Moody's Spin-Off From D&B
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Holmes Report

Moody's Spin-Off From D&B

Concern had grown among the Associates about the impact of the Spin on Moody’s, how they would be affected in terms of compensation, benefits and stock options, and lack of information on the critical changes taking place.

Paul Holmes

On October 1, 2000, Moody’s Investors Service became Moody’s Corporation, an independent public company. The origins of the Campaign date back to December 1999 when it was announced that Moody’s would be spun off from its parent, The Dun & Bradstreet Corporation, to enhance shareholder value. By June, the target date for the divestiture (“the Spin”) of October 1, 2000 was confirmed. While many legal, financial, and tax issues had been addressed between December and June, there had been virtually no communication with Associates during that period. Concern had grown among the Associates about the impact of the Spin on Moody’s, how they would be affected in terms of compensation, benefits and stock options, and lack of information on the critical changes taking place. Moody’s took action to resolve this situation by creating an independent Internal Communications Department dedicated to the informational needs of all Associates. Internal Communications was given a prominent place on the Moody’s Spin Task Force, and on June 1, complete responsibility for informing Associates about the Spin. With a Spin date of October 1 and no time to spare, Frances Laserson, Senior Vice President, Internal Communications initiated the planning process. On June 16, the Spin Communications Campaign Plan was presented to the Task Force and quickly approved.


Confidential information: Much of the information on the Spin was confidential. The Internal Communications Department worked closely with the Legal Department to establish as open and active communication channels as possible.

Time pressure: Internal Communications had three months to achieve a range of ambitious objectives in a highly charged environment. Plans for stock options, benefits, compensation and crucial communications were executed as they were created.

Corporate culture: Moody’s is an analytical corporate culture where most Associates were interested in the mechanics of the Spin and the finest technical detail. This necessitated communications that met a wide range of information needs.

Resource Allocation: Internal Communications was not given additional staff or resources.


The planning process entailed consultation with Spin Task Force and other members of senior management, interviews with key Associates who influence opinion within the Company, and research on best practices.


Maintain the comfort level of Associates regarding the Spin through open and timely communication.

Create awareness of Spin activities with detailed, effective information distributed via multiple appropriate channels.  

Sustain the commitment of Associates to the new organization following the Spin.


Create a steady, consistent flow of information on the Spin using multiple, cost-effective channels.

Present and clarify the advantages of the Spin for the Company and the Associates, including changes to employee benefits.

Provide Associates a channel to ask questions and receive feedback.

Distribute all information on the Spin through Internal Communications. 

Present all aspects of the Spin in an international context. While Moody’s is a relatively small company, its culture and markets are global, with one third of revenues coming from 13 overseas offices and key growth opportunities outside the U.S. The Campaign highlighted the Spin activities of Associates in Europe, Asia, South America and Canada. Country-specific benefit information and forms were provided on the Intranet, and telephone numbers included global dialing instructions. 

Communicate in the analytical language of the Moody’s culture.

Reinforce strategically critical messages, using all communications channels, to increase recognition and awareness.

Communicate and explain the award of stock options made at the time of the Spin to all Associates.


Given the three-month window, the Spin Communications Campaign was executed on parallel tracks. While the benefit programs were being redesigned, the benefit communications were created. While the Spin Task Force was investigating whether the gift of stock options could be made in 14 countries, Internal Communications was planning the options communications. The Campaign utilized the following tools, events, and approaches:

Intranet Site: The first action by Internal Communications was the establishment of a dedicated Spin site on the Moody’s Intranet, which became a primary communication channel of the Campaign. It was the source for all news on the Spin, and the place where Associates could ask questions and receive prompt, detailed responses.

Spin News Updates: An e-mail publication called Spin News Update was created to cover all aspects of the Spin. Between June 1 and October 1, 30 Updates were mailed to every Associate. As the Spin date approached, Associates received as many as four every week.

Response to the Updates was very positive. Whenever an Update went out, seven to 10 Associates would e-mail questions or comments. Internal Communications responded to all appropriate questions, sending answers worldwide in new Updates.

Meeting the Needs of an Analytical Culture: Moody’s is a culture of analysts, and the Associates were intensely interested in the smallest details of the Spin. In response, the Campaign provided a tremendous amount of technical information, discussing the new benefits plan, then the company's private placement of debt, stock options, investment options, profit participation plans, the choice of a new stock options administrator, creation of a treasury department, and new banking relationships.

Aaa, The Magazine of Moody’s: Three Spin-Off Updates were also published in Aaa, the employee magazine of Moody’s. At the start of the Campaign, Internal Communications created Aaa: Special Edition, an eight-page publication with messages from the President and Chief Administrative Officer, a feature on the Spin Task force, Spin news to date and instructive, Spin-related articles. The September issue dedicated six pages to the Spin, with a Spin-Off News Summary and coverage of international benefits and a feature on Moody's International Spin Team.

Aaa was given a completely new look; a formidable task that was accomplished in six weeks for the first post-Spin issue. The redesign sends a strong visual signal that Moody’s is a new company. The first revamped issue focused on key post-Spin topics.

News Coverage: The Campaign dealt with confidentiality limitations by distributing third party news stories to all Associates.

Town Hall Meetings: Moody’s hosted two global Town Hall Meetings for Associates. At the first meeting in December 1999, Moody's President discussed the Spin and what it would mean for the Company and the Associates, then hosted a Q&A session. At the second meeting in September, he previewed the “road show” presentation for prospective investors. Every Moody’s office around the world was teleconferenced for the events, and Associates could hear replays following both meetings.

Moody’s Spin-Off Celebrations: On the day of the Spin, Moody’s hosted parties for Associates in New York and 19 other locations around the world. The parties were also given in honor of Moody’s 100th anniversary. That day, every Associate received a grant of Moody’s stock options.

Stock Option Guide: Internal Communications created an in-depth information booklet, Moody’s Corporation Stock Option Grant, that explains stock options and how to read the option document, evaluate and exercise options, and manage the options grant. The majority of Associates had never before received stock options.

Spin Logo: Moody’s designed a special Spin logo that was displayed prominently throughout the Campaign and utilized in Aaa.


The 1,500 Associates of Moody’s: 1,100 are located in the United States and 400 reside in 13 other countries around the world. The audience also included approximately 600 retirees and distinguished alumni who receive Aaa, the magazine of Moody’s.


Moody’s employed an existing measurement tool — the annual Business Effectiveness Survey (BES). As Moody’s Corporation is a relatively small company and 80% of the staff works in a single building, some of the program evaluation was anecdotal — comments and suggestions from employees and senior management in person and by email.  

In November 2000, Moody’s sent out its 2000 BES, which was completed by over 70% of employees. Scores on "Pride and Commitment" questions reflect accomplishment of two program goals: (1) maintaining the comfort level of Associates regarding the Spin-off, and (2) sustaining the commitment of Associates to the new organization following the Spin-off.

"To what extent do you feel proud to work for Moody’s?"  Favorable/neutral 91%;  Unfavorable 9%

"How would you rate Moody's as a place to work compared with other companies you know about?"

Favorable/neutral 92%; Unfavorable 8%

"To what extent do you feel like part of a successful team?" Favorable/neutral 85%; Unfavorable 15%

The goal to create awareness of Spin activities with detailed, effective information distributed via multiple appropriate channels was measured several ways:

A BES question reflected successful communication of the new Corporation’s business goals: "Do you understand how your work fits into Moody’s strategy and objectives?" Favorable/neutral 90%; Unfavorable 10%

Attendance records for the two Town Hall meetings had participation of over 90%.

Internal Communications received more than 100 follow-up emails in response to the Spin News Update emails.

One Spin News Update was sent with a return receipt. Not a single recipient deleted the email without opening it first.

Attendance at worldwide Spin Celebrations equaled or surpassed annual holiday party attendance.  

The Internal Communications Department continues be contacted by associates who believe the department to be the most knowledgeable source on spin-related matters.
Unsolicited, positive feedback from dozens of employees and retirees on the redesign of Aaa magazine. 

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