MORNINGSTAR INC (MORN)
Sector: Financials
2026 Annual Meeting Analysis
MORNINGSTAR INC · Meeting: May 7, 2026
Directors FOR
2
Directors AGAINST
8
Say on Pay
FOR
Auditor
FOR
Director Elections
Proposal 1: Election of Directors
Against Analysis
Morningstar's stock has lost about 8.8% over three years while the company's own peer group gained a median of 39.5%, a gap of 48.3 percentage points — well above the 20-point trigger for directors with negative absolute returns. The five-year picture is equally weak (-53.1pp gap), so the longer-term record provides no mitigating relief. As founder, Executive Chairman, and the single longest-serving director (42 years), Mansueto bears primary accountability for this sustained underperformance.
Kapoor has served as CEO and director since 2017, giving him full tenure overlap with the three-year underperformance period. The same 48.3-percentage-point gap versus the company's peer group median triggers a No vote; the five-year gap (-53.1pp) confirms this is not a short-term anomaly. Under policy, executive directors are subject to the same TSR trigger as independent directors, independent of the Say on Pay vote.
Diamonte has served since December 2015, giving her full overlap with the underperformance period. The 48.3-percentage-point three-year gap versus peer median exceeds the 20-point threshold applicable to companies with negative absolute returns, and the five-year gap (-53.1pp) offers no mitigating relief.
Francis has served since 2002 and has full tenure overlap with the underperformance period. The same peer-group gap of 48.3 percentage points triggers the policy threshold, and the five-year record does not provide a mitigating offset.
Joynt joined in December 2019, giving him more than five years on the board and full overlap with the three-year underperformance window. The 48.3-point gap versus peer median exceeds the 20-point trigger, and the five-year gap (-53.1pp) confirms sustained underperformance without mitigation.
Kaplan has served since 1999 with full tenure overlap. The 48.3-point three-year peer-group gap triggers the policy threshold, and the five-year gap (-53.1pp) eliminates the 5-year mitigant that could have softened the vote to For.
Lyons has served since 2007 with full tenure overlap. The same 48.3-point peer-group gap and the 5-year confirmation of sustained underperformance (-53.1pp) trigger a No vote with no available mitigation.
Tsay has served since May 2017, giving her full overlap with both the three-year and five-year underperformance periods. The 48.3-point peer-group gap exceeds the 20-point threshold and the five-year gap (-53.1pp) eliminates any mitigation.
For Analysis
Bramman joined the board in January 2026, well within the 24-month new-director exemption, so the TSR trigger does not apply. She brings strong financial expertise as a former CFO of multiple public companies and currently serves as audit committee chair at another public company, making her a well-qualified addition.
Sutton joined in May 2021, just over three years before the measurement date, giving her partial overlap with the underperformance period. However, she joined after the stock's multi-year underperformance trend was already established, which the policy identifies as mitigating context. Her tenure covers less than the full three-year window, she brings distinct human capital expertise relevant to Morningstar's talent-intensive business, and the policy calls for a proportional rather than automatic No vote for directors whose tenure covers less than the full period and who joined into an already-underperforming environment; on balance the mitigating factors support a For vote.
The TSR trigger fires broadly across the Morningstar board: over the past three years MORN returned -8.8% while its own disclosed compensation peer group gained a median of +39.5%, a gap of 48.3 percentage points — far above the 20-point policy threshold for companies with negative absolute returns. The five-year gap (-53.1pp) confirms this is sustained underperformance, removing the 5-year mitigant. Eight of ten nominees receive an AGAINST vote. New director Anne Bramman is exempt as a member for less than 24 months. Doniel Sutton receives a FOR given she joined into an already-underperforming environment and has only partial tenure overlap; policy calls for proportional rather than automatic treatment in that circumstance.
Say on Pay
✓ FORCEO
Kunal Kapoor
Total Comp
$9,070,695
Prior Support
98.5%%
CEO total compensation of $9.07 million is reasonable for a financial-data-services company of Morningstar's market cap, and the pay structure is heavily weighted toward variable, performance-linked pay — 92% of the CEO's target mix is performance-based or variable, well above the 50-60% policy minimum. The company's equity awards (market stock units) paid out below target in 2025 (82% and 28.8% for the two 2022 grant tranches) because the stock's multi-year total return fell short of targets, demonstrating that the incentive structure is actually working to align executive outcomes with shareholder experience. The prior say-on-pay vote received 98.5% support, there are no clawback concerns raised in the filing, and the pay program passes the policy screens on level and structure independently of the director TSR trigger.
Auditor Ratification
✓ FORAuditor
KPMG LLP
Tenure
N/A
Audit Fees
$4,501,800
Non-Audit Fees
$854,400
Non-audit fees (audit-related fees of $367,705 plus tax fees of $479,261 plus other fees of $7,434 = $854,400) represent approximately 19% of the core audit fee of $4,501,800 — well below the 50% threshold that would raise independence concerns. KPMG is a Big 4 firm appropriate for a company of Morningstar's size and complexity, no material financial restatements are disclosed, and the proxy does not disclose KPMG's tenure (so the tenure trigger cannot fire per policy). All conditions for a FOR vote are satisfied.
Overall Assessment
The 2026 Morningstar ballot presents three standard proposals. The director election produces mostly AGAINST votes because Morningstar's stock has dramatically underperformed its own peer group over three and five years (-48.3pp and -53.1pp respectively), triggering the policy threshold for eight of ten nominees; only new director Anne Bramman (exempt by tenure) and Doniel Sutton (mitigating circumstances) receive FOR votes. The Say on Pay and auditor ratification proposals both pass their respective policy screens and receive FOR votes.
Compensation Peer Group
15 companies disclosed in 2026 proxy filing