Shareholders' Equity (Deficit)

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Shareholders' Equity (Deficit)

11. SHAREHOLDERS’ EQUITY (DEFICIT)

This note reflects the share repurchases and related activity as well as share-based compensation activity recognized by the Company, for all periods referenced.

Return of capital 

On October 29, 2020, the Board of Directors authorized a stock repurchase program for the purchase of up to $1,000.0 million worth of shares of MSCI’s common stock in addition to the $804.5 million of authorization then remaining under a previously existing share repurchase program (the “2020 Repurchase Program”) for a total of $1,804.5 million of stock repurchase authorization.

Share repurchases made pursuant to the 2020 Repurchase Program may take place in the open market or in privately negotiated transactions from time to time based on market and other conditions. This authorization may be modified, suspended or terminated by the Board of Directors at any time without prior notice. As of December 31, 2021, there was $1,589.2 million of available authorization remaining under the 2020 Repurchase Program.  

The following table provides information with respect to repurchases of the Company’s common stock made on the open market:

Year Ended	Average Price Paid Per Share		Total Number of Shares Repurchased		Dollar Value of Shares Repurchased
	(in thousands, except per share data)
December 31, 2021	$	412.25		339	$	139,580
December 31, 2020	$	291.76		2,493	$	727,344
December 31, 2019	$	147.97		690	$	102,081

The following table presents dividends declared per common share as well as total amounts declared, distributed and deferred for the periods indicated

	Dividends
	Per Share		Declared		Distributed		(Released)/ Deferred
2021	(in thousands, except per share data)
Three Months Ended March 31,	$	0.78	$	65,947	$	66,153	$	(206	)
Three Months Ended June 30,		0.78		64,863		64,489		374
Three Months Ended September 30,		1.04		86,476		85,961		515
Three Months Ended December 31,		1.04		86,475		85,973		502
Year Ended December 31,	$	3.64	$	303,761	$	302,576	$	1,185
2020
Three Months Ended March 31,	$	0.68	$	59,233	$	59,455	$	(222	)
Three Months Ended June 30,		0.68		57,360		57,068		292
Three Months Ended September 30,		0.78		65,830		65,454		376
Three Months Ended December 31,		0.78		65,029		64,653		376
Year Ended December 31,	$	2.92	$	247,452	$	246,630	$	822
2019
Three Months Ended March 31,	$	0.58	$	55,339	$	57,988	$	(2,649	)
Three Months Ended June 30,	0.58			49,613		49,365		248
Three Months Ended September 30,	0.68			58,176		57,882		294
Three Months Ended December 31,	0.68			58,176		57,916		260
Year Ended December 31,	$	2.52	$	221,304	$	223,151	$	(1,847	)

Common Stock

The following table presents activity related to shares of common stock issued and repurchased for the periods indicated:

	Common		Treasury			Common Stock
	Stock Issued		Stock			Outstanding
Balance At December 31, 2018		130,029,926		(45,855,788	)		84,174,138
Dividend payable/paid		1,064		(585	)		479
Common stock issued and exercise of stock options		2,387,145		—			2,387,145
Shares withheld for tax withholding		—		(1,077,815	)		(1,077,815	)
Shares repurchased under stock repurchase programs		—		(689,891	)		(689,891	)
Shares issued to Directors		1,277		(403	)		874
Balance At December 31, 2019		132,419,412		(47,624,482	)		84,794,930
Dividend payable/paid		553		(337	)		216
Common stock issued		406,960		—			406,960
Shares withheld for tax withholding		—		(165,239	)		(165,239	)
Shares repurchased under stock repurchase programs		—		(2,492,994	)		(2,492,994	)
Shares issued to Directors		2,250		27,284			29,534
Balance At December 31, 2020		132,829,175		(50,255,768	)		82,573,407
Dividend payable/paid		268		(156	)		112
Common stock issued		331,427		—			331,427
Shares withheld for tax withholding		—		(133,431	)		(133,431	)
Shares repurchased under stock repurchase programs		—		(338,577	)		(338,577	)
Shares issued to Directors		1,308		5,203			6,511
Balance At December 31, 2021		133,162,178		(50,722,729	)		82,439,449

Share-Based Compensation

The Company regularly issues share-based compensation to its employees and directors who are not employees of the Company. The accounting guidance for share-based compensation requires measurement of

compensation cost for share-based awards at fair value and recognition of compensation cost over the service period, net of estimated forfeitures.

In February 2022, the Company granted a portion of its employees awards in the form of RSUs, PSUs and performance stock options (“PSOs”). The total number of units and options granted was 227,684. The aggregate fair value of the awards was $79.6 million. The RSUs granted in 2022 vest at the end of a three-year service period. The PSUs granted in 2022 vest at the end of a three-year service period, are subject to a one-year sale restriction and are also subject to the achievement of an absolute total shareholder return compounded annual growth rate, measured over a three-year period. The PSOs granted in 2022 vest and become exercisable at the end of a three-year service period and are subject to a performance condition based on the combined level of achievement of a cumulative revenue performance goal and a cumulative adjusted EPS performance goal, measured over a three-year period. All of these awards are subject to forfeiture under specific criteria set in the award agreements.

In connection with awards under its equity-based compensation and benefit plans, the Company is authorized to use newly-issued shares or certain shares of common stock held in treasury.

The following table presents the amount of share-based compensation expense by category for the periods indicated:

	Years Ended
	December 31,		December 31,		December 31,
(in thousands)	2021		2020		2019
Cost of revenues	$	17,285	$	14,523	$	11,190
Selling and marketing		14,411		13,545		14,943
Research and development		7,913		7,344		5,966
General and administrative		17,463		19,826		11,991
Other expense (income)		1,416		379		—
Total share-based compensation expense	$	58,488	$	55,617	$	44,090

The windfall tax benefits for share-based compensation expense related to RSUs, PSUs and other restricted stock unit awards (together, the “Share-based Awards”) as well as stock options granted to Company employees and to directors who are not employees of the Company were $22.3 million, $20.9 million and $82.5 million for the years ended December 31, 2021, 2020 and 2019, respectively.

As of December 31, 2021, $52.3 million of compensation cost related to MSCI unvested share-based awards granted to the Company’s employees and to directors who are not employees of the Company had not yet been recognized. The unrecognized compensation cost relating to unvested stock-based awards expected to vest will be recognized primarily over the next one to five years.

In connection with awards under its equity-based compensation and benefit plans, the Company is authorized to issue shares of common stock. As of December 31, 2021, 3.8 million shares of common stock were available for future grants under these plans.

Certain Company employees have been granted Share-based Awards pursuant to a share-based compensation plan. The plan provides for the deferral of a portion of certain employees’ discretionary compensation with awards made in the form of Share-based Awards. Recipients of Share-based Awards generally have rights to receive dividend equivalents that are subject to vesting. The Company reports the target number of PSUs granted unless it has determined, based on the actual achievement of performance measures, that an employee will receive a different amount of shares underlying the PSUs, in which case the Company reports the amount of shares employees are likely to receive.

The fair value of the PSUs on the award dates were estimated under the Monte Carlo method using the following assumptions:

	Years Ended
	December 31,			December 31,			December 31,
	2021			2020			2019
Risk free interest rate		0.33	%		1.28	%		2.46	%
Historical stock price volatility		34.13	%		25.42	%		21.98	%
Term (in years)		4.0			3.8			3.7
Discount of Lack of Marketability		4.0	%		0.0	%		0.0	%

The risk-free interest rate was determined based on the yields available on U.S. Constant Maturity Treasury yield curve as of the valuation dates with a maturity commensurate with the terms.  The expected stock price volatility was determined using historical volatility. Since the PSU awards are dividend-protected, the assumed dividend yield applied in the valuation was 0.0%.

The following table presents activity concerning the Company’s vested and unvested Share-based Awards applicable to its employees (share data in thousands) for the period indicated:

				Weighted
				Average
				Grant
	Number of			Date Fair
For the Year Ended December 31, 2021	Shares			Value
Vested and unvested Share-based Awards at    December 31, 2020		739		$	163.99
Granted		330		$	265.99
Conversion to common stock		(340	)	$	153.66
Canceled		(32	)	$	274.66
Vested and unvested Share-based Awards at    December 31, 2021 (1)		697		$	217.05

⁽¹⁾ As of December 31, 2021, 639 Share-based Awards, with a weighted average grant date fair value of $213.70, were vested or expected to vest.

The total fair value of Share-based Awards held by the Company’s employees that converted to MSCI common stock during the years ended December 31, 2021, 2020 and 2019 was $152.6 million, $133.6 million and $401.7 million, respectively.

The following table presents activity concerning the Company’s unvested Share-based Awards related to its employees (share data in thousands):

				Weighted
				Average
				Grant
	Number of			Date Fair
For the Year Ended December 31, 2021	Shares			Value
Unvested Share-based Awards at December 31, 2020		727		$	164.58
Granted		293		$	268.91
Vested		(318	)	$	156.41
Canceled		(32	)	$	274.66
Unvested Share-based Awards at December 31, 2021		670		$	217.05
Unvested Share-based Awards expected to vest		612		$	210.15

There were no remaining stock options outstanding that could be exercised during any of the years ended December 31, 2021 and 2020. The intrinsic value of the stock options exercised by the Company’s employees during the year ended December 31, 2019 was $22.1 million.