The current CFO’s resume includes running the respectable yet stagnant equity research team before being named Chief Strategy Officer. In his time in this role, the company tripled headcount, overpaid for an ESG company at the very height of ESG fever, and wildly overpaid for a leveraged loan data company whose data still hasn’t been integrated into the company’s broader data or analytics teams three years later. As a result of all this, of course, he was promoted to CFO, where he now bemoans the wage costs (read: having to pay employees sub-market salaries while he makes seven figures) that come from the headcount expansion his “Strategy” tenure oversaw at every quarterly Town Hall.
The current President of Wealth and Research & Investments cut his teeth running the Investment Management division of the company into the ground via poor product ideas and pervasive underperformance. As a reward, he was given the research arm of the company, which he seems to want to send to the stone age by limiting any sort of quantitative analysis in a world where scalable insights are more important than ever.
And finally, the CEO himself. He loves to say “Execution is Everything,” conveniently ignoring the necessity of sound strategy in a successful business after years of strategic blunders. The only reason I might not want this CEO out is that I fear he would be replaced by one of the two mentioned above, who have failed upwards to such a breathtaking extent that I can't discount one of them having the top job one day.
In a brief period, the company’s strategy has shifted from “all-in on ESG” to “all-in on AI” to “all-in on public/private convergence,” the last of which represents a laughable conflict of interest. I do not know a single investment professional working at Morningstar who is interested in interval funds or other semi-liquid investments, and yet the company is doing everything it can to normalize them, presumably to curry favor with asset managers and sell more private market research. These funds are expensive, opaque, and dangerous for retail investors, and the Morningstar of old would be telling anyone and everyone to steer clear of them. Instead, our CEO does things like interview the CEO of Apollo, a private credit manager, and ask “How do you think that allocation [to private markets] might change, and what’s the path to that allocation changing?” In a shocking twist, the CEO of of the private credit firm said that more private credit investment is good. The theme of “Public/private convergence” is an unethical strategic disaster, but the company seems more dedicated to it than ever.
I love what this company can be on its best days, and like most others here, care about its mission to help empower investor success. For now, though, it has lost its way.
