DEF: Moody's Sets 2026 Annual Meeting, Highlights Strong 2025 Performance

Moody's Corporation announces its 2026 Annual Meeting of Stockholders, detailing strong 2025 financial results and executive compensation decisions.

Summary

• The 2026 Annual Meeting of Stockholders will be held virtually on Tuesday, April 14, 2026, at 9:30 a.m. EDT, with February 18, 2026, as the record date for voting.
• Stockholders will vote on the election of ten director nominees, the ratification of KPMG LLP as the independent registered public accounting firm for 2026, and an advisory resolution approving executive compensation.
• For 2025, the company reported revenue of $7,718 million, an increase of 9% from 2024, with growth across both Moody's Analytics and Moody's Ratings segments.
• GAAP diluted earnings per share (EPS) for 2025 was $13.67, up 21% from 2024, and adjusted diluted EPS was $14.94, up 20% from 2024.
• Operating income for 2025 was $3,351 million, up 17% from 2024, and adjusted operating income was $3,942 million, up 16% from 2024.
• Executive compensation for 2025 saw cash incentive award payouts for Named Executive Officers (NEOs) ranging from 101% to 105% of target.
• Performance shares granted for the 2023-2025 cycle were earned at 159% of target, based on MCO EPS for Compensation Purposes, MIS Ratings Performance, and MA Cumulative Revenue.
• Nine of the ten director nominees are independent, and Lisa P. Sawicki is expected to join the Board effective March 16, 2026.
• Stephen Tulenko resigned as President of Moody's Analytics effective September 2, 2025, and received retirement treatment for his compensation plans.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this filing positively due to strong 2025 financial results, high executive compensation achievement tied to performance, and robust corporate governance practices, despite a slight underperformance against the broader S&P 500 for one-year TSR.

Positives

• Strong 2025 financial performance with revenue increasing 9% to $7,718 million.
• GAAP diluted EPS rose 21% to $13.67, and adjusted diluted EPS increased 20% to $14.94 in 2025.
• Operating income grew 17% to $3,351 million, and adjusted operating income increased 16% to $3,942 million.
• Achieved 120% of the three-year MCO EPS for Compensation Purposes profitability performance target.
• 2023-2025 performance shares were earned at a robust 159% of target.
• NEO cash incentive awards ranged from 101% to 105% of target, reflecting strong business and individual performance.
• The company's 1-year Total Shareholder Return (TSR) ranked at the 84th percentile and its 3-year TSR at the 93rd percentile among its peer group.
• Nine out of ten Board nominees are independent, ensuring strong oversight.
• Robust corporate governance practices include comprehensive clawback policies, strong stock ownership guidelines, and anti-hedging/anti-pledging policies.

Negatives

• One Form 4 filing for Mr. Forlenza was filed late due to an inadvertent administrative error.

Risks

• The Board oversees the company's enterprise-wide approach to major risks, including financial and compliance risks, internal controls, and cyber risks.
• Climate-related risks, such as business continuity disruption and reputational or credibility concerns, stemming from the incorporation of climate-related risks into credit rating methodologies.
• Cybersecurity risks and threats, which are regularly reported to the Board and Audit Committee.
• Risks related to Artificial Intelligence (AI) governance and regulatory compliance, with the Board providing oversight of strategy, investments, and innovation initiatives.
• Compensation practices are continuously assessed to ensure they do not create incentives for undue risk-taking behavior.
• Legal, financial, regulatory, and reputational risks associated with products and services, and expansion into new markets.

Future Outlook

The company's executive compensation program is designed to motivate executives to drive long-term stockholder value and focus on future financial and operational objectives. Strategic initiatives include continued leadership in GenAI internal adoption, product development, and partnerships, pursuing an AI-first product development lifecycle, expanding into new markets, and leveraging new distribution channels.

Management Comments

• Vincent A. Forlenza, Chairman of the Board, stated: "Your vote is important. Whether or not you plan to attend the Annual Meeting, we encourage you to review the proxy materials and hope you will vote as soon as possible."
• Robert Fauber, President and Chief Executive Officer, was recognized for driving growth by championing an integrated risk assessment strategy, exercising strong cost discipline, and making key investments in platforming across Moody's Ratings and Moody's Analytics.
• Robert Fauber was also noted for his continued leadership in GenAI internal adoption, product development, and partnerships with leading technology companies, pursuing an AI-first product development lifecycle to drive innovation, accelerate development, and enhance efficiency.

Industry Context

StockSavvy.ai notes that Moody's strong financial performance in 2025, particularly the 9% revenue growth across both Moody's Analytics and Moody's Ratings, indicates robust demand for credit risk analysis and financial information services. The high percentile ranking in TSR against its peer group suggests outperformance in a competitive financial services and fintech landscape, especially given the broader market conditions. The focus on AI and digitalization aligns with a major industry trend of leveraging advanced technology for efficiency and new product development in financial services.

Comparison to Industry Standards

• Moody's 1-year TSR of 9% (8.74%) underperformed the S&P 500 Composite Index's 17.72% for the same period.
• Moody's 3-year TSR of 88% (87.98%) slightly outperformed the S&P 500 Composite Index's 85.51% for the same period.
• Moody's 1-year TSR ranked at the 84th percentile among its peer group, which includes CME Group Inc., Gartner Inc., Nasdaq, Inc., Equifax Inc., Global Payments Inc., S&P Global Inc., Fair Isaac Corporation, Intercontinental Exchange, Inc., Thomson Reuters Corp., Fidelity National Information Services, Inc., Marsh & McLennan Companies, Inc., Verisk Analytics, Inc., Fiserv Inc., MSCI Inc., and Workday, Inc.
• Moody's 3-year TSR ranked at the 93rd percentile among its peer group.
• The company's compensation plan payout curves are more demanding than typical market practice, requiring higher performance for maximum payouts and offering lower minimum payouts at threshold performance.
• Voluntary employee turnover is lower than the sector average, indicating strong talent retention.
• The company exceeds industry standards for phishing exercises, demonstrating robust cybersecurity awareness.
• Moody's Ratings has been recognized by Extel as the best credit rating agency for a 14th consecutive year.
• Moody's has been ranked #1 in the Chartis RiskTech 100 for the fourth consecutive year.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders benefit from strong 2025 financial performance, high Total Shareholder Return (TSR) relative to peers, and robust corporate governance practices designed to align executive interests with long-term value creation.
• Employees are positively impacted by competitive total rewards programs, industry-leading benefits, flexible work arrangements under the 'PurposeFirst' framework, and comprehensive talent development and inclusion initiatives.
• Customers are a key focus, with efforts to improve the Net Promoter Score, extensive global C-suite engagement, and strategic initiatives aimed at enhancing product offerings and market leadership, particularly in private credit.
• Regulators are engaged through a continued focus on compliance, risk management, cybersecurity, and internal controls, ensuring adherence to legal and regulatory requirements in the company's operations and credit rating methodologies.

Next Steps

• Stockholders are encouraged to vote on director nominees, auditor ratification, and executive compensation at the 2026 Annual Meeting on April 14, 2026.
• The Board will consider contingent resignations if any director fails to receive a majority of votes cast in their election.
• The Audit Committee will re-evaluate its selection of KPMG LLP if stockholders do not ratify their appointment as independent auditors.
• The Board and the Compensation & Human Resources Committee will review and consider the voting results on the advisory resolution approving executive compensation.
• The next advisory vote on executive compensation is expected to be held at the 2027 annual meeting of stockholders.
• Stockholder proposals for inclusion in the 2027 annual meeting proxy statement must be received by November 4, 2026.
• Director nominations via proxy access for the 2027 annual meeting must be delivered between October 5, 2026, and November 4, 2026.
• Notices of other matters for the 2027 annual meeting (not for inclusion in the proxy statement) must be received between December 15, 2026, and January 14, 2027.

Key Dates

Recommendation

While Moody's demonstrated strong financial performance in 2025 and has robust governance practices, the filing is primarily a proxy statement for an annual meeting, not a new earnings report or strategic announcement. The positive financial results for 2025 are already known from the 10-K filing. The 1-year TSR underperformed the S&P 500, suggesting that while the company is performing well relative to its specific peer group, the broader market may offer higher short-term returns. Therefore, a 'hold' recommendation is appropriate for investors to maintain their position and monitor future developments.

Keywords

Moody's, MCO, Proxy Statement, Annual Meeting, Executive Compensation, Corporate Governance, Financial Performance, Stockholder Return, Credit Ratings, Financial Analytics, Risk Management, Cybersecurity, Artificial Intelligence, Board of Directors, KPMG