Morningstar, Inc. (MORN) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to the 2020 Morningstar Annual Shareholder Meeting. I'm Joe Mansueto, Chairman of the Board, and I'm glad you could join us here this morning. Like most public companies holding annual meetings this month, we are holding our meeting virtually due to the COVID-19 crisis. We regret not being able to see you in person this year. But I hope everyone has been healthy and safe, and our hearts go out to anyone who has been negatively affected by the virus. It's certainly been a challenging time for the entire world. So even though we're holding this meeting virtually, we've kept the format identical to prior years'. We have 3 main parts to today's meeting. First is the official business of the meeting, which I don't anticipate will take too long. We'll do that on this audio call, which is hosted on the Broadridge platform since it has the necessary regulatory and compliance features. Then we'll take a short break until 9:30 a.m. Chicago time, Central Time, and reconvene on a Zoom call for the remainder of the meeting. We'll move to Zoom since it has better video and interactive capabilities. We'll then, on Zoom, move to the next 2 parts of the meeting, which are our management presentations, followed by our question-and-answer period. If you have any questions you'd like us to address in the live Q&A portion of the Zoom meeting, you'll have an opportunity to ask them via our zoom chat or through audio or video participation. Even though our meeting is virtual this year, we look forward to seeing you in the video. I am hearing your questions, so please get them ready. Okay. So let's now move to the official business of today's meeting. There are 3 items of business on today's agenda: the election of our directors, an advisory vote to approve executive compensation and the ratification of the appointment of KPMG as our independent auditors for this year. Greg Malatia, a representative of Broadridge Financial Services, is here today to act as the inspector of election. Pat Maloney, our General Counsel and Corporate Secretary, will now report on the mailing of the notice of this meeting, and the number of shares represented at today's meeting.

Thank you, Joe. We are holding this meeting pursuant to a notice mailed on April 3 to each shareholder of record on March 16. A certified copy of the list of shareholders of record has been available at our offices for the last 10 days. I can report that we have established a quorum for the conduct of business at this meeting.

Thank you, Pat. So the first item of business today is the election of directors. We will elect 10 directors at today's meeting. The directors elected today will hold office until the 2021 Annual Shareholders' Meeting or until their successors, if any, are elected or appointed. The nominees for director are Robin Diamonte, Cheryl Francis, Steve Joynt, Steve Kaplan, Kunal Kapoor, Gail Landis, Bill Lyons, Jack Noonan, Carolyn Tsay and myself, Joe Mansueto. The second item of business is the say on pay vote. As we now plan to do each year, we're asking our shareholders to vote on an advisory basis to approve the compensation of our named executive Officers as described in our proxy statement. The goals of our executive compensation program are to attract and retain talented executives, to motivate and reward them for their contributions to our company and then to align their interests with the long-term interests of our shareholders. And then the third item of business is a ratification of the appointment of KPMG as our independent auditors for 2020. The Board recommends a vote for each of these proposals. So I now declare the polls are open. If you are a shareholder, you may use the voting window on your screen to vote your shares at this time. Please remember that if you're already sending your proxy card or you voted by Internet, your shares have been voted accordingly. You do not need to vote today unless you're voting for the first time or wish to change your previous vote. [Voting]

If anyone has a question or a statement related to the proposals, please utilize the question field in your window and wait to be recognized. As I mentioned, there'll be a general question-and-answer session later in the meeting, but at this time, we'll only take questions that are related to the proposals. Are there any questions related to our proposals? We have Barb Noverini, our Head of Investor Relations, monitoring the incoming questions, and I am not hearing any. So if I don't hear any, we will move on. I now declare that the polls are closed. Pat, will you please report on the voting results?

The inspector of election has advised me that more than a majority of the shares represented in person or by proxy and entitled to vote at this meeting has been voted for each of the director nominees listed in our proxy statement in favor of our compensation for our named executive officers and to ratify the appointment of KPMG. We will file an 8-K with more detailed voting results in the next couple of days.

Thank you, Pat. So this concludes the formal business portion of our meeting. But before we sign off on this part, I have a few final comments. First, I'd like to thank us at Hugh Zentmyer for his 10 years of service on our Board. He reached our director retirement age this year and so did not stand for reelection. Hugh's been an outstanding director who has provided valuable oversight and advice to our management team over the past decade. Thank you, Hugh, for all your contributions to Morningstar's growth. You will definitely be missed. At the same time, I'd like to welcome Steve Joynt to our Board. Steve is a prior CEO of Fitch and, more recently, DBRS. As credit ratings are now a larger part of our business, Steve's counsel will be especially valuable. So I want to welcome Steve to our Board. And then finally, I'd like to thank Kunal Kapoor, our CEO, our management team and all of our staff at Morningstar for really doing incredible work over the past few months during the pandemic. Everyone worked so hard to successfully transition to a work-from-home environment while continuing to deliver the highest-quality data, research and ratings to investors without any interruptions. Our clients around the world look to us to help navigate the uncertainty and market volatility of the last few months, and we were there for them 24/7. So on behalf of our shareholders, I really want to thank everyone at Morningstar for all of your admirable efforts. They're much appreciated. So now we invite you to join us for our management presentations and a question-and-answer session on Zoom. We will hear from our CEO, Kunal Kapoor; our CFO, Jason Dubinsky; and Detlef Scholz, the Head of our Credit Ratings business. That session will begin promptly at 9:30 a.m. Chicago time, Central Time. So please follow the directions displayed on the screen to access the Zoom meeting, and we will continue with the remainder of the presentation there. Thanks very much for joining us this morning. We appreciate having all of you as our shareholders. We'll see you in a few minutes at 9:30 a.m. Central Time.