Raymond W. McDaniel, Jr. is chairman and chief executive officer of Moody's Corporation., the parent company of Moody's Investor Services and Moody's Analytics.[1]
McDaniel joined Moody's in 1987 and in 2001 became the President of Moody's Investors Service.[2] He served as the corporate chief operating officer and later the president before becoming the chief information officer.[3] McDaniel has been known for achieving record profits and globalizing Moody's.[4][5]
Mr. McDaniel has also been the subject of significant scrutiny for the timing of his stock sales. "If you look at his major sales in 2007, 2009, 2010, they are all around price peaks and followed by large declines. The likelihood that this is just 'lucky' is very low — it appears he is using inside information to time his trades,said Jesse Fried, a Harvard University law professor who studies stock trading by CEOs.",[6] In one instance, Mr. McDaniel executed a trade for some 100,000 shares of stock on the day the firm received notice from the Securities and Exchange Commission that the company was the subject of probes by the regulatory agency. The day the announcement of the SEC "Wells Notice" was made public (and following Mr. McDaniel's transactions), Moody's stock dropped by 6.807.[7]
Mr. McDaniel has expressed in congressional committee testimony that he was "deeply disappointed" in the performance of the part of his firm which rated the collateralized debt obligations prior to the collapse of the housing market in 2008.[8] However, efforts by company employees to report improperly evaluated financial products were handled slowly, and little publicity was drawn to subsequent revisions of financial models on which the evaluations were based. Moody's, and Mr. McDaniel personally, were named in a civil lawsuit alleging employees who reported such actions were subjected to "defamation, injurious falsehoods and tortious interference with business relationships" through "malicious, false and/or scandalous statements" [9]
In December, 2010, Mr. McDaniel's terms of employment with Moody's were changed. "According to a Dec. 20 regulatory filing, Moody's said that it amended its “change in control” plan so that in the event of a sale, Mr. McDaniel would get a lump-sum payment equal to three times his base salary and “target bonus.” Based on his pay for 2009, the most recent year available, the change would make Mr. McDaniel eligible for a payment of $6.9 million, which is about seven times as much as he would have received under the former arrangement."[10] This information was not publicly disclosed prior to its announcement, and no statement explaining the action was released by the Moody's Board of Directors. Dr. Henry [Hank] A. McKinnell, Jr. is currently the head of the Governance and Compensation Committee of Moody's Board of Directors, receiving himself some $230,000 in compensation for his efforts at revising Mr. McDaniel's agreement, among other tasks. Between the time McDaniel was promoted to CEO and the increased compensation award, the share price of Moody's has dropped more than 30%.[11] McKinnell is personally familiar with Golden Parachutes given to CEOs by companies who see significant drops in stock while at the helm. McKinnell negotiated an $83,000,000 severance package with Pfizer when he departed as CEO of the pharmaceutical manufacturer, despite a 46% drop in the stock value during his tenure.[12]
In 2007, Moody's Corporation was split into two operating divisions, Moody's Investors Service, the rating agency, and Moody's Analytics, a leading enterprise risk management solutions provider.[13]
Mr. McDaniel holds a J.D. from Emory University School of Law and a B.A. in political science from Colgate University.[14]