MORNINGSTAR INC (MORN)
Sector: Financials
2026 Annual Meeting Analysis
MORNINGSTAR INC · Meeting: May 7, 2026
Directors FOR
1
Directors AGAINST
9
Say on Pay
FOR
Auditor
FOR
Director Elections
Proposal 1: Election of Directors
Against Analysis
Morningstar's stock has fallen 15% over the past three years while the financial sector ETF (XLF) rose 58.9% — a gap of nearly 74 percentage points, far exceeding the 30-point trigger for a negative absolute 3-year return. As founder and Executive Chairman since 1984, Mansueto bears full tenure overlap with the underperformance period. The 5-year return is -28.5% versus XLF's strong gains, so the 5-year mitigant does not apply.
As CEO and director since 2017, Kapoor has full tenure overlap with the 3-year underperformance period; the stock's -15% 3-year return trails XLF by ~74 percentage points, well above the 30-point threshold. The 5-year return of -28.5% versus XLF's strong multi-year gains means the 5-year mitigant does not rescue this vote.
Diamonte has served since December 2015, providing full overlap with the 3-year underperformance period; Morningstar's -15% 3-year return versus XLF's +58.9% is a -73.9 percentage-point gap, far exceeding the 30-point threshold for a negative absolute return. The 5-year picture is equally poor (-28.5% vs. strong ETF gains), so the 5-year mitigant does not apply.
Francis has served since 2002 with complete overlap over the underperformance period; the 3-year gap of -73.9 percentage points against XLF far exceeds the 30-point threshold, and the 5-year return (-28.5%) confirms this is sustained rather than transient underperformance.
Joynt has served since December 2019, more than 24 months ago, giving him meaningful overlap with the full 3-year underperformance window; the -73.9 percentage-point gap versus XLF far exceeds the 30-point trigger, and the 5-year mitigant is inapplicable given sustained negative 5-year absolute returns.
Kaplan has served since 1999 with full tenure overlap; the stock's 3-year return of -15% versus XLF's +58.9% is a -73.9 percentage-point gap far exceeding the 30-point threshold, and the negative 5-year absolute return means the 5-year mitigant does not apply.
Lyons has served since 2007 with full overlap over the underperformance period; the -73.9 percentage-point 3-year gap versus XLF is well above the 30-point threshold for companies with negative absolute returns, and the 5-year return (-28.5%) confirms sustained underperformance that prevents application of the mitigant.
Sutton joined in May 2021 — approximately 4 years ago — which is beyond the 24-month new-director exemption, giving her meaningful overlap with the full 3-year underperformance period; the -73.9 percentage-point gap versus XLF far exceeds the 30-point trigger, and the 5-year mitigant is unavailable given the sustained negative absolute returns.
Tsay has served since May 2017 with full overlap over the underperformance period, and the -73.9 percentage-point 3-year gap versus XLF far exceeds the 30-point threshold; additionally, she currently serves on three other public company boards (The Coca-Cola Company, NiCE Ltd., and Semrush Holdings), which approaches but does not technically breach the four-board overboarding limit under policy, though it is a material commitment concern alongside the performance trigger.
For Analysis
Bramman joined the board in January 2026, well within the 24-month new-director exemption, so the TSR underperformance trigger does not apply; she brings strong CFO experience and clear financial expertise relevant to her Audit Committee role.
All ten director nominees are subject to a TSR underperformance trigger: Morningstar's 3-year stock return of -15% trails the financial sector ETF (XLF) by 73.9 percentage points, far exceeding the 30-point threshold applicable to companies with negative absolute 3-year returns. The 5-year return of -28.5% confirms sustained underperformance, so the 5-year mitigant that would otherwise soften the trigger does not apply to any director. The sole exception is Anne Bramman, who joined in January 2026 and is within the 24-month new-director exemption.
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 and analytics company of Morningstar's size and complexity, and the pay mix is strongly performance-oriented — 92% variable for the CEO — satisfying the policy's requirement that a majority of pay be at risk. The company demonstrated genuine pay-for-performance alignment in 2025: long-term stock-based awards (market stock units) paid out at only 82% and 28.8% of target due to below-target stock price performance, and the compensation committee exercised negative discretion to reduce the annual bonus from the formulaic 115.5% to 111.4% due to delayed product deliveries. Prior-year say-on-pay support was 98.5%, indicating broad shareholder approval, and no structural concerns — such as lack of performance conditions or a missing clawback policy — are evident in the filing.
Auditor Ratification
✓ FORAuditor
KPMG LLP
Tenure
N/A
Audit Fees
$4,501,800
Non-Audit Fees
$854,400
Non-audit fees (combining audit-related fees of $367,705, tax fees of $479,261, and other fees of $7,434, totaling approximately $854,400) represent about 19% of audit fees ($4,501,800), well below the 50% threshold that would raise independence concerns. KPMG is a Big 4 firm appropriate for Morningstar's size and complexity, and the proxy does not disclose auditor tenure — under policy, the tenure trigger requires confirmed data to fire, so no negative inference is drawn from the absence of disclosure.
Overall Assessment
The 2026 Morningstar ballot presents three standard proposals: director elections, say-on-pay, and auditor ratification. While the executive compensation program passes policy screens and KPMG's audit fees are clean, nine of the ten director nominees — everyone except newly appointed Anne Bramman — warrant an AGAINST vote due to Morningstar's severe and sustained stock underperformance, with the share price trailing the financial sector ETF (XLF) by nearly 74 percentage points over three years against a 30-point policy threshold.