
73%
TotalTargetDirectCompensationisthesumofthebasesalary,targetannualcashincentiveandgrantdatefairvalueofequityawards.
(2)
Includesannualincentivetargetawardamountandtargetequitygrant.
Name
2014 Base
Salary
Base Salary
2015 Base
Salary
Percentage
Change
RaymondW.McDaniel
$1,000,000
$1,000,000
0%
LindaS.Huber
591,000
609,000
3.05%
MichelMadelain(1)
488,093
502,839
3.02%
MarkE.Almeida
507,000
522,000
2.96%
JohnJ.Goggins
487,000
502,000
3.08%
(1) Mr.MadelainscompensationfiguresareshowninthetableinU.S.dollars.However,certainelementsofhiscompensationwerepaidinBritish
poundssterling.Anexchangerateof1.4746fromTheFederalReserveBankasofDecember31,2015wasusedtocalculatetheU.S.dollaramount.
Forthepurposeofcomparing2014BaseSalaryto2015BaseSalary,thesameexchangerateasofDecember31,2015hasbeenused.
Annual Cash Incentives
EachNEOhasanannualcashincentivetargetthatcanbeearnedbaseduponperformanceagainstbothfinancialandindividualoperationalobjectives.Cash
incentivesfor2015werepaidoutat87.4%to133.2%oftargetbaseduponfinancialandindividualperformanceandtheresultsofanInstitutionalInvestor
Satisfactionsurvey.
Process for Determining Annual Cash Incentives
Funding
of
Cash
Incentive
Pool
.ThecashincentivepoolisfundedbasedontheCompanysfinancialperformanceagainstitsgoals.For2015,goals
weresetequaltobudget.ThetargetperformancegoalsthattheCommitteesetsareintendedtomotivateperformancebybeingaspirationaland
challenging,butachievable.WhentheCommitteesettheNEOstargets,themembersbelievedthatexceedingthetargetswouldrequireextraordinary
effortsindividuallyandcollectivelybytheNEOs.Therefore,inordertoreceivethemaximumcashincentivepayments,managementwouldhaveto
exceedtargetsbyapproximately20%,reflectingextraordinaryperformance.For2015,fundingofthecashincentivepoolwasbasedonacombination
ofCompanyoperatingincome,MoodysAnalyticsoperatingincome,MoodysInvestorsServiceoperatingincomeandEPSgoalsrelativetotarget;
theweightingofeachmeasurediffereddependingontheindividualsareaofresponsibility.Companyoperatingincome,MIS
33
Table of Contents
andMAoperatingincome,andCompanyEPSgoalsserveasthebasisfortargetsinorderforcashincentivepayoutstoreflectachievementagainst
expectationsforprofitability.Forcompensationfundingdeterminations,theCompanysEPSwasadjustedforforeignexchangerates,acquisitionrelatedcostsandlegacytaxitems(EPS).TheNEOcashincentivepoolfor2015wasfundedat96.3%duetothefactthatCompanyEPSandMA
operatingincomeexceededtargetswhereastheoperatingincomeoftheCompany,MISandCopalAmbamissedtargetsby2.3%,3.5%and22.7%,
respectively.TheperformancegoalsandresultsaredescribedbelowunderCompanyPerformance.
Adjustment
to
Cash
Incentive
Pool
.Afterthecashincentivepoolisfunded,theCommitteecanmakeadjustmentstotheformulaicpayoutpercentage
basedontheresultsofafixed-incomeInstitutionalInvestorSatisfactionSurveyconductedonbehalfoftheCompanybyanindependentthirdparty.
TheresultsofthatsurveyaredescribedbelowunderInstitutionalInvestorSatisfaction.For2015,theNEOcashincentiveformulaicpayout
percentagewasadjustedupwardby10%ofaggregatebonustargetsbasedonimprovedInstitutionalInvestorSatisfactionSurveyresults.Thisresulted
intheNEOcashincentivepoolbeingfundedat106.3%.
Allocation
of
Cash
Incentive
Pool
.TheamountofcashincentivefundingawardedtoeachindividualNEOisdeterminedbaseduponanassessmentof
thatindividualsperformanceagainstqualitative,largelyoperationalobjectivesestablishedfortheyear.ThesearedescribedbelowunderIndividual
Performance.
Peer
Group
ComparisonMaximum
and
Minimum
Funding.
Forthe2015planyear,maximumincentivefundingopportunitywas200%oftarget.
Performancebelowanestablishedthresholdwouldresultinnofunding.
TheCommitteecontinuestoberigorousinitsoversightofincentivemetrics,goalsandtherelationshipbetweenperformanceandpay.
WithassistancefromtheCommitteescompensationconsultant,Meridian,theCommitteeconductedareviewin2015oftheperformance
intervalsandpayoutcurvesthattheCompanyutilizesforitscashincentiveplan.
ThisreviewconfirmedthattherelationshipbetweenCompanyperformanceandcashincentivepayoutsismoredemandingthantypicalmarket
practice.Fortheupsideincentiveopportunityabovetarget,theCompanyspayoutatmaximumperformancelevels(whichinrelationtotarget
opportunityisdirectlyinlinewithmarketpractice)generallyrequireshigherperformanceimprovementthanitspeersandthegeneralindustry
require.
ForthedownsideopportunitybelowtargetattheCompany,therelationshipbetweentargetperformanceandperformanceatthresholdis
generallyalignedwithpeersandgeneralindustrypractices;however,minimumpayoutatthresholdperformancerelativetotargetbonusis
generallylowerthantypicalminimumpayouts.
34
Table of Contents
oftheCompany),and20%basedonCopalAmbasoperatingincome,duetoherresponsibilityinleadingCopalAmbaandthedesiretoconnecther
directbusinessunitresponsibilitieswithherannualincentivecompensation.
Name
RaymondW.McDaniel
LindaS.Huber
MichelMadelain
MarkE.Almeida
JohnJ.Goggins
MCO Operating
Income
MA Operating
Income
MIS Operating
Income
50%
40%
25%
25%
50%
50%
50%
Copal
Amba Operating
Income
EPS
20%
50%
40%
25%
25%
50%
For2015,performancein-linewiththeCompanysbudgetforoperatingincomeandEPSwouldresultin100%fundingofthetargetcashincentive
pool.Forthe2015planyear,maximumincentivefundingopportunitywas200%oftarget.Performancebelowanestablishedthresholdwouldresultin
nofunding.
Forthepurposesofdeterminingincentivecompensationfunding,certainadjustmentsaremadetotheCompanysreportedresults.Suchadjustments
thatimpacted2015fundingwereforeignexchangerates,acquisition-relatedcosts,legacytaxitemsandtheCEOdiscretionarybonuspool.
MoodysoperatingincomeandEPSgoalsfor2015were$1,519.6millionand$4.60(growthof5.6%and9.3%),respectively.Forthepurposesof
determiningincentivecompensationfunding,operatingincomeandEPSwere$1.486.3millionand$4.64,respectively(reflectinggrowthof3.3%and
10.2%,respectively).
TheMIS,MAandCopalAmbaoperatingincomegoalswere$1,296.7million,$191.4millionand$31.5million,respectively.Forthepurposesof
determiningincentivecompensationfunding,operatingincomeresultswere$1,253.3millionforMIS,$209.0millionforMAand$24.0millionfor
CopalAmba.
Performance Metric
MCOOperatingIncome
MISOperatingIncome
MAOperatingIncome
CopalAmbaOperatingIncome
EPS
Threshold Funding
$
$
$
$
$
1,303.7million
1,112.5million
164.7million
26.6million
3.97
Target Funding
$
$
$
$
$
1,519.6million
1,296.7million
191.4million
31.5million
4.60
Maximum Funding
$
$
$
$
$
1,807.4million
1,542.2million
227.1million
38.0million
5.44
Plan Performance
$
$
$
$
$
1,486.3million
1,253.3million
209.0million
24.0million
4.64
35
Table of Contents
fundingoftheannualcashincentiveprogrambyupto10%basedonachievementsversustheCompanyscustomervaluegoals.
TheCompanysinstitutionalinvestorgoalsfor2015wereconsistentwith2014.Thetwoprimarygoalsweremanagementsabilityto(i)continueto
enhancepositiveinvestorimpressionsofMoodysproductsandservicesand(ii)reducelessfavorableimpressionsoftheCompanyinthemarketplace.
ThesurveyresultsdonotproduceadirectnumericaladjustmentbytheCommittee.Rather,theCommitteecompletesasubjectiveanalysisof(i)the
degreetowhichpositiveimpressionsincreasedandnegativeimpressionsdecreasedversusthepreviousyear;and(ii)thedegreetowhichthe
impressionsofMoodysweremeaningfullydifferentrelativetotheimpressionsofMoodyscompetitorsincludedinthesurvey.For2015,the
Committeeadjustedthecashincentivepoolupwardby10%,reflectingoverallsurveyresultsthatimprovedversustheCompanysprioryear
performance.
Mr.
McDaniel
:TheCommitteedetermined,basedonMr.McDaniels(i)contributionstotheCompanysEPSandoperatingincome
performance,(ii)managingregulatoryprocessesandinitiatives,sothatMIScancontinuetooperateindependentlyandsuccessfully,
(iii)coordinatingmanagementofandcommunicationoflitigationriskwithmarketparticipantsandemployees,(iv)supportinggrowthand
diversificationoftheCompanysbusinessbyadvancingMAsstrategicthinkingandtheintegrationofnewlyacquiredentities,(v)continuing
improvementofinvestorsatisfactionresultsand(vi)improvingoveralloperatingeffectivenessbyenhancingworkforcequalityand
productivity,topayMr.McDaniel106.7%ofhistargetannualcashincentive.
Ms.
Huber
:TheCommitteedetermined,basedonMs.Hubers(i)contributionstotheCompanysfinancialperformance,includingthe
CompanysEPSperformancethatforthepurposesofdeterminingincentivecompensationfundingexceededEPSgrowthtargetsby1.0%,but
alsoincludedmissingCompanyoperatingincomeandCopalAmbaoperatingincometargetsby2.3%and22.7%,respectively,
(ii)coordinationofoutreachrelatingtoMoodysratingsandfinancialperformanceandco-managementofcommunicationinitiatives,
(iii)successfulcompletionofapublicdebtofferingof500millionaggregateprincipalamountof1.75%seniorunsecurednotesdue2027and
of$300millionaggregateprincipalamountof5.250%seniorunsecurednotesdue2044,(iv)executionofasuccessfulsharerepurchase
programandmanagementofbudgetandtheCompanyscapitalpositionwhilemaintainingfinancialflexibility,(v)contributionstoproduct
andbusinessdevelopment,(vi)focustoimproveoperationalefficiencyandworkforceeffectiveness,and(vii)riskmanagementwithrespectto
ITassets,dataprotectionandinformationsecurityprogramsaswellasenhancementofITgovernanceframeworks,topayMs.Huber87.4%
ofhertargetannualcashincentive.
Mr.
Almeida
:TheCommitteedetermined,basedonMr.Almeidas(i)contributionstoMAsoperatingincomeandCompanyEPS
performancethatforthepurposesofdeterminingincentivecompensationexceededMAsoperatingincomeandCompanyEPSgrowthtargets
by9.9%and1.0%,respectively,butalsoincludedmissingCompanyoperatingincometargetby2.3%,(ii)continuedworkonenhancingMAs
productportfolio,meetingcustomerdemandforanalyticandinsighttools,businessdevelopmentandpositioningMAforgrowth,
(iii)integrationofWebEquity,(iv)focusonensuringcompliancewithcorporatepoliciesandcompliantinternalauditresults,(v)enhancement
ofproductqualityandservice,(vi)contributionstothepromotional
36
Table of Contents
campaignforMAwithCompanystockholders,inanefforttoeducatetheinvestorpopulationabouttheworkandstrengthsofMA,(vii)focus
oncybersecurity,and(viii)continueddevelopmentoftheMAorganizationalcultureandattentiontoachievingcollaborationacrossMAand
amongindividualbusinessunits,emphasizingvaluescustomerfocus,innovation,commercialeffectivenessandoperationaleffectiveness,and
thedevelopmentofemployees,topayMr.Almeida133.2%ofhistargetannualcashincentive.
Mr.
Madelain
:TheCommitteedeterminedthat,basedonMr.Madelains(i)contributionstotheCompanysEPSperformancethatfor
purposesofdeterminingincentivecompensationfundingexceededEPSgrowthtargetsby1.0%butalsoincludedmissingMISoperating
incomeandCompanyoperatingincometargetsby3.5%and2.3%,respectively,(ii)continuedworktomaintainandenhanceratingsquality,
(iii)implementationofinitiativesrelatingtooperatingeffectiveness,(iv)focusonworkforceeffectiveness,(v)supervisionoftheeffective
implementationoftheglobalregulatoryframeworks,(vi)focusonbusinessdevelopmentandgrowthinitiatives,and(vii)fosteringofrisk
awarenessregardingcyberrisk,topayMr.Madelain99.6%ofhistargetannualcashincentive.
Mr.
Goggins
:TheCommitteedeterminedthat,basedonMr.Goggins(i)managementoftheCompanyslegalriskandallmateriallitigation
mattersandgovernmentalinvestigations,(ii)mitigationofcontingentliabilitiesforproductsandservices,(iii)coordinationwithmarket
participantsaboutregulatoryaffairsandengagementwithregulatorsandlegislatorsglobally,(iv)managementofallkeycomponentsofthe
Companyscompliancefunctionandpreparationforexaminationsbyregulatorybodies,and(v)supportofMISandMAbusinessinitiatives,
topayMr.Goggins106.7%ofhistargetannualcashincentive.
Name
RaymondW.McDaniel
$
1,500,000
$
3,000,000
$
1,600,500
LindaS.Huber
708,000
1,416,000
618,500
MichelMadelain(1)
601,637
1,203,274
598,983
MarkE.Almeida
624,000
1,248,000
830,900
JohnJ.Goggins
414,000
828,000
441,700
(1) Mr.MadelainscompensationfiguresareshowninthetableinU.S.dollars.However,certainelementsofhiscompensationwerepaidinBritishpounds
sterling.Anexchangerateof1.4746fromTheFederalReserveBankasofDecember31,2015wasusedtocalculatetheU.S.dollaramount.
Long-Term Equity Incentive Compensation
2015 Long-Term Equity Incentive Mix
For2015,equitygrantsweremadeinFebruarybasedupontheCommitteesevaluationof2014performanceandthelevelofeachNEOsTargetTotalDirect
Compensationincomparisontothepeergroupandthebroaderfinancialservicesindustry.In2015,theaggregatelong-termequitycompensationawardsgranted
fortheNEOgroupinFebruarywerebetweenthe25thand50thpercentileofexecutivesinthepeergroup.Since2010,long-termequitygrantshavebeenawarded
intheformofstockoptionsandthree-yearperformanceshares.For2015,theCommitteedeterminedthat,foralloftheNEOs,60%ofgrantdateequityvalue
wouldcontinuetobegrantedintheformofperformance-basedsharesinordertomaintaintheNEOsfocusonfinancialandnon-financialperformance.The
remaining40%ofthegrantdateequityvaluewouldcontinuetobegrantedinstock
37
Table of Contents
options.TheCommitteedeterminedthecontinuedfocusonsharepriceappreciationalignstheNEOswithMoodysstockholders.Inmakingthesedecisions,the
Committeealsoconsideredtheneedtomanagethenumberofsharesusedtodeliverequityawards,andtoallowtheCompanytomeasureandtobalanceincentives
basedonfinancialandoperationalgoalswithrewardsthataretiedmoredirectlytoshareholdervalue.Furthermore,theCommitteemaintainedthemaximum
payoutforthethree-yearperformanceshareplanat225%ofthetargetnumberofperformancesharesgrantedasitwasdeterminedthatthiswouldincentforstretch
performance.
Stock options. Stockoptionsvestbasedoncontinuedserviceoverfouryearsinannual25%increments,whichmeans(i)executiveswillrealizevaluefrom
theirawardsonlyifthemarketpriceoftheCompanysstockappreciatesabovetheoptionsexercisepriceaftertheoptionshavevestedand(ii)executivesare
motivatedtoremainwiththeCompanyduetothemulti-yearvestingschedule.TheCommitteebelievesthatbecausevalueisrealizedonlyiftheCompanysstock
pricerises,stockoptionsareperformance-basedcompensation.Stockoptionsexpiretenyearsafterthegrantdate.
Performance shares . Theperformanceshareswillbeearnedfollowingthecompletionofathree-yearperformanceperiodifcertaincumulativeperformance
goalsareachievedorexceeded.Thenumberofperformancesharestreatedasvestedandthecorrespondingnumberofsharesactuallyissuedtoanemployeeas
payoutattheendofthethreeyearperformanceperiodmaybelessthanthenumberdeterminedbytheperformancegoalformulaatthediscretionofthe
Committee.Forthe2015-2017performanceperiod,aggregateEBITDA(includingfutureacquisitions,ifany),MISsratingsaccuracyperformanceandaggregate
MAsSalesservedastheperformancethresholds.TheCommitteedecided,basedontherecommendationoftheCEO,tomaintaintheperformancemetricof
CompanyprofitabilitysothatitwouldbemeasuredbyEBITDA(includingfutureacquisitions,ifany).ItwasdeterminedthattheuseofEBITDA,insteadofEPS
whichwasoneofthemeasuresusedpriorto2012,betteralignsmanagementincentiveswiththeCompanysstrategyintheeventacquisitionsaremade.The
CommitteealsodecidedthattheimpactofMAacquisitionswouldcontinuetobeincludedwhenmeasuringMASales,withacquiredsalesreceivingalower
weightingthanorganicsales.In2010and2011,acquisitionswerenotincludedinMASalestargetsandthereforenotincludedinthefinalMASalesmeasurement.
MISratingsaccuracycontinuedtobeusedasaperformancemetric.Thesethreemetricswerechosenbecausetheyincentivizemanagementtoconsiderthelong
andmedium-termimpactofbusinessdecisionsandthemetricsprovideabalanceoffinancialandoperationalfactorsforbusinesssuccess.Theweightsofthese
threeperformancegoalsvarydependingoneachNEOsroleandresponsibilities.Theweightingofeachperformancemeasurediffersbasedonthecorporateentity
inwhicheachNEOoperates,asreflectedinthetablebelow:
Performance Measure
MIS
Michel Madelain
MCOProfitability
MISRatingsPerformance
MASales
50%
50%
0%
MA
Mark E. Almeida
MCO/Shared Services
Raymond W. McDaniel
Linda S. Huber
John J. Goggins
50%
0%
50%
60%
20%
20%
TheCommitteebelievestheseweightstobeappropriatebasedontheindividualsmoredirectinvolvementwithcertaincorporateentities.AllNEOshavean
incentivetocontributetotheoverallCompanysprofitability,whileMr.MadelainsandMr.AlmeidasperformancesharesaremoredirectlytiedtotheMISand
MAentitiesthattheyoperate,respectively.
2015 Long-Term Equity Incentive Grant Levels. IndeterminingthevalueofequitygrantedtotheNEOs,inadditiontotheitemsnotedinthefollowing
paragraph,theCommitteeconsideredtheshareutilizationpracticesoftheCompanyspeergroupandendeavoredtobalancealigningtheinterestsofNEOswith
stockholderswhilealsomotivatingtheNEOstoimprovetheCompanyscurrentmarketposition.Asaresult,theCommitteerecommended(basedona
recommendationfromtheCEO,otherthanwithrespecttohisownpay),andtheBoardapproved,equitygrantscomprisedofstockoptionsandperformanceshares,
withtheaverageindividual
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Table of Contents
NEOgrantvalueincreasingapproximately14%higherthantheindividualNEOgrantsin2014,inordertobringequityawardvaluesmoreinlinewithmedian
marketlevels.The2015equitygrantlevelforeachNEOwaswithinorsomewhatbelowthe50thpercentilecompetitiverangeofthepeergroupandfinancial
servicesindustrydata.TheNEOsindividualawardsarereportedintheGrantsofPlan-BasedAwardsfor2015tableonpage51.
BecausetheannualgrantsaremadeinFebruary,eachindividualawarddeterminationconsidered(i)theCompanys2014performance,(ii)theNEOsrolein
thatperformance,includingtheachievementofindividualgoalsdescribedaboveinAnnualCashIncentives,and(iii)retentionobjectivesforthatNEO.The
awardsareintendedtoaligntheinterestsofNEOswiththoseoftheCompanysstockholders.Annualawardsaredeterminedbyanexaminationofthepresent
periodaswellasbyconsideringexpectationsofthefuture.
2013-2015 Performance Share Payouts
The2013-2015performanceperiodforperformancesharesgrantedin2013endedonDecember31,2015,withtheNEOsreceivingbetween93.4%and
97.5%oftheirperformancesharetargetamountsbasedontheCompanysresults.Theweightingthatwasassignedtoeachofthethreeperformancegoalsatthe
timetheperformanceshareswereoriginallygrantedvarydependingoneachNEOsroleandresponsibilities.Thethreshold,targetandmaximumperformance
goals,aswellasactualresults,fortheProfitabilityandMASalesperformancecriteriaaresetforthinthetablebelow.MISRatingsPerformanceisevaluatedbased
oninternallydevelopedmetricsthatareproprietaryandcompetitivelysensitive,andthereforearenotdisclosedinthetablebelow.Thethreshold,targetand
maximumMISRatingsPerformancegoalsweresettoreflectadegreeofdifficultythatwascomparabletothestandardappliedinsettingtheperformancegoalsfor
theothercriteria,withtargetperformancelevelsbeingdifficultbutobtainable,basedonhistoricalresultsunderthismetric.
2013-2015 Performance Share Metrics
Threshold
Target
Maximum
Actual Performance
Profitability(EBITDA)
(includingacquisitions)($inmillions)
MASales
(includingacquisitions)($inmillions)
$ 3,835
$4,511
$ 5,301
4,506
$ 2,830
$3,216
$ 3,730
3,302
Asaresultofthelevelofperformancethatwasachieved,thenumberofsharesthatvestinMarch2016(subjecttocontinuedservicethroughthevesting
date)foreachNEOrelativetothetargetnumberofsharesgrantedisreflectedinthetablebelow:
Name
RaymondW.McDaniel
LindaS.Huber
MichelMadelain
MarkE.Almeida
JohnJ.Goggins
2013-2015 Performance
Share Award at Target
(# of shares)
2013-2015 Performance
Share Award to Vest
(# of shares)
48,460
15,559
14,137
13,142
9,214
46,619
14,968
13,204
12,813
8,864
TheNEOsindividualperformanceshareawardsarereportedintheOutstandingEquityAwardsatFiscal-YearEndTableFor2015onpage52.
39
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The Role of the Governance and Compensation Committee, Its Consultant and Management
TheCommittee,whichiscomprisedentirelyofindependentdirectors,hasresponsibilityforoversightoftheCompanyscompensationprogramandhasfinal
authorityforevaluatingandsettingcompensationforNEOs.Toassistinthisprocess,itconsidersrecommendationsmadebytheCEO(exceptwithrespecttohis
owncompensation)andusesmarketdataandanalysesthattheCommitteescompensationconsultantprovidesinordertohelpformulatetargetcompensation
levels.TheCommitteehasengagedMeridianCompensationPartnersLLC,anindependentcompensationconsultingcompany,toadvisetheCommitteeonmatters
relatedtoexecutiveanddirectorcompensation.MeridianisengageddirectlybyandreportstotheCommittee.Meridiandoesnotofferorprovideanyotherservices
totheCompanyandtheCommitteedeterminedthattheretentionofMeridianhasnotraisedanyconflictsofinterest.
TheCommitteesindependentconsultantreviewedananalysisoftheannualcomparisonoftheelementsofMoodysexecutivecompensationstructureand
practicestothoseoftheCompanyspeergroup,assetforthbelow,andthebroaderfinancialservicesindustry.Basedonitsreview,theconsultantconcludedthat
theCompanysexecutivecompensationprogramstructureisconsistentwithindustrypractices.
Determining Compensation Levels
Peer and Market Review
TheindependentcompensationconsultantannuallyreviewsthepeergroupwiththeCommittee.Basedontheconsultantsreview,managementrecommends
andtheCommitteemayapprovechangestothepeergroup.Asaresultofthe2015review,FederatedInvestors,Inc.andMorningstarInc.werebothremovedfrom
thepeergroupwhileFiservInc.andFidelityNationalInformationServiceswerebothaddedtothepeergroup.Thechangestothepeergroupweredeemedtobe
appropriateinregardstothesize,revenueandmarketcapitalizationofMoodysCorporation.For2015,thepeercompanieswere:
CMEGroupInc.
Dun&BradstreetCorp.
EatonVanceCorp.
EquifaxInc.
FactSetResearchSystemsInc.
FidelityNationalInformationServices
FiservInc.
GartnerInc.
IHSInc.
IntercontinentalExchange,Inc.
InvescoLtd.
McGraw-HillFinancialInc.
MSCI
NASDAQOMXGroupInc.
NielsenHoldingsN.V.
Price(T.Rowe)Group
SEIInvestmentsCo.
ThomsonReutersCorp.
VeriskAnalytics,Inc.
Thisgroup,theCommitteebelieves,appropriatelyreflectsthecompanieswithwhichMoodyscompetesforbusinessandexecutivetalent.Thisgroupalso
appropriatelyreflectsthecompaniesagainstwhichMoodysfinancialperformanceismeasured,asitincludesfirmsthat:
Provideanalyticsproductsandservicesinadditiontocreditriskanalysis;
Providecompanyandindustrycreditresearchandbusinessinformationservices;
Hadmedianrevenueof$3.1billion(Moodys2014revenueequaled$3.3billion);and
Hadamedianmarketcapitalizationof$10.6billionasofDecember31,2014(Moodysmarketcapitalizationequaledapproximately$19.5billionas
ofDecember31,2014).
TheCommitteecontinuallyseekstoimprovethecriteriauponwhichthepeergroupisselected.TheCommitteereviewedthepeercompanyselectioncriteria
andaspartofthatreviewestablishedanewrevenuethresholdfornon-financialcompanies.Inadditiontoreviewingcompensationpracticesandpaylevelswithin
theCompanyspeergroup,theCommitteelooksatthebroaderfinancialservicesindustryscompensationdatafurnishedbymanagementscompensation
consultant,AonHewitt,andreviewedbytheCommitteesconsultant.ThisadditionalcompensationdataisbasedonAonHewittssurveydatafromapproximately
twenty-fivecompaniesandisusedonlyforreferencewhenevaluatingpayfortheCompanysNEOs.
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MeridianprovidedtheCommitteeandmanagementwithtotaldirectcompensationdatafromthesecomparisongroupsalongwithanalysesofeachelement
ofcompensation.Thecomparisongroupsinformationisreviewedinquartileranges,beginningwiththe25thpercentile.In2015,thetargetedtotaldirect
compensationopportunityinaggregatefortheCEOindividuallywasatthe25thpercentileand,fortheNEOsasagroup,betweenthe25thpercentileandthe50th
percentileascomparedtothepeergroup.TheCommitteeperiodicallybenchmarksbenefitsandperquisitesandbelievesbenefitstobein-linewithmarketpractice
andperquisitestobebelowcurrentmarketpractice.
Compensation Philosophy
TheCompanyscompensationphilosophygenerallyistotargetthe50thpercentileforbasesalary,targetannualincentives,long-termincentivesandtarget
totalcompensation.TheCompanyhasalsofoundthattargetingthe50thpercentilerangehasallowedittoretainkeytalentandremaincompetitiveinthe
marketplace.However,anexecutivespositioningagainstmarketmaybeaboveorbelowourtargetpositioningbasedonanumberoffactorsspecifictothe
individual,includingperformance,marketconditionsandtheuniquenatureofMoodysbusiness.
MarketdataisjustoneofthereferencepointsusedbytheCommitteewhenestablishingtargetedtotaldirectcompensation.TheCommitteealsoreviews
eachNEOs:
skills,
experience,
tenure,and
performanceduringtheprioryear.
Thesefactorscontributetovariationsinactualandtargetcompensationlevels.BasedontheCommitteesanalysisoftheabove,andconsiderationofa
recommendationfromtheCEO(otherthanwithrespecttohisowncompensation),theCommitteeestablishesatargetedtotaldirectcompensationlevelforeach
NEOthatitbelievesiscompetitive.
Chief Executive Officer Compensation
TheCommitteebeginsitsanalysisoftotaldirectcompensationfortheCEObyanalyzingthecompensationofexecutiveofficersatcompaniesincludedinits
peergroup,aswellasinthebroaderfinancialservicesmarket.ItalsoreviewstheCEOspaywithrespecttotheotherNEOs.InlightoftheCEOsbroad
responsibilitiesrequiringoversightoftheentireorganizationandbasedontheachievementsdetailedonpage36underIndividualPerformance,theCommittee
determinedthatahighertotaldirectcompensationpackagewaswarrantedascomparedwiththeotherNEOs.
ThemixofMr.McDanielstotaldirectcompensationpackagehaschangedinrecentyears.From2007through2010,hisbasesalarywassetat$936,000.
Thissalarywasmaintainedataconsistentlevelinordertoreducethefixedportionofhistotaldirectcompensationandincreasetheat-riskpercentageofhistotal
directcompensation.In2011,theCommitteedeterminedthata2%basesalaryincrease,alongwitha2%incentivecompensationtargetincrease,wereappropriate
forMr.McDanielinordertomovehistotaldirectcompensationmoreinlinewiththe50thpercentileofthepeergroupandinrecognitionofthefactthathehad
nothadasalaryincreaseinthreeyears.TheCommitteedeterminedthatbasesalaryincreasesof2.7%,0%and0%wereappropriateforMr.McDanielin2013,
2014and2015,respectively,inordertokeephistotaldirectcompensationinlinewithcompetitivebenchmarks.
Intermsofhisequitygrants,40%ofMr.McDaniels2015equityawardwascomprisedofstockoptionsand60%wascomprisedofperformanceshares.
Mr.McDanielstargetatriskcompensationwasapproximately87%.ThisincreasewasduetotheCommitteesobjectiveofbetteraligningtheCEOs
compensationwithlong-termCompanyperformance.
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Inaddition,thefollowinggraphscomparethetotaloneandthreeyearcumulativestockholderreturnsoftheCompanytotheperformanceofStandard&Poors
Stock500CompositeIndex.
42
Table of Contents
ThecomparisonsincludedintheMCOStockTotalReturngraphsaboveassumethat$100.00wasinvestedintheCompanyscommonstockandintheS&P
500CompositeIndexonDecember31,2014andDecember31,2012.Thecomparisonalsoassumesthereinvestmentofdividends,ifany.The1-yeartotalreturn
forthecommonstockwas6.13%duringtheperformanceperiodascomparedwithatotalreturnduringthesameperiodof1.38%fortheS&P500Index.The3yeartotalreturnforthecommonstockwas107.59%duringtheperformanceperiodascomparedwithatotalreturnduringthesameperiodof52.51%fortheS&P
500Index.
Ascomparedtoitspeergroup,MoodysTotalShareholderReturn(definedastheannualizedrateofsharepriceappreciationplusthereinvestmentof
dividends)wasinthe38thpercentileamongthepeersfortheone-yearperiodendingDecember31,2015andinthe66thpercentileforthethree-yearperiodending
December31,2015.
Thorough Committee Analysis. TheCommitteeundertookanextensiveanalysisofCEOpayin2015inordertoevaluatewhetherthecompensation
structurecontinuestobeappropriate.
TheCommitteereviewedthealignmentbetweenMr.McDanielspayandCompanyperformanceforthethree-yearperiodrangingfrom2012through
2014.WiththeassistanceoftheCommitteesadvisor,Meridian,theCommitteeassessedtherelationshipbetweenMr.McDanielsrealized/realizable
compensationandtheCompanysperformanceacrossarangeofprofitability,growthandreturnmetricsforthethree-yearperiodrelativetothe
Companyspeergroup.
TheCommitteereviewedthesensitivitybetweenpayoutopportunitiesunderMr.McDanielslong-termincentivecompensationandtheCompanys
performancebymodelingavarietyofscenarioswithawidecombinationofsharepriceperformanceandpayoutoutcomes.Thiswasthencomparedto
thepayoutsensitivityoftheaveragemixoflong-termincentivecompensationfortheCompanyspeers.
TheCommitteeconcludedthattherelativepositioningofMr.McDanielstotalcompensationhasbeenwellalignedwiththeCompanysperformance
andthatthecombinedstructureoftheCompanysincentiveplansisappropriateandinkeepingwiththeCommitteesobjectivesfortheseprograms.
Mr.McDanielstargetedtotaldirectcompensationfor2015wasatthe25thpercentileascomparedtotheCompanyspeergroup.Hisactualtotaldirect
compensationwasbelowthemedianofthebenchmarkactualtotaldirectcompensationlevelsofthecomparativegroup.Inlightoftheindividualachievements
listedonpage36andthedescriptionofCompanyachievementsonpage27,theCommitteebelievesMr.McDanielstotaldirectcompensationpackagetobe
appropriate.
43
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44
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wheretherehasbeenareductionintheCompanysworkforceoreliminationofspecificjobs;
wheretheindividualsjobperformancehasnotmetexpectations(butdoesnotinvolveabasisforterminatinghisemploymentforcause);or
wheretheCompanyhasagreedwithanindividualthatitisinthemutualbestinterestsofthepartiestosevertheemploymentrelationship.
Whilehavingsuchaplaninplaceisinthebestlong-terminterestofstockholders,theplanisnotdesignedtorewardindividualswhohavenotperformedto
expectationsorwhohaveengagedinconductthatisdetrimentaltotheCompanyanditsstockholders,andtheplancontainsprovisionstosafeguardagainstthisby
providingthatnoseveranceispayablewhenterminationisforcause.
CTPbenefitsarebasedonpositionaswellastenureandaremorefullydescribedonpage58.
Change in Control Arrangements
OnDecember14,2010,theBoardofDirectorsapprovedtheadoptionoftheCICP.ThepurposeoftheCICPistoofferitsparticipants,whichincludethe
CompanysexecutiveofficersandotherkeyemployeesselectedbytheCommittee,protectionintheeventofaterminationofemploymentinconnectionwitha
ChangeinControl(asdefinedintheCICP).TheCICPhasbeenadoptedtoenhancethealignmentoftheinterestsofmanagementandstockholdersbyallowing
executivestoremainobjectivewhenfacingtheprospectofasaleandpotentialjobelimination.UndertheCICP,participantsareentitledtoseverancebenefits
triggeredonlyifaparticipantsemploymentisterminatedwithin90dayspriortoortwoyearsfollowingachangeincontroloftheCompanybytheCompanyorits
successorwithoutCause,orbytheparticipantforGoodReason(bothtermsasdefinedintheCICP)(i.e.,adouble-trigger).FortheCEO,severancebenefits
undertheCICPconsistofalumpsumcashpaymentequaltothreetimesthesumofhisbasesalaryandtargetannualincentivefortheyearoftermination,plus
threeyearsofcontinuedcoverageundertheCompanysmedicalanddentalinsuranceplans.Forotherexecutives,includingtheotherNEOs,theseverancebenefits
consistofalumpsumcashpaymentequaltotwotimesthesumoftheirbasesalariesandtargetannualincentives,plustwoyearsofcontinuedmedicalanddental
coverage.Executiveofficersarenotentitledtoreceive(eitherundertheCICPoranyotherarrangement)agoldenparachuteexcisetaxgross-upwithrespectto
changeincontrolbenefits.
Stock Ownership Guidelines
InJuly2004,Moodysadoptedstockownershipguidelinesforitsexecutives,includingtheNEOs,anditsnon-managementdirectors,encouragingthemto
acquireandmaintainameaningfulstakeintheCompany.TheseguidelineswererevisedinFebruary2008andagaininJuly2012toreflectnewmanagement
structures.Moodysbelievesthattheseguidelinesencourageitsexecutiveofficerstoactasowners,therebybetteraligningtheexecutivesinterestswiththoseof
theCompanysstockholders.
TheguidelinesareintendedtobalanceanofficersneedforportfoliodiversificationwiththeCompanysdesireforofficerstoholdanownershiplevel
sufficienttoassurestockholdersoftheindividualscommitmenttovaluecreation.
Executiveofficersareexpected,withinfiveyearsofappointmenttoofficerlevel,toacquireandholdsharesoftheCompanysCommonStockequal
invaluetoaspecifiedmultipleoftheirbasesalary(whichvariesbasedonposition).Ownershipisexpectedtobeincreasedinlinewithbasesalary
increases.
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Table of Contents
Thecurrentownershiplevelmultiples,asmostrecentlyadjustedin2012,are:(i)sixtimesbasesalaryfortheCEO,(ii)threetimesbasesalaryforthe
remainingNamedExecutiveOfficers,aswellasalldirectreportsoftheCEO,(iii)onetimesbasesalaryfortheremainingofficerssubjecttothe
guidelines,and(iv)fivetimestheannualcashretainerfornon-managementdirectors.
RestrictedsharesandsharesownedbyimmediatefamilymembersorthroughtheCompanystax-qualifiedsavingsandretirementplanscounttoward
satisfyingtheguidelines.
Stockoptions,whethervestedorunvested,donotcounttowardsatisfyingtheguidelines.
Unearnedperformancesharesdonotcounttowardsatisfyingtheguidelines.
In2012,aholduntilmetrequirementwasaddedforallindividualssubjecttothestockownershipguidelines.Thisrequiresexecutivestohold75%
ofnetsharesthattheyareawardeduntiltheirownershipmultipleismet,includingwhenanexecutivesholdingsnolongersatisfytherequired
ownershipmultipleduetoadeclineinstockprice.
AsofDecember,31,2015,eachoftheNEOswasincompliancewiththeguidelines.Theguidelinesforanindividualexecutiveofficermaybesuspendedatthe
discretionoftheBoardofDirectorsinsituationsthatitdeemsappropriate.
Anti-Hedging and Anti-Pledging Policy; Short Sales and Other Speculative Trades
Allexecutiveofficersanddirectorsaresubjecttoasecuritiestradingpolicyunderwhichtheyareprohibitedfromenteringintothefollowingtransactions
withrespecttoMoodyssecurities,includinganypubliclytradedsecuritiesofaMoodyssubsidiary:
makingshortsalesofMoodyssecurities;
engaginginspeculativetransactionsorenteringintoanytransaction(includingpurchasingforwardcontracts,equityswaps,putsorcalls)thatare
designedtooffsetanydecreaseinthemarketvalueoforareotherwisebasedonthepriceofMoodyssecurities;
pledgingMoodyssecuritiesascollateralforaloan;and
holdingMoodyssecuritiesinmarginaccounts.
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Table of Contents
WhileMoodysgenerallyseekstoensurethedeductibilityoftheincentivecompensationpaidtotheCompanysexecutives,theCommitteeintendstoretain
theflexibilitynecessarytoprovidecashandequitycompensationinlinewithcompetitivepractice.Inaddition,thereareambiguitiesinhowtheconditionsto
qualifyingasperformance-basedwillbeinterpretedandadministeredundertheincometaxregulations,sothatamountsthatMoodysintendsorexpectsto
qualifyasfullydeductiblemaynotsoqualify.Accordingly,thereisnocertaintythatelementsofcompensationdiscussedinthisproxystatementwillinfactbe
fullytaxdeductible.
47
Table of Contents
Bonus
($)(1)
Stock
Awards
($)(2)
$2,999,988
2,460,004
2,249,998
Option
Awards
($)(3)
$1,999,996
1,639,999
1,499,996
Non-Equity
Incentive Plan
Compensation
($)(4)
$
1,600,500
2,250,000
2,250,000
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(5)
$
1,425,428
6,741,699
1,341,861
All Other
Compensation
($)(6)
$
44,757
7,800
70,134
Total ($)
$ 9,070,669
14,099,502
8,411,989
Year
2015
2014
2013
Salary
($)
$1,000,000
1,000,000
1,000,000
LindaS.Huber
ExecutiveVicePresident
andChiefFinancialOfficer
2015
2014
2013
609,000
591,000
591,000
883,168
798,602
722,404
588,788
532,401
481,604
618,500
1,040,700
903,800
575,213
1,591,034
471,165
23,150
12,133
36,259
3,297,819
4,565,870
3,206,232
MichelMadelain(7)
PresidentandCOOof
MoodysInvestorsService
2015
2014
2013
502,839
515,632
548,599
752,423
690,017
656,381
501,595
460,006
437,601
598,983
854,142
896,819
57,510
63,185
91,126
2,413,350
2,582,982
2,630,526
MarkE.Almeida
PresidentofMoodysAnalytics
2015
2014
2013
522,000
507,000
507,000
691,167
634,173
610,183
460,811
422,785
406,801
830,900
989,300
715,200
207,432
359,998
60,695
32,844
40,565
30,070
2,745,154
2,953,821
2,329,949
JohnJ.Goggins
ExecutiveVicePresidentandGeneralCounsel
2015
2014
2013
502,000
487,000
487,000
552,580
467,993
427,806
368,389
312,003
285,200
441,700
600,000
602,500
691,676
1,741,722
532,279
18,161
11,699
26,506
2,574,506
3,620,417
2,361,291
(1)
TheamountsreportedintheBonuscolumnrepresentdiscretionarybonusespaidtotheNamedExecutiveOfficers.PaymentsundertheCompanysannual
cashincentiveprogramarereportedintheNon-EquityIncentivePlanCompensationcolumn.
(2)
TheamountsshownintheStockAwardscolumnrepresentthefullgrantdatefairmarketvalueofperformancesharegrants.Thefullgrantdatefairvalueis
basedonthefairmarketvalueofthestock,whichisdefinedasthearithmeticmeanofthehighandlowpricesoftheCommonStock.Allgrantsof
performancesharesweremadeundertheCompanys2001KeyEmployeesStockIncentivePlan(asamendedandrestatedonDecember11,2012,the2001
StockIncentivePlan).
OnFebruary11,2015,thefairmarketvalueoftheCommonStockwas$98.01andthefollowinggrantsofperformancesharesofCommonStockwere
receivedbyMr.McDaniel30,609,Ms.Huber9,011shares,Mr.Madelain7,677shares,Mr.Almeida7,052shares,andMr.Goggins5,638shares.
TheseperformanceshareawardsaresubjecttoperformancemetricsofEBITDA,MAssalesgrowthandMISsratingsqualityduringthethreecalendaryear
periodendingDecember31,2017.Becausetheachievementornon-achievementoftheseperformancemetricsdependsupontheoccurrenceoffutureevents,
theactualfinalpayoutoftheseperformanceshareawardsarenotknownatthistime.Assuch,thetotalgrantdatefairvalueoftheperformancesharesis
calculatedusingthetargetnumberofsharesunderlyingtheseawardsandthepersharegrantdatepriceonthedateofgrantof$98.01.Nocashdividendswill
bepaidwhentheunderlyingsharesvest.
Atmaximumachievement,thegrantdatefairvalueoftheawardswouldhavebeen225%oftheamountreportedforeachexecutive,orforMr.McDaniel
$6,749,973,Ms.Huber$1,987,128,Mr.Madelain$1,692,952,Mr.Almeida$1,555,126,andMr.Goggins$1,243,305.
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Table of Contents
(3)
TheamountsshownintheOptionAwardscolumnrepresentthefullgrantdatefairvalueofnon-qualifiedoptionsgrantedineachyearindicated.The
February11,2015grantdatefairvalueforstockoptionsisbasedontheBlack-Scholesoptionvaluationmodel,applyingthefollowingassumptions:astock
priceof$98.01;astock-pricevolatilityfactorof39.35%;arisk-freerateofreturnof1.88%;adividendyieldof1.39%;andanexpectedtimeofexerciseof
6.9yearsfromthedateofgrant.TheFebruary12,2014grantdatefairvalueforstockoptionsisbasedontheBlack-Scholesoptionvaluationmodel,
applyingthefollowingassumptions:astockpriceof$79.55;astock-pricevolatilityfactorof41.17%;arisk-freerateofreturnof2.30%;adividendyieldof
1.41%;andanexpectedtimeofexerciseof7.2yearsfromthedateofgrant.TheFebruary13,2013grantdatefairvalueforstockoptionsisbasedonthe
Black-Scholesoptionvaluationmodel,applyingthefollowingassumptions:astockpriceof$46.43;astock-pricevolatilityfactorof42.61%;arisk-freerate
ofreturnof1.53%;adividendyieldof1.72%;andanexpectedtimeofexerciseof7.2yearsfromthedateofgrant.TheBlack-Scholesmodelispremisedon
theimmediateexercisabilityandtransferabilityoftheoptions,neitherofwhichappliestotheoptionssetoutinthetableabove.Theactualamountsrealized,
ifany,willdependontheextenttowhichthestockpriceexceedstheoptionexercisepriceatthetimetheoptionisexercised.
(4)
TheamountsreportedintheNon-EquityIncentivePlanCompensationcolumnrepresenttheamountsearnedbytheNamedExecutiveOfficersfor2015,
2014and2013undertheCompanysannualcashincentiveprogram.Theamountsfor2015,2014and2013wereactuallypaidonMarch4,2016,March4,
2015andMarch5,2014,respectively.Foradescriptionofthisprogram,seeAnnualCashIncentivesintheCD&Aonpage33.
(5)
TheamountsreportedintheChangeinPensionValueandNonqualifiedDeferredCompensationEarningscolumnrepresenttheaggregatechangeduring
2015intheactuarialpresentvalueoftheNamedExecutiveOfficersaccumulatedbenefitsundertheCompanysRetirementAccount,PensionBenefit
EqualizationPlan,andSEBP.Foradescriptionoftheseplans,seethePensionBenefitsTableonpage54.Thechangeintheactuarialpresentvalueyearover
yearislargelydrivenbytheimpactontheSEBPcomponentofthefollowingvariables:oneadditionalyearofserviceandpay;onelessyearofdiscounting
inthepresentvaluecalculation;andannualassumptionchanges(suchasthediscountrateormortalityassumption).TheChangeinPensionValueforeach
oftheNEOsfor2015haveincreasedsincetheyear-end2014proxydisclosures,dueinparttochangesintheactuarialassumptions.Thediscountrateforthe
RetirementAccount,PBEPandSEBPthatisthebasisfortheproxycalculationsincreasedduring2015to4.25%,3.70%and3.40%,respectively.Whilethe
3SEBPparticipantscontinuedtohaveanincreasetotheirfinalaveragepay,thegrowthinfinalaveragepaywassignificantlylessthanatyear-end2014.
Mr.McDanielsfinalaveragepayincreasedbyapproximately$180,000,increasinghisannualtargetSEBPbenefitbyapproximately$100,000.Similar
changesoccurredforMs.HuberandMr.Goggins,butweresmaller.ThePBEPandSEBPplanscomplywithSection409AoftheInternalRevenueCode.
SEBPparticipantselectedeitheranannuityoralumpsumformofpaymentthatwillapplyatretirement,andthePBEPwasamendedsoitwillautomatically
providelumpsumdistributionstoterminatedparticipantsatthelaterofage55orsixmonthsfollowingterminationfromMoodys.TheSEBPwasclosedas
ofJanuary1,2008tonewparticipantsandtheonlyNEOswhoparticipateintheplanareMr.McDaniel,Ms.HuberandMr.Goggins.Theseamountsdonot
includeanynon-qualifieddeferredcompensationearningsastherewerenoabovemarketearningsfortheNEOsinMoodysDeferredCompensationPlan.
49
Table of Contents
(6)
TheamountsreportedintheAllOtherCompensationcolumncomprisethefollowingcompensationitems:
Name
RaymondW.McDaniel
LindaS.Huber
MichelMadelain
MarkE.Almeida
JohnJ.Goggins
Year
Perquisites
and Other
Personal
Benefits
(a)
2015
2015
2015
2015
2015
$ 13,714
Company
Contributions
to
Defined
Contribution
Plans(b)
Dividends or
Other
Earnings
Paid on
Stock
Awards(c)
44,757
23,150
43,796
32,844
18,161
Total
(a)
ForalltheNEOsexceptMichelMadelain,perquisitesandotherpersonalbenefitsprovidedinfiscal2015were,intheaggregate,lessthan$10,000per
individual.ForMichelMadelain,theperquisiteamountsrepresentsacarallowance(asisthepracticeintheUKforexecutiveofficers)paidinBritish
poundssterling.Anexchangerateof1.4746fromtheFederalReserveBankasofDecember31,2015wasusedtocalculatethe2015U.S.dollar
amount.
(b)
TheseamountsrepresenttheaggregateannualCompanycontributionstotheaccountsoftheNamedExecutiveOfficersundertheCompanysProfit
ParticipationPlanandthenon-qualifiedDeferredCompensationPlanintheUnitedStates.TheProfitParticipationPlanandtheDeferred
CompensationPlanaretax-qualifieddefinedcontributionplans.TheamountdescribedwithrespecttoMr.Madelainwascontributedbythe
CompanyssubsidiaryintheUKtotheMoodysGroupPersonalPensionPlan.Anexchangerateof1.4746fromTheFederalReserveBankasof
December31,2015wasusedtocalculatetheU.S.dollaramount.
(c)
Theseamountsrepresentdividendequivalentspaidonrestrictedstockawardsthatvestedduring2015.
(7)
$44,757
23,150
57,510
32,844
18,161
Mr.MadelainscompensationfiguresareshowninthetableinU.S.dollars.However,certainelementsofhiscompensationwaspaidinBritishpounds
sterling.Anexchangerateof1.4746fromTheFederalReserveBankasofDecember31,2015wasusedtocalculatethe2015U.S.dollaramount.
50
Table of Contents
Name
RaymondW.McDaniel
Estimated Future
Payouts Under
Non-Equity Incentive Plan
Awards(2)
Estimated Future
Payouts Under
Equity Incentive Plan
Awards(3)
Grant
Authorization Threshold
Target
Maximum Threshold Target Maximum
Date
Date(1)
($)
($)
($)
(#)
(#)
(#)
2/11/2015 12/16/2014
7,652 30,609
68,870
2/11/2015 12/16/2014
N/A
All Other
Option
Awards:
Number
of
Securities
Underlying
Options(4)
(#)
55,463
Exercise
or Base
Price of
Option
Awards(5)
($/Sh)
$
98.01
Grant
Date Fair
Value of
Stock and
Option
Awards(6)
$2,999,988
1,999,996
LindaS.Huber
2/11/2015
2/11/2015
N/A
12/16/2014
12/16/2014
2,253 9,011
20,275
16,328 $
98.01
883,168
588,788
MichelMadelain
2/11/2015
2/11/2015
N/A
12/16/2014
12/16/2014
1,919 7,677
17,273
13,910 $
98.01
752,423
501,595
MarkE.Almeida
2/11/2015
2/11/2015
N/A
12/16/2014
12/16/2014
1,763 7,052
15,867
12,779 $
98.01
691,167
460,811
JohnJ.Goggins
2/11/2015
2/11/2015
N/A
12/16/2014
12/16/2014
N/A 414,000
1,410 5,638
12,686
10,216 $
98.01
552,580
368,389
(1)
828,000
TheGovernanceandCompensationCommitteeauthorizedthegrantofstockoptionsandperformancesharesfor2015onDecember15,2014,tobeeffective
onFebruary11,2015,thethirdtradingdayfollowingthedateofthepublicdisseminationoftheCompanysfinancialresultsfor2014.
(2)
Thesecashincentiveawardsweregrantedin2015undertheCompanysannualcashincentiveprogram.TheGovernanceandCompensationCommittee
establishedperformancemetricsforoperatingincomeandEPSgrowththatdeterminetheaggregatefundingoftheprogram.TheGovernanceand
CompensationCommitteeconsidersotherfactorsincludingindividualperformancewhendeterminingthefinalawardamountsforannualincentiveawards.
Foradditionalinformationontheannualcashincentiveprogram,seetheCD&Abeginningonpage27.Theseawardswereearnedduring2015andarepaid
inMarch2016.
(3)
Theseperformanceshareawardsweregrantedin2015undertheCompanys2001StockIncentivePlan.TheGovernanceandCompensationCommittee
determinedthetargetperformanceshareamountsandsetperformancemeasuresoverthethree-yearperformanceperiodendingDecember31,2017.For
Mr.McDaniel,Ms.HuberandMr.Goggins,performanceisbasedonEBITDA,MAssalesgrowthandMISsratingsquality.ForMr.Madelain,
performanceisbasedonEBITDAandMISsratingsquality.ForMr.Almeida,performanceisbasedonEBITDAandMAssalesgrowth.Atmaximum
achievement,thegrantdatefairvalueoftheawardswouldhavebeen225%oftheamountreportedforeachexecutive,orforMr.McDaniel$6,749,973,
Ms.Huber$1,987,128,Mr.Madelain$1,692,952,Mr.Almeida$1,555,126,andMr.Goggins$1,243,305.
(4)
ThesestockoptionawardsweremadeundertheCompanys2001StockIncentivePlan.Theyvestinfourequalannualinstallmentsbeginningonthefirst
anniversaryofthedateofgrant,February11,2015andexpireonFebruary11,2025.
(5)
TheexercisepriceoftheseawardsisequaltothearithmeticmeanofthehighandlowmarketpriceoftheCompanysCommonStockonthegrantdate.
(6)
TheFebruary11,2015grantdatefairvalueforstockoptionsisbasedontheBlack-Scholesoptionvaluationmodel,applyingthefollowingassumptions;an
expectedstock-pricevolatilityfactorof39.35%;arisk-freerateofreturnof1.88%;adividendyieldof1.39%;andanexpectedtimeofexerciseof6.9years
fromthedateofgrant.TheBlack-Scholesmodelispremisedontheimmediateexercisabilityandtransferabilityoftheoptions,neitherofwhichappliesto
theoptionssetoutinthetableabove.Theactualamountsrealized,ifany,willdependontheextenttowhichthestockpriceexceedstheoptionexerciseprice
atthetimetheoptionisexercised.
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Option Awards(1)
Number of
Securities
Underlying
Unexercised
Options (#)
Name
RaymondW.McDaniel
LindaS.Huber
MichelMadelain
MarkE.Almeida
JohnJ.Goggins
Exercisable
185,000
180,863
88,292
110,843
64,356
42,662
13,020
45,000
44,500
85,000
25,133
7,078
35,100
22,713
13,697
4,226
70,012
28,791
28,916
20,138
12,446
3,652
22,750
62,500
65,344
27,236
27,354
19,188
11,570
3,356
24,250
50,000
52,509
21,593
20,784
13,445
8,111
2,477
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
21,453
42,662
39,060
55,463
7,571
13,698
12,681
16,328
6,713
12,446
10,956
13,910
6,396
11,570
10,070
12,779
4,482
8,112
7,431
10,216
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
Option
Exercise
Price
($)
38.0700
25.3700
26.7800
30.0100
38.6100
46.4300
79.5500
98.0100
63.0900
72.7150
38.0700
25.3700
26.7800
30.0100
38.6100
46.4300
79.5500
98.0100
38.0700
25.3700
26.7800
30.0100
38.6100
46.4300
79.5500
98.0100
72.7150
38.0700
25.3700
26.7800
30.0100
38.6100
46.4300
79.5500
98.0100
72.7150
38.0700
25.3700
26.7800
30.0100
38.6100
46.4300
79.5500
98.0100
52
Option
Grant
Date
2/12/2008
2/10/2009
2/9/2010
2/8/2011
2/13/2012
2/13/2013
2/12/2014
2/11/2015
2/8/2006
2/12/2007
2/12/2008
2/10/2009
2/9/2010
2/8/2011
2/13/2012
2/13/2013
2/12/2014
2/11/2015
2/12/2008
2/10/2009
2/9/2010
2/8/2011
2/13/2012
2/13/2013
2/12/2014
2/11/2015
2/12/2007
2/12/2008
2/10/2009
2/9/2010
2/8/2011
2/13/2012
2/13/2013
2/12/2014
2/11/2015
2/12/2007
2/12/2008
2/10/2009
2/9/2010
2/8/2011
2/13/2012
2/13/2013
2/12/2014
2/11/2015
Number
of
Shares
or
Units
of
Stock
That
Have
Option
Not
Expiration
Vested
Date
(#)
2/12/2018
2/10/2019
2/9/2020
2/8/2021
2/13/2022
2/13/2023
2/12/2024
2/11/2025
2/8/2016
2/12/2017
2/12/2018
2/10/2019
2/9/2020
2/8/2021
2/13/2022
2/13/2023
2/12/2024
2/11/2025
2/12/2018
2/10/2019
2/9/2020
2/8/2021
2/13/2022
2/13/2023
2/12/2024
2/11/2025
2/12/2017
2/12/2018
2/10/2019
2/9/2020
2/8/2021
2/13/2022
2/13/2023
2/12/2024
2/11/2025
2/12/2017
2/12/2018
2/10/2019
2/9/2020
2/8/2021
2/13/2022
2/13/2023
2/12/2024
2/11/2025
Stock Awards
Market
Value of
Shares
or Units
of Stock
That
Have
Not
Vested
($)(2)
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
(#)(3)
48,460
30,924
30,609
15,559
10,039
9,011
14,137
8,674
7,677
13,142
7,972
7,052
9,214
5,883
5,638
Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
($)(2)
4,862,476
3,102,914
3,071,307
1,561,190
1,007,313
904,164
1,418,507
870,349
770,310
1,318,668
799,910
707,598
924,533
590,300
565,717
Grant
Date
2/13/2013
2/12/2014
2/11/2015
2/13/2013
2/12/2014
2/11/2015
2/13/2013
2/12/2014
2/11/2015
2/13/2013
2/12/2014
2/11/2015
2/13/2013
2/12/2014
2/11/2015
Table of Contents
(1)
Optionawardsareexercisableinfourequal,annualinstallmentsbeginningonthefirstanniversaryofthedateofgrant.Thegrantdateforoptionsistenyears
earlierthantheOptionExpirationDatereportedinthetable.
(2)
ValueiscalculatedbasedontheclosingpriceoftheCommonStockonDecember31,2015,$100.34.
(3)
Representsperformanceshareawardsthatpayoutsubjecttotheattainmentofperformanceobjectivesandvestingrequirementsmeasuredoverathree-year
period.TheperformancesharesgrantedonFebruary13,2013vestinMarch2016fortheperformanceperiodendingDecember31,2015,theperformance
sharesgrantedonFebruary12,2014vestinMarch2017fortheperformanceperiodendingDecember31,2016andtheperformancesharesgrantedon
February11,2015vestinMarch2018fortheperformanceperiodendingDecember31,2017.
OPTION EXERCISES AND STOCK VESTED TABLE FOR 2015
ThefollowingtablesetsforthinformationconcerningthenumberofsharesofCommonStockacquiredandthevaluerealizedupontheexerciseofstock
optionsandthenumberofsharesofCommonStockacquiredandthevaluerealizeduponvestingofrestrictedstockawardsduring2015foreachoftheCompanys
NamedExecutiveOfficersonanaggregatedbasis.Inthecaseofstockoptions,thevaluerealizedisbasedonthemarketpriceoftheCompanysCommonStockon
theNewYorkStockExchangeatthetimeofexerciseandtheoptionexerciseprice;inthecaseofrestrictedstockawards,thevaluerealizedisbasedontheaverage
highandlowmarketpriceoftheCompanysCommonStockontheNewYorkStockExchangeonthevestingdate.
Name
Option Awards
Number of Shares
Acquired on
Value Realized on
Exercise (#)
Exercise ($)
Stock Awards
Number of Shares
Acquired on
Value Realized
Vesting (#)(1)
on Vesting ($)
RaymondW.McDaniel
217,023
$ 7,427,401
76,919
$ 7,439,606
LindaS.Huber
27,146
2,625,561
MichelMadelain
21,857
2,114,009
MarkE.Almeida
25,000
1,200,355
21,894
2,117,588
JohnJ.Goggins
68,050
3,526,526
16,071
1,554,387
(1) Theperformancesharesgrantedforthe2013-2015performanceperiodvestedonMarch1,2016andthereforearenotreflectedintheabovetable.
53
Table of Contents
Name
RaymondW.McDaniel
Plan Name
Number of
Years Credited
Service (#)(1)
Present Value of
Accumulated
Benefit at 12/31/15
($)
Payments
During Last
Fiscal Year
($)
27.5000
27.5000
28.8333
626,407
4,341,742
31,556,461
9.5833
9.5833
10.6667
217,508
885,857
4,896,552
RetirementAccount
PensionBenefitEqualizationPlan
SupplementalExecutiveBenefitPlan
RetirementAccount
PensionBenefitEqualizationPlan
SupplementalExecutiveBenefitPlan
MichelMadelain(2)
MoodysGroupPersonalPensionPlan
MarkE.Almeida
RetirementAccount
PensionBenefitEqualizationPlan
SupplementalExecutiveBenefitPlan
26.5000
26.5000
569,489
1,331,614
RetirementAccount
PensionBenefitEqualizationPlan
SupplementalExecutiveBenefitPlan
15.8333
15.8333
16.9167
343,303
829,760
6,115,502
LindaS.Huber
JohnJ.Goggins
(1)
ThecreditedservicefortheRetirementAccountandthePBEPisbasedonservicefromthedatetheindividualbecameaparticipantintheplan.Individuals
becomeparticipantsintheplanonthefirstdayofthemonthcoincidentwithornextfollowingthecompletionofoneyearofservice.TheSEBPprovides
creditedservicefromanindividualsdateofhirewithMoodys.ForMessrs.McDanielandAlmeida,thedateofparticipationintheRetirementAccountis
basedonanearlierplanprovisionthatprovidedforindividualstobecomeparticipantsontheJanuary1orJuly1followingthecompletionofoneyearof
service.
(2)
TheCompanyprovidesretirementbenefitstotheNEOsunderthreedefinedbenefitpensionplans,exceptforMichelMadelain,whoisnotaU.S.employee.
Asreflectedinfootnote(6)totheSummaryCompensationTable,anamountwascontributedbytheCompanyssubsidiaryintheUKtotheMoodysGroup
PersonalPensionPlan,whichisadefinedcontributionplan,onMr.Madelainsbehalf.Usinganexchangerateof1.4746fromtheFederalReserveBankas
ofDecember31,2015,theamountcontributedwas$43,796in2015.
TheCompanyprovidesretirementbenefitstotheNamedExecutiveOfficersunderthreedefinedbenefitpensionplans,exceptforMr.Madelain,whoisnota
U.S.employee:theRetirementAccount,thePBEPandtheSEBP.TheRetirementAccountisabroad-basedtax-qualifieddefinedbenefitpensionplan.ThePBEP
isanon-tax-qualifieddefinedbenefitpensionplanthatrestoresbenefitstoparticipantsthatwouldotherwisebelostundertheRetirementAccountdueto
limitationsunderthefederalincometaxlawsontheprovisionofbenefitsundertax-qualifieddefinedbenefitpensionplans.TheRetirementAccount,togetherwith
thePBEP,isacashbalancedesignthatprovidesretirementincomebasedonapercentageofannualcompensationthatiscreditedtoanotionalaccountthatis
thencreditedwithperiodicinterestcredits.TheSEBPisanon-tax-qualifiedsupplementalexecutiveretirementplanthatprovidesadditionalpensionbenefitsfor
designatedseniorexecutiveofficersoftheCompany.AnamountwascontributedbytheCompanyssubsidiaryintheUKtotheMoodysGroupPersonalPension
Plan,whichisadefinedcontributionplandescribedbelow,onMr.Madelainsbehalf.
ThePBEPandSEBPareintendedtocomplywiththerequirementsofSection409AoftheInternalRevenueCode.SEBPparticipantselectedeitheran
annuityoralumpsumformofpaymentthatwillapplyatretirement,
54
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andthePBEPgenerallyprovideslumpsumdistributionstoterminatedparticipantsatthelaterofage55orsixmonthsfollowingterminationfromMoodys.
TheassumptionsmadeincomputingthepresentvalueoftheaccumulatedbenefitsoftheNamedExecutiveOfficers,exceptasdescribedinthefollowing
sentence,areincorporatedhereinbyreferencetothediscussionofthoseassumptionsundertheheadingPensionandOtherPost-RetirementBenefitsinthe
ManagementsDiscussionandAnalysisandNote12tothefinancialstatementsascontainedintheCompanysAnnualReportonForm10-Kfiledwiththe
CommissiononFebruary24,2016.TheassumedretirementageusedincomputingthepresentvalueoftheaccumulatedbenefitsoftheNamedExecutiveOfficers
wasage65inthecaseoftheRetirementAccountandthePBEPandage55inthecaseoftheSEBP.
Thematerialtermsineffectin2014oftheRetirementAccount,thePBEP,theSEBPandMoodysGroupPersonalPensionPlanaredescribedbelow.Future
benefitaccrualsundertheseplansaresubjecttochange.
Moodys Corporation Retirement Account
AllU.S.employeeshiredpriortoJanuary1,2008andwhohavebeencontinuouslyemployedareeligibletoparticipateintheRetirementAccountafter
attainingage21andcompletingoneyearofservicewiththeCompany.Participantsearnonemonthofcreditedserviceforeachmonthorfractionthereoffromthe
datetheybecomeeligibletoparticipateintheplan.TheRetirementAccountisacashbalanceplanprovidingbenefitsthatgrowmonthlyashypotheticalaccount
balances,whicharecreditedwithinterestandpay-basedcredits.Interestcreditsarebasedona30-yearTreasuryinterestrateequivalentwithaminimum
compoundedannualinterestrateof4.5%.Pay-basedcreditsareamountsallocatedtoeachparticipantshypotheticalaccountbaseduponapercentageofmonthly
pensionablecompensation.Thepercentageofcompensationallocatedannuallyrangesfrom3%to12.5%.Eachparticipantspay-basedcreditpercentageisbased
onhisorherattainedageandcreditedservice.Compensationisbasedonactualearnings,whichincludebasesalary,regularbonus(orannualincentiveaward),
overtimeandcommissions.Severancepay,contingentpaymentsandotherformsofspecialremunerationareexcluded.
ParticipantsvestintheirbenefitsaftercompletingthreeyearsofservicewiththeCompany.Uponterminationofemployment,aparticipantmayelectto
receiveanimmediatelumpsumdistributionequalto100%ofhisorhercashbalanceaccountorincertainotherforms.Thenormalretirementageunderthe
RetirementAccountisage65,butparticipantswhohaveattainedage55withatleast10yearsofservicemayelecttoretireearly.Uponretirement,participants
maychooseamongthelumpsumandvariousactuariallyequivalentformsofannuitiesofferedundertheplan.Ms.HuberandMessrs.Almeida,Gogginsand
McDanielarecurrentlyeligibleforearlyretirementundertheRetirementAccount.
Moodys Corporation Pension Benefit Equalization Plan
ThePBEPisanon-tax-qualifieddefinedbenefitpensionplanthatrestoresbenefitstoparticipantswhosepensionablecompensationexceedsthelimitations
underthefederalincometaxlawsontheprovisionofbenefitsundertax-qualifieddefinedbenefitpensionplans.For2015,thislimitationwas$265,000.The
benefit-relatedprovisionsofthePBEParethesameasthoseoftheRetirementAccountexceptfortheformofpaymentwhichmustbeasalumpsum.Upon
attainingage55withatleast10yearsofservice,participantsmayelecttoretire.ThePBEPwasamendedasofJanuary1,2008toprovidethatanyparticipantwho
isanactiveemployeeoftheCompanyoranysubsidiaryafterDecember31,2004shallreceiveallofhisbenefitsunderthePBEPinalumpsumonthesixmonth
anniversaryofhisseparationfromservicewiththeCompanyorasubsidiary.Ms.HuberandMessrs.Almeida,GogginsandMcDanielarecurrentlyeligiblefor
earlyretirementunderthePBEP.
55
Table of Contents
Employee
Employer
3%
4%
5%
6%
6%
8%
10%
12%(maximumemployercontribution;nomaximumforemployee)
56
Table of Contents
MoodysUKwillstoppayingcontributionstotheGPPPwhenanemployeeleavesservice,oronthedateofcontractualretirement,ifearlier.Asacondition
tomembershipintheGPPP,anemployeeisrequiredtomakeregularcontributionsofatleast3%ofsalary.
EmployeecontributionsqualifyforfulltaxreliefviaasalarysacrificearrangementcalledPensionSense.Employeesarenottaxedonthecontributionspaid
intotheGPPPbyMoodysUK.
NONQUALIFIED DEFERRED COMPENSATION TABLE(1)
ThefollowingtablesetsforthinformationconcerningthenonqualifieddeferredcompensationoftheNamedExecutiveOfficersin2015.
Name
Executive
Contributions
in Last Fiscal
Year ($)
Registrant
Contributions
in Last Fiscal
Year ($)
Aggregate
Earnings
in Last
Fiscal
Year ($)
Aggregate
Withdrawals/
Distributions
($)
Aggregate
Balance
at Last
Fiscal
Year End
($)
RaymondW.McDaniel
$ (1,354)
$237,440
LindaS.Huber
(1,132)
104,653
MichelMadelain
N/A
N/A
N/A
N/A
N/A
MarkE.Almeida
$ 78,300
$ 13,050
(30,982)
763,754
JohnJ.Goggins
(14,478)
103,476
(1) NonqualifieddeferredcompensationearningsareincludedintheAggregateEarningsinLastFiscalYearcolumnofthistable.Companycontributionsto
theaccountsoftheNEOsundertheCompanysnonqualifiedDeferredCompensationPlanalsoarereflectedincolumn(b)offootnote(6)totheSummary
CompensationTable.Contributionsof$521,940forMr.Almeidaand$54,818forMr.GogginswerereportedascompensationintheCompanysSummary
CompensationTableforprioryears.
Moodys Corporation Deferred Compensation Plan
EffectiveJanuary1,2008,theCompanyimplementedtheMoodysCorporationDeferredCompensationPlan(theDCP).Eachyear,employeesexpected
toearnannualcompensationinexcessoftheIRScompensationlimitforallowablepre-taxdeferralsintotheMoodysProfitParticipationPlanarenotifiedoftheir
eligibilitytoparticipateintheDCP.
TheprimarypurposeoftheDCPistoallowtheseemployeestocontinuepre-taxdeductionsintoanonqualifiedplanandreceivethemaximumcompany
matchoncompensationwhichexceedstheIRSlimitsforallowablepre-taxdeferralsintotheMoodysProfitParticipationPlan.Alimitedgroupofhighly
compensatedmembersofseniormanagementhavetheoptionofimmediatedeferralofupto50%ofbasesalaryand/orbonus.However,theCompanymatchonly
appliestodeferralsoncompensationinexcessoftheIRSlimitoncompensation($265,000for2015).Inaddition,theCompanywillcredittotheDCPemployer
contributionsthatwouldhavebeenmadetotheProfitParticipationPlanbutfortheapplicationoftheIRStotalcontributionlimit.
EachparticipantmayselectoneormoredeemedinvestmentfundsofferedundertheDCPfortheinvestmentoftheparticipantsaccountandfuture
contributions.ThedeemedinvestmentfundsaresubstantiallythesameasthefundsavailableintheProfitParticipationPlan.TheDCPisunfundedandnocash
amountsarepaidintoorsetasideinatrustorsimilarfundundertheDCP.Allamountsdeductedfromaparticipantsearnings,alongwithanyCompany
contributions,areretainedaspartoftheCompanysgeneralassetsandarecreditedtotheparticipantsbookkeepingaccountundertheDCP.Thevalueofa
participantsaccountincreasesordecreasesinvaluebaseduponthefairmarketvalueofthedeemedinvestmentfundsasoftheendoftheyear.Theformsof
distributionundertheDCPareeitheralumpsumorinstallmentpaymentsaftertermination,aswellasanalternativeforparticipantstoelectin-servicedistribution
atthetimedeferralelectionsaremade.
57
Table of Contents
58
Table of Contents
Inaddition,theexecutiveisentitledtoreceiveanybenefitsthatheorsheotherwisewouldhavebeenentitledtoreceiveunderMoodysretirementplans,although
thesebenefitsarenotincreasedoraccelerated.
ExceptinthecaseofaterminationofemploymentbytheCompanyforunsatisfactoryperformance,theNamedExecutiveOfficeralsomayreceive:
aproratedportionoftheactualannualcashincentivefortheyearofterminationofemploymentthatwouldhavebeenpayabletotheexecutiveofficer
undertheannualcashincentiveplaninwhichtheexecutiveofficerwasparticipatingatthetimeoftermination,providedthattheexecutiveofficerwas
employedforatleastsixfullmonthsduringthecalendaryearoftermination;
financialplanningandcounselingservicesduringthesalarycontinuationperiodtothesameextentaffordedimmediatelypriortoterminationof
employment.
TheplangivestheCompanysChairmanandChiefExecutiveOfficerthediscretiontoreduceorincreasethebenefitsotherwisepayableto,orotherwise
modifythetermsandconditionsapplicableto,aNamedExecutiveOfficer(otherthanhimself)undertheplan.Asamatterofpolicy,ifMr.McDanielintendedto
increasethebenefitspayable,anysuchproposalwouldbereviewedbytheCommittee.
ThereceiptofanybenefitsundertheplaniscontingentupontheaffectedNamedExecutiveOfficersigningaseveranceandreleaseagreementthatprohibits
himfromengaginginconductthatisdetrimentaltotheCompany,suchasworkingforcertaincompetitors,solicitingcustomersoremployeesafteremployment
ends,anddisclosingconfidentialinformation,thedisclosureofwhichwouldresultincompetitiveharmtotheCompany.Theseprovisionsextendfortheone-year
periodduringwhichtheNamedExecutiveOfficerwouldbereceivingpaymentspursuanttotheCTP.
TheestimatedpaymentsandbenefitspayabletotheNamedExecutiveOfficersassuminganeventtriggeringpaymentundertheCTPasofthelastdayof
2015arereportedinthediscussionofPotentialPaymentsUponTerminationorChangeinControlbeginningonpage58.
TheestimatedpaymentsandbenefitsthatwouldbeprovidedtoeachNamedExecutiveOfficerstillservinginthatcapacityundereachcircumstancethatis
coveredbytheCareerTransitionPlanarelistedinthetablesbelow.
Potential Payments and Benefits Upon a Termination of Employment
by Reason of a Reduction in Force, Job Elimination,
or a Mutually Agreed Upon Resignation(1)
Name
RaymondW.McDaniel
LindaS.Huber
MichelMadelain
MarkE.Almeida
JohnJ.Goggins
(1) Forpurposesofthisanalysis,thefollowingassumptionswereused:
$1,000,000
609,000
502,839
522,000
502,000
$1,500,000
708,000
601,637
624,000
414,000
$ 16,108
42
9,658
16,108
thedateofterminationofemploymentwasDecember31,2015;
eachNEOsbasesalarywastheamountasofDecember31,2015andiscontinuedforaperiodof52weeks;and
eachNEOsannualcashincentiveisequalto100%ofthetargetamountundertheannualcashincentiveprogram.
Annual Cash
Incentive
($)
Salary
Continuation
($)
Medical,
Dental, and
Life
Insurance
Benefits
($)
59
OutPlacement
Services
($)
$ 40,000
40,000
40,000
40,000
40,000
Total
($)
$2,556,108
1,357,042
1,144,476
1,195,658
972,108
Table of Contents
Name
RaymondW.McDaniel
LindaS.Huber
MichelMadelain
MarkE.Almeida
JohnJ.Goggins
(1) Forpurposesofthisanalysis,thefollowingassumptionswereused:
OutPlacement
Services
($)
$ 40,000
40,000
40,000
40,000
40,000
500,000
304,500
251,420
261,000
251,000
thedateofterminationofemploymentwasDecember31,2015;and
eachNEOsbasesalarywastheamountasofDecember31,2015andiscontinuedforaperiodof26weeks.
Salary
Continuation
($)
Medical,
Dental, and
Life
Insurance
Benefits
($)
8,054
21
4,829
8,054
Total
($)
$548,054
344,521
291,420
305,829
299,054
intheeventofthedeathordisabilityofaNamedExecutiveOfficerafterthefirstanniversaryofthedateofgrantofastockoption,theunvested
portionofsuchstockoptionwillimmediatelyvestinfullandsuchportionmaythereafterbeexercisedduringtheshorterof(a)theremainingstated
termofthestockoptionor(b)fiveyearsafterthedateofdeathordisability;
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Table of Contents
intheeventoftheretirementofaNamedExecutiveOfficerafterthefirstanniversaryofthedateofgrantofastockoption,theunvestedportionof
suchstockoptionwillcontinuetovestduringtheshorterof(a)theremainingstatedtermofthestockoptionor(b)fiveyearsafterthedateof
retirement;
intheeventofaterminationforanyreasonotherthandeath,disabilityorretirement,anunexercisedstockoptionmaythereafterbeexercisedduring
theperiodending30daysafterthedateoftermination,butonlytotheextentsuchstockoptionwasexercisableatthetimeoftermination;
intheeventofthedeath,disability,orretirementofaNamedExecutiveOfficerafterthefirstanniversaryofthedateofgrantofarestrictedstock
award,theawardwillimmediatelyvestinfull;
intheeventofterminationforanyreasonotherthandeath,disabilityorretirement,afterthefirstanniversaryofthedateofgrantofarestrictedstock
award,theunvestedportionoftheawardshallbeforfeited;
intheeventofachangeincontroloftheCompany,theunvestedportionofalloutstandingstockoptionsandrestrictedstockawardsgrantedpriorto
January1,2013vestinfull;
intheeventofachangeincontroloftheCompany,(i)unlessotherwisedeterminedbytheCommittee,iftheacquirerassumesorsubstitutesanaward
ofequivalentvalue,theunvestedportionofalloutstandingstockoptionsandrestrictedstockawardsgrantedonorafterJanuary1,2013vestinfullif
theNamedExecutiveOfficersemploymentisterminatedbyuswithoutcauseorbytheNamedExecutiveOfficerforgoodreasonwithin90days
beforeortwoyearsafterthechangeincontrol,or(ii)iftheacquirerdoesnotassumeorsubstituteawardsofequivalentvalue,theunvestedportionof
theawardsshallvestinfull;
intheeventofthedeath,disabilityorretirementofaNamedExecutiveOfficer,theNEOshallhavesuchrightsinhisorherperformanceshares,if
any,asmaybeprescribedbytheawardagreement;
intheeventofaterminationforanyreasonotherthandeath,disabilityorretirementpriortotheendofanyapplicableperformanceperiod,anNEOs
performancesharesshallbeforfeited,unless,subjecttothe2001Plan,theGovernanceandCompensationCommittee,initssolediscretion,shall
determineotherwise;and
intheeventofachangeincontroloftheCompany,performancesharesshallbecomepayableinsuchmannerasshallbesetforthintheaward
agreement.
Name
Salary
Continuation
($)
Annual
Cash
Incentive
($)
RaymondW.McDaniel
$3,000,000 $4,500,000
LindaS.Huber
1,218,000 1,416,000
MichelMadelain
1,005,678 1,203,274
MarkE.Almeida
1,044,000 1,248,000
JohnJ.Goggins
1,004,000 828,000
(1) Forpurposesofthisanalysis,thefollowingassumptionswereused:
Stock Options
($)(2)
Restricted
Stock
Awards
($)(2)
$ 48,324
84
19,316
32,216
$ 4,565,488
1,507,499
1,345,542
1,257,694
892,285
Performance
Share
Awards
($)
$11,036,697
3,472,667
3,059,166
2,826,176
2,080,550
Total
($)
thedateofterminationofemploymentwasDecember31,2015;
fortheCEO,Mr.McDaniel,thatheexecutedageneralreleaseandtwo-yearnon-competeagreementundertheCICPandreceivedasalarylumpsum
payoutequaltothreetimeshisbasesalaryasofDecember31,2015,anannualcashincentivelump-sumpayoutequaltothreetimeshis2015annual
targetcashincentiveandthreeyearscontinuationofcurrentelectedcoverageunderthemedical,dentalandlifeinsuranceprograms;
61
$23,150,509
7,614,250
6,613,660
6,395,186
4,837,051
Medical,
Dental and
Life
Insurance
Benefits
($)
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foreachNEO,otherthanMr.McDaniel,thatheorsheexecutedageneralreleaseandtwo-yearnon-competeagreementundertheCICPandreceiveda
salarylump-sumpayoutequaltotwotimestheexecutivesbasesalaryasofDecember31,2015,anannualcashincentivelump-sumpayoutequalto
twotimestheexecutives2015annualtargetcashincentive,andtwoyearscontinuationofcurrentelectedcoverageunderthemedical,dentalandlife
insuranceprograms;
themarketpricepershareoftheCompanysCommonStockonDecember31,2015was$100.34pershare,theclosingpriceoftheCommonStockon
thatdate;
unvestedequityawardsvestinfullbecausetheNEOisterminatedwithoutcauseinconnectionwiththechangeincontrol;and
performancesharespaidattarget.
(2)
ValuereflectsbenefitreceiveduponChangeinControlregardlessofwhethertheexecutivesemploymentisterminated.
Potential Payments and Benefits Upon a Termination of
Employment by Reason of Death, Disability or Retirement(1)
Name
RaymondW.McDaniel
LindaS.Huber
MichelMadelain
MarkE.Almeida
JohnJ.Goggins
(1) Forpurposesofthisanalysis,thefollowingassumptionswereused:
$ 4,436,259
1,469,455
1,313,132
1,227,919
868,482
$6,931,085
2,232,732
1,998,740
1,851,941
1,318,066
Total
($)
$11,367,344
3,702,187
3,311,872
3,079,860
2,186,548
thedateofterminationofemploymentwasDecember31,2015;
themarketpricepershareoftheCompanysCommonStockonDecember31,2015was$100.34pershare,theclosingpriceoftheCommonStockon
thatdate;and
performancesharespaidattarget.
Performance
Share
Awards
($)
Stock Options
($)
Restricted Stock
Awards
($)
OTHER BUSINESS
TheBoardofDirectorsknowsofnobusinessotherthanthematterssetforthhereinthatwillbepresentedattheAnnualMeeting.Inasmuchasmattersnot
knownatthistimemaycomebeforetheAnnualMeeting,theenclosedproxyconfersdiscretionaryauthoritywithrespecttosuchmattersasmayproperlycome
beforetheAnnualMeeting,anditistheintentionofthepersonsnamedintheproxytovoteinaccordancewiththeirbestjudgmentonsuchmatters.
STOCKHOLDER PROPOSALS FOR 2017 ANNUAL MEETING
StockholderproposalswhicharebeingsubmittedforinclusionintheCompanysproxystatementandformofproxyforthe2017annualmeetingof
stockholdersmustbereceivedbytheCompanyatitsprincipalexecutiveofficesnolaterthan5:00p.m.ESTonNovember2,2016.Suchproposalswhensubmitted
mustbeinfullcompliancewithapplicablelaws,includingRule14a-8oftheExchangeAct.
62
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UndertheCompanysBy-Laws,noticesofmatterswhicharebeingsubmittedotherthanforinclusionintheCompanysproxystatementandformofproxy
forthe2017annualmeetingofstockholdersmustbereceivedbytheCorporateSecretaryoftheCompanyatitsprincipalexecutiveofficesnoearlierthan
January12,2017andnolaterthanFebruary1,2017.Ifthe2017annualmeetingismorethan20daysbeforeormorethan70daysaftertheanniversarydateofthis
yearsAnnualMeeting,suchnoticesmustbereceivednoearlierthanthe90thdaypriortosuchannualmeetingandnolaterthanthecloseofbusinessonthelater
ofthe70thdaypriortosuchannualmeetingorthe10thdayfollowingthedayofpublicannouncementofthemeetingdate.Suchmatterswhensubmittedmustbe
infullcompliancewithapplicablelawandtheCompanysBy-Laws.Thechairmanofthemeetingmayrefusetoacknowledgeorintroduceanysuchmatterif
noticeofthematterisnotreceivedwithintheapplicabledeadlinesordoesnotcomplywiththeCompanysBy-Laws.Ifastockholderdoesnotmeetthese
deadlines,ordoesnotsatisfytherequirementsofRule14a-4oftheExchangeAct,thepersonsnamedasproxieswillbeallowedtousetheirdiscretionaryvoting
authoritywhenandifthematterisraisedatthemeeting.
March2,2016
63
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GO GREEN
e-Consentmakesiteasytogopaperless.Withe-Consent,youcanquicklyaccessyourproxymaterials,statements
andothereligibledocumentsonline,whilereducingcosts,clutterandpaperwaste.Enrolltodayvia
www.amstock.comtoenjoyonlineaccess.
THEBOARDOFDIRECTORSRECOMMENDSAVOTEFORTHEELECTIONOFTHEDIRECTORSANDFORPROPOSALS2AND3.
PLEASESIGN,DATEANDRETURNPROMPTLYINTHEENCLOSEDENVELOPE.PLEASEMARKYOURVOTEINBLUEORBLACKINKASSHOWNHEREx
1. ELECTIONOFDIRECTORSOFTHECOMPANY:
BASILL.ANDERSON
JORGEA.BERMUDEZ
DARRELLDUFFIE,PH.D.
KATHRYNM.HILL
EWALDKIST
RAYMONDW.MCDANIEL,JR.
HENRYA.MCKINNELL,JR.,PH.D.
LESLIEF.SEIDMAN
BRUCEVANSAUN
2.
RATIFICATIONOFTHEAPPOINTMENTOF
INDEPENDENTREGISTEREDPUBLIC
ACCOUNTINGFIRMOFTHECOMPANYFOR
2016.
ADVISORYRESOLUTIONAPPROVING
EXECUTIVECOMPENSATION.
3.
FOR
AGAINST
ABSTAIN
Intheirdiscretion,theproxiesareauthorizedtovoteuponsuchotherbusinessasmay
properlycomebeforetheAnnualMeeting.Thisproxywhenproperlyexecutedwillbevoted
asdirectedhereinbytheundersignedshareholder.If no direction is made, this proxy will
be voted FOR THE NOMINEES in Proposal 1 and FOR Proposals 2 and 3.
Tochangetheaddressonyouraccount,pleasechecktheboxat
therightandindicateyournewaddressintheaddressspace
above.Pleasenotethatchangestotheregisteredname(s)on
theaccountmaynotbesubmittedviathismethod.
SignatureofStockholder
Date
SignatureofStockholder
Date
Note:
PleasesignexactlyasyournameornamesappearonthisProxy.Whensharesareheldjointly,eachholdershouldsign.Whensigningasexecutor,
administrator,trusteeorguardian,pleasegivefulltitleassuch.Ifthesignerisacorporation,pleasesignfullcorporatenamebydulyauthorizedofficer,
givingfulltitleassuch.Ifsignerisapartnership,pleasesigninpartnershipnamebyauthorizedperson.
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MOODYS CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD TUESDAY, APRIL 12, 2016
As an alternative to completing this form, you may enter your vote instruction by telephone at 1-800-PROXIES, or via the Internet at
WWW.PROXYVOTE.COM and follow the simple instructions. Use the Company Number and Account Number shown on your proxy card.
TheundersignedherebyappointsRaymondW.McDaniel,Jr.,LindaS.HuberandJohnJ.Goggins,andeachofthem,asproxies,eachwithfullpowerof
substitution,torepresenttheundersignedandvoteallthesharesofcommonstockofMoodysCorporationwhichtheundersignedisentitledtovoteattheAnnual
MeetingofStockholderstobeheldonApril12,2016at9:30a.m.,localtime,attheCompanysofficesat7WorldTradeCenterat250GreenwichStreet,New
York,NewYork10007,andanyadjournmentorpostponementthereof.Theundersigneddirectsthenamedproxiestovoteasdirectedonthereversesideofthis
cardonthespecifiedproposalsandintheirdiscretiononanyotherbusinesswhichmayproperlycomebeforethemeetingandanyadjournmentorpostponement
thereof.
ThiscardalsoconstitutesvotinginstructionstotheTrusteeoftheMoodysCorporationProfitParticipationPlantovote,inpersonorbyproxy,the
proportionateinterestoftheundersignedinthesharesofcommonstockofMoodysCorporationheldbytheTrusteeundertheplan,asdescribedintheProxy
Statement.
(Continued and to be marked, signed and dated, on the reverse side.)
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Voteonline/phoneuntil11:59PMEDTthedaybeforethemeeting.
COMPANY NUMBER
ACCOUNT NUMBER
MAIL Sign,dateandmailyourproxycardintheenvelopeprovidedassoonaspossible.
IN PERSON YoumayvoteyoursharesinpersonbyattendingtheAnnualMeeting.
GO GREEN e-Consentmakesiteasytogopaperless.Withe-Consent,youcanquicklyaccessyourproxymaterials,statementsandother
eligibledocumentsonline,whilereducingcosts,clutterandpaperwaste.Enrolltodayviawww.amstock.comtoenjoyonlineaccess.
iPleasedetachalongperforatedlineandmailintheenvelopeprovidedIFyouarenotvotingviatelephoneortheInternet.i
THEBOARDOFDIRECTORSRECOMMENDSAVOTEFORTHEELECTIONOFTHEDIRECTORSANDFORPROPOSALS2AND3.
PLEASESIGN,DATEANDRETURNPROMPTLYINTHEENCLOSEDENVELOPE.PLEASEMARKYOURVOTEINBLUEORBLACKINKASSHOWNHEREx
1. ELECTIONOFDIRECTORSOFTHECOMPANY:
BASILL.ANDERSON
JORGEA.BERMUDEZ
DARRELLDUFFIE,PH.D.
KATHRYNM.HILL
EWALDKIST
RAYMONDW.MCDANIEL,JR.
HENRYA.MCKINNELL,JR.,PH.D.
LESLIEF.SEIDMAN
BRUCEVANSAUN
2. RATIFICATIONOFTHEAPPOINTMENTOFINDEPENDENT
REGISTEREDPUBLICACCOUNTINGFIRMOFTHE
COMPANYFOR2016.
3. ADVISORYRESOLUTIONAPPROVINGEXECUTIVE
COMPENSATION.
Tochangetheaddressonyouraccount,pleasecheckthe
boxattherightandindicateyournewaddressinthe
addressspaceabove.Pleasenotethatchangestothe
registeredname(s)ontheaccountmaynotbesubmittedvia
thismethod.
Intheirdiscretion,theproxiesareauthorizedtovoteuponsuchotherbusinessasmayproperly
comebeforetheAnnualMeeting.Thisproxywhenproperlyexecutedwillbevotedasdirected
hereinbytheundersignedshareholder.If no direction is made, this proxy will be voted FOR
THE NOMINEES in Proposal 1 and FOR Proposals 2 and 3.
SignatureofStockholder
Date
SignatureofStockholder
Date
Note:
PleasesignexactlyasyournameornamesappearonthisProxy.Whensharesareheldjointly,eachholdershouldsign.Whensigningasexecutor,
administrator,trusteeorguardian,pleasegivefulltitleassuch.Ifthesignerisacorporation,pleasesignfullcorporatenamebydulyauthorizedofficer,
givingfulltitleassuch.Ifsignerisapartnership,pleasesigninpartnershipnamebyauthorizedperson.
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A DMISSION T ICKET
MOODYS CORPORATION
7 World Trade Center
250 Greenwich Street
New York, New York 10007
Annual Meeting of Stockholders
Tuesday, April 12, 2016
9:30 a.m. EDT