Compensation Committee Charter

Effective as of May 15, 2020


The purpose of the Compensation Committee (the “Committee”) is to assist the board of directors (the “Board”) of Morningstar, Inc. (“Morningstar”) in discharging its responsibilities relating to director and management compensation.


The Committee will consist of at least three directors, each of whom must be "independent" as defined under Rule 5605(a)(2) of The Nasdaq Stock Market listing rules, a “non-employee director” as defined under Rule 16b-3 under the Securities Exchange Act of 1934 (the “Exchange Act”), an "outside director" for purposes of Section 162(m) of the Internal Revenue Code, and will meet the criteria for independence set forth in Rule 10C-1(b)(1) under the Exchange Act. A subsequent determination that any member of the Committee does not satisfy the foregoing requirements shall not invalidate any action theretofore taken by the Committee except to the extent required by law or determined appropriate to satisfy any regulatory standards. The Board will interpret these rules using its business judgment. The members will be appointed by the Board and will serve at the discretion of the Board for a term of one year. The Board shall appoint the Chair of the Committee. The Board is responsible for removing and adding members and can do so at any time. Appointments to the Committee, including the Chair of the Committee, shall conform to Morningstar’s by-laws, this Charter, and applicable laws and regulations, as appropriate under the circumstances.

Committee Organization and Procedures

The Committee will meet at least twice annually in person or by telephone. It may meet more frequently, if the Committee deems it necessary to comply with the responsibilities defined in this Charter.

The Committee will have a Chair, who will be responsible for, with input from the other members of the Committee, calling, establishing agendas for, and supervising the Committee meetings. The Chair will report to the Board the actions and recommendations of the Committee.

The Committee shall have the authority to establish its own rules and procedures consistent with Morningstar’s bylaws for notice and conduct of its meetings should the Committee, in its discretion, deem it desirable to do so. A majority of the members of the Committee shall constitute a quorum for the transaction of business and the action of a majority of the members present at any meeting at which there is a quorum shall be the act of the Committee. Unless otherwise stated herein or established by the Committee, the Committee shall be governed by the same procedural rules, including rules regarding meetings, actions without meetings, notices, and waivers of notice, as are applicable to the Board. The Committee may also take any action permitted in this Charter by unanimous written consent.

The Committee may request any officer or employee of Morningstar or Morningstar’s outside legal counsel to attend a Committee meeting or to meet with any members of, or consultants to, the Committee.

The Committee shall have the funding, resources, and authority appropriate to fulfill its responsibilities, including the authority to retain and utilize the services of Morningstar’s regular counsel and advisors with respect to matters within its purview or, at its discretion, retain outside counsel and other advisors if it determines that such counsel or advice is necessary or appropriate under the circumstances. In retaining or seeking advice from outside counsel or other advisors (other than Morningstar’s in-house counsel), the Committee must consider the factors it considers appropriate in light of applicable law and listing standards, including all factors relevant to the advisors’ independence from management. The Committee shall be directly responsible for the appointment, termination, compensation and oversight of the work of any adviser retained by the Committee. Any communications between the Committee and legal counsel in the course of obtaining legal advice will be considered privileged communications of Morningstar, subject to the Committee taking the necessary steps to preserve the privileged nature of these communications.

The Committee will keep adequate minutes of its proceedings and shall maintain copies of such minutes and each written consent to action taken without a meeting.

The Committee may, in its discretion and only to the extent consistent with applicable law and regulations, delegate certain of its authority to a subcommittee of the Committee.


The Committee will:

  • Review, at least annually, the performance of management in meeting Morningstar’s goals and review and approve employment agreements, severance arrangements, base salaries, base salary increases, incentive plan awards and equity-based plan awards for the Chief Executive Officer and other executive officers. The Chief Executive Officer may not be present during any voting or deliberations by the Committee on his compensation.
  • Oversee the administration of Morningstar’s compensation plans, incentive plans and equity based plans, including the Morningstar Incentive Plan and Morningstar’s stock incentive plans, approve plan amendments, oversee compliance, interpret plan guidelines, and determine annual grants to employees, management and directors, in a manner consistent with the terms of such plans.
  • Oversee the administration of Morningstar’s employee benefit plans, including Morningstar’s 401(k) plan. The Committee shall have and shall exercise the authority of the Board with respect to the administration of such plans.
  • Periodically review Morningstar’s compensation policies for directors and how Morningstar’s director compensation practices compare with those of comparable public corporations. Review and recommend to the Board for approval any changes to Morningstar’s director compensation practices.
  • Review and recommend to the Board for approval compensation plans, policies, programs, and amendments to existing compensation plans, designed to attract, retain and appropriately reward employees.
  • Monitor compliance by directors and executive officers with Morningstar's stock ownership and retention guidelines.
  • Oversee Morningstar’s compliance with SEC rules and regulations regarding any “say on pay” or other shareholder vote regarding Morningstar’s compensation programs and review the results of any such votes or other shareholder engagement.
  • Review and discuss with management Morningstar’s “Compensation Discussion and Analysis” proxy statement disclosure and prepare and approve an annual report on management compensation for inclusion in Morningstar’s annual proxy statement according to the rules and regulations of the Securities and Exchange Commission set forth in Schedule 14A to the Securities Exchange Act of 1934.
  • Review and reassess the adequacy of this Charter annually and recommend any changes to the Board.
  • Prepare and review with the Board an annual performance evaluation of the Committee in fulfilling the duties of this Charter. Set goals and objectives of the Committee for the upcoming year. The performance evaluation may be conducted as the Committee deems appropriate. The report to the Board may take the form of an oral report by the Chair of the Committee or any other member of the Committee.

This Charter may be amended or modified only with the approval of the Board. Amended and restated as of May 15, 2020.

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