UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934

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MSCI Inc.

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Dear fellow shareholders,

First and foremost, thank you for your continued support of MSCI Inc. (“MSCI” or the “Company”). At MSCI, we have taken significant steps to live up to our mission of powering better investment decisions for a better world. We believe enhancing our own environmental, social and governance (“ESG”) practices and providing greater transparency not only benefits our employees and the environment but is also accretive to long-term shareholder value. As we approach the 2020 annual meeting of shareholders (the “2020 Annual Meeting”), we would like to share with you, on behalf of the Board of Directors (the “Board”), some of our key accomplishments and initiatives for 2019 and the beginning of 2020.

Refreshing Board Governance

The Board remains strongly committed to ensuring that we have fresh and diverse perspectives on the Board and its committees. We have appointed five new independent directors in the past five years. Most recently, we added Paula Volent and Sandy C. Rattray to the Board, both of whom have extensive experience in the investment industry as further detailed on page 31 of this Proxy Statement. In considering their appointments, the Nominating and Corporate Governance Committee (the “Governance Committee”) conducted a comprehensive search for candidates whose skill sets could complement and further strengthen the Board’s breadth of talent. Further, the Board sought directors whose experiences could equip them to advise management on long-term growth initiatives.

This year, we will bid farewell to Alice W. Handy and George W. Siguler as they approach their retirements from the Board at the 2020 Annual Meeting. Since joining the Board in 2009, Alice and George have helped guide MSCI’s strategic direction and supported the management team in executing ambitious growth plans. We join our fellow directors in welcoming Sandy and Paula and thanking Alice and George for their commitment to MSCI and its shareholders.

In light of these changes and with the aim of retaining continuity while also promoting refreshment, we reconstituted our committees to ensure that we have optimal alignment between individual director skill sets and the purpose and objectives of each of our committees.

Investing in Our People and Promoting a Strong Corporate Culture

The Board recognizes the importance of developing and retaining top talent for the long-term success of the Company. Through the leadership of its Compensation & Talent Management Committee (the “Compensation Committee”), the Board advises on talent management, succession planning, culture, and inclusion and diversity strategies. In 2019, the Company continued to focus on gender compensation parity and to enhance its training programs by increasing diverse representation in leadership and management development programs. We were also very proud to see that 45% of newly appointed managing directors in 2019 were women. Additionally, the Company continued to support inclusion and diversity by engaging employees around the world through events hosted by our Executive Diversity Council, MSCI Pride group and the Women’s Leadership Forum. The Company recently joined Out Leadership, a coalition of global companies working to improve LGBTQ+ equality.

The Compensation Committee remains focused on further aligning the interests of shareholders and management and cultivating an “owner-operator” mindset among our senior executives. The Compensation Committee is also focused on deepening a performance and growth culture among all our employees. As a result of these initiatives and engagement with our shareholders, in 2019, the Company granted annual performance stock units (“PSUs”) that cover a three-year performance cycle (the “3-Year PSUs”) as well as annual PSUs that cover a five-year performance cycle (the “5-Year PSUs”) and eliminated the additional relative total shareholder return compound annual growth rate performance metric modifier and the performance period “re-test” feature for the PSUs. In 2020, the Compensation Committee increased the percentage of our senior executives’ equity incentive compensation mix granted in the form of the 5-Year PSUs, thereby subjecting a greater percentage of our senior executives’ total compensation for 2019 to longer-term Company performance. You can read more about these changes starting on page 55 of this Proxy Statement.

We believe these talent management and compensation initiatives provide appropriate incentives to our senior management team and create a culture of high performance at the Company that will drive long-term shareholder return.

Reducing our Climate Impact

While MSCI operates in a relatively low-carbon industry, we understand the importance of being transparent about our carbon footprint and doing our part to reduce our impact on the environment. The Governance Committee receives a quarterly update from the Company’s Chief Responsibility Officer on the Company’s ESG practices. In 2019, the Company further strengthened its commitment to the environment through a variety of actions, including forming 15 local employee-driven environmental groups and eliminating single-use plastics from our largest offices. Additionally, the Company participated in the Carbon Disclosure Project, disclosing its carbon emissions and committing to setting carbon emissions targets by 2021, and conducted a TCFD-aligned scenario analysis of its carbon footprint. We believe these assessments and the Company’s ESG initiatives have allowed us to minimize the impact of our business on the environment.

Enabling ESG Investing

In addition to establishing robust ESG practices within our Company, MSCI has been at the forefront of providing tools that enable ESG integration across the investment industry. Today, investment processes are rapidly evolving in light of increased awareness of climate change, human capital practices, shifts in institutional governance and other ESG considerations that can impact long-term risks and opportunities in financial markets.

During 2019, we continued to focus on expanding our ESG offerings through organic and inorganic growth initiatives. We launched Climate Change EU Transition and Paris Agreement-aligned (COP-21) indexes as well as Fixed Income ESG indexes. We made ESG Ratings on over 2,800 companies in the MSCI ACWI Index publicly accessible. We also strengthened our climate-risk capabilities by acquiring Carbon Delta AG (“Carbon Delta”), an environmental fintech and data analytics firm. Through Carbon Delta, we plan to create a comprehensive climate risk assessment and reporting offering for the institutional market, equipping global investors with tools to help them better understand the impact of climate change on their investment portfolios.

Earlier this year, MSCI published “The MSCI Principles of Sustainable Investing,” a framework that sets forth the Company’s views and recommendations on the core principles and best practices for ESG integration. Given the significant impact that ESG factors are expected to exert on the pricing of assets and the allocation of capital in the coming decades, the framework urges adoption of ESG integration throughout the entire investment process, including in: (1) designing and monitoring investment strategies, (2) performing portfolio management activities and (3) conducting investment research. Investors who aim to improve long-term risk-adjusted returns can no longer disregard the importance of ESG risks and opportunities. We believe that we are just at the beginning of this very important shift in investing toward widespread adoption of ESG considerations. As demonstrated by the initiatives described above, facilitating ESG transparency across the investment ecosystem remains a key strategic focus of our Board.

We Ask for Your Support

Your vote is very important to us. We strongly encourage you to read both our Proxy Statement and annual report on Form 10-K for the year ended December 31, 2019 in their entirety and ask that you support our recommendations. We value hearing from, and engaging with, our stockholders. We sincerely appreciate your continued support of MSCI, and we look forward to the 2020 Annual Meeting.

Thank you for your continued support of MSCI and your participation in the 2020 Annual Meeting.

Henry A. Fernandez Chairman, Chief Executive Officer and Shareholder March 18, 2020		Robert G. Ashe Independent Lead Director and Shareholder March 18, 2020

Dear fellow shareholders:

I cordially invite you to attend the MSCI 2020 Annual Meeting to be held via the internet through a virtual web conference at www.virtualshareholdermeeting.com/MSCI2020 on April 28, 2020 at 2:30 P.M. Eastern Time, and any adjournments or postponements thereof, which may include a national emergency that makes us unable to hold the meeting on the date or in the manner that we planned. You will be able to attend the 2020 Annual Meeting online, vote your shares electronically and submit questions online during the meeting by logging in to the website listed above using the 16-digit control number included in your Notice of Internet Availability of the proxy materials, on your proxy card or on any additional voting instructions accompanying these proxy materials. We recommend that you log in a few minutes before the meeting to ensure you are logged in when the meeting starts.

We have adopted this technology to expand access to the meeting, improve communications and lower the cost to our shareholders, the Company and the environment. In the past, in-person shareholders’ meetings were only attended by a few shareholders. We believe virtual meetings enable increased shareholder participation from locations around the world. The online format allows us to communicate more effectively via a pre-meeting forum that you can enter by visiting www.proxyvote.com with your control number. Additionally, given the heightened concerns around COVID-19, the virtual meeting format allows us to continue to proceed with the meeting while mitigating the health and safety risks to participants.

The meeting is being convened for the following purposes:

Our Board of Directors recommends that you vote “FOR” the election of the directors, the approval, on an advisory basis, of our executive compensation and the ratification of the appointment of our independent auditor.

We are once again pleased to furnish our proxy materials over the internet pursuant to Securities and Exchange Commission (“SEC”) rules. As a result, we are mailing to many of our shareholders the Notice of Internet Availability of Proxy Materials instead of a paper copy of our proxy materials, including this Proxy Statement and our annual report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report on Form 10-K”). The Notice of Internet Availability of Proxy Materials contains instructions on how to access this Proxy Statement (including the proxy card) and our 2019 Annual Report on Form 10-K over the internet, how to request a paper or email copy of these materials and how to vote by mail or via the internet. We believe that posting the proxy materials on the internet expedites shareholders’ receipt of the information that they need, while lowering our costs of printing and delivery and reducing the environmental impact of the 2020 Annual Meeting.

Our Board has fixed the close of business on March 3, 2020 as the record date for determining the shareholders entitled to notice of, and to vote at, our 2020 Annual Meeting. The Notice of Internet Availability of Proxy Materials will be mailed to our shareholders of record beginning on or about March 18, 2020. These proxy materials are being made available beginning on or about March 18, 2020.

As a shareholder of MSCI, your vote is important. Whether or not you plan to attend our 2020 Annual Meeting, it is important that you vote as soon as possible to ensure that your shares are represented. For information on how to vote by mail, telephone, or via the internet, please refer to the question “How do I vote my shares?” in Annex A, or instructions in the Proxy Statement Summary, the proxy card, or the Notice of Internet Availability of Proxy Materials distributed to you on or about March 18, 2020.

Thank you for your support of MSCI.

Sincerely,

Henry A. Fernandez

Chairman, Chief Executive Officer and Shareholder

March 18, 2020

Note on Forward-Looking Statements

This Proxy Statement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect our actual results, levels of activity, performance or achievements.

Other factors that could materially affect actual results, levels of activity, performance or achievements can be found in the 2019 Annual Report on Form 10-K filed with the SEC on February 18, 2020 and in quarterly reports on Form 10-Q and current reports on Form 8-K filed or furnished with the SEC. If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what MSCI projected. Any forward-looking statement in this Proxy Statement reflects MSCI’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to MSCI’s operations, results of operations, growth strategy and liquidity. MSCI assumes no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise, except as required by law.

Information and reports on our website that we refer to in this Proxy Statement will not be deemed a part of, or otherwise incorporated by reference, in this Proxy Statement.

Table of Contents

MSCI INC. PROXY STATEMENT      •      i

Annual Meeting Agenda and Voting Recommendations

About MSCI Inc.

We are a leading provider of critical decision support tools and services for the global investment community. Leveraging our knowledge of the global investment process and our expertise in research, data and technology, our actionable solutions⁽¹⁾ power better investment decisions by enabling our clients to understand and analyze key drivers of risk and return and confidently and efficiently build more effective portfolios.

Investors all over the world use our tools and services to gain insight and improve transparency throughout their investment processes, including to help define their investment universe, inform and analyze their asset allocation and portfolio construction decisions, measure and manage portfolio performance and risk, conduct performance attribution, implement sustainable and other investment strategies, design and issue exchange traded funds (“ETFs”) and other index-enabled financial products, and facilitate reporting to stakeholders.

Our industry-leading, research-enhanced products and services include indexes; portfolio construction and risk management analytics; environmental, social and governance (“ESG”) research and ratings; and real estate benchmarks, return-analytics and market insights. Through our integrated franchise we provide solutions across our products and services to support our clients’ dynamic and complex needs. We are flexible in the delivery of our content and capabilities, much of which can be accessed by our clients through multiple channels and platforms.

We are focused on staying at the forefront of investment trends to address the evolving needs of our clients in a changing industry. In order to most effectively serve our clients, we are committed to driving an integrated solutions-based approach, achieving service excellence, enhancing our differentiated research and content, and delivering flexible, cutting-edge technology and platforms.

(1) The term “solutions” as used throughout this Proxy Statement refers to the use of our products and/or services by our clients to help them achieve their objectives.

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u The below depicts how we serve our clients and our overall role in the investment ecosystem.

MSCI INC. PROXY STATEMENT      •      3

OUR STRATEGY        

We aim to expand our position as a leading source for mission critical content, applications and services that support the investment processes of the largest and most sophisticated participants in the global investment industry. We continue to grow across our current offerings, execute our in-flight initiatives and invest in the next wave of opportunities. Our growth strategy is focused on a number of key initiatives that optimize the value of our integrated company and capitalize on our competitive advantages to address the changing needs of our clients and the investment industry. These strategic initiatives include:

In executing our strategy, we are committed to maintaining overall cost discipline and continuing to deliver positive operating leverage. Through disciplined expense management we can self-fund initiatives that deliver the highest return on investment.

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TOTAL SHAREHOLDER RETURN        

The following graph compares the cumulative total shareholders’ return (“TSR”) of our common stock, the Standard & Poor’s 500 Stock Index and the NYSE Composite Index since December 31, 2009 (a little over two years after our IPO) assuming an investment of $100 at the closing price of each respective investment on December 31, 2009. In calculating annual TSR, we have assumed the reinvestment of dividends, if any. The indexes are included for comparative purposes only. They do not necessarily reflect management’s opinion that such indexes are an appropriate measure of the relative performance of our common stock.

The above graph is not “soliciting material,” is not to be deemed filed with the SEC and is not to be incorporated by reference in any of our filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

MSCI INC. PROXY STATEMENT      •      5

STRONG FINANCIAL PERFORMANCE        

In 2019, we continued to execute a focused strategy to accelerate growth, improve efficiency and attract the best talent. Our strong results reflect our commitment to building long-term shareholder value. Financial highlights for the year ended December 31, 2019 include the following:

(1) MSCI has presented supplemental non-GAAP financial measures as part of this Proxy Statement. Definitions of each non-GAAP measure and a reconciliation of each non-GAAP financial measure with the most comparable GAAP measure are set forth in Annex B. The non-GAAP financial measures presented in this Proxy Statement should not be considered as alternative measures for the most directly comparable GAAP financial measures. The non-GAAP financial measures presented in this Proxy Statement are used by management to monitor the financial performance of the business, inform business decision making and forecast future results.

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Aligning Executive Compensation

with Company Strategy and Performance

We believe our executive compensation program was integral to our successful financial performance in 2019. To align the compensation and interests of our named executive officers (“NEOs”) with the long-term interests of our shareholders and to enhance the performance culture that is key to successfully delivering on our corporate strategy, MSCI’s executive compensation program emphasizes performance-based compensation in the form of equity incentive awards under our Long-Term Incentive Plan (“LTIP”) and cash incentive awards under our Annual Incentive Plan (“AIP”).

As previously described in our 2019 proxy statement, we reformulated our executive compensation program in 2019 to be one that is more closely aligned with shareholder interests and focused on the achievement of both short- and long-term financial and strategic targets, including tailoring our LTIP to incentivize our executives to focus on the long-term execution of our strategic priorities to create shareholder value.

In 2019, 98.2% of the votes cast on the “Say-on-Pay” proposal to approve our executive compensation program (the “Say-on-Pay Vote”) were voted in support of the compensation of our NEOs.

LTIP

The Compensation & Talent Management Committee (the “Compensation Committee”) adopted enhancements to the Company’s LTIP in 2019 which are designed to (i) prioritize shareholder value creation and (ii) facilitate an “owner-operator” mindset among our senior executives. In that regard, in 2019 and consistent with our historical practice since 2016, Mr. Fernandez’s LTIP award was granted entirely in the form of performance stock units (“PSUs”) and our other NEOs were granted a mix of PSUs and restricted stock units (“RSUs”).

The 2019 LTIP comprises a mix of the following:

In addition, in response to feedback from shareholders in the meetings described below, the Compensation Committee determined that the 3- and 5-year PSUs granted under the 2019 LTIP would not contain a relative TSR CAGR performance metric or use an extended performance assessment period when determining actual achievement of the absolute TSR CAGR goals. These changes provide for an even more rigorous performance assessment and increase the “at-risk” element of the LTIP.

For additional information about the 2019 LTIP program, please see page 66 of this Proxy Statement.

MSCI INC. PROXY STATEMENT      •      7

AIP

The AIP closely aligns the interests of our NEOs with those of shareholders by using a formulaic approach based on specific annual financial criteria aligned with our Board approved Operating Plan and individual key performance indicators (“KPIs”) when determining annual cash incentives. The Compensation Committee regularly assesses the metrics and weighting of those metrics, in addition to shareholder feedback, to ensure that the AIP reflects the appropriate metrics and proper balance of those metrics necessary to deliver the annual growth that will serve as the foundation for longer-term value creation.

Actual cash incentives paid to our NEOs for 2019 were higher than their target values based on actual performance against the applicable financial metrics and their KPIs due to our strong financial performance and the performance of our NEOs in 2019.

For additional information about the 2019 AIP program, please see page 58 of this Proxy Statement.

CEO COMPENSATION

For 2019, Mr. Fernandez was awarded an annual incentive payout of $1.7 million, reflecting above-target performance against financial targets in our plan and a KPI score of 115% (see page 65 of this Proxy Statement for details).

For 2020, the Compensation Committee determined to make no increase to Mr. Fernandez’s base salary or total target cash incentive award amount. The Compensation Committee increased Mr. Fernandez’s LTIP award by 15.4% for 2020. The Compensation Committee determined that 100% of his LTIP would again be granted solely in the form of PSUs which are contingent on 3- and 5-year total shareholder return. The Compensation Committee’s determination was predicated on the substantial performance contingency of the PSU program and in consideration of market pay levels among MSCI peers and MSCI’s superior performance under Mr. Fernandez’s leadership since becoming a public company in 2007.

ENHANCED CLAWBACK POLICY

Effective February 7, 2019, the Company’s Clawback Policy was enhanced to be more rigorous and cover a broader range of detrimental conduct and financial restatements. Under the enhanced Clawback Policy, the Board, acting upon the recommendation of the Compensation Committee, may, to the extent permitted by applicable law, recoup any incentive compensation (cash and equity) received by members of the Company’s Executive Committee and the Company’s Principal Accounting Officer, in the event of (1) a restatement of the Company’s financial statements, (2) a restatement or adjustment of the achievement of applicable performance metrics, (3) detrimental conduct that has impacted the achievement of applicable performance metrics and (4) detrimental conduct that causes material financial or reputational harm to the firm. For additional details regarding our enhanced Clawback Policy, see page 73 of this Proxy Statement.

INCREASED STOCK OWNERSHIP REQUIREMENTS

As part of the Compensation Committee’s ongoing assessment of the Company’s compensation policies and practices to ensure furtherance of the goals identified above and for alignment with best practices, the Compensation Committee adopted more rigorous stock ownership guidelines that became effective in 2019. The ownership requirements for the Company’s President and Chief Operating Officer (“COO”) and Chief Financial Officer (“CFO”) were increased from 3x base salary to 4x base salary and the ownership requirements for the rest of the Company’s Executive Committee members (other than our CEO) increased from 2x base salary to 3x base salary. Our CEO’s ownership requirements remained at 6x base salary. For more information on the changes to the stock ownership guidelines, refer to page 72 of this Proxy Statement.

SHAREHOLDER ENGAGEMENT

As noted above, in 2019, 98.2% of the votes cast on the Say-on-Pay Vote were voted in support of the compensation of our NEOs. The Company will continue to maintain an active dialogue with shareholders and evaluate feedback on issues of importance to them, including the metrics that drive each of our NEO’s long-term incentive compensation. Our engagement with shareholders on executive compensation is further described on page 55 of this Proxy Statement.

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MSCI INC. PROXY STATEMENT      •      9

Governance Highlights

DIVERSE BOARD

ROBUST CORPORATE GOVERNANCE PRACTICES

ACTIVE BOARD REFRESHMENT

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OUR BOARD OF DIRECTORS NOMINEES        

Each of our current directors, other than Alice W. Handy and George W. Siguler (who will both retire from our Board effective as of the 2020 Annual Meeting and will therefore not stand for re-election this year), is standing for election to hold office until the next annual meeting of shareholders or until the director’s earlier resignation, death or removal. The table below provides information on each of our director nominees.

MSCI INC. PROXY STATEMENT      •      11

Corporate

Governance

Proposal No. 1 - Election of Directors

Our Board currently has 12 directors. Each director stands for election at each annual meeting of shareholders and holds office until his or her successor has been duly elected and qualified or the director’s earlier resignation, death or removal. Each of George W. Siguler and Alice W. Handy will not be standing for re-election at the 2020 Annual Meeting and will be retiring from our Board, effective April 28, 2020. Concurrent with their resignations, the size of the Board will be decreased to 10 directors. All of the nominees presented beginning on page 14 of this Proxy Statement are directors of MSCI as of March 18, 2020. All directors, other than Sandy C. Rattray and Paula Volent, were elected at the 2019 annual meeting of shareholders. The Board believes that each of the nominees brings strong skills and experience to the Board, giving the Board, as a group, the appropriate skills needed to exercise its oversight responsibilities and advise management with respect to the Company’s strategic initiatives.

Each nominee has indicated that he or she is willing and able to serve if elected. We do not anticipate that any nominee will be unable or unwilling to stand for election, but if that happens, your proxy will be voted for another person nominated by the Board or the Board may elect to reduce its size.

VOTE REQUIRED AND RECOMMENDATION        

The affirmative vote of a majority of the votes cast with respect to each director’s election at our 2020 Annual Meeting is required to approve Proposal No. 1. Abstentions shall not be treated as votes cast. For additional information on the consequences for directors who do not receive a majority of the votes cast, please refer to “What happens if a director does not receive a majority of the votes required for his or her re-election” in Annex A.

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DIRECTOR CORE COMPETENCIES        

Our Board includes an appropriate mix of experience, tenure, diversity, leadership, skills and qualifications in areas of importance to the Company. Our directors have had senior leadership experience at various domestic and multinational companies. In these positions, they obtained diverse management skills, including strategic and financial planning, regulatory compliance, risk management and leadership development. Additional detail on each director nominee’s experiences and qualifications follows their biographies beginning on page 14 of this Proxy Statement. The Governance Committee believes the director skills and experiences set forth on the “Director Core Competencies” table below are those most relevant to the Board’s oversight responsibilities and the Company’s strategic direction and strives to ensure that the Board includes a balanced mix of qualifications.

MSCI INC. PROXY STATEMENT      •      13

2020 DIRECTOR NOMINEES        

		Henry A. Fernandez Chairman and CEO Age: 61 Director since: 2007

BIOGRAPHY: Mr. Fernandez has served as a director and Chairman of our Board since 2007 and as our CEO since 1998. He served as our President from 1998 to 2017. Before leading MSCI’s transition to becoming a fully independent public company in 2007, he was a Managing Director at Morgan Stanley, where he worked in emerging markets product strategy, equity derivative sales and trading, mergers and acquisitions, worldwide corporate finance and mortgage finance for U.S. financial institutions. Mr. Fernandez worked for Morgan Stanley from 1983 to 1991 and from 1994 to 2007. Mr. Fernandez holds a Bachelor of Arts in economics from Georgetown University, an M.B.A. from the Stanford University Graduate School of Business and pursued doctoral studies in economics at Princeton University.

 

		Robert G. Ashe Independent Lead Director Age: 60 Director since: 2013

BIOGRAPHY: Mr. Ashe retired from IBM Corporation (“IBM”) in January 2012, where he had most recently served as General Manager of Business Analytics from 2010 to 2012 and before that as General Manager of Business Intelligence and Performance Management since 2008, following IBM’s acquisition of Cognos Inc. (“Cognos”), a Canadian provider of business intelligence and performance management products. Mr. Ashe worked for Cognos from 1984 to 2008 holding various executive positions, including most recently President and Chief Executive Officer from 2004 to 2008, President and Chief Operating Officer from 2002 to 2004 and Chief Corporate Officer from 2001 to 2002, during a portion of which time he also served as Chief Financial Officer. He also held various Senior Vice President positions in Worldwide Field Operations, Products and Application Development Tools from 1996 to 2001. Prior to that, he held various Vice President roles within Product

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		Benjamin F. duPont Independent Director Age: 56 Director since: 2008

BIOGRAPHY: Mr. duPont is co-founder and Managing Partner at Chartline Capital Partners. Chartline Capital Partners has 26 portfolio companies, and invests in “structured” stage venture capital—with a focus on: Digital Health, Retail Analytics, Telecom Infrastructure, Digital Industrial and Food Supply Chain. In 2010, he co-founded yet2Ventures and while it continues to exist as a manager of legacy investments, as of October 2016, continuing investments are made under Chartline Capital Partners and he no longer serves as a principal of yet2Ventures. Mr. duPont also co-founded yet2, a global open innovation and technology scouting services company, and continues to serve on its board of directors. Prior to

		Wayne Edmunds Independent Director Age: 64 Director since: 2015

BIOGRAPHY: Mr. Edmunds previously served as the Interim Group Chief Executive of BBA Aviation plc from July 2017 to March 2018. He previously served as Chief Executive Officer of Invensys plc at Invensys Systems, Inc. from 2011 until his retirement in 2014. Previously, Mr. Edmunds was Chief Financial Officer of Invensys. Prior to joining Invensys in 2008, Mr. Edmunds was Senior Vice President of Finance at Reuters America, Inc. from 2005 to 2008. Mr. Edmunds served as the Chief Financial Officer of Innovance Networks Inc. (“Innovance”) from 2000 to 2004, where he was responsible for financial planning and operations. Prior to joining Innovance, Mr. Edmunds held other senior management roles in the technology sector, including working 17 years at Lucent Technologies, Inc., where he served as Vice President of Finance for the Optical Networking Division and as Vice

MSCI INC. PROXY STATEMENT      •      15

		Catherine R. Kinney Independent Director Age: 68 Director since: 2009

BIOGRAPHY: Ms. Kinney retired from NYSE Euronext in March 2009, having served as a Co-President and Co-Chief Operating Officer from 2002 to 2008. From 2007 to 2009, she served in Paris overseeing global listings, marketing and branding, and served as part of the integration team following the merger of the New York Stock Exchange (the “NYSE”) and Euronext in April 2007. Ms. Kinney joined the NYSE in 1974 and rose through the ranks holding management positions with responsibility for several divisions including: all client relationships from 1996 to 2007, trading floor operations and technology from 1987 to 1996 and regulation from 2002 to 2004. Ms. Kinney holds a Bachelor of Arts from Iona College and has completed the Advanced Management Program at Harvard Graduate School of Business. She has received honorary degrees from Georgetown University, Fordham University and Rosemont College.

		Jacques P. Perold Independent Director Age: 61 Director since: 2017

BIOGRAPHY: Mr. Perold was President of Fidelity Management & Research Company, the investment advisor for Fidelity’s family of mutual funds, until his retirement in 2014. From 2001 to 2009, Mr. Perold was President of Geode Capital Management, LLC, a sub-advisor to Fidelity. He is currently a trustee of New York Life Insurance Company’s Mainstay mutual funds, a trustee of Partners in Health, and a co-founder of CapShift, a company focused on enabling impact investments from donor advised funds and foundations. Mr. Perold holds a Bachelor of Arts in economic history from the University of Cape Town and a post-graduate Bachelor of Arts Honours in sociology from the University of Cape Town.

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		Sandy C. Rattray Independent Director Age: 50 Director since: 2020

BIOGRAPHY: Mr. Rattray is currently the Chief Investment Officer of Man Group plc, a position he has held since 2017. He previously served as Chief Executive Officer of Man AHL from 2013 to 2017, and Chief Investment Officer of Man Systematic Strategies from 2010 to 2013. Prior to holding such positions, he held several other senior leadership positions at Man Group. Before Joining GLG Partners, which was later acquired by Man Group, in 2007, he spent 15 years at Goldman Sachs where he held various positions, including Managing Director and head of the Fundamental Strategy Group. Mr. Rattray also sits on the MSCI Advisory Council. He

		Linda H. Riefler Independent Director Age: 59 Director since: 2007

BIOGRAPHY: Ms. Riefler retired from Morgan Stanley in February 2013. Ms. Riefler served as the Chair of Global Research at Morgan Stanley from June 2011 to February 2013 and prior to that served as the Global Head of Research from 2008. She was the Chief Talent Officer of Morgan Stanley from 2006 to 2008. In these roles she served on both the Management Committee and Operating Committee of Morgan Stanley. Ms. Riefler joined Morgan Stanley in 1987 in the Capital Markets division and was appointed a Managing Director in 1998 while in the Research division. Ms. Riefler holds a Bachelor of Arts in economics from Princeton University and an M.B.A. from the Stanford University Graduate School of Business.

MSCI INC. PROXY STATEMENT      •      17

		Marcus L. Smith Independent Director Age: 53 Director since: 2017

BIOGRAPHY: Mr. Smith was most recently the Director of Equity (Canada) and a portfolio manager at MFS Investment Management (“MFS”) until his retirement in April 2017. As a portfolio manager, he was responsible for managing the MFS Institutional International Equity Portfolio and the International Concentrated Portfolio. He joined MFS in 1994 and held a variety of positions, including Director of Equity (Asia) from 2010 to 2012, based in Boston, Director of Asian Research from 2005 to 2009, based in Singapore, and Equity Analyst from 1995 to 2000, based in London. Mr. Smith currently also serves

		Paula Volent Independent Director Age: 63 Director since: 2020

BIOGRAPHY: Ms. Volent is currently the Senior Vice President for Investments and Chief Investment Officer at Bowdoin College, a role she has held since 2006. She previously served as Vice President for Investments at Bowdoin College from 2002 to 2006, and Associate Treasurer at Bowdoin College from 2000 to 2002. Prior to joining Bowdoin College in 2000, Ms. Volent served as a Senior Associate at the Yale Investments Office and before focusing on endowment management, she worked as a paper conservator. She holds an M.B.A. from Yale School of Management, a Master of Arts from the

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Structure of our Board and Governance Practices

BOARD LEADERSHIP STRUCTURE        

Henry A. Fernandez has served as the Chairman of our Board since our IPO in November 2007 and CEO since 1998. Robert G. Ashe has been our Lead Director since April 2018. The key attributes and responsibilities of the Chairman and the Lead Director roles (which are set forth below) have evolved over time to make MSCI’s leadership both decisive and effective, and enable the Company to execute on its growth strategies.

We believe that it is in the best interests of MSCI and its shareholders to combine the roles of Chairman and CEO at this time because it provides the Company with continued unified leadership and direction. We believe Mr. Fernandez is best situated to serve as Chairman because he is the director most knowledgeable about the Company’s products, services and industry, and is in a position to effectively identify strategic priorities, recommend appropriate agendas and lead the execution of our strategy. Mr. Fernandez’s historical knowledge and in-depth understanding of the Company and its

MSCI INC. PROXY STATEMENT      •      19

products and services enable him to identify areas of focus for the Board while effectively executing the Company’s strategy. At the same time, the Company’s independent directors bring experience, oversight and expertise from various perspectives and disciplines. We also believe that combining the role of Chairman and CEO facilitates the flow of information between management and the Board, provides clear accountability and promotes efficient decision making, all of which are essential to effective governance.

Additionally, our Board leadership structure is enhanced by the independent leadership provided by our Lead Director who provides effective independent oversight through his expansive responsibilities.

While we believe that continuing to combine the roles of Chairman and CEO is the most effective leadership structure for our Board and the Company at this time, our Amended and Restated Bylaws (“Bylaws”) and Corporate Governance Policies also permit a structure where the CEO would not serve contemporaneously as the Chairman of the Board should the separation of such roles be deemed appropriate and in the best interests of MSCI and its shareholders in the future.

DIRECTOR INDEPENDENCE        

Our Corporate Governance Policies provide that the Board should have a significant majority of independent directors meeting the independence requirements of the NYSE. Our Board has determined that each of Messrs. Ashe, duPont, Edmunds, Perold, Rattray, and Smith, Mmes. Kinney, Riefler and Volent, and Ms. Handy and Mr. Siguler is independent in accordance with the requirements of our Corporate Governance Policies, which follow the NYSE rules and guidelines. In making such determinations, there were no material transactions, relationships or arrangements not disclosed herein under “Other Matters—Certain Transactions” to be considered by the Board in determining whether each director was independent. Therefore, 11 of our 12 current directors are independent. Following the retirements of Ms. Handy and Mr. Siguler, nine of our ten directors will be independent. Only Mr. Fernandez is not independent because of his position as CEO of MSCI.

All members of the Audit Committee, Compensation Committee and Governance Committee satisfy the independence requirements of the NYSE. In addition, each member of the Audit Committee and Compensation Committee meets the heightened independence standards of the NYSE required for audit committee and compensation committee members, respectively.

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BOARD AND INDIVIDUAL DIRECTOR EVALUATIONS        

In addition to the ongoing assessment of the functioning of the Board, each year our directors formally evaluate the effectiveness of the Board and its committees through a self-assessment administered by our directors and management. Directors respond to questions designed to elicit information that will be useful in improving Board and committee effectiveness. Such feedback is discussed during executive session and, where appropriate, addressed with management. The process for this annual feedback is set forth below.

The Board may also periodically engage a third-party evaluation firm. In 2019, a third-party evaluation firm met with certain members of senior management and members of the Board. The feedback from the third-party evaluation firm was considered by the Board and, where appropriate, the Board recommended enhancements to its practices based on such feedback.

DIRECTOR EDUCATION        

All new directors participate in a director orientation program that includes in-person briefings by senior management representing the heads of the product lines and key functional areas on topics that include, among others: the Company’s strategic plans, capital structure, product overviews, historical financial performance, and key policies and practices, including compliance and trading policies. New directors are also encouraged to attend all committee meetings during their first year. Directors are encouraged and provided with opportunities to attend educational sessions on subjects that could assist them in performing their duties. Pursuant to its Director Education Policy, the Company will reimburse directors for reasonable costs incurred from attending these sessions. In addition to external educational opportunities, directors participate in onsite educational sessions, including an annual review of leading corporate governance practices by corporate governance experts, briefing sessions on topics that present special risks and opportunities, updates on accounting topics, and product line reviews presented by the heads of each of our product segments.

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SHAREHOLDER ENGAGEMENT        

We believe that engaging with our shareholders, prospective shareholders and sell-side analysts is the best way to address the issues that matter most to them. Dialogue with these constituencies helps us understand their perspectives on the Company’s goals and expectations for performance, as well as identify issues that might affect our long-term strategy, corporate governance and compensation practices. As such, we offer several opportunities to provide feedback to our Board and senior management, including inviting certain shareholders to address the Board and present their views on the Company.

We also engage with shareholders before, during and after the proxy season to review and receive feedback on the Company’s governance practices and design features in our executive compensation program. During these engagements, we typically discuss topics such as market trends affecting our industry, the competitive environment, our go-to-market strategy, our financial performance and our overall outlook for the Company.

Additionally, in response to the investment community’s interest in ESG practices, we enhanced the disclosures on our Corporate Responsibility webpage to provide additional information on the framework within which MSCI manages its ESG practices and initiatives, career development practices, employee management programs, compliance policies, and environmental and sustainability practices. Multiple corporate ESG objectives were also incorporated into our CEO’s KPIs for 2019.

Our discussions with our top shareholders in the fall of 2019 were centered around several key topics: (i) our strategy, (ii) our governance, (iii) our people, (iv) executive compensation and (v) corporate responsibility. During these meetings, we discussed, among other things: (i) changes to compensation, (ii) our general compensation philosophy, (iii) the retirement age for directors, (iv) Board refreshment, (v) the Strategy and Finance Committee (the “Strategy Committee”), (vi) sustainability practices in light of being a leader in ESG ratings and data and (vii) shareholder proposals. These meetings often included the Chair of our Governance Committee, Head of Investor Relations, General Counsel, Chief Strategy Officer, Chief Responsibility Officer and Global Head of Compensation and Benefits.

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Our directors and senior executives recognize the benefits that come from providing our shareholders, prospective shareholders and sell-side analysts with visibility and transparency into our business and knowing their positions on issues that are important to them. We are committed to continuing to maintain an active dialogue with these constituencies. Please see page 55 of this Proxy Statement for additional information on our engagement efforts specific to compensation matters.

ATTENDANCE AT BOARD MEETINGS AND ANNUAL MEETING OF SHAREHOLDERS        

Our Board met nine times, held independent director executive sessions following all nine of those meetings and took action by unanimous written consent on four occasions during 2019. Each director attended at least 75% of the total meetings of the Board and committees on which the director served that were held while the director was a member.

Discussions between the Board and management on strategic direction, new business opportunities and the scope and mix of the Company’s products were held at each quarterly Board meeting. In addition to formal meetings, members of our Board informally interact with senior management on a periodic basis.

Our Corporate Governance Policies state that directors are expected to attend the annual meetings of shareholders. In 2019, all of our directors who were on the Board at the time attended our annual meeting of shareholders.

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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS        

Our Board has adopted a written charter for each of the Audit Committee, Compensation Committee, Governance Committee and Strategy Committee setting forth the roles and responsibilities of each committee. Each committee annually reviews and assesses the adequacy of its charter and recommends any proposed changes to the Board for approval. To access these charters, click on the “Corporate Governance” link found on our website’s Investor Relations homepage (http://ir.msci.com).

The table below provides detail on the composition of each of our designated standing committees for the following periods: (i) May 1, 2019 to April 26, 2020 (“2019”) and (ii) effective April 27, 2020 (“2020”).

(1) Ms. Handy is not standing for re-election at the 2020 Annual Meeting but will remain on the Board through that date.

(2) Ms. Lane did not stand for re-election at the 2019 Annual Meeting but remained on the Board through that date.

(3) Mr. Rattray was appointed to the Board, effective February 26, 2020.

(4) Mr. Siguler is not standing for re-election at the 2020 Annual Meeting but will remain on the Board through that date.

(5) Ms. Volent was appointed to the Board, effective February 26, 2020.

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Alice W. Handy is not standing for re-election at the 2020 Annual Meeting but will remain on the Board through that date. Effective April 27, 2020, Linda H. Riefler and Sandy C. Rattray will serve on the Audit Committee. Each of Ms. Riefler and Mr. Rattray is independent within the meaning of the NYSE standards of independence for audit committee members, satisfies the NYSE financial literacy requirements and has accounting or other relevant management expertise. Effective April 27, 2020, Mr. Smith will no longer serve on the Audit Committee.

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Effective April 27, 2020, Marcus L. Smith will serve on the Compensation Committee. Mr. Smith qualifies as a “non-employee” director for purposes of Rule 16b-3 under the Exchange Act and satisfies the requirements of “outside directors” pursuant to §162(m) of the IRC. Mr. Smith has also confirmed in connection with his appointment that there exists no Compensation Committee interlocks or insider participation.

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George W. Siguler is not standing for re-election at the 2020 Annual Meeting but will remain on the Board through that date. Effective April 27, 2020, Catherine R. Kinney and Paula Volent will serve on the Governance Committee, and Ms. Riefler will no longer serve on the Governance Committee.

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Effective April 27, 2020, Sandy C. Rattray and Paula Volent will serve on the Strategy Committee, and Catherine R. Kinney and Henry A. Fernandez will no longer serve on the Strategy Committee.

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BOARD ROLE IN RISK OVERSIGHT        

The Board’s role in risk oversight is consistent with the Company’s leadership structure, with management having day-to-day responsibility for identifying, evaluating and managing the Company’s risk exposure and the Board having the ultimate responsibility for overseeing risk management governance with a focus on the Company’s most significant risks. The Board is assisted in meeting this responsibility by its committees as described below.

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Cybersecurity

On a quarterly basis, the Audit Committee is updated on the Company’s IT risk program and its related priorities and controls. As part of this update, the Audit Committee is provided with a written report on such topics that is also made available to the full Board. The Chair of the Audit Committee informs the Board of any key updates during his quarterly reports to the Board.

DIRECTOR QUALIFICATIONS        

The Governance Committee’s charter requires it to review candidates’ qualifications for membership on the Board or a committee of the Board, including making a specific determination as to the independence of each candidate based on criteria approved by the Board (and taking into account the enhanced independence, financial literacy and financial expertise standards that may be required under applicable law or NYSE rules for audit committee membership purposes, and heightened independence standards that may be required under law or NYSE rules for compensation committee membership purposes). If the Governance Committee determines that adding a new director is advisable, it will recommend such individual to the Board for appointment as a member of the Board and any committees (as applicable).

Consistent with our Corporate Governance Policies, when appointing directors, the Board seeks members who combine sound business judgment, professionalism and a broad spectrum of experience and expertise with a reputation for the highest standards of ethics and integrity. Directors should have experience in positions with a high degree of responsibility, be leaders or senior managers in the companies or institutions with which they are or were affiliated and be selected based upon contributions they can make to the Board and management and their ability to represent and advance the interests of the Company and its shareholders. The Board will also take into account diversity of a candidate’s perspectives, background, and other demographics. Our diversity objectives are also implemented and monitored through periodic reviews by the Governance Committee of the composition of the Board and its committees in light of the then-current challenges and needs of the Board, the Company and each committee, which result in determinations as to whether it may be appropriate to make changes after considering issues of judgment, diversity, age, skills, background and experience. The composition of our current Board demonstrates the Board’s commitment to diversity in a number of areas. Women represent 30% of our current director nominees. Our directors also have differing backgrounds, educations, professional experiences, skills, ages, national origins and viewpoints. See “Proposal No. 1—Election of Directors.”

NEW DIRECTOR SEARCH PROCESS        

Our two newest directors, Sandy C. Rattray and Paula Volent, who were both appointed to the Board early in 2020, have extensive experience in the investment industry. Their global experience and expertise across diverse asset classes and emerging industry trends, including technological innovation, further strengthen the Board’s breadth of talent. Ms. Volent is well versed in multi-asset class investments and asset allocation, as demonstrated by her excellent track record managing a sophisticated endowment, and will help us further build our asset owner strategy. With his extensive asset management career and expertise in derivatives trading and volatility indexes, Mr. Rattray will be able to provide insights into the many use cases for indexes and the importance of risk management for our clients. The appointments of both directors were the result of the rigorous search process outlined below.

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MSCI INC. PROXY STATEMENT      •      31

TENURE AND BOARD REFRESHMENT        

Our Board has shown an ongoing commitment to Board refreshment and to having highly qualified, independent perspectives in the boardroom. Five of the Company’s director nominees have been added to the Board since the beginning of 2015. The average tenure of the director nominees is currently 6.4 years. Also, under our Corporate Governance Policies, directors should not stand for re-election following their 72nd birthday.

TALENT DEVELOPMENT AND INCLUSION AND DIVERSITY        

Our talented employees and leaders are crucial to our success. We are committed to supporting them through career and leadership development with the aim of promoting a high performance and growth culture at MSCI. Our employees are invited to attend development opportunities, including both formal and informal programs, throughout the year. Additionally, we believe that advancing inclusion and diversity (“I&D”) at all levels of MSCI to attract, develop and retain the best talent with a wide range of perspectives is integral to our long-term success. We periodically report our progress on talent development, I&D initiatives and culture to the Compensation Committee, which oversees the Company’s talent management program.

SUCCESSION PLANNING        

One of the Board’s principal responsibilities is to ensure appropriate succession plans are in place for our senior management. The Compensation Committee oversees the process for succession planning for senior management positions. During 2019, the Board and the Compensation Committee met on several occasions in furtherance of its succession planning and executive development initiatives. In addition to an annual review of the CEO led by the Lead Director and ongoing reviews of our leadership bench, the Compensation Committee holds a formal succession planning and talent review session annually, which includes identifying successors and reviewing progression plans for all senior management positions, including the CEO and President positions. All of our directors are invited to attend this meeting and provide their input. The Board’s talent review and succession planning discussions take into account desired leadership skills and experience in light of our current business and long-term strategy. Additionally, high-potential leaders are given exposure to our directors through formal presentations at Board or committee meetings, one-on-one meetings with individual directors and participation in other Board activities.

The Company made the following appointments to its Executive Committee from its succession pools:

INDEPENDENT DIRECTOR MEETINGS        

Our Corporate Governance Policies provide that our Lead Director will preside over non-employee director sessions. The Lead Director presided over nine independent director sessions during 2019. The Board’s standing committees also have a practice of holding executive sessions after their quarterly meetings. Our Corporate Governance Policies further provide

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that if any non-employee directors are not independent, then the independent directors will meet at least once a year in an independent director session and the Lead Director will preside over each such independent director session. During 2019, all non-employee directors were independent.

COMPENSATION GOVERNANCE        

The Compensation Committee operates under a written charter adopted by the Board. As noted above, the Compensation Committee is responsible for reviewing and approving annually all compensation awarded to the Executives, including the CEO and the other NEOs presented in the Summary Compensation Table on page 76 of this Proxy Statement. Information on the Compensation Committee’s processes, procedures and analysis of executive officer compensation for 2019 is provided in the “Compensation Discussion and Analysis” section included herein.

The Compensation Committee actively engages in its duties and follows procedures intended to ensure good compensation governance. See page 26 of this Proxy Statement for additional information on the Compensation Committee’s responsibilities.

The principal compensation plans and arrangements applicable to our executive officers are described in the “Compensation Discussion and Analysis” section and the executive compensation tables included herein. The Compensation Committee may delegate the administration of these plans, as appropriate, including to one or more officers of the Company, subcommittees or to the Chair of the Compensation Committee, in each case, when it deems doing so to be appropriate, in the best interests of the Company and consistent with applicable law and NYSE requirements.

The Compensation Committee has the authority to retain and terminate any compensation consultant assisting the Compensation Committee in the evaluation of CEO or other executive officer compensation, including authority to approve such compensation consultant’s fees and other retention terms. As further described in the “Compensation Discussion and Analysis” section included herein, during 2019, the Compensation Committee retained Semler Brossy Consulting Group, LLC (“Semler Brossy”) as its own external compensation consultant to review CEO and other executive officer compensation. All of the services provided by Semler Brossy to the Compensation Committee during 2019 were to provide advice or recommendations on the amount or form of executive officer and director compensation, and Semler Brossy did not provide any additional services to the Company during 2019. The Compensation Committee has considered, among other things, the factors delineated in Rule 10C-1 under the Exchange Act (“Rule 10C-1”), including the NYSE listing rules implementing Rule 10C-1 and Semler Brossy’s conflict of interest policies, and determined that the engagement of Semler Brossy does not raise any conflict of interest or other factors that compromise the independence of its relationship with the Compensation Committee. In developing its views on compensation matters and determining the compensation awarded to our CEO and other executive officers, the human resources department provides data and analyses to aid the Compensation Committee in its decisions. The CEO also makes recommendations on compensation for executive officers other than himself and the Compensation Committee takes these recommendations into account in reaching its compensation decisions. From time to time, the Compensation Committee may obtain input from external legal counsel, including Davis Polk & Wardwell LLP (“Davis Polk”), on compensation award documentation and other compensation-related practices, which in 2019 was communicated to the Compensation Committee via management, the legal department or the human resources department. In light of this relationship, the Compensation Committee has considered, among other things, the factors delineated in Rule 10C-1, including the NYSE listing rules implementing Rule 10C-1 and Davis Polk’s conflict of interest policies.

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CORPORATE GOVERNANCE DOCUMENTS        

MSCI has a corporate governance webpage that can be found under the “Corporate Governance” link on our website’s Investor Relations homepage (http://ir.msci.com).

Our Corporate Governance Policies (including our Director Independence Standards), Code of Ethics and committee charters are available electronically, without charge, on or through our website. To access these documents, click on the “Corporate Governance” link found on our website’s Investor Relations homepage (http://ir.msci.com). These documents are also available, without charge, to any shareholder who requests them by writing to us at c/o Corporate Secretary, MSCI Inc., 7 World Trade Center, 250 Greenwich Street, 49th Floor, New York, New York 10007 or via email at investor.relations@msci.com.

Our Code of Ethics applies to our directors, executive officers and employees. If we make any substantive amendment to, or grant a waiver to, a provision of the Code of Ethics for our CEO, CFO, Principal Accounting Officer and Global Controller or persons performing similar functions, we will satisfy the applicable SEC disclosure requirement by promptly disclosing the nature of the amendment or waiver on our website’s Investor Relations homepage (http://ir.msci.com).

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Director Compensation and Stock Ownership Guidelines

Director Compensation

The Compensation Committee reviews non-employee director compensation every two years and recommends changes, when appropriate, to the Board. The Compensation Committee is aided in its review by its external independent compensation consultant, Semler Brossy. The Compensation Committee takes into account peer benchmarking and broader general industry practices to establish non-employee director compensation. In 2020, based on the Compensation Committee’s review of the competitive market analysis and advice of Semler Brossy, the Compensation Committee recommended modest increases to the annual cash and equity retainers for non-employee directors as described below.

In 2019, each non-employee director was entitled to receive an annual cash retainer of $75,000. Effective May 1, 2020, the annual cash retainer will increase to $80,000. The annual cash retainer has not been increased since it was set in connection with our initial public offering in 2007. In addition to the annual retainer, non-employee directors were also entitled to the following cash retainers for serving as chairs and/or non-chair members of the Board’s standing committees. Directors do not receive meeting fees and employee directors do not receive any separate compensation for their Board activities.

MSCI INC. PROXY STATEMENT      •      35

Each non-employee director was also entitled to receive an annual equity award payable in RSUs having an aggregate fair market value of $160,000 for non-employee directors and $210,000 for the Lead Director based on the closing price of our common stock as reported by the NYSE on the date prior to grant. Effective May 1, 2020, the annual equity award payable in RSUs to each non-employee director will increase to $165,000 and the annual equity award payable in RSUs to the Lead Director will increase to $215,000.

Directors may elect under the terms of the MSCI Inc. 2016 Non-Employee Directors Compensation Plan (the “Directors Plan”) to receive their cash retainer in the form of shares of our common stock. Under the Directors Plan, non-employee directors are subject to annual limits on their cash and equity compensation, as follows: non-employee directors may not receive in any calendar year (i) options, restricted stock, RSUs and other stock-based awards with a grant date fair value of more than $1,000,000 (as determined in accordance with applicable accounting standards) and (ii) retainers and other cash-based awards in excess of $1,000,000.

RSUs granted to non-employee directors are granted on May 1st of each year and vest on the first anniversary of the grant date. Cash retainers and RSU awards are prorated when a director joins the Board and/or a committee at any time other than May 1st. RSUs granted on or after May 1st vest on the next May 1st of the year following the grant date. For example, if a director joins the Board on February 1, 2020, his or her prorated RSUs will vest on May 1, 2020. If a director joins the Board on May 31, 2020, his or her prorated RSUs will vest on May 1, 2021.

RSUs are recognized as an expense in the Company’s financial statements for financial reporting purposes with respect to 2019 in accordance with FASB ASC Subtopic 718-10.

Holders of these RSUs are entitled to participate in dividend equivalent payments and such payments may be settled in cash, shares of our common stock, or a combination thereof, to be decided by the Company in its sole discretion. Prior to the conversion to shares, RSU holders do not have any rights as an MSCI shareholder with respect to such RSUs, including the right to vote the underlying shares. The RSUs are generally non-transferable; however, our Board may, in its discretion, specify circumstances under which an award may become immediately transferable and nonforfeitable or under which the award will be forfeited. The RSUs vest and convert to shares immediately upon termination of service for reasons of death, disability or a change in control. If service as a director terminates for any other reason, all unvested RSUs will be cancelled and forfeited unless determined otherwise by the Board or the Compensation Committee.

Non-employee directors are reimbursed for expenses incurred in connection with attending Board meetings.

Director Deferral Plan

On August 2, 2011, the Board adopted the MSCI Inc. Independent Directors Deferral Plan and subsequently amended and restated the plan in 2016 as the MSCI Inc. Non-Employee Directors Deferral Plan (the “Deferral Plan”). The Deferral Plan permits directors to defer receipt of shares of our common stock payable in lieu of cash retainers and/or upon conversion of RSUs granted to the director following the year for which an election has been submitted; provided that an election made by a director within 30 days after the director becomes eligible to receive a cash retainer or RSUs shall apply to any common stock payable in lieu of such a cash retainer and/or upon conversion of such RSUs granted to the director following the date on which the director makes the election. Receipt of shares of our common stock may be deferred until a future date specified by the director, a separation from service (as defined by Treasury regulations), or the earlier of the two. While the Deferral Plan allows for it, the Board has not yet implemented a process for the deferral of cash payments.

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2019 Non-Employee Director Compensation

(1) Pursuant to MSCI’s Third Amended and Restated Articles of Incorporation, directors hold office for a term expiring at the next annual meeting of shareholders. The Board term beginning on April 25, 2019 and ending on April 28, 2020 (the “2019 Board Term”) and the Board term beginning on May 10, 2018 and ending on April 25, 2019 (the “2018 Board Term”) do not coincide with MSCI’s January through December fiscal year. Amounts included in the table above represent cash earned or paid, or stock awards granted, as applicable, during the year ended December 31, 2019. Because directors are paid for service from May 1 to April 30, prorated amounts are calculated from the applicable date to May 1^st of the relevant Board term.

(2) Cash amounts in this column include the annual retainers and committee fees paid during the year ended December 31, 2019. Four of our directors elected to receive all or a portion of their annual cash retainers in stock as set forth below. The number of shares issued was determined by dividing the aggregate value of the elected portion of the cash retainer by the closing price of the Company’s common stock on the grant date ($222.72) and rounding down to the next whole share. Each of Mr. duPont and Ms. Handy elected to defer receipt of such shares until the 60th day after his or her “separation from service” as a director under the Deferral Plan.

(3) Represents the aggregate grant date fair value of RSUs granted in 2019 in accordance with FASB ASC Subtopic 718-10. The fair value is calculated by multiplying the closing price of our common stock on the date prior to the grant date by the number of units awarded. For assumptions regarding these calculations, please see notes 1 and 10 to the consolidated financial statements included in our 2019 Annual Report on Form 10-K filed with the SEC on February 18, 2020. However, the values in this column may not correspond to the actual value that will be realized by the non-employee directors at the time the RSUs vest. The number of RSUs awarded is determined by dividing the aggregate value of the RSU award by the closing price of the Company’s common stock on the trading day prior to the grant date ($225.38) and rounding down to the next whole RSU. For the 2019 Board term, each of Messrs.

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duPont, Edmunds, Perold, Siguler and Smith and Mmes. Handy, Kinney and Riefler received 709 RSUs, and Mr. Ashe received 931 RSUs. These RSUs will vest on May 1, 2020. Mr. duPont and Ms. Handy elected to defer receipt of such shares issuable upon vesting until the 60th day after their respective “separation from service” as a director under the Deferral Plan.

(4) As of December 31, 2019, each of our non-employee directors had the following outstanding stock awards in the form of RSUs: Messrs. duPont, Edmunds, Perold, Siguler and Smith and Mmes. Handy, Kinney and Riefler each had 709 RSUs outstanding, and Mr. Ashe had 931 RSUs outstanding.

(5) Cash amounts in this column include dividend equivalents paid during the year ended December 31, 2019 in connection with the Company’s payment of its quarterly cash dividend. Each of Mr. duPont and Mmes. Handy and Kinney received shares of our common stock and a cash payment for fractional shares received as a dividend equivalent payment for outstanding RSUs and in lieu of receiving a cash dividend payment for shares, in each case subject to his or her deferral election. The table below sets forth the amounts received by each. Ms. Kinney elected to discontinue her deferral election for RSUs granted on or after May 1, 2019. As such, the cash amounts in this column also include for Ms. Kinney $1,375.46 in dividend equivalents paid with respect to RSUs granted to her on May 1, 2019.

(6) Ms. Handy is not standing for re-election at the 2020 Annual Meeting but will remain on the Board through that date.

(7) Ms. Lane did not stand for re-election at the 2019 Annual Meeting and served on our Board through April 25, 2019, and thus did not receive compensation for the 2019 Board Term.

(8) Mr. Rattray was appointed to the Board, effective February 26, 2020.

(9) Mr. Siguler is not standing for re-election at the 2020 Annual Meeting but will remain on the Board through that date.

(10) Ms. Volent was appointed to the Board, effective February 26, 2020.

Non-Employee Director Stock Ownership Guidelines

Under the Company’s stock ownership guidelines for non-employee directors, commencing on the date of our 2016 annual meeting of shareholders, each non-employee director has been required to own a target number of shares of stock of the Company equal to the sum of the “net shares” resulting from the vesting of the RSUs granted to such director for each of the last five years, with such aggregate share ownership to be achieved within five years of initially being elected or appointed to the Board and maintained thereafter. “Net shares” means the number of shares that would remain if the shares resulting from the vesting of the RSUs are sold to satisfy any tax obligations (assuming a tax rate of 40%) upon either (i) the conversion of such RSUs into shares or (ii) the cessation of any tax deferral period with respect to such RSUs.

Shares that count towards satisfaction of the target level of stock ownership under these stock ownership guidelines consist of the following:

As of the date of this Proxy Statement, all of our non-employee directors are in compliance with the Company’s stock ownership guidelines.

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Beneficial Ownership of Common Stock

Stock Ownership of Executive Officers and Directors

We require members of our Executive Committee (which includes all of our executive officers) and our directors to comply with our stock ownership guidelines to further align their interests with the interests of our shareholders. As of the date of this Proxy Statement, all of the members of our Executive Committee and our directors are in compliance with the applicable stock ownership guidelines. See “Compensation Matters—Compensation Discussion and Analysis—Stock Ownership Guidelines” on page 72 of this Proxy Statement and “Director Compensation and Stock Ownership Guidelines—Non-Employee Director Stock Ownership Guidelines” on page 38 of this Proxy Statement for additional information regarding our ownership guidelines for the members of our Executive Committee and our directors, respectively.

The following table sets forth the beneficial ownership of our common stock by each of our NEOs and directors, and by all of our directors and executive officers as of March 3, 2020, as a group. The address for each of our executive officers and directors is 7 World Trade Center, 250 Greenwich Street, 49th Floor, New York, New York 10007. Percentage of share ownership amounts are based on 85,014,750 shares of our common stock outstanding as of March 3, 2020.

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(1) Excludes shares of our common stock that may be acquired through the vesting of RSUs and PSUs. Includes 27,884, 20,132 and 4,593 shares of our common stock for Mmes. Handy and Kinney and Mr. duPont, respectively, for which such directors have elected to defer receipt of their respective shares until the 60th day after such director’s “separation from service” as a director.

(2) Includes shares of our common stock that can be acquired through vesting of RSUs within 60 days of the date of this table (i.e., through May 2, 2020). See the “Outstanding Equity Awards at Fiscal Year-End” Table included herein for additional information regarding RSUs held by each NEO as of December 31, 2019. As of December 31, 2019, each of our non-employee directors had the following outstanding stock awards, all of which are in the form of RSUs: Messrs. duPont, Edmunds, Perold, Siguler and Smith and Mmes. Handy, Kinney and Riefler each had 709 RSUs outstanding, and Mr. Ashe had 931 RSUs outstanding. Such RSUs are scheduled to vest on May 1, 2020.

(3) Except as indicated in the footnotes to this table, to our knowledge each executive officer and director, as of March 3, 2020, had sole voting and investment power with respect to his or her shares of our common stock. Beneficial Ownership Totals may differ from those set forth in Statements of Changes in Beneficial Ownership reported on Form 4 filed with the SEC due to the exclusion herein of RSUs granted by the Company, as described in footnote (1) to this table.

(4) All executive officers and directors (other than Mr. Fernandez) each beneficially owned less than 1.0% of the shares of our outstanding common stock. Percentages for each beneficial owner are calculated in accordance with Rule 13d-3(d)(1) under the Exchange Act. Percentages for each named executive officer, executive officer and director as of March 3, 2020 and collectively as a group are based on the number of our shares outstanding as of March 3, 2020, which excludes shares of our common stock that can be acquired through vesting of RSUs within 60 days of the date of this table (i.e., through May 2, 2020).

(5) Includes 314,479 shares of our common stock held by the Fernandez 2007 Children’s Trust in which the spouse of Mr. Fernandez is the trustee and his children are the beneficiaries, 4,355 shares of our common stock held by two of his children under the Uniform Transfer to Minors Act and 7,900 shares of our common stock directly held by one of Mr. Fernandez’s children.

(6) The Company hired Ms. Huber to serve as Chief Financial Officer, effective as of May 6, 2019.

(7) On October 25, 2019, Mr. Seyer notified the Company of his decision to retire and, accordingly, resigned from his position as Chief Operating Officer and Chief Client Officer, effective as of January 2, 2020.

(8) On March 1, 2019, Ms. Winters notified the Company of her decision to resign. Ms. Winters resigned from her position as Chief Financial Officer, effective as of March 5, 2019.

(9) The Board appointed Andrew C. Wiechmann, who has been serving as the Company’s Chief Strategy Officer, to serve as Interim Chief Financial Officer and Treasurer, effective as of March 5, 2019 to May 6, 2019.

(10) Ms. Handy is not standing for re-election at the 2020 Annual Meeting but will remain on the Board through that date.

(11) Mr. Rattray was appointed to the Board, effective February 26, 2020.

(12) Mr. Siguler is not standing for re-election at the 2020 Annual Meeting but will remain on the Board through that date.

(13) Ms. Volent was appointed to the Board, effective February 26, 2020.

(14) Shares of our common stock attributable to each of Messrs. Seyer and Wiechmann and Mmes. Lane and Winters have been excluded as each of Messrs. Seyer and Wiechmann and Ms. Winters is no longer an executive officer of the Company and Ms. Lane is no longer a director of the Company.

Stock Ownership of Principal Shareholders

The following table contains information regarding the only persons we know of that beneficially own more than 5% of our common stock. Percentage of class amounts are based on 85,014,750 shares of our common stock outstanding as of March 3, 2020.

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(1) Because percentage of class ownership is based on the total number of shares of our common stock outstanding as of a date that differs from the date used by the principal shareholders to calculate the percentages for purposes of filing the applicable Schedule 13G or 13G/A, percentages of class ownership presented herein may differ from amounts reported in the applicable Schedule 13G or 13G/A filed with the SEC by the relevant principal shareholder.

(2) Based on information in a Schedule 13G/A (Amendment No. 7) filed with the SEC on February 12, 2020. The Schedule 13G/A discloses that The Vanguard Group had sole voting power as to 130,817 shares of our common stock, shared voting power as to 22,806 shares of our common stock, sole dispositive power as to 9,272,643 shares of our common stock and shared dispositive power as to 146,158 shares of our common stock. In addition, the Schedule 13G/A discloses that the person filing the report is an investment adviser in accordance with §240.13d-1(b)(1)(ii)(E) and the identification and classification of the subsidiaries which acquired the securities being reported on therein are set forth on Appendix A thereto.

(3) Based on information in a Schedule 13G/A (Amendment No. 8) filed with the SEC on February 5, 2020. The Schedule 13G/A discloses that BlackRock, Inc. had sole voting power as to 5,871,688 shares of our common stock and sole dispositive power as to 6,681,359 shares of our common stock. In addition, the Schedule 13G/A discloses that the person filing the report is a parent holding company or control person in accordance with §240.13d-1(b)(1)(ii)(G) and the identification and classification of the subsidiaries which acquired the securities being reported on therein are set forth on Exhibit A thereto.

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Compensation Matters

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Compensation Discussion and Analysis

This Compensation Discussion and Analysis (referred to as the “CD&A”) section summarizes our general philosophy with regard to the compensation of our CEO, our current Chief Financial Officer, our three next most highly paid executive officers in 2019 and two former Chief Financial Officers (collectively referred to as “named executive officers” or “NEOs”). The CD&A provides context for the executive compensation disclosures presented below in both tabular and narrative form. Under its charter, the Compensation Committee reviews the Company’s compensation strategy and reviews and approves executive officer compensation as well as the Company’s compensation and benefits policies generally. The Compensation Committee approved the compensation structure and amounts for each of our NEOs for 2019 and also approved changes to the long-term equity incentive component of our executive compensation program that became effective for equity grants in 2019 incorporating feedback we received from our shareholders.

Additional 2019 NEOs:

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Highlights

EXECUTIVE SUMMARY        

Our executive compensation program is designed to link pay to performance, encourage prudent decision-making and risk management, and create a balanced focus on short-term and long-term performance and value creation. In the dynamic and competitive environment in which we operate, it is imperative that we maintain a responsible executive compensation program that encourages and rewards our leaders for achieving short-term and long-term results.

The following table sets forth the key components of our target-based compensation program in effect in 2019. The Compensation Committee approved certain enhancements to the 2019 long-term equity incentive program in response to shareholder feedback. These enhancements are described in greater detail beginning on page 55 of this Proxy Statement.

We believe that this target-based incentive structure fosters a culture of high performance and accountability and promotes long-term sustainable shareholder value creation by closely aligning executive compensation with objectively measured Company performance and strategic goal attainment as further described below.

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BUSINESS STRATEGY AND COMPENSATION        

The diagram below illustrates how our executive compensation program links the strategic initiatives underlying our corporate mission to long-term shareholder value creation. The metrics included in our short-term compensation program are aligned with our strategic initiatives and are designed to measure the achievement of objectives that not only deliver short- and medium-term returns, but also help to build the foundation for long-term shareholder value creation.

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2019 BUSINESS HIGHLIGHTS        

EXECUTION ON STRATEGIC PRIORITIES

(1) See Annex B for the definition of Retention Rate.

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STRONG FINANCIAL PERFORMANCE

(1) “Adjusted EPS” and “free cash flow” are non-GAAP financial measures. See Annex B for definitions and reconciliations of all non-GAAP financial measures referenced herein.

(2) Net New Sales is defined as gross sales (new recurring subscription sales plus non-recurring sales) less subscription cancellations.

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CAPITAL OPTIMIZATION

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KEY 2019 COMPENSATION DECISIONS        

After a thorough review and evaluation of the Company’s and its peers’ equity grant practices in late 2018, and taking into account shareholder feedback, the Compensation Committee implemented enhancements to the Company’s long-term equity incentive program in 2019 that continued to employ absolute TSR CAGR as the overarching measure of performance. The Company’s 2019 equity compensation consists of a mix of grants of annual RSUs and PSUs that varies based on position, as further detailed on page 67 of this Proxy Statement.

The Compensation Committee introduced the 5-Year PSUs in 2019, which have a five-year performance period, to complement the use of RSUs, 3-Year PSUs, and our AIP. We believe that near-term investments in our business—including financial, human capital, and technology investments—will support the growth and health of our business over a longer timeframe than is captured solely by our AIP and our RSUs and 3-Year PSUs. The Compensation Committee believes that the 5-Year PSUs serve to encourage a longer-term orientation to managing our business and encourage our senior executives to manage the business with an “owner-operator” mindset that spans beyond any particular performance time horizon and creates the strongest alignment between our executives and shareholders.

To that end, the AIP, RSUs and 3-Year PSUs continue to serve as meaningful checks and balances to ensure that our compensation programs continue to measure and reward for performance against core operational milestones and medium-term shareholder returns. Our 5-Year PSUs serve as a tool to further align our executives’ pay outcomes with the long-term health of our business by fully capturing the success of investments made in our business years earlier.

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The key features of the 2019 RSUs and PSUs are as follows:

(1) Ms. Huber’s 3-Year PSUs cliff-vest at the end of a three-year performance cycle from May 5, 2019 to May 4, 2022. Ms. Huber’s 5-Year PSUs cliff-vest at the end of a five-year performance cycle from May 5, 2019 to May 4, 2024.

Other changes made to the Company’s executive compensation program in 2019 include:

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Governance and Administration

EXECUTIVE COMPENSATION PRACTICES        

Our executive compensation practices incorporate the following corporate governance best practices that protect the interests of our shareholders and are consistent with high standards of risk management.