8-KLeadership ChangesShareholder MattersExhibits & Filings

MOODYS CORP /DE/ 8-K Report, Executive Changes (Apr 26, 2010)

Filed April 26, 2010For Securities:MCO

Summary

Moody's Corporation filed an 8-K report on April 26, 2010, detailing the outcomes of its Annual Stockholders Meeting held on April 20, 2010. The primary focus of the filing is the approval of two key executive compensation plans: the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive Plan and the 2004 Moody’s Corporation Covered Employee Cash Incentive Plan, as amended. These plan amendments, approved by the Board of Directors in December 2009, aimed to align definitions, enhance specificity for performance-based awards, increase share availability under the stock plan, and establish maximum award limits for the cash incentive plan, particularly to ensure deductibility under Section 162(m) of the Internal Revenue Code. Additionally, the filing reports on the election of directors and the ratification of KPMG LLP as the independent auditor. Notably, a stockholder proposal for an independent board chairman was defeated.

Key Highlights

  • 1Stockholders approved the Amended and Restated 2001 Key Employees' Stock Incentive Plan, allowing for various stock-based awards with updated 'Change in Control' definitions and increased share limits.
  • 2The 2004 Covered Employee Cash Incentive Plan, as amended, was also approved, providing performance-based cash incentives to senior management with defined maximum award payouts and conformity to tax regulations.
  • 3Three Class III directors were elected to three-year terms: Basil L. Anderson, Darrell Duffie, Ph.D., and Raymond W. McDaniel, Jr.
  • 4KPMG LLP was ratified as the independent registered public accounting firm for Moody's Corporation for the year 2010.
  • 5A stockholder proposal to adopt a policy requiring an independent chairman of the Board of Directors was not approved.
  • 6Amendments to the incentive plans included changes to 'Change in Control' definitions and introduced specificity to performance criteria and award structures.
  • 7The 2001 Stock Incentive Plan includes a maximum of 800,000 shares that can be granted annually to any participant, and prohibits repricing of options/SARs without stockholder approval.

Frequently Asked Questions

The amendments aimed to align 'Change in Control' definitions across company incentive plans, provide greater specificity for performance-based awards, increase the number of shares available under the stock plan, and establish maximum award limits for the cash incentive plan to preserve tax deductibility under Section 162(m) of the Internal Revenue Code.

The plan permits various awards, including stock options (incentive and nonqualified), stock appreciation rights, restricted stock, restricted stock units, performance shares, and other stock-based awards.

The stockholder proposal to adopt a policy that the chairman of the Company's Board of Directors be an independent director was defeated, with significantly more votes against it than for it.

The plan is for members of senior management who are 'Covered Employees' as defined by Section 162(m) of the Tax Code and whose compensation may be subject to tax deduction limitations. Typically, five to seven executives are expected to participate annually.