After 15 years at the helm, Harold McGraw III revealed plans on Thursday to relinquish the CEO and president titles at McGraw Hill Financial (MHFI), handing the keys over to Standard & Poor’s Ratings Service exec Douglas Peterson.
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While McGraw is stepping down as CEO and president effective November 1, the 64-year-old will stay on as chairman of the board.
“Doug's strategic thinking and client focus have been evident throughout his career and he brings to the role of President and CEO a distinct combination of vision, thought leadership, global insight and commitment to realizing the great future opportunities for McGraw Hill Financial," McGraw said.
Peterson joined McGraw Hill in 2011 and is currently president of the company’s formidable ratings arm, Standard & Poor’s Ratings Service.
Prior to leading S&P, Peterson served as an executive at Citigroup (C), including a stint as chief operating officer of Citibank, N.A. and CEO of Citigroup Japan.
"I feel honored and proud to be asked to lead this great company,” Peterson said. “Terry and the board had the vision to create McGraw Hill Financial and now I look forward to leading this new, fast-growing financial intelligence company.”
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McGraw has been at the top of the company for almost two decades, having been elected to serve as president and COO in 1993, CEO in 1998 and chairman in 1999.
According to McGraw Hill, since McGraw became CEO in 1998, the company’s total return to shareholder has been about 300%, compared with 97% for the S&P 500.
However, S&P and its rivals Moody’s (MCO) and Fitch, have been heavily criticized for their role in the 2008 financial meltdown. The ratings companies continued to bless questionable mortgage-related securities with pristine AAA ratings right up until the crisis.
McGraw Hill said it is searching for a successor to Peterson to lead S&P.
Shares of New York-based McGraw Hill were inactive in premarket trading on Thursday after having gained 2.2% so far this year, underperforming the S&P 500’s 16% rally over that span.
The company had been known as McGraw-Hill Cos. until earlier this year when it finalized a $2.4 billion sale of its education business to private-equity firm Apollo Global Management.