Baer Pettit
MSCIAbout Baer Pettit
C.D. Baer Pettit is MSCI’s President (since Oct 2017) and Chief Operating Officer (COO) (Jan 2020; previously COO 2015–2017), responsible for commercial and operational functions across client coverage, marketing, product management, R&D, technology, and operations. He joined MSCI in 2000, is age 60, holds an MA in history from Cambridge University and an MS from Georgetown’s School of Foreign Service, and has served on MSCI’s Board since 2023 (executive, non‑independent) . Company performance in 2024 included operating revenue growth of +12.9%, operating income +10.4%, adjusted EPS +12.4%, and cash from operations +21.5% (diluted EPS −2.4%), with ~$810.2M in share repurchases and an increased dividend (to $1.80 in 2025), underscoring execution under the senior team Pettit helps lead .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| MSCI | President | 2017–present | Led commercial and operational functions; owner-operator culture, performance-weighted LTIP . |
| MSCI | Chief Operating Officer | 2015–2017; 2020–present | Oversight of integrated operations, technology and processes . |
| MSCI | Head of Products; Head of Index Products; Head of Marketing; Head of Client Coverage | Various | Built product leadership and client-centric coverage across core franchises . |
Board Governance and Service
- Board service: Director since 2023 (executive, non‑independent) .
- Committee roles: Not listed as a member on Audit, Compensation, Governance, or Strategy committees; all committees are fully independent under NYSE heightened standards .
- Board meeting attendance: All directors met the 75% attendance threshold in 2024; eight Board meetings with independent director executive sessions after each .
- Dual-role implications: MSCI combines Chairman/CEO roles with a strong independent Lead Director, fully independent committees, majority independent board, and executive sessions that mitigate independence risks of executive directors (e.g., CEO + Chairman, President + Director) .
Fixed Compensation
Multi-year (fiscal) compensation for Baer Pettit (Summary Compensation Table):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | 773,397 | 777,076 | 798,743 |
| Non-Equity Incentive (AIP) ($) | 985,951 | 1,158,826 | 1,109,703 |
| All Other Compensation ($) | 419,430 | 295,318 | 586,225 |
Notes:
- 2024 base salary rate £625,000 (converted to $ using average spot rates; paid in GBP) .
- No defined benefit pension or nonqualified deferred compensation; straightforward program without excessive perquisites or excise tax gross-ups .
Performance Compensation
Annual Incentive Plan (AIP) – Structure and 2024 Outcomes
| Component | Weighting | Target Basis | 2024 Actual Payout (Pettit) |
|---|---|---|---|
| Financial Metrics | 70% | Revenue (20%), Adjusted EPS (30%), Total Net Sales (40%), Free Cash Flow (10%) | 94.3% of target |
| KPIs | 20% | Individual goals | 100% of target |
| Sustainability Goals | 10% | Executive accountability framework | 105% of target |
| Total Cash Incentive ($) | — | Target £900,000 (converted); AIP paid in GBP | $1,109,703 |
Long-Term Incentive Plan (LTIP) – Vehicles, Metrics, Vesting
| Vehicle | Weight (2024) | Metric | Target (2024 grants) | Vesting/Holding |
|---|---|---|---|---|
| PSUs | 30% | Absolute TSR CAGR; 0–200% payout (max cap reduced from 300% in 2024) | 3,880 target PSUs | Cliff-vest 1/31/2027; 1-year mandatory post-vest holding |
| PSOs | 70% | Combined cumulative Revenue and cumulative Adjusted EPS over 3 years (equally weighted) | 20,466 target PSOs; strike $598.62 | Cliff on 3rd anniversary, 10-year term; value only if stock > strike and goals achieved |
| RSUs | 0% | N/A | N/A | N/A |
2024 grant-date fair values: PSUs $1,950,088; PSOs $4,550,206 .
2025 LTIP allocation maintained at PSUs 30% and PSOs 70%; total 2025 equity compensation $7,200,000 (PSUs $2,160,000; PSOs $5,040,000) .
PSU performance curve (2024 awards): threshold 8% TSR CAGR (25%), target 10% (100%), max ≥20% (200%) .
2024 Earned/Vested Activity and Dividends
| Item | 2024 Value / Count |
|---|---|
| Shares acquired on vesting (#) | 27,158 |
| Value realized on vesting ($) | 15,843,706 |
| 2024 dividend equivalents paid ($) | 499,718 |
Equity Ownership & Alignment
| Ownership Metric | Data |
|---|---|
| Beneficial Ownership (shares) | 304,787 shares |
| Rights to Acquire (options) | 16,260 |
| Beneficial Ownership Total | 321,047 |
| Shares Outstanding (for % calc) | 77,601,625 |
| Ownership as % of Outstanding | ~0.41% (321,047 / 77,601,625) |
| Executive Stock Ownership Guideline | President & COO: 12x base salary; compliance and significantly exceeds guideline |
| Retention Requirement | Hold 25% of net shares from all equity awards while on Executive Committee |
| Anti-hedging/Anti-pledging | Hedging and pledging prohibited for all directors and employees |
Outstanding and unvested awards at 12/31/2024 (subject to performance/forfeiture):
| Award Type | Counts / Details |
|---|---|
| PSOs (unexercised, unearned) | 2024: 40,932 (max assumption); 2023: 31,478 (max); 2022: 16,260 (target); strikes $598.62 (2024), $554.52 (2023), $549.83 (2022); expirations 2/1/2034, 2/2/2033, 2/3/2032 |
| PSUs (unvested) | 42,475 at target across cycles; 2020 5-year PSU payout certified 25,943 vested (Feb 6, 2025); 2022 3-year PSUs paid 0% |
| RSUs | None (not granted to CEO/President & COO) |
Ownership guidelines counting rules: beneficially owned shares and unvested RSUs count; unexercised options and unearned performance awards excluded from minimum ownership calculation (amended per shareholder feedback) .
Employment Terms
| Provision | Key Terms / Amounts |
|---|---|
| Employment status | At-will; no fixed-term employment agreements for NEOs |
| Involuntary Termination (without cause) | Lump-sum equal to base salary + target annual bonus; plus prorated AIP based on actual performance through termination (as of 12/31/2024, illustrative: $3,099,124 for Pettit) |
| Change-in-Control (CIC) Severance Plan | Double-trigger; cash severance = 2x base salary + 2x average annual cash bonus (3-year avg) |
| Equity Acceleration (Illustrative as of 12/31/2024; $600.01/share) | Involuntary without cause (target equity): $20,163,254; Death/Disability (target equity): $24,504,124; Qualified retirement (target equity, “55/10” eligibility): $20,163,254; CIC termination (target equity): $24,504,124; Cash severance (CIC): $4,164,623; COBRA/UK medical continuation premiums: $17,908 |
| Clawbacks | Executive Committee Compensation Recoupment Policy (cash and equity; detrimental conduct) and Financial Statement Compensation Recoupment Policy (SEC Rule 10D‑1 compliant) |
Post-retirement advisory arrangement: Upon retirement effective March 1, 2026, Pettit will serve as advisor through a date in Q3 2026 to support a smooth transition . Retirement was announced Nov 17, 2025; he will remain President and Director until March 1, 2026; CEO will reassume President title thereafter; Board size reduced from 12 to 11 .
Compensation Structure Analysis
- Equity-heavy, performance-weighted mix: Pettit’s LTIP is 100% performance equity (PSUs/PSOs), reinforcing pay-for-performance and stock price alignment; RSUs excluded for President & COO .
- AIP metrics tied to operating plan: Clear link to revenue, adjusted EPS, net sales, FCF (70%); balanced with KPIs (20%) and sustainability goals (10%) to drive culture and execution .
- Shareholder-responsive changes: PSU max reduced from 300% to 200% starting 2024; ownership calculation tightened; PSO weighting increased to emphasize operational metrics .
- Governance practices: Double-trigger CIC; strong clawbacks; anti-hedging/pledging; independent consultant (Semler Brossy) with no conflicts .
Compensation Peer Group and Say-on-Pay
- 2024/2025 peer groups include S&P Global, Moody’s, MarketAxess, FactSet, Verisk, Equifax, TransUnion, Gartner, FICO, SEI, SS&C, Dun & Bradstreet; 2025 additions Cboe, CME, CoStar, ICE, Nasdaq; Aspen Technology and Black Knight removed .
- Say-on-Pay approval: ~97.3% in 2024; seventh consecutive year ≥96% .
Performance & Track Record
| Company Metric (2024) | Result |
|---|---|
| Operating Revenue Growth | +12.9% |
| Operating Income Growth | +10.4% |
| Adjusted EPS | +12.4% (diluted EPS −2.4%) |
| Cash From Operations | +21.5% |
| Free Cash Flow | +21.1% |
| Capital Returns | ~$810.2M repurchases (avg $537.72/share); dividend per quarter increased to $1.60 in 2024 and subsequently $1.80 in 2025 |
These outcomes reflect firm-wide execution across franchises Pettit oversees (Index, Analytics, ESG & Climate, Private Assets) and capital allocation discipline .
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited (reduces alignment risk) .
- Options repricing: Not permitted without shareholder approval; no evergreen; minimum vesting requirements .
- Clawbacks: Broad coverage beyond SEC minimums .
- Director independence: Majority independent Board; independent committees; mitigates dual-role concerns .
Board Director Compensation (Context)
Non-employee directors receive annual RSUs (May 1 grants; one-year vest) and cash retainers with robust stock ownership guidelines; caps are aligned to $1,000,000 aggregate (cash+equity) under the 2025 plan. Employee directors (e.g., Pettit) are not listed in the non‑employee director compensation table .
Employment & Transition Risk
- Announced retirement (effective March 1, 2026) introduces transition risk; CEO to reassume President title; COO responsibilities transitioned to Jorge Mina (also Head of Analytics) .
- Advisory arrangement mitigates handover risk; Board size to be reduced, keeping majority independence .
Investment Implications
- Alignment: Pettit’s equity-heavy LTIP and strict ownership/retention rules (12x salary guideline; 25% net shares hold; anti-pledging/hedging) suggest strong alignment and limited near-term selling pressure, though PSU/PSO cliffs in early 2027 could create episodic liquidity events; mitigated by 1‑year PSU post-vest holding and retention requirements .
- Performance sensitivity: AIP and PSO metrics tie comp to revenue and adjusted EPS, providing leverage to operating execution; PSU TSR thresholds ensure shareholder return focus .
- Transition: Retirement timeline and COO succession (to Mina) reduce execution gap risk; CEO consolidates titles, with independent governance structures (Lead Director, independent committees) sustaining oversight .
- Pay program support: High Say-on-Pay approval and responsive program changes (PSU cap, ownership rules) indicate low compensation governance overhang .