Richard Steele
MOODYS CORP /DE/About Richard Steele
Senior Vice President and General Counsel at Moody’s Corporation; appointed following the retirement of the prior General Counsel effective September 4, 2023. Joined Moody’s KMV in 2006 as Chief Legal Officer and became General Counsel of Moody’s Analytics in January 2008; previously a corporate lawyer at Wilson Sonsini Goodrich & Rosati and held senior legal roles in financial technology, software, and venture capital. Education: B.A., University of California, San Diego; J.D., University of California, College of the Law, San Francisco . Moody’s executive incentives emphasize equity value and adjusted operating metrics rather than relative TSR; core performance measures include MCO EPS for Compensation Purposes, MIS Ratings Performance, MA Operating Income, and MA ARR/MA Cumulative Revenue; equity-heavy pay links realized compensation to stock performance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Moody’s KMV Company | Chief Legal Officer | 2006–2008 | Established legal framework for KMV risk analytics; foundation for integration into Moody’s Analytics |
| Moody’s Analytics | General Counsel | Jan 2008–Sep 2023 | Led legal strategy for analytics expansion and product/platform evolution |
| Wilson Sonsini Goodrich & Rosati | Corporate Lawyer | Prior to 2006 | Corporate advisory experience relevant to fintech/software transactions |
| Financial technology, software, venture capital firms | Senior legal positions | Prior to 2006 | Operated across growth-stage tech; transactional and governance expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Wilson Sonsini Goodrich & Rosati | Corporate Lawyer | Prior to 2006 | Exposure to complex corporate/technology matters; supports GC decision-making |
| Various fintech/software/VC firms | Senior Legal Roles | Prior to 2006 | Operational legal leadership in high-growth sectors |
Fixed Compensation
| Year | Base Salary ($) | Bonus ($) | Change in Pension Value and Non-qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Notes |
|---|---|---|---|---|---|
| 2024 | 540,000 | — | 80,693 | 93,216 | Named SVP & GC |
| 2023 | 540,000 base salary as of year-end; total salary paid 462,470 | — | 112,256 | 34,608 (incl. $24,000 NYC apartment and tax reimbursement) | Promotion to SVP–GC in Sep 2023; 28.2% salary increase vs 2022 |
- 2023 perquisites included company-leased NYC apartment and agreed reimbursement of related tax liability (a disclosed tax gross-up exception) .
- Moody’s generally does not provide tax gross-ups on perquisites (exceptions disclosed) .
Performance Compensation
Annual Cash Incentive (ACI)
| Year | Target ACI ($) | Actual ACI Paid ($) | % of Target Paid | Financial Metrics (2/3 weighting) | Qualitative Metrics |
|---|---|---|---|---|---|
| 2024 | 500,000 | 675,000 | 135% | MIS Operating Income; MA Operating Income; MA ARR (adjusted for non-recurring items) | Strategic/operational assessment with individual adjustments |
| 2023 | Not disclosed | 500,000 | Not disclosed | MIS Operating Income; MA Operating Income; MA Sales for Compensation Purposes (adjusted) | Strategic/operational assessment |
- ACI metrics use adjusted measures approved by the Compensation & HR Committee; maximum payout generally requires >20% above targets .
Long-Term Incentives (LTI) – Mix and Metrics
| Element | Typical Weight | Vesting | 2023–2025 PSU Metrics (Weighting) | 2024–2026 PSU Metrics (Weighting) | Max Payout |
|---|---|---|---|---|---|
| Stock Options | ~20% of annual LTI | 25% annually over 4 years; 10-year term; strike ≥ mean of high/low on grant date | — | — | — |
| RSUs | ~20% of annual LTI | Four equal tranches; for 2024 grants: Mar 1, 2025/2026/2027/2028 | — | — | — |
| Performance Shares (PSUs) | ~60% of annual LTI | 3-year performance period; settled post-certification | MCO EPS for Compensation Purposes (50%); MIS Ratings Performance (25%); MA Cumulative Revenue (25%) | Same metrics retained | 200% of target |
Strategic Incentive Award (2024)
| Award | Performance Period | Metrics | Max Payout | Vest Date |
|---|---|---|---|---|
| Strategic Incentive Award (Steele) | 2024–2025 | Medium-term Organic Recurring Revenue; execution of GenAI initiatives and platform engineering | 125% of target | Mar 1, 2026 |
Equity Ownership & Alignment
| Category | Detail |
|---|---|
| Ownership Guidelines | NEOs must hold shares worth ≥3× base salary; 75% “hold until met” on net shares; options and unearned PSUs do not count; all NEOs in compliance as of Dec 31, 2024 . |
| Anti-Hedging/Pledging | Executives and family members prohibited from short sales, speculative hedging, margin purchases, and pledging Moody’s securities . |
| Clawback | Comprehensive policy exceeding SEC/NYSE rules; recoupment on restatements or misconduct/financial harm; applies to cash incentives and equity awards . |
| Insider Selling Pressure | 2023 exercises/vesting: 873 options exercised ($224,426); 712 shares vested ($208,306) . RSU tranches vest annually each March; PSUs vest in March following performance period; 75% hold requirement mitigates sell pressure . |
Outstanding Equity Awards at FY-End 2024 (as of Dec 31, 2024)
| Instrument | Quantity | Key Terms |
|---|---|---|
| Stock Options (Exercisable/Unexercisable) | 2020 grant: 727 exercisable, 0 unexercisable, $280.42 strike, exp. 2/20/2030 | Options vest 25% annually; 10-year term . |
| 2021 grant: 547 exercisable, 183 unexercisable, $276.84 strike, exp. 2/22/2031 | ||
| 2022 grant: 356 exercisable, 357 unexercisable, $325.99 strike, exp. 2/17/2032 | ||
| 2023 grant: 158 exercisable, 476 unexercisable, $295.33 strike, exp. 2/21/2033 | ||
| 2024 grant: 0 exercisable, 2,007 unexercisable, $372.16 strike, exp. 2/20/2034 | ||
| RSUs (Unvested) | 45 ($21,302 MV); 53 ($25,089); 92 ($43,550); 120 ($56,804); 153 ($72,426); 645 ($305,324); 380 ($179,881) | 2024 RSUs vest Mar 1, 2025/26/27/28 . |
| PSUs (Unearned) | 1,218 ($576,565 payout value) – granted 2/21/2023; 3,870 ($1,831,942 payout value) – granted 2/20/2024; plus 380 ($179,881) | 2023/2024 PSU cycles vest Mar 1, 2026/2027 at achievement . |
Note: 2023 vesting calendars include RSU tranches vesting on March 1, 2024/2025/2026/2027 depending on grant dates; performance shares for Steele granted in 2021 and 2022 were earned at stated levels for the period ending Dec 31, 2023 and vest in March 2024, subject to continued service .
Employment Terms
| Plan/Policy | Key Economics | Triggers/Conditions |
|---|---|---|
| Career Transition Plan (CTP) | Without Cause RIF/job elimination/mutual resignation: Steele estimated benefits at 12/31/2023 = $540,000 salary continuation (52 weeks), $500,000 target ACI, $435 insurance, $40,000 outplacement; Total $1,080,435 . Unsatisfactory performance: 26-week salary $270,000, $218 insurance, $40,000 outplacement; Total $310,218 . | Requires severance/release; non-compete/non-solicit/confidentiality during benefit period (typically one year) . |
| Change in Control Severance Plan (CICP) | Double-trigger only. For NEOs (non-CEO): lump sum 2× (base salary + target annual incentive) plus 2 years medical/dental coverage; no excise tax gross-ups . Steele estimated CIC termination benefits at 12/31/2023: $1,080,000 salary; $1,000,000 ACI; $870 insurance; $156,474 options; $224,572 RSUs; $1,019,361 PSUs; Total $3,481,277 . | Payable if terminated without Cause or resign for Good Reason within 90 days before or 2 years after a change in control; non-compete/non-solicit for two years; annual auto-renewal of plan . |
| Employment Agreements | Moody’s does not maintain U.S. executive employment agreements; executives are at-will . | |
| Equity Grant Practices | Annual grants typically 3–5 business days post 10-K; options priced at mean of high/low; minimum one-year vesting for equity awards . |
Compensation Structure Analysis
- Mix shift: 2024 equity awards for Steele increased materially (Stock Awards $1,073,309; Option Awards $240,017) versus 2023 ($239,808 stock; $60,021 options), increasing at-risk equity exposure and alignment with shareholder outcomes .
- ACI payout momentum: 2024 ACI paid at 135% of target (vs. 2023 absolute $500,000), reflecting strong outcomes against adjusted financial metrics; signals operational execution and upside versus targets .
- Performance metrics rigor: PSU metrics balanced across earnings (MCO EPS), ratings quality (MIS Ratings Performance), and MA growth (Cumulative Revenue/ARR); max payout capped at 200% and adjusted to exclude non-recurring items .
- Strategic award focus: Added two-year Strategic Incentive Award tying to Organic Recurring Revenue and GenAI/platform execution with max 125%; suggests emphasis on medium-term digital/platform initiatives within legal/compliance enablement .
Multi-Year Compensation Summary (NEO disclosure)
| Year | Salary ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive ($) | Change in Pension Value & NQDC Earnings ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| 2024 | 540,000 | 1,073,309 | 240,017 | 675,000 | 80,693 | 93,216 | 2,702,236 |
| 2023 | 462,470 | 239,808 | 60,021 | 500,000 | 112,256 | 34,608 | 1,409,163 |
Equity Ownership & Vesting Schedule Details
| Instrument | Grant Date | Vesting Schedule | Key Dates |
|---|---|---|---|
| RSUs (2024 grant) | Feb 20, 2024 | 4 equal tranches | Mar 1, 2025; Mar 1, 2026; Mar 1, 2027; Mar 1, 2028 |
| PSUs (2023 grants) | Feb 21, 2023; Sep 29, 2023 | 3-year performance; settle at target to max | Vest Mar 1, 2026 for period ending Dec 31, 2025 |
| PSUs (2024 grant) | Feb 20, 2024 | 3-year performance; settle at target to max | Vest Mar 1, 2027 for period ending Dec 31, 2026 |
| Options | Annual grants | 25% annually; 10-year expiry | Strikes and expirations per award table |
Employment Start, Tenure, Qualifications
- Appointment: Succeeded EVP–GC effective Sept 4, 2023 .
- Moody’s tenure: Joined in 2006 (KMV CLO); MA GC in 2008 .
- Education: B.A., UC San Diego; J.D., UC College of the Law, San Francisco .
Governance, Peer Group, Say-on-Pay
- Peer benchmarking: Committee reviews select peer group; 2023 changes included removing Invesco and adding Marsh & McLennan Companies to better align with risk/analytics comparables .
- Say-on-Pay: 2023 approval ~92%; five-year average support >92% per Board statement .
Investment Implications
- Alignment: Increased 2024 equity grants and PSU-heavy LTI strengthen pay-for-performance linkage; anti-pledging and 75% hold requirements reduce sell pressure from vesting events .
- Near-term flows: RSU tranches vest each March (2025–2028); PSUs vest March 2026/2027—watch for Form 4s around these dates; 75% net-share retention tempers supply .
- Retention risk: Strong severance protections (CTP/CICP) with double-trigger CIC terms and strategic incentive awards suggest lower flight risk; absence of employment contracts keeps flexibility but CTP/CICP non-compete obligations provide post-termination protections .
- Red flags: Isolated tax gross-up on NYC housing perquisite disclosed for 2023; company policy generally prohibits tax gross-ups and pledging; no evidence of hedging/pledging allowed, reducing alignment concerns .
Monitoring recommendations: Track annual March equity vestings and any incremental “Growth/Strategic” awards; review insider Form 4 activity for net-share dispositions vs. hold-till-met compliance, and monitor PSU achievement disclosures in future proxies to assess realized pay versus performance .