Henry Fernandez
MSCIAbout Henry Fernandez
Henry A. Fernandez is Chairman and CEO of MSCI (CEO since 1998; Chairman since 2007). He holds a BA in Economics from Georgetown, an MBA from Stanford GSB, and pursued doctoral studies in Economics at Princeton; age 66 as of March 2025 . MSCI’s performance under his leadership includes strong 2024 results (operating revenues $2.9B, +13% YoY; adjusted EPS +12%; free cash flow +21%) and disciplined capital allocation (1.5M shares repurchased for $810.2M) . Since MSCI’s 2007 IPO, the stock price increased more than 37x, implying a TSR CAGR of 23.5% vs 10.6% for the S&P 500 over the same period ; MSCI’s 10-year cumulative TSR reached $1,410 versus the S&P 500 at $342 as of 12/31/24 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| MSCI | Head of MSCI business | 1996–1998 | Led unit within Morgan Stanley pre-IPO; foundation for standalone MSCI |
| MSCI | President | 1998–Oct 2017 | Drove product, client expansion before transitioning to Chairman+CEO focus |
| Morgan Stanley | Managing Director (various: EM strategy, equity derivatives, M&A, corporate & mortgage finance) | 1983–1991; 1994–2007 | Built capital markets and strategic execution experience applicable to MSCI’s scale-up |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Royalty Pharma plc | Director | Aug 2020–present | Adds governance perspective from another public company board |
Fixed Compensation
Multi-year CEO compensation (Summary Compensation Table):
| Metric ($) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary | 1,000,000 | 1,000,000 | 1,000,000 |
| Stock Awards (fair value) | 5,000,359 | 5,500,207 | 3,480,002 |
| Option Awards (fair value) | 5,000,159 | 5,500,190 | 8,120,159 |
| Non-Equity Incentive (AIP cash) | 1,246,410 | 1,449,830 | 1,357,720 |
| All Other Compensation | 751,888 | 342,918 | 1,738,726 |
| Total | 12,998,816 | 13,793,145 | 15,696,607 |
2024 annual base and bonus:
| Component | 2024 Target | 2024 Actual |
|---|---|---|
| Base Salary ($) | 1,000,000 | 1,000,000 |
| AIP Target Cash Bonus ($) | 1,400,000 | 1,357,720 |
Performance Compensation
A. Annual Incentive Plan (AIP) structure and 2024 payout:
| Metric | Weighting | Target | Actual Achievement | Payout Impact |
|---|---|---|---|---|
| Financial (Revenue, Adjusted EPS, Total Net Sales, Free Cash Flow) | 70% | 980,000 | 94.3% | 923,720 |
| Individual KPIs | 20% | 280,000 | 100.0% | 280,000 |
| Sustainability Goals | 10% | 140,000 | 110.0% | 154,000 |
| Total AIP | — | 1,400,000 | — | 1,357,720 (96.98% of target) |
B. Long-Term Incentive Plan (LTIP) 2024 award mix (CEO 100% performance-based):
| Instrument | Weight | Grant Detail | Performance Metric | Vesting/Holding |
|---|---|---|---|---|
| PSUs | 30% | Target 6,924; max 13,848 | Absolute TSR CAGR over 3 years | Cliff vest end of performance period (Feb 1, 2024–Jan 31, 2027), then 1-year holding |
| PSOs | 70% | Target 36,523 at $598.62 exercise price | Combined cumulative Revenue and Adjusted EPS over 3 years (equal weighting) | Cliff vest at 3rd anniversary of grant (Feb 1, 2027), subject to performance |
C. 2025 one-time premium-priced option award (retention and performance lever):
| Tranche | Exercise Price | Premium vs $590.73 Close (1/30/2025) | Vesting | Term | Grant Value Allocation |
|---|---|---|---|---|---|
| PPO Tranche 1 | $1,000 | +69.3% | 5-year cliff (around Jan 31, 2030) | 10 years | Equal third of $15.0M |
| PPO Tranche 2 | $1,100 | +86.2% | 5-year cliff | 10 years | Equal third |
| PPO Tranche 3 | $1,200 | +103.1% | 5-year cliff | 10 years | Equal third |
Notes:
- PPO has no retirement vesting; forfeitable unless continued service or specific termination/CIC conditions; double-trigger vesting within 24 months post-CIC; full vest if not assumed at CIC .
- 2025 annual LTIP increased to $14.6M, 70% PSOs and 30% PSUs; no change to base or annual AIP target .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 2,182,801 shares (incl. right to acquire 29,564); 2.77% of outstanding (77,601,625) |
| Stock Ownership Guidelines | CEO: 12x base salary; he significantly exceeds requirement |
| Retention Requirement | Must retain 25% of net shares from all equity award settlements while on Executive Committee (post-2022 grants) |
| Anti-Hedging/Pledging | Prohibited for all directors and employees, including NEOs |
| 2024 Vesting Activity | 91,320 shares vested for Henry; realized value $53,275,175 (no options exercised) |
| Outstanding Service RSUs | None for CEO (CEO awards entirely performance-based) |
| PSU Outcomes (select) | 2020 5-year PSUs adjusted to 58,370 vested on Feb 6, 2025; 2022 3-year PSUs paid 0% |
Future vesting events and potential selling pressure:
- 2024 PSOs/PSUs cliff vest in early 2027 (performance-dependent), with PSUs subject to a 1-year holding post-vesting .
- 2025 PPO vests in early 2030 and is deeply performance-linked, reinforcing retention and alignment .
Employment Terms
| Provision | Terms |
|---|---|
| Severance Multiple (CIC Plan) | Lump sum = 2x base salary + 2x three-year average annual cash bonus |
| Henry’s Estimated Cash Severance | $4,702,640 (as of 12/31/24 assumptions) |
| Equity Acceleration (no CIC, involuntary without cause) | RSUs/PSUs to target; PSOs in-the-money portion; Henry: $48,737,717 (target) |
| Equity Acceleration (Death/Disability) | RSUs/PSUs to target; PSOs in-the-money; Henry: $48,737,717 (target) |
| Qualified Retirement Acceleration | Acceleration per retirement eligibility (Henry’s figure shown at target $48,737,717) |
| CIC Treatment | If awards not assumed/substituted at CIC: full vest pre-CIC; double-trigger full vest upon termination without cause or resignation for good reason within 24 months post-CIC |
| Clawbacks | Financial Statement Recoupment Policy (Rule 10D-1 compliant) and broader Executive Committee Recoupment Policy for detrimental conduct; awards subject to clawback under 2025 Plan |
| Restrictive Covenants (2025 PPO) | Post-employment non-compete, non-solicit (clients/employees), confidentiality; plus stock ownership/retention requirements apply |
| Tax Gross-Ups | Company does not provide excise tax gross-ups; options repricing prohibited without shareholder approval |
Board Governance (including dual-role implications)
| Attribute | Detail |
|---|---|
| Board Leadership | Combined Chairman & CEO (Henry Fernandez) with strong independent Lead Director (Robert G. Ashe, since 2018) |
| Independence | 11 of 13 directors were independent as of Feb 28, 2025; will be 10 of 12 post-Edmunds retirement; committees fully independent |
| Lead Director Responsibilities | Approves agendas/schedules, presides over independent sessions, advisor retention authority, shareholder engagement, performance/succession oversight |
| Committee Memberships (Henry) | Not a member of Audit, Compensation, Governance, Strategy (all independent) |
| Board Process | 8 Board meetings and independent director sessions after each; every director attended ≥75% of meetings |
Dual-role implications:
- Combination justified by Board as best for unified strategy execution; mitigated by robust lead director, fully independent committees, and regular independent sessions; investor feedback supports current structure .
Director Compensation and Say-on-Pay
- Non-employee directors primarily compensated via annual RSUs; subject to stock ownership guidelines requiring holding “net shares” from the last five years; anti-hedging/pledging applies .
- Say-on-Pay support was 97.3% at the 2024 annual meeting; enhancements include lowering PSU max from 300% to 200% and excluding unexercised options/unvested performance awards from ownership calculations .
Performance & Track Record
- 2024 achievements under Fernandez: operating revenues $2.9B (+13% YoY); adjusted EPS +12%; free cash flow +21%; strategic acquisitions/integration (Burgiss; Fabric; Foxberry); capital returns (1.5M shares at $537.72 avg; dividend increased 15.9%) .
- Product and data leadership (Climate Indexes adoption; Trove Research integration; Carbon Project Ratings; GeoSpatial Asset Intelligence) and AI initiatives (AI-focused reviews; AI Champions) .
- Since IPO: >37x share price increase; TSR CAGR 23.5% vs S&P 10.6% . Ten-year cumulative TSR also materially outperformed S&P 500 and MSCI USA Financials Index .
Compensation Structure Analysis
- High at-risk pay: 93% variable for CEO in FY 2024; 100% of LTIP in PSUs/PSOs (no time-based RSUs) .
- Performance metrics balance: Short-term financial and sustainability goals; long-term TSR and multi-year revenue/EPS PSOs; PSU cap lowered to 200% in 2024 (shareholder-aligned) .
- Retention design: 2025 PPO’s 5-year cliff and premium strikes, plus 25% net-share retention requirement, increase long-horizon alignment and reduce near-term selling incentives .
- Risk controls: Robust clawbacks (restatements and detrimental conduct), anti-hedging/pledging, no excise tax gross-ups, no option repricing without shareholder approval .
Investment Implications
- Alignment and retention: Fernandez’s 2.77% beneficial stake and stringent 12x salary ownership, 25% net-share retention and prohibition on hedging/pledging point to strong alignment; the premium-priced 2025 options materially tether value to multi-year outperformance, reducing near-term sale pressure .
- Pay-for-performance: AIP payout at ~97% of target reflects balanced execution vs plan; LTIP metrics (TSR, Revenue/EPS) and reduced PSU cap intensify pay-for-performance discipline; 2022 PSUs paid 0% (demonstrated downside for underperformance) .
- Governance checks on dual role: Combined Chair/CEO is offset by an empowered Lead Director, independent committees, and regular executive sessions; historical strong Say-on-Pay support suggests investors accept current structure, though succession and continuity should be monitored given PPO’s strict vesting .
- Event risk and severance economics: CIC severance equals 2x salary+bonus with substantial equity acceleration potential (~$48.7M at target), which could be material in M&A scenarios; policy design uses double-trigger vesting to align with shareholder outcomes .