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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.    )

Filed by the Registrant    x

Filed by a Party other than the Registrant    ¨

Check the appropriate box:

        Rule 14a-6(e)(2))

The McGraw-Hill Companies, Inc.

(Name of Registrant as Specified In Its Certificate)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

x    No fee required.

Notes:

Reg. §240.14a-101.

SEC 1913 (3-99)

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March 19, 2013

Dear Shareholder:

On behalf of our Board of Directors and management, we cordially invite you to attend our Annual Meeting of Shareholders on Wednesday, May 1, 2013. The Meeting will be held at our headquarters at 1221 Avenue of the Americas, New York, New York 10020-1095, at 11:00 a.m. (EDT). If you are unable to attend the Annual Meeting in New York, please join us via live Webcast on the Company’s Website at www.mcgraw-hill.com.

The Notice of Meeting and Proxy Statement accompanying this letter describe the business we will consider at the Meeting. Your vote is very important. I urge you to vote to be certain your shares are represented at the Meeting even if you plan to attend. Most shareholders have a choice of voting over the Internet, by telephone or by using a traditional proxy card. Please refer to your proxy materials or the information forwarded by your bank, broker or other holder of record to see which methods are available to you.

I look forward to seeing you at the Meeting.

Harold McGraw III

Chairman of the Board, President and Chief Executive Officer

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Notice of Annual Meeting of Shareholders

To Be Held May 1, 2013

The Annual Meeting of Shareholders of The McGraw-Hill Companies, Inc. will be held on Wednesday, May 1, 2013, at 11:00 a.m. (EDT) at the Company’s headquarters at 1221 Avenue of the Americas, New York, New York 10020-1095. At the Meeting, shareholders will be asked to:

You may vote at the Meeting if you were a shareholder of the Company at the close of business on March 11, 2013, the record date for the Meeting.

By Order of the Board of Directors.

Scott L. Bennett

Senior Vice President, Associate General

Counsel and Secretary

New York, New York

March 19, 2013

Please sign and return the enclosed proxy card in the postage-paid envelope provided or, if you prefer, please follow the instructions on the enclosed proxy card for voting by telephone or via the Internet. You may access the Company’s Investor Relations Website at www.mcgraw-hill.com/investor  relations for further Internet voting instructions as well as to view the Proxy Statement and Annual Report online.

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The McGraw-Hill Companies, Inc.

Proxy Statement

2013 Annual Meeting of Shareholders

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The McGraw-Hill Companies, Inc.

Proxy Statement

2013 Annual Meeting of Shareholders

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDERS MEETING TO BE HELD ON MAY 1, 2013.

THE COMPANY’S ANNUAL REPORT, LETTER TO SHAREHOLDERS, NOTICE OF ANNUAL MEETING, PROXY STATEMENT AND PROXY CARD ARE AVAILABLE AT www.mcgraw-hill.com/investor_relations.

GENERAL INFORMATION

Why did I receive this Proxy Statement?

The Board of Directors of The McGraw-Hill Companies, Inc. (the “Company”, “we” or “us”) is soliciting proxies for the 2013 Annual Meeting of Shareholders (the “Annual Meeting” or “Meeting”) to be held on Wednesday, May 1, 2013, at 1221 Avenue of the Americas, New York, New York 10020-1095, at 11:00 a.m. (EDT) and at any adjournment of the Meeting. When the Company asks for your proxy, we must provide you with a Proxy Statement that contains certain information specified by law. This Proxy Statement summarizes the information you need in order to vote at the Meeting.

The Company’s Annual Report, Letter to Shareholders, Notice of Annual Meeting, Proxy Statement and proxy card are being mailed to shareholders beginning on or about March 19, 2013.

What will I vote on?

The following items:

Will there be any other items of business on the agenda?

We do not expect any other items of business at the Annual Meeting. Nonetheless, if there is an unforeseen need, your proxy will give discretionary authority to the persons named on the proxy to vote on any other matters that may be properly brought before the Meeting. These persons will use their best judgment in voting your proxy.

Who is entitled to vote?

Shareholders as of the close of business on the record date, which is March 11, 2013, may vote at the Annual Meeting.

How many votes do I have?

You have one vote at the Meeting for each share of common stock you held on the record date.

What constitutes a quorum for the Annual Meeting?

A quorum is necessary to conduct business at the Annual Meeting. A quorum requires the

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presence at the Meeting of a majority of the outstanding shares entitled to vote, in person or represented by proxy. You are part of the quorum if you have voted by proxy. As of the record date, 281,762,657 shares of Company common stock were issued and outstanding.

May I vote by telephone or via the Internet?

Yes. Instead of submitting your vote by mail using the enclosed proxy card, you may be able to vote on the Internet or by telephone. Please note that there are separate Internet and telephone voting arrangements depending on whether you hold your shares:

If you are a registered shareholder, you may vote by telephone or via the Internet by following the instructions on your proxy card.

If you are a beneficial owner, please refer to the information forwarded by your bank, broker or other holder of record to see which options are available to you. Most brokers and banks offer voting by telephone and via the Internet as well as by mail.

If you vote via the Internet, you may incur costs, such as usage charges from Internet access providers and telephone companies. You will be responsible for these costs.

How do I vote at the Annual Meeting?

You can vote either in person at the Annual Meeting or by proxy without attending the Meeting. We urge you to vote by proxy even if you plan to attend the Meeting so we will know as soon as possible that enough votes will be present for us to hold the Meeting. If you are a registered shareholder and attend the Meeting in person, you may vote at the Meeting and your earlier proxy will not be counted. If you are a beneficial owner and your McGraw-Hill shares are held for you by your bank, broker or other holder of record, you must obtain a legal proxy from that entity and bring it with you to hand in with your ballot in order to be able to vote your shares at the Meeting.

What should I do if I want to attend the Annual Meeting?

All shareholders and employees of the Company may attend the Annual Meeting. Please bring your admission ticket or proof of ownership of your McGraw-Hill shares to enter the Annual Meeting. When you arrive at the Annual Meeting, you may be asked to present photo identification, such as a driver’s license, to be admitted. The McGraw-Hill Companies employees wishing to attend the Annual Meeting can present their employee identification card to be admitted.

For safety and security reasons, no cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the Meeting.

How do I vote my shares in the Company’s Dividend Reinvestment Plan?

If you participate in the Company’s Dividend Reinvestment Plan, any proxy you give will also govern the voting of all shares you hold in this Plan, unless you give us other instructions.

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How do I vote my shares in the Company’s employee benefit plans?

If you received this Proxy Statement because you are an employee of the Company who participates in these plans and you have shares of common stock of the Company allocated to your account under these plans, you may vote your shares held in these plans as of March 11, 2013 by mail, by telephone or via the Internet. Instructions are provided on the enclosed proxy card from Computershare Shareowner Services, LLC, the Company’s transfer agent. Computershare must receive your instructions by 2:00 p.m. (EDT) on April 29, 2013 in order to communicate your instructions to the plans’ Trustee, who will vote your shares. Any plan shares for which we do not receive instructions from the employee will be voted by the Trustee in the same proportion as the shares for which we have received instructions.

Can I revoke or change my vote?

Yes. If you are a shareholder of record, you have the right to revoke your proxy at any time before the Annual Meeting by sending a signed notice to the Company’s Secretary, The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, New York 10020-1095. If you want to change your vote at any time before the Meeting, you must deliver a later dated proxy by telephone, via the Internet or in writing. You may also change your proxy by voting in person at the Meeting.

If you are a beneficial owner, please refer to the information forwarded by your broker, bank or other holder of record for procedures on revoking or changing your proxy.

What are the costs of soliciting these proxies and who will pay them?

The Company will pay all costs of soliciting these proxies. In addition, some of our officers and employees may solicit proxies by telephone or in person. We will reimburse banks and brokers for the expenses they incur in forwarding the proxy materials to you. Georgeson Inc. is assisting us with the solicitation of proxies for a fee not to exceed $21,500 plus reimbursement for out-of-pocket expenses.

How many votes are required for the approval of each item?

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Are abstentions and broker non-votes part of the quorum?

Yes. Abstentions and broker non-votes count as “shares present” at the Annual Meeting for purposes of determining a quorum.

What are broker non-votes?

If your shares are held by a broker, the broker may require your instructions in order to vote your shares. If you give the broker instructions, your shares will be voted as you direct. If you do not give instructions, one of two things can happen depending on the type of proposal. If the proposal is considered “routine” under the rules of the New York Stock Exchange, the broker may vote your shares in its discretion. For other proposals, the broker may not vote your shares without your instructions. When that happens, it is called a “broker non-vote.”

Item 2 in this Proxy Statement (proposed amendment to change the name of the Company) and Item 4 in this Proxy Statement (ratification of the appointment of the Company’s independent Registered Public Accounting Firm for 2013) will be considered routine under the rules of the New York Stock Exchange and the broker may vote your shares for these Items in its discretion. The broker is not entitled to vote your shares on the other Items unless the broker has received instructions from you.

Who will count the vote?

Votes at the Annual Meeting will be counted by two independent inspectors of election appointed by the Board.

What if I do not vote for some or all of the matters listed on my proxy card?

If you are a registered shareholder and you return a signed proxy card without indicating your vote for some or all of the matters, your shares will be voted as follows for any matter you did not vote on:

How do I submit a shareholder proposal for the 2014 Annual Meeting?

The Company’s 2014 Annual Meeting is scheduled for April 30, 2014. There are two different deadlines for submitting shareholder proposals. First, if a shareholder wishes to have a proposal considered for inclusion in next year’s Proxy Statement, he or she must submit the proposal in writing so that we receive it by 5:00 p.m. (EDT) on November 19, 2013. Proposals should be addressed to the Company’s Secretary, The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, New York 10020-1095. If you submit a proposal, it must comply with applicable laws, including Rule 14a-8 of the Securities Exchange Act of 1934.

In addition, the Company’s By-Laws provide that any shareholder wishing to nominate a candidate for Director or to propose any other business at the Annual Meeting must give the Company written notice no earlier than January 1, 2014 and no later than January 31, 2014. This notice must comply with applicable laws and the Company’s By-Laws. Copies of the By-Laws are available to shareholders free of

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charge on request to the Company’s Secretary, The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, New York 10020-1095. You may also download the By-Laws from the Corporate Governance section of the Company’s Investor Relations Website at www.mcgraw-hill.com/investor_relations.

May I view future proxy materials online instead of receiving them by mail?

Yes. Shareholders may provide their consent to electronic delivery of Proxy Statements and Annual Reports instead of receiving them by postal mail. If you elect this feature, you will receive an e-mail notice which will include the Web address for viewing the materials online. The e-mail notice will also include instructions so you can vote your proxy online or by telephone. If you have more than one account, you may receive separate e-mails for each account. Costs normally associated with electronic delivery, such as usage and telephone charges, as well as any costs incurred in printing documents, will be your responsibility.

During the 2013 proxy voting period, the Internet voting systems will automatically provide shareholders the option to consent to electronic delivery of future years’ materials.

During the year, shareholders may provide their consent to electronic delivery by going to the appropriate website:

What are the benefits of electronic delivery?

Electronic delivery benefits the environment and saves the Company money by reducing printing and mailing costs. It will also make it convenient for you to view your proxy materials and vote your shares online. If you have shares in more than one account, it is also an easy way to eliminate receiving duplicate copies of proxy materials.

What are the costs of electronic delivery?

The Company charges nothing for electronic delivery. You may, of course, incur expenses associated with Internet access such as telephone charges or charges from your Internet service provider.

How do I opt-out of electronic delivery?

At any time, shareholders may revoke their consent to electronic delivery and resume postal mail delivery of the Proxy Statement and Annual Report by going to the appropriate website:

Will I receive a print copy of the Company’s Annual Report?

Unless you previously elected to view our Annual Report via the Internet, we mailed our 2012 Annual Report to shareholders beginning on or about March 19, 2013.

What is “householding”?

We have adopted “householding”, a procedure under which beneficial owners who have the same address and last name and do not participate in electronic delivery of proxy materials will receive only one copy of our Annual Report and Proxy Statement unless one or more of these shareholders notifies us that they wish to continue receiving individual copies. This procedure reduces duplicate mailings and thus reduces our printing costs and postage fees. Shareholders who participate in householding will continue to receive separate proxy cards. Householding does not affect dividend check mailings.

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How do I request a separate paper or e-mail copy of the Proxy Statement or Annual Report at no charge?

If you wish to receive a separate paper or e-mail copy of the 2012 Annual Report or this Proxy Statement at no charge, please call us toll-free at (866) 436-8502, or send an e-mail to investor_relations@mcgraw-hill.com, or write to: Investor Relations, The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, New York 10020-1095. We will promptly deliver to you the documents you requested. Please make your request for documents on or before April 17, 2013 to facilitate timely delivery of the documents to you prior to the Annual Meeting.

Where can I find the voting results?

We will publish voting results in a Form 8-K which we will file with the SEC on or before May 7, 2013. To view this Form 8-K online, log on to the Company’s Investor Relations Website at www.mcgraw-hill.com/investor_relations, and click on the SEC Filings link located in the Digital Investor Kit.

Can shareholders and other interested parties communicate directly with our Board? If so, how?

Yes. You may communicate directly with one or more members of the Board by writing to the Company’s Secretary, The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, New York 10020-1095, or by sending an e-mail to the Company’s Secretary at corporate_secretary@mcgraw-hill.com. The Company’s Secretary will then forward all questions or comments directly to our Board or a specific Director, as the case may be.

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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

The Company’s business and affairs are overseen by our Board pursuant to the New York Business Corporation Law and our Restated Certificate of Incorporation and By-Laws. We currently have 13 Directors, all of whom are being nominated at this Annual Meeting for a one-year term which will expire at the Annual Meeting in 2014. (See Item 1 on page 69.)

Director Independence

The Board has determined that all of the Company’s Directors, with the exception of Messrs. Harold McGraw III (the Company’s Chairman, President and Chief Executive Officer) and Robert P. McGraw (the brother of Harold McGraw III), have met the independence requirements of the New York Stock Exchange, based upon the application of objective categorical standards adopted by the Board. To be considered independent, a Director must have no material relationship (other than as a Director) with the Company, or any of its subsidiaries, either directly or as a partner, shareholder or officer of an organization that has a material relationship with the Company or any of its subsidiaries. In making independence determinations, the Board broadly considers all relevant facts and circumstances. In accordance with the Company’s Corporate Governance Guidelines, a Director will not be an independent Director of the Company if:

For purposes of sub-paragraphs (i) through (v) above, an “immediate family member” includes a person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law and anyone (other than domestic employees) who shares such person’s home. Individuals who are no longer immediate family members as a result of legal separation or divorce, or those who have died or become incapacitated are not taken into consideration with respect to the determination of a Director’s independence.

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As noted on page 29 of this Proxy Statement, Mathew Haldeman, the son of Charles E. Haldeman, Jr., commenced employment with the Company’s McGraw-Hill Education business unit on February 1, 2013. On November 26, 2012, the Company signed an agreement to sell its McGraw-Hill Education business to investment funds affiliated with Apollo Global Management, LLC. The Company expects to complete the sale of McGraw-Hill Education in the first quarter of 2013.

Additional Information Regarding Director Independence

In making its independence determinations with respect to our Directors, the Board considered the following transactions that the Company engages in from time to time with organizations in which our independent Directors serve as executive officers or otherwise have a material interest:

All of these transactions are entered into in the ordinary course of business and on terms that are substantially equivalent to those prevailing at the time for comparable transactions with other similarly situated customers or vendors of the Company.

In making its independence determinations with respect to our Directors, the Board reviews the materiality of these transactions not only from the standpoint of the applicable Director but also from the standpoint of the organizations in which they serve. Based on this review, the Board has concluded that these transactions do not inter-

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fere with the ability of each such Director to exercise independent judgment in carrying out his or her Board responsibilities.

Annual Meeting Attendance

It is the Company’s policy that, subject to illness or an unavoidable schedule conflict, all Directors will attend and be introduced at the Annual Meeting. All of our Directors attended the 2012 Annual Meeting except for one Director who was unable to attend due to an unavoidable schedule conflict.

Leadership Structure of the Board of Directors

The Company’s business and affairs are overseen by its Board of Directors which has 13 members. There is one management representative on the Board and, of the 12 remaining Directors, 11 are independent. The Board has standing Nominating and Corporate Governance, Audit and Compensation and Leadership Development Committees composed solely of outside independent Directors. The Chair of each Committee reports to the full Board as appropriate from time to time. In addition to these three standing Committees, the Board has an Executive Committee and a Financial Policy Committee.

The Company’s Corporate Governance Guidelines provide that the Board shall select annually the Chairman of the Board based upon the criteria that the Company’s independent Nominating and Corporate Governance Committee recommends and what the Directors believe to be in the best interests of the Company. This process includes consideration of whether the roles of Chairman and Chief Executive Officer should be combined or separated based upon the Company’s needs and the strengths and talents of its executives at any given time. On April 25, 2012, the Board appointed Harold McGraw III as the Chairman of the Board, President and Chief Executive Officer of the Company for the period April 25, 2012 through May 1, 2013.

The Company’s Corporate Governance Guidelines further provide that, in the event the Chief Executive Officer is also serving as Chairman of the Board, the Board shall designate an independent Director to serve as Presiding Director. The selection of the Presiding Director is made at a meeting at which only independent Directors are present.

The position of Presiding Director is intended to provide a check and balance on the role and responsibilities of the Chief Executive Officer. On April 25, 2012, the Board appointed Mr. Edward B. Rust, Jr., the Chairman of the Nominating and Corporate Governance Committee, as the Presiding Director of the Board for the period April 25, 2012 through May 1, 2013. As Presiding Director, Mr. Rust has the following responsibilities as set forth in the Company’s Corporate Governance Guidelines:

“(i) be readily available to be consulted by any of the senior executives of the Company as to any concerns they may have about the Company; (ii) be readily available to all Directors to communicate their issues and concerns to the Chief Executive Officer; (iii) be readily available to the Chief Executive Officer to offer counsel; (iv) preside at all meetings of the Board at which the Chairman is not present, including all meetings of non-management Directors and all executive sessions of the independent Directors; (v) authority to call meetings of the independent Directors, including in the event of a crisis and/or the incapacitation of the Chief Executive Officer; (vi) communicate Directors’ feedback to the Chief Executive Officer from the meetings of the non-management Directors and from informal conversations with Directors; (vii) review and approve the proposed agenda for each upcoming Board meeting and the annual Board calendar; (viii) review and approve meeting schedules to assure there is sufficient time for discussion of all agenda items; (ix) consult with the other Directors and advise the Chief Executive Officer about the quality and timeliness of the materials distributed to the Board; (x) review and approve the materials and information sent to the Board; (xi) interview, along with the Chief Executive Officer and, as applicable, the Chair of the

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Nominating and Corporate Governance Committee, candidates for the Board; and (xii) assist the Nominating and Corporate Governance Committee with broad issues of corporate governance.”

The Board believes that its current leadership structure assures the appropriate level of management oversight and independence. This leadership structure provides clarity that Harold McGraw III, the Chief Executive Officer and Chairman, has primary responsibility for managing the Company’s business, implementing the Company’s strategy and directing the work of other officers, under the oversight, and subject to the review, of the Board. This structure results in a single leader being directly accountable to the Board and, through the Board, to shareholders, and enables Mr. McGraw to act as the key link between the Board and other members of management. It also facilitates the Board’s decision-making process because Mr. McGraw, who has first-hand knowledge of our operations and the major issues facing the Company, chairs the Board meetings where the Board discusses strategic and business issues.

Role of Board of Directors in Risk Oversight

The Board of Directors administers its risk oversight role through its Committee structure and the Committees’ regular reports to the Board at each Board meeting. The Board’s Audit Committee meets frequently during the year and discusses with management, the Company’s chief audit executive and the Company’s independent external auditor: (a) current business trends affecting the Company; (b) the major risk exposures facing the Company; (c) the steps management has taken to monitor and control such risk factors; and (d) the adequacy of internal controls that could significantly affect the Company’s financial statements. The Chair of the Audit Committee provides the Board with a report concerning its risk oversight activities at each Board meeting.

In 2012, management updated its prior review of the Company’s incentive compensation plans to include a new plan that was adopted in 2012. The findings and conclusions of the updated review are that the new plan design does not encourage excessive risk taking. Management reviewed its findings with the Committee, and Frederic W. Cook & Co. concurred in these findings and conclusions.

In 2012, the Committee established performance metrics that focused on operating income and earnings per share growth, and established goals and payment schedules for each metric that were designed to provide a balance to motivate the achievement of the established goals without the need for inappropriate or excessive risk taking by providing a range of payment opportunities for achievement both below and above the target goals established for the short and long-term incentives. In addition, the Committee reviews and assesses plan design, performance metrics, and goals for the annual incentive plans within the Company’s business units to ensure that the designs of those annual incentive plans do not encourage inappropriate or excessive risk taking.

Process for Identifying and Evaluating Directors and Nominees

The Nominating and Corporate Governance Committee reviews with the Board, on an annual basis, the appropriate skills and characteristics required of Board members in the context of the then-current composition of the Board. The Committee also recommends to the Board the general criteria for selection of proposed nominees for election as Directors and the slate of individuals who will constitute the nominees of the Board for election as Directors at each Annual Meeting. In addition to qualities of intellect, integrity and judgment, this assessment by the Committee takes into consideration diversity, background, senior management experience and an understanding of some combination of marketing, finance, technology, international business matters, government regulation, public policy and the global capital and commodity markets. The Committee makes this determination in the context of an assessment of the perceived needs of the Board at that point in time. The Committee evaluates all nominees for Director based on these criteria,

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including nominees recommended by shareholders. Although the Committee considers diversity as a factor in assessing the appropriate skills and characteristics required of Board members, the Board does not have a formal policy with regard to diversity in identifying Director nominees. The Committee has sole authority to retain and terminate search firms, to assist the Board in identifying and reviewing prospective Director nominees, and to approve the fees and other retention terms of any search firms.

Specific Experience, Qualifications, Attributes and Skills of Directors

The Nominating and Corporate Governance Committee has reviewed with the Board the specific experience, qualifications, attributes and skills of each Director nominee standing for re-election as a Director at the Annual Meeting. The Committee has concluded that each Director nominee has the appropriate skills and characteristics required of Board membership, and each possesses an in-depth knowledge of the Company’s complex global businesses and strategy. The Committee further believes that our Board is composed of well-qualified and well-respected Directors who are prominent in business, finance and the global capital and commodity markets. The experience and key competencies of each Director nominee, as reviewed and considered by the Committee, are set forth below.

Pedro Aspe: As Co-Chairman of Evercore Partners, Inc., a leading investment bank in the United States, and Chairman of Protego Casa de Bolsa, a broker dealer, and Managing Director of Protego Asesores, an investment banking company, both of which are headquartered in Mexico, Dr. Aspe has substantial financial services, capital markets, finance and accounting experience, and broad international business exposure. This experience enables Dr. Aspe to provide the Company with effective leadership in the conduct of its business as a global information services provider serving the financial services, business information, and global capital and commodity markets. In addition, the positions Dr. Aspe has held with the Mexican government have given him extensive government regulation and public policy experience which is extremely important to the Company in the conduct of its complex global business.

Sir Winfried Bischoff: As Chairman of Lloyds Banking Group plc and former Chairman of Citigroup, Inc. and Schroders plc, Sir Win has substantial financial services, capital markets, finance and accounting experience, broad international business exposure, and extensive experience involving government regulation and public policy. This experience enables Sir Win to provide the Company with effective leadership in the conduct of its business as a global information services provider serving the financial services, business information, and global capital and commodity markets.

William D. Green: As former Chairman and Chief Executive Officer of Accenture plc, a global management consulting, technology services and outsourcing company, Mr. Green has substantial sales, marketing, finance, manufacturing, technology and accounting experience, broad international business exposure and an extensive knowledge of government regulation and public policy. This experience enables Mr. Green to provide the Company with effective leadership in the conduct of its business as a global information services provider serving the financial services, business information, and global capital and commodity markets, including in connection with the numerous technology issues that the Company faces. As a former member of Business Roundtable, Mr. Green is able to provide the Company with valuable guidance in its business as a global provider of benchmarks and analytics for the global capital and commodity markets.

Charles E. Haldeman, Jr.: As former Chief Executive Officer and a Director of Federal Home Loan Mortgage Corporation (“Freddie Mac”), the publicly traded mortgage company, former President and Chief Executive Officer of Putman Investment Management, LLC, former Chairman and Chief Executive Officer of Delaware Investments, and former President and Chief Operating Officer of United Asset Management Corporation, Mr. Haldeman has extensive financial services, capital markets, finance and accounting experience. This experience enables Mr. Haldeman to provide the Company with effective leadership

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and guidance in the conduct of its business as a global information services provider serving the financial services, business information, and global capital and commodity markets. This experience has also resulted in Mr. Haldeman working closely with regulators in the financial services industry, which enables Mr. Haldeman to provide the Company with valuable guidance and insight as a global provider of credit ratings services.

Linda Koch Lorimer: As Vice President of the University at Yale, former Secretary of Yale University, former President of Randolph-Macon Woman’s College, former Associate Provost of Yale University, former Chairman of the Board of the Association of American Colleges and Universities and the Women’s College Coalition, and a Trustee of Hollins University, Ms. Lorimer has extensive experience involving government regulation and public policy. As a result of this experience, Ms. Lorimer is able to provide the Company with valuable guidance in its business as a global provider of benchmarks and analytics for the global capital and commodity markets. In addition, Ms. Lorimer has been responsible during the past eight years for Yale University’s Office of International Affairs, which gives her insight into the global developments affecting the Company. Ms. Lorimer has also been a director of three other publicly traded companies, including service on audit and compensation committees where she contributed valuable guidance in corporate strategic and financial policy matters.

Harold McGraw III: As President and Chief Executive Officer of the Company, and through the many positions Mr. McGraw has held with the Company since joining the Company in 1980, Mr. McGraw has substantial financial services, capital markets, finance, accounting, sales and marketing experience, and broad international business exposure. This experience enables Mr. McGraw to provide the Company with effective leadership in the conduct of its business as a global information services provider serving the financial services, business information, and global capital and commodity markets. As former Chairman and a member of Business Roundtable, Chairman of the Emergency Committee for American Trade (ECAT) and U.S. Council for International Business, Vice Chairman of the International Chamber of Commerce, Chairman of the U.S. Trade Representative’s Advisory Committee for Trade Policy and Negotiations (ACTPN), member of Boards for the U.S.-China Business Council and the U.S.-India Business Council and a member of the Business Council, Mr. McGraw has extensive government regulation and public policy experience which is extremely valuable to the Company in the conduct of its complex global business.

Robert P. McGraw: As Chairman and Chief Executive Officer of Averdale Holdings, LLC, an international investment company, and through the many positions Mr. McGraw has previously held with the Company, Mr. McGraw has substantial sales and marketing experience, and extensive international business exposure, particularly in China, which is a growth market for the Company. This experience enables Mr. McGraw to provide the Company with valuable guidance and effective leadership in the conduct of its business as a global information services provider serving the financial services, business information, and global capital and commodity markets.

Hilda Ochoa-Brillembourg: As President, Chief Executive Officer and Chief Investment Officer of Strategic Investment Group, a group of affiliated investment management firms, and as former Chief Investment Officer of the Pension Investment Division at the World Bank, Ms. Ochoa-Brillembourg has substantial finance, accounting, financial services and capital markets experience, and broad international business exposure. As a former lecturer at the Universidad Catolica Andres Bello in Venezuela, Vice Chairman, Dean’s Alumni Leadership Council, Harvard Kennedy School of Government, Advisory Board member of the Rockefeller Center for Latin American Studies at Harvard University and board member of The Atlantic Council of the United States and The Council on Foreign Relations, Ms. Ochoa-Brillembourg has extensive government regulation and public policy experience. This experience is extremely valuable to the Company in the conduct of its complex global business.

Sir Michael Rake: As Chairman of BT Group plc, one of the largest communications companies in the world, and former Chairman of KPMG International, one of the world’s leading accounting organizations, Sir Michael has substantial finance,

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accounting, financial services, capital markets, technology and digital products experience, and broad international business exposure. This experience enables Sir Michael to provide the Company with effective leadership in the conduct of its business as a global information services provider serving the financial services, business information, and global capital and commodity markets. The positions that Sir Michael has held as Chair of the Commission for Employment and Skills in the UK, as a member of the Board of the Financial Reporting Council in the UK, and as a member of the Board of the Transatlantic Business Council have given him extensive government regulation and public policy experience which is extremely valuable to the Company in the conduct of its complex global business.

Edward B. Rust, Jr.: As Chairman of the Board, President and Chief Executive Officer of State Farm Mutual Automobile Insurance Company, as Chairman of the U.S. Chamber of Commerce, as former Co-Chair and a current member of Business Roundtable, as former Chairman of the American Enterprise Institute and as former Chairman and a current member of The Financial Services Roundtable, Mr. Rust has substantial financial services, capital markets, finance, accounting, sales and marketing experience, and extensive government regulation and public policy experience which is extremely valuable to the Company in the conduct of its complex global business. This experience enables Mr. Rust to provide the Company with effective leadership as a global information services provider serving the financial services, business information, and global capital and commodity markets.

Kurt L. Schmoke: As General Counsel of Howard University, former Dean of Howard University School of Law and a former partner at the law firm of Wilmer Cutler & Pickering, Mr. Schmoke has substantial legal experience. This experience enables Mr. Schmoke to provide the Company with effective leadership as a global information services provider serving the financial services, business information, and global capital and commodity markets. As a former Mayor of Baltimore, a former State’s Attorney for Baltimore, a member of the Council on Foreign Relations, and a former member of President Jimmy Carter’s domestic policy staff, Mr. Schmoke has extensive government regulation and public policy experience which is extremely valuable to the Company in the conduct of its complex global business.

Sidney Taurel: As former Chairman and Chief Executive Officer of Eli Lilly and Company, a global pharmaceutical company, Mr. Taurel has substantial sales and marketing, financial services, capital markets, finance and accounting experience, and broad international business exposure. This experience enables Mr. Taurel to provide the Company with effective leadership as a global information services provider serving the financial services, business information, and global capital and commodity markets. As a former CEO of a global company and as a member of the Board of Overseers of the Columbia Business School, and as a founder of the International School of Indiana, an international school located in Indianapolis, Mr. Taurel provides effective leadership relating to global expansion and innovation. The positions Mr. Taurel has held as a member of The Business Council, the Homeland Security Advisory Council, President George W. Bush’s Export Council, and the Advisory Committee for Trade Policy and Negotiations have given him extensive government regulation and public policy experience which is extremely valuable to the Company in the conduct of its complex global business.

Richard E. Thornburgh: As Vice Chairman of Corsair Capital LLC, a private equity firm focused on investing in the global financial services industry, and as a former executive holding key financial and other positions at Credit Suisse and Credit Suisse First Boston, the investment banking arm of Credit Suisse, Mr. Thornburgh has substantial financial services, capital markets, finance and accounting experience and broad international business exposure. This experience enables Mr. Thornburgh to provide the Company with effective leadership as a global information services provider serving the financial services, business information, and global capital and commodity markets. The positions Mr. Thornburgh has held with the Securities Industry Association have further enhanced Mr. Thornburgh’s experience in these areas.

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Directors’ Biographies

The following 13 Director nominees are currently serving as Directors of the Company and have been nominated to stand for re-election at the Annual Meeting to serve one-year terms that will expire at the 2014 Annual Meeting. Please see pages 1 through 6 and page 69 of this Proxy Statement for voting information.

		Sir Winfried Bischoff, age 71, has been Chairman of Lloyds Banking Group plc since September 15, 2009. Prior to that he was Chairman of Citigroup, Inc. (“Citi”), a global financial services firm, from December 11, 2007 through February 23, 2009. He served as acting Chief Executive Officer of Citi from November 4, 2007 through December 11, 2007 and Chairman of Citi Europe from 2000 until 2009. Sir Win was Chairman of Schroders plc, an international investment banking and asset management firm headquartered in Great Britain, from 1995 to 2000. Prior to that, Sir Win was Chairman of J. Henry Schroder Co. (the London investment bank of Schroders plc) from 1983 to 1995 and Group Chief Executive of Schroders plc from 1984 to 1995. He is a Director of Eli Lilly and Company and a Trustee (formerly Chairman) of Career Academies UK and a member of the International Advisory Board of Akbank TAS, Turkey. He was a Director of Land Securities plc and Prudential plc. He was knighted in 2000 for his services to the banking industry. Sir Win has served as a Director of the Company since 1999 and is Chair of the Financial Policy Committee and a member of the Compensation and Leadership Development and Executive Committees.

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		William D. Green, age 59, was Executive Chairman of Accenture, a global management consulting, technology services and outsourcing company, from 2011 through January 2013, and served as Accenture’s Chairman and Chief Executive Officer from September 2004 through December 2010. Mr. Green was a Director of Accenture from 2001 through January 2013. Prior to serving as Chief Executive Officer, Mr. Green was Accenture’s Chief Operating Officer-Client Services with overall management responsibility for the company’s operating groups. In addition, he served as Group Chief Executive of the Communications & High Tech operating group from 1999 to 2003. He was also Group Chief Executive of the Resources operating group for two years. Earlier in his career, Mr. Green led the Manufacturing industry group and was Managing Director for Accenture’s business in the United States. He joined Accenture in 1977 and became a partner in 1986. Mr. Green is a member of the United Nations’ Secretary-General’s High-Level Group on Sustainable Energy for All, the Initiative for Global Development, the Business Council, the International Business Council of the World Economic Forum and the G100. Mr. Green is also a frequent speaker at business, technology and academic forums worldwide. Mr. Green has served as a Director of the Company since 2011 and is a member of the Compensation and Leadership Development and Nominating and Corporate Governance Committees.

		Charles E. Haldeman, Jr., age 64, was Chief Executive Officer of Federal Home Loan Mortgage Corporation (“Freddie Mac”), the publicly traded mortgage company, from 2009 through 2012. Mr. Haldeman was a Director of Freddie Mac from 2009 through 2012. Prior to that, he was Chairman of Putnam Investment Management, LLC in 2008 and 2009 and its President and Chief Executive Officer from 2003 through 2008. Before his tenure at Putnam, he was Chairman and Chief Executive Officer of Delaware Investments and earlier served as President and Chief Operating Officer of United Asset Management Corporation. He holds a Chartered Financial Analyst (CFA) designation. He was Chairman of the Board of Trustees of Dartmouth College from 2007 through 2010, and served as a Trustee from 2004 through 2012. He formerly served on the Board of Governors of the Investment Company Institute and the Investment Counsel Association of America. Mr. Haldeman has served as a Director of the Company since July 2, 2012 and is a member of the Audit and Compensation and Leadership Development Committees.

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		Linda Koch Lorimer, age 61, is Vice President of the University at Yale where she serves as senior counselor to the President and directs a broad array of administrative units ranging from the Office of International Affairs, to Public Affairs and Communications to the Office of Digital Dissemination. She has been at Yale since 1993 when she became Secretary of the University. She was President of Randolph-Macon Woman’s College from 1987 to 1993 and was Associate Provost of Yale University from 1983 to 1987. Ms. Lorimer is the former Chairman of the Board of the Association of American Colleges and Universities and also the Women’s College Coalition. She served as Vice Chair of the Center for Creative Leadership. Ms. Lorimer is a Director of Yale-New Haven Hospital and a Trustee of Hollins University and Save the Children. She was a Director of Sprint Nextel, Centel Corporation and First Colony Life Insurance Company. She currently is Vice Chair of the Global Agenda Council on “The Future of Universities.” Ms. Lorimer has served as a Director of the Company since 1994 and is a member of the Compensation and Leadership Development and Nominating and Corporate Governance Committees. She was the Presiding Director of the Company’s Board of Directors from 2004 to 2009.

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		Robert P. McGraw, age 58, has been since 1999 Chairman and Chief Executive Officer of Averdale Holdings, LLC, an international investment company. Prior to that, Mr. McGraw was Executive Vice President of the Professional Publishing Group of the Company from 1989 to 1998. He was Executive Vice President of the Healthcare Group from 1987 to 1989, and Group Vice President of that same group from 1985 to 1987. Prior to that, he served in several key positions in the Health Professions Division of the Company: General Manager from 1983 to 1985; Editorial Director from 1982 to 1983; and Editor from 1979 to 1982. He joined the Company in 1976 as a sales representative for McGraw-Hill Higher Education. Mr. McGraw has served as a Director of the Company since 1995 and is a member of the Financial Policy Committee. (a)

		Hilda Ochoa-Brillembourg, age 68, is the founder and has been since 1987 the President, Chief Executive Officer and Chief Investment Officer of Strategic Investment Group, a group of affiliated investment management firms. From 1976 to 1987, she was Chief Investment Officer of the Pension Investment Division at the World Bank. Prior to joining the World Bank, she served as an independent consultant in the fields of economics and finance, as a lecturer at the Universidad Catolica Andres Bello in Venezuela and as Treasurer of the C.A. Luz Electrica de Venezuela in Caracas. Ms. Ochoa-Brillembourg is a Director of General Mills, Inc. and Cementos Pacasmayo S.A.A. In addition, she is a Director of The Atlantic Council of the United States and a lifetime member of The Council on Foreign Relations. She is also Vice Chairman, Dean’s Alumni Leadership Council, Harvard Kennedy School of Government. Ms. Ochoa-Brillembourg is Founding Chair of the Youth Orchestra of the Americas. She is also an Advisory Board member of the Rockefeller Center for Latin American Studies at Harvard University. She is a former Director of the World Bank/International Monetary Fund Credit Union and the Harvard Management Company. Ms. Ochoa-Brillembourg has served as a Director of the Company since 2004 and is a member of the Audit and Financial Policy Committees.

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		Sir Michael Rake, age 65, has been Chairman of BT Group plc (“BT”), one of the largest communications companies in the world, serving customers in more than 170 countries, since 2007. Prior to being named Chairman of BT, he was Chairman of KPMG International, one of the world’s leading accounting organizations, with operations in 148 countries and more than 113,000 professionals working in member firms worldwide. After joining KPMG in 1972, he served the company in various capacities in Belgium, Luxembourg, the Middle East and London, and led a number of major global clients’ services teams. He joined the company’s UK Board in 1991, was elected UK Senior Partner in 1998 and named International Chairman in 2002. Sir Michael is the former Chair of the Commission for Employment and Skills in the UK and has been Chairman of easyJet plc since 2010. In addition, Sir Michael is Deputy Chairman at Barclays plc and was formerly on the Board of the Financial Reporting Council. He is a member of the Board of the Transatlantic Business Council and is a William Pitt Fellow at Pembroke College, Cambridge. Educated at Wellington College, where he is Chairman of the Governors, Sir Michael is qualified as a UK chartered accountant. He was knighted in 2007 for his services to the accounting profession. Sir Michael has served as a Director of the Company since 2007 and is Chair of the Audit Committee and a member of the Executive and Financial Policy Committees.

		Edward B. Rust, Jr., age 62, has been Chief Executive Officer of State Farm Mutual Automobile Insurance Company, the largest insurer of automobiles and homes in the United States, since 1985. He was elected Chairman of the Board two years later. Mr. Rust was also President of State Farm Mutual Automobile Insurance Company from 1985 to 1998 and was re-elected President in 2007. Mr. Rust is a Director of Helmerich & Payne, an oil and gas drilling company, and Caterpillar Inc., a manufacturer of construction and mining equipment. Mr. Rust is a Trustee for Illinois Wesleyan University. Additionally, Mr. Rust is Chairman of the U.S. Chamber of Commerce and is a member of Business Roundtable, where he served as Co-Chair for seven years, and the Financial Services Roundtable, where he served as Chairman. He was also a member of President George W. Bush’s Transition Advisory Team Committee on Education. Mr. Rust has served as a Director of the Company since 2001 and is Chair of the Nominating and Corporate Governance Committee and a member of the Audit, Compensation and Leadership Development and Executive Committees. He has also served as the Presiding Director of the Company’s Board of Directors since 2010.

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		Sidney Taurel, age 64, is Chairman Emeritus of Eli Lilly and Company, a global pharmaceutical company. Prior to that he was Chairman of Eli Lilly and Company from 1999 to December 31, 2008 and Chief Executive Officer from 1999 to March 31, 2008. He was also its President from 1996 through 2005. Mr. Taurel joined Eli Lilly and Company in 1971 and held management positions in the company’s operations in Brazil and Europe before becoming President of Eli Lilly International Corporation in 1986. He was elected a Director of Eli Lilly and Company in 1991, became Executive Vice President in 1993, and President and Chief Operating Officer in 1996. Mr. Taurel is Chairman of the Strategic Advisory Committee for Capital Royalty, LLC. He is also a member of the Boards of IBM Corporation and BioCrossroads. In addition, Mr. Taurel is a member of the global advisory Boards for Moelis, Takeda and Almirall. He serves on the Board of Overseers of the Columbia Business School, is a member of The Business Council, and a Trustee of the Indianapolis Museum of Art. Mr. Taurel received three Presidential appointments: to the Homeland Security Advisory Council (2002-2004); the President’s Export Council (2002-2007); and the Advisory Committee for Trade Policy and Negotiations (2007-2009). Mr. Taurel has served as a Director of the Company since 1996 and is Chair of the Compensation and Leadership Development Committee and a member of the Executive and Nominating and Corporate Governance Committees.

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		Richard E. Thornburgh, age 60, is Vice Chairman of Corsair Capital LLC, a private equity firm focused on investing in the global financial services industry. Mr. Thornburgh joined Corsair in 2006. Prior to that, Mr. Thornburgh held key positions with Credit Suisse First Boston (CSFB), the investment banking arm of Credit Suisse, including Executive Vice Chairman of CSFB from 2004 through 2005. He has also held key positions with Credit Suisse, including Chief Financial Officer, Chief Risk Officer and member of the Executive Board of Credit Suisse. Mr. Thornburgh is a Director of Credit Suisse Group AG, Reynolds American Inc. and NewStar Financial, Inc. He was a Director of National City Corporation and Dollar General Corporation. Mr. Thornburgh served as Chairman of the Securities Industry Association in 2004 and later joined its International Advisory Council, which provides guidance on World Trade Organization negotiations, United States-European Union market trends and other issues affecting international capital markets. In addition, he serves on the Executive Committee of the University of Cincinnati Foundation and is on the University of Cincinnati Investment Committee. Mr. Thornburgh has served as a Director of the Company since 2011 and is a member of the Audit and Financial Policy Committees.

(a) Messrs. Harold McGraw III and Robert P. McGraw are brothers.

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Corporate Governance Materials

The following corporate governance materials are available and can be viewed and downloaded from the Corporate Governance section of the Company’s Investor Relations Website at www.mcgraw-hill.com/investor_relations: (i) the Company’s Restated Certificate of Incorporation; (ii) the Company’s By-Laws; (iii) the Company’s Corporate Governance Guidelines; (iv) Board Committee Charters for the Company’s Audit, Compensation and Leadership Development, Executive, Financial Policy and Nominating and Corporate Governance Committees; (v) the Code of Business Ethics applicable to all Company employees; (vi) the Code of Ethics applicable to the Company’s Chief Executive Officer and Senior Financial Officers; (vii) the Code of Business Conduct and Ethics for Directors applicable to all the Company’s Directors; and (viii) the Audit Committee’s Policy concerning Employee Complaint Procedures Regarding Accounting and Auditing Matters.

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Committees of the Board of Directors

The Company has standing Nominating and Corporate Governance, Audit and Compensation and Leadership Development Committees. The Chair of each Committee reports to the full Board as appropriate from time to time. Each Committee has a Charter that is reviewed by the Nominating and Corporate Governance Committee on a regular basis. In addition to these three standing Committees, the Board has an Executive Committee and a Financial Policy Committee. A brief description of the Nominating and Corporate Governance, Audit and Compensation and Leadership Development Committees follows.

Nominating and Corporate Governance Committee

The functions performed by the Nominating and Corporate Governance Committee include, among other matters:

Additional information about the Nominating and Corporate Governance Committee follows:

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Processes and Procedures for Determining Director Compensation

The Nominating and Corporate Governance Committee is comprised of five Directors, all of whom meet the independence requirements of the New York Stock Exchange. The Board of Directors appoints the Committee Chair and determines which Directors serve on the Committee.

The Committee is solely responsible for determining all matters concerning compensation for the independent members of the Board. It is not authorized to delegate its authority to determine Director compensation. All compensation recommendations by the Committee are submitted to the full Board for review and approval. Directors who are employees of the Company do not receive any compensation for their Board services.

The Committee has sole authority to directly retain external consultants and to commission surveys or analyses that it determines necessary to fulfill its responsibilities.

Executive officers play no role in determining the amount or form of Director compensation. The Committee annually reviews the competitiveness of the Company’s Director compensation using survey data covering U.S. public companies in the publishing, information and media, and financial industries as well as data on similarly sized U.S. public companies from general industry. During 2012, the Committee engaged Frederic W. Cook & Co. to review this compensation survey data and advise the Committee on changes to Director compensation.

Audit Committee

The Company has an Audit Committee comprised of five Directors that has been established by the Board of Directors for the purpose of overseeing the accounting and financial reporting processes of the Company and the audits of the Company’s financial statements. The Board of Directors appoints the Committee Chair and determines which Directors serve on the Committee. The Audit Committee’s duties include, among other matters, assisting the Board’s oversight of:

Additional information about the Audit Committee follows:

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Compensation and Leadership Development Committee

The Compensation and Leadership Development Committee’s duties include, among other matters:

Additional information about the Compensation and Leadership Development Committee follows:

Processes and Procedures for Determining Executive Compensation

The Compensation and Leadership Development Committee is comprised of six Directors, all of whom meet the independence requirements of the New York Stock Exchange. The Board of Directors appoints the Committee Chair and determines the composition of the Committee members.

The Committee is responsible for approving all matters concerning the Company’s total compensation philosophy, including conducting periodic reviews of the philosophy to ensure it supports the Committee’s objectives and shareholder interests. The Committee is responsible for administering and interpreting the Key Executive Short-Term Incentive Compensation Plan, the Employee Stock Incentive Plan and all other compensation and benefits plans in which the Company’s senior management participate.

The Committee has sole authority to retain and terminate all external consultants and to commission surveys or analyses that it determines necessary to fulfill its responsibilities. Additionally, the Committee has sole authority to approve the fees of the external consultants. The Committee utilizes the services of Frederic W. Cook & Co. as its external compensation advisor for all matters concerning the Company’s senior management compensation pro-

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grams. Frederic W. Cook & Co. provides no other executive compensation consulting or other services to the Company or its management. Frederic W. Cook & Co. works in cooperation with Company management on matters that come before the Committee but always in its capacity as the Committee’s independent advisor and representative. The Committee has entered into a consulting agreement with Frederic W. Cook & Co. that specifies the nature and scope of its responsibilities, which include: (1) reviewing Committee agendas and supporting materials in advance of each meeting and raising questions or issues with management and the Committee Chair as appropriate; (2) at the Committee’s instigation, working with management on major proposals in advance of finalization by, and presentation to, the Committee; (3) reviewing drafts of the Company’s Compensation Discussion and Analysis and the Compensation Committee Report and related tables for inclusion in the Company’s Proxy Statement each year; (4) evaluating the chosen compensation peer group and survey data for competitive comparisons; (5) reviewing comparative data on the compensation of the Chief Executive Officer and providing independent analyses and recommendations on the Chief Executive Officer’s compensation to the Committee Chair; and (6) proactively advising the Committee on best practices for Board governance of executive compensation.

The Committee annually reviews and approves the corporate goals and objectives for the Chief Executive Officer’s compensation, evaluates the Chief Executive Officer’s performance in light of those goals and objectives, establishes the Chief Executive Officer’s total compensation and refers its recommendations to the independent Directors of the Board of Directors for ratification.

The Committee annually reviews and approves the individual compensation actions for the direct reports to the Chief Executive Officer and for approximately seven other senior executives. Below this level, the Committee approves the overall design of the total executive compensation program and delegates the discretion to approve individual compensation decisions to the Chief Executive Officer. The other named executive officers recommend compensation actions for the senior executives in their organizations and these compensation actions are then approved by the Chief Executive Officer.

During 2012, Frederic W. Cook & Co. was also engaged by the Nominating and Corporate Governance Committee to advise on compensation paid to the non-employee Directors. In this capacity, Frederic W. Cook & Co. works solely for the Board and provides no services to management.

In accordance with the Committee’s new policy on assessing adviser independence, the Committee determined in 2013 that there were no conflicts of interest or issues related to independence that would impact the advice to the Committee from the firm of Frederic W. Cook & Co. and the representatives of Frederic W. Cook & Co. who advise both the Committee on executive compensation matters and the Nominating & Corporate Governance Committee on director compensation matters. For a further discussion of the independence assessment policy, see page 33 of this Proxy Statement.

Compensation Committee Report

The Compensation and Leadership Development Committee has reviewed and discussed with Company management the Compensation Discussion and Analysis found on pages 31 through 45 of this Proxy Statement, and based on this review and discussion, the Compensation and Leadership Development Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K and this Proxy Statement.

The foregoing report has been furnished on behalf of the Board of Directors by the members of its Compensation and Leadership Development Committee.

Sidney Taurel (Chairman)

Sir Winfried Bischoff

William D. Green

Charles E. Haldeman, Jr.

Linda Koch Lorimer

Edward B. Rust, Jr.

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Membership and Meetings of the Board and Its Committees

In 2012, no Director attended fewer than 75 percent of the aggregate of the total number of meetings of the Board and the Committees on which he or she served. Current Committee membership and the number of meetings of the full Board and each Committee held during 2012 are shown in the table below.

In 2012, the non-management Directors met in executive sessions twice without any member of management present. Mr. Robert P. McGraw, who is not an independent Director as defined in the rules of the New York Stock Exchange due to his familial relationship with Mr. Harold McGraw III, the Company’s Chairman, President and Chief Executive Officer, was not present at one of these non-management Director executive sessions.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation and Leadership Development Committee has served as one of our officers or employees at any time. None of our executive officers serves as a member of the compensation committee of any other company that has an executive officer serving as a member of our Board of Directors. None of our executive officers serves as a member of the board of directors of any other company that has an executive officer serving as a member of our Board’s Compensation and Leadership Development Committee.

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Director and Officer Indemnification and Insurance

Each Director and certain of our executive officers have entered into an indemnification agreement with the Company which provides indemnification for judgments and amounts paid in settlement and related expenses to the fullest extent permitted under the applicable provisions of the New York Business Corporation Law (“NYBCL”). This indemnification will be reduced to the extent that a Director or executive officer is indemnified by the Company’s Directors’ and Officers’ liability insurance.

The Company has for many years had an insurance program in place that provides Directors’ and Officers’ liability insurance coverage. The Company’s current insurance coverage was purchased for the period May 15, 2012 to May 15, 2013 for a premium of approximately $2,850,000. This insurance is provided by a consortium of carriers, which includes: National Union Fire Insurance Company of Pittsburgh, PA; Federal Insurance Co.; Great American Insurance Co.; Freedom Specialty Insurance Co.; AXIS Insurance Company; St. Paul Mercury Insurance Co.; and Arch Insurance Co. This program also includes additional capacity dedicated to providing excess coverage for Directors and certain of our executive officers when the Company cannot indemnify them. The additional capacity is provided by: RLI Insurance Company; Continental Casualty Company; Carolina Casualty Insurance Company; and XL Specialty Insurance Company. No sums have been paid under this coverage to the Company or any Directors or officers nor have any claims for reimbursement been made in 2012.

The Company also maintains a fiduciary liability insurance program that covers Directors and employees who serve as fiduciaries for our employee benefit plans. This coverage, subject to a number of standard exclusions and certain deductibles, indemnifies the Directors and employees from alleged breaches of fiduciary or administrative duties, as defined in the Employee Retirement Income Security Act of 1974 or similar laws or regulations outside the United States. The Company’s current fiduciary liability coverage was purchased for the period May 15, 2012 to May 15, 2013 for a premium of approximately $275,000 and is provided by the following consortium of carriers: National Union Fire Insurance Company of Pittsburgh, PA; Arch Insurance Co.; and XL Specialty Insurance Company. No sums have been paid under this coverage to the Company or any Directors or officers nor have any claims for reimbursement been made in 2012.

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Audit Committee Report

The Audit Committee reviews the Company’s financial reporting process on behalf of the Board. All of the members of the Committee are independent Directors as defined in the rules of the New York Stock Exchange. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal controls. The Board has adopted a written Charter for the Audit Committee.

In this context, the Committee has met and held discussions with management and the Company’s independent Registered Public Accounting Firm. Management represented to the Committee that it is responsible for the financial reporting process, including the system of internal controls, for the preparation of the Company’s consolidated financial statements in accordance with generally accepted accounting principles and for the report on the Company’s internal controls over financial reporting. The Committee has reviewed and discussed the consolidated financial statements with management and the Company’s independent Registered Public Accounting Firm, which review included a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. The Committee also discussed with management the process used to support the certifications required by the Sarbanes-Oxley Act of 2002 and to support management’s annual report on the Company’s internal controls over financial reporting. The Committee discussed with the independent Registered Public Accounting Firm matters to be discussed as required by the Public Company Accounting Oversight Board (PCAOB), rules of the Securities and Exchange Commission, and other applicable regulations.

In addition, the Committee has reviewed and discussed with the Company’s independent Registered Public Accounting Firm the firm’s independence from the Company and its management. The Audit Committee received from the independent Registered Public Accounting Firm the written disclosures and the letter regarding its independence as required by the PCAOB’s applicable requirements.

The Committee has also considered whether the provision of services by the Company’s independent Registered Public Accounting Firm, Ernst & Young LLP, not related to the audit of the financial statements referred to above, is compatible with maintaining Ernst & Young LLP’s independence.

The Committee discussed with the Company’s internal auditors and independent Registered Public Accounting Firm the overall scope and plans for their respective audits. The Committee met with the internal auditors and independent Registered Public Accounting Firm, with and without management present, to discuss the results of their examinations, the evaluations of the Company’s internal controls and the overall quality of the Company’s financial reporting.

In reliance on the reviews and discussions referred to above, the Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, as filed with the Securities and Exchange Commission. The Committee and the Board also have recommended, subject to shareholder ratification, the selection of Ernst & Young LLP as the Company’s independent Registered Public Accounting Firm for 2013.

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Transactions With Related Persons

Under SEC rules, we are required to disclose material transactions with the Company in which “related persons” have a direct or indirect material interest. Related persons include any Director, nominee for Director, executive officer of the Company, any immediate family members of such persons, and any persons known by the Company to be beneficial owners of more than five percent of the Company’s voting securities. The term “transaction” is broadly defined under SEC rules to include any financial transaction, arrangement or relationship, including any indebtedness transaction or guarantee of indebtedness.

Based on information available to us and provided to us by our Directors and executive officers and other than the items referred to below, we do not believe that there were any such material transactions in effect since January 1, 2012, or any such material transactions proposed to be entered into during 2013.

As noted on pages 45 and 49 of this Proxy Statement, for security reasons, Mr. Harold McGraw III is required to use Company provided aircraft for all air travel. When using Company provided aircraft for personal travel, Mr. McGraw is required to reimburse the Company for the equivalent of first class commercial airfare for himself and for each passenger traveling with him. Mr. McGraw and the Company have entered into an Aircraft Time Sharing Agreement, dated as of September 15, 2004, which provides for such reimbursement. The Compensation and Leadership Development Committee and the Nominating and Corporate Governance Committee of the Company’s Board of Directors have approved this arrangement. The Company’s policy limits the cost of personal travel to the Company. Under this policy, if the incremental cost of personal travel to the Company exceeds $200,000 in any calendar year (excluding, for this purpose, the cost of travel to Board meetings of third party companies), in lieu of reimbursement equivalent to first class commercial airfare, Mr. McGraw is required to reimburse the Company for the full incremental cost of such travel. During 2012, Mr. McGraw made payments to the Company of $95,515 under this Agreement.

Mr. Whit McGraw, the son of Harold McGraw III, is employed by the Company as an executive in its S&P Capital IQ business unit. During 2012, Whit McGraw received compensation of $309,531.86 (which included a base salary of $150,000, an incentive payment of $40,000 and the reimbursement of certain relocation expenses). His compensation (including base salary and long-term and short-term incentive opportunities) is reviewed on an annual basis in accordance with the Company’s regular pay practices.

On February 1, 2013, Mr. Mathew Haldeman, the son of Charles E. Haldeman, Jr., a Director of the Company, was employed by the Company as an executive in its McGraw-Hill Education business unit. Mathew Haldeman is receiving a base salary of $180,000 with an annual bonus potential of up to 25% of base salary. He is also eligible for participation in the McGraw-Hill Education Long-Term Incentive Program. His compensation (including base salary and long-term and short-term incentive opportunities) is reviewed on an annual basis in accordance with the Company’s regular pay practices. The Company entered into an agreement to sell its McGraw-Hill Education business on November 26, 2012 and expects to complete the sale in the first quarter of 2013.

The Company’s Board of Directors has adopted a written policy that requires the Board’s Nominating and Corporate Governance Committee to review and approve any related party transactions. At each calendar year’s first regularly scheduled meeting of the Nominating and Corporate Governance Committee, management is required to present to the Committee specific information with respect to any such transaction expected to be entered into or continued during that calendar year. After reviewing this information, the Committee will approve such transaction only if the following two conditions are met: (1) the transaction must be in the best interests (or not inconsistent with the best interests) of the Company and its shareholders; and (2) the transaction must be entered into by the Company on terms that are comparable to those that would be obtained in an arm’s-length transaction with an unrelated third party. If any additional related party transactions are proposed to be entered into subsequent to the Committee’s first calendar year meeting, management is required to present such transactions to the Committee for approval or ratification at a subsequent meeting of the Committee.

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EXECUTIVE COMPENSATION

This section contains information on various aspects of compensation of the Company’s executives. In particular, it contains information regarding the cash and equity compensation of the “named executive officers”. The named executive officers of the Company include the Chief Executive Officer (“CEO”), Mr. Harold McGraw III, and the Chief Financial Officer (“CFO”), Mr. Jack F. Callahan, Jr. The named executive officers also include the Company’s three most highly compensated executive officers other than the CEO and CFO who were serving as executive officers on December 31, 2012.

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Compensation Discussion and Analysis

The Compensation and Leadership Development Committee of our Board of Directors (the “Committee”) oversees our compensation program for senior executives on behalf of our Board and shareholders. Information about the Committee and its members who are Director nominees can be found on pages 14 through 19 of this Proxy Statement.

This Compensation Discussion and Analysis (“CD&A”) describes our executive compensation program, the basis for the compensation paid to our named executive officers for 2012 and the approved compensation opportunities for our named executive officers for 2013. Our CD&A includes adjusted financial information. Please see our 2012 year-end earnings release filed on Form 8-K dated February 12, 2013 for exhibits that reconcile the differences between the non-GAAP measures in the CD&A and comparable financial measures calculated in accordance with U.S. GAAP.

Executive Summary

Philosophy. Our compensation philosophy is to reward our executives for value-creating performance and to link a significant portion of pay to one or more performance metrics that are intended to create value for our shareholders. Within the framework of pay-for-performance, our compensation practices are implemented in a manner that we believe attracts the highest quality talent to our executive ranks and retains these individuals by rewarding excellence in leadership and success in the implementation of our business strategy.

In 2012, the three key elements of our pay program continued to be base salary, annual cash bonus and long-term incentive awards linked to our common stock. This summary discusses compensation highlights from 2012, noting, in particular, how pay was impacted by our Growth & Value Plan that includes separating our business into two companies and the development of our business strategy for the Company following that separation. We also note in this summary certain decisions we have made that affect the 2013 compensation of our named executive officers.

Highlights. The following are the key aspects of our 2012 compensation program and also certain aspects of our program for 2013:

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We believe the highlights above demonstrate our commitment to pay-for-performance, to rewarding excellence by our executives in developing and implementing our business strategy and to adapting our compensation practices to take into account changes in our business and market conditions. The remainder of this CD&A provides further information about the topics highlighted in this summary.

Details of Our Executive Compensation Program

This section of our CD&A provides in question and answer format more detailed information about our executive compensation program.

What Are Our Main Compensation Objectives?

The main objectives of our executive compensation program are:

What Are the Core Principles and Practices We Use to Implement Our Executive Compensation Program?

We use the following core principles and practices to set the compensation of our named executive officers:

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What Are the Elements of Our Executive Compensation Program?

Our executive compensation program for our named executive officers consists of the following elements:

We also provide (i) defined contribution retirement benefits and other post-employment benefits under our tax-qualified and non-qualified retirement plans and under our Senior Executive Severance Plan, (ii) health and welfare benefits under our group benefit plans and supplemental death and disability plans, and (iii) limited perquisites and other fringe benefits.

How Do We Use Market Data in Setting Compensation Levels?

For our named executive officers other than the CEO, we review the range of market compensation between the 25th and 75th percentiles for the companies in the compensation surveys described below. For the CEO, our Committee reviews a composite of the market data prepared by Frederic W. Cook & Co. In either case, these reviews are conducted to provide information about the general market practice for these positions. In general, we design our executive compensation program to pay median

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levels of compensation for target levels of achievement, to pay below median for achievement below target, and to pay above median compensation for significantly higher levels of achievement versus target goals.

We review compensation market data in setting base salaries and short-term and long-term incentive opportunities for our named executive officers. However, we do not limit or increase individual incentive payments based solely on these broad compensation market data reference points.

For purposes of setting the compensation of the named executive officers for 2012, the Committee was provided with information from the 2012 Towers Watson Media Industry Executive Survey, in which the Company participates. This survey contains information on base salaries, annual incentives, and equity awards within the publishing, information, and media industries. For 2012, Towers Watson provided compensation information based on data reported by 48 companies participating in the Media Industry Executive Survey, appropriately sized for our revenue, for positions comparable to those of our named executive officers. For purposes of setting compensation targets for 2013, the Committee was provided with information from the 2012 Towers Watson General Industry Executive Compensation and the 2012 Towers Watson Financial Services Executive Compensation Surveys, in which the Company also participates. Following the separation of McGraw-Hill Education, the Media Industry Executive Survey will no longer be used for purposes of setting the compensation of the named executive officers. None of the survey data provided to us in any Towers Watson survey identifies the specific companies that reported this compensation information.

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With regard to the CEO, for 2012 Frederic W. Cook & Co. used data from the Towers Watson Media Industry Survey and the proxy data for companies in the S&P 500 Financial Services Sector to determine a market composite for developing recommendations for the total compensation opportunities for the CEO for consideration by the Committee. For 2013, Frederic W. Cook & Co. used the Towers Watson General Industry Survey rather than the Media Industry Survey for the same reasons discussed above. We believe that the addition of compensation information for the S&P 500 Financial Services Sector as a reference point in determining compensation for our CEO is appropriate given that the S&P business operations are a part of the financial services industry. While all of the companies included in the S&P 500 Financial Services Sector are not direct business comparables, we believe that the aggregate compensation data for the Sector is appropriate to take into account in determining compensation levels for the CEO. For 2012, the S&P 500 Financial Services Sector comprised the following 81 companies:

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How Did We Take into Account the Results of Last Year’s Say-on-Pay Vote?

We value the opinions of our shareholders. At the 2012 Annual Meeting of shareholders, approximately 97.6% of the votes cast on the say-on-pay proposal were in favor of our executive compensation program described in our 2012 Proxy Statement. In light of this strong shareholder support, we concluded that no revisions were necessary to our executive compensation program based solely on the results of the say-on-pay vote.

What Actions Did We Take to Address Risk in Our Executive Compensation Program?

In 2012, management updated its prior review of the Company’s incentive compensation plans to include one new program adopted in 2012 for the Company’s S&P Dow Jones Indices business unit. This program does not apply to our named executive officers. The findings and conclusions of the updated review are that the design of the new plan does not involve risks that are reasonably likely to have a material adverse effect on the Company. Management reviewed its findings with the Committee, and Frederic W. Cook & Co. concurred in these findings and conclusions.

In 2012, the Committee established performance metrics that focused on operating income and earnings per share growth, and established goals and payment schedules for each metric that were designed to provide a balance to motivate the achievement of the established goals without the need for inappropriate or excessive risk taking by providing a range of payment opportunities for achievement both below and above the target goals established for the short and long-term incentives. In addition, the Committee reviews and assesses plan design, performance metrics, and goals for the annual incentive plans within the Company’s business units to ensure that the designs of those annual incentive plans are appropriately aligned with business and regulatory considerations and do not encourage excessive risk taking.

How Do We Consider Individual Performance for Our Named Executive Officers?

The Committee and the other independent members of the full Board review and approve the Company performance objectives and personal goals for the CEO at the beginning of the year. At or after year-end, the Committee members evaluate the CEO’s performance, achievements, and contributions and make decisions concerning the CEO’s base salary, target annual incentive and long-term incentive awards for the upcoming year. The Committee Chairman reviews these decisions with the other independent members of the Board and solicits their input and approval for the CEO’s compensation. The Committee Chairman then reports these decisions to the CEO along with feedback about the assessments of his performance during the year.

For all executive officers other than the CEO, we use a global Performance Management Program that measures performance against individual qualitative and quantitative goals, behaviors and competencies. The performance evaluations are then used along with other considerations, such as compensation survey data, merit budget increase guidelines, and the consideration of an individual’s potential contributions by his or her manager, to determine base salary changes, annual incentive payments, and the amount of long-term incentive awards. For 2012, however, the Committee determined not to apply the global Performance Management Program to our corporate employees (including our named executive officers) due to the considerable amount of restructuring we underwent in connection with the implementation of the Growth & Value Plan. We concluded that it would have been difficult to assign individual goals to our corporate employees since many functions were reorganized and many employees saw their roles change considerably, including a number of the direct reports to our named executive officers (other than the CEO). We intend to

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revert to our usual practice of having all employees globally, including our named executive officers, participate in the Performance Management Program in 2013.

The CEO reviews and assesses the accomplishments and achievements of each of the other named executive officers and formulates a performance evaluation and compensation recommendation for each of them. We do not use specific corporate performance targets in assessing individual performance of the named executive officers (other than the CEO). As described below, the CEO makes annual recommendations to the Committee regarding the base salary and the annual and long-term incentives awarded to the other named executive officers for the Committee’s review and approval and, in connection with his recommendations, he discusses with the Committee his evaluation of each executive’s individual performance.

How Do We Determine Base Salaries?

We pay a base salary to our named executive officers to provide a fixed amount of cash compensation on which they can rely. Base salaries of named executive officers are reviewed on an annual basis against compensation market data as described above. For our named executive officers other than the CEO, increases to base salary are based on the CEO’s assessment of the executives’ individual performance evaluated under our Performance Management Program each year and the guidelines established for merit increases for corporate employees for the year. Our Committee independently evaluates the performance of the CEO and establishes the CEO’s base salary so that, together with his target annual incentive opportunity and stock-based long-term incentive awards, his total annual target compensation is competitive against median market data for a composite of media or general industry, as appropriate, and for the financial services industry.

As a result of the separation of McGraw-Hill Education, as noted above, we are in the process of adjusting our competitive market data and identifying an appropriate peer group of companies to reflect our business segments and the anticipated revenue and market capitalization size of the Company after the completion of the separation. As a part of this process, both management and the Committee determined that, for purposes of the 2012 and 2013 calendar years, none of the named executive officers would receive salary increases.

How Do We Determine Annual Incentive Plan Funding?

For Our Named Executive Officers Other Than the CEO. As noted above, our Key Executive Short-Term Incentive Compensation Plan uses an incentive pool design for the named executive officers and other corporate employees, except for the CEO. The amount of our target annual incentive pool is approved at the start of each year by the Committee and is based on the sum of the “at-target” anticipated payments to covered participants. “At-target” payments are generally determined as a specified percentage of either the mid-point for the applicable salary range or the participant’s base salary. Individual bonus targets, however, are not established for individual participants. The target incentive pool is adjusted each year for changes in participant headcount. The actual funding of the pool is determined following year-end by the Committee based on the achievement of approved performance goals. The pool targets for 2012 were based on operating income and the separation of McGraw-Hill Education. Each named executive officer’s annual incentive payment is recommended to the Committee by the CEO, after review of the individual’s payment history, the funding of the pool, and evaluations of the individual’s performance for the year and the individual’s contributions to Company performance.

A portion of the 2012 annual incentive for three of our named executive officers, Messrs. McGraw, Callahan and Berisford, is attributable to the effective separation of McGraw-Hill Education, including by sale or spin-off. As of the date of this Proxy Statement, the separation has not been completed and, therefore, the amount of the bonus attributable to the separation has not been paid to Messrs. McGraw, Callahan and Berisford. The portion of the annual incentive attributable to the separation is not included in the column for non-equity incentive plan compensation in the Summary Compensation Table on page 46 of this

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Proxy Statement but will be disclosed by the Company on a Form 8-K report once it has been paid. For the three executives, the expected additional bonus amounts are $96,674 for Mr. McGraw, $157,500 for Mr. Callahan and $40,000 for Mr. Berisford.

For the CEO. The CEO position is not included in the corporate annual incentive pool. Instead, the Committee establishes a target annual incentive opportunity that, together with his base salary and long-term incentive grants, is set to be generally competitive with composite median market levels reflecting information from general industry and financial services companies and input from Frederic W. Cook & Co. For 2013, the Committee determined that the CEO’s target annual incentive opportunity will continue to be $1,288,980, which was the same amount used for the CEO’s 2011 and 2012 annual incentive target opportunity.

How Were the Annual Incentive Performance Targets Established for 2012?

For operating income, which represents 70% of the annual incentive performance goal, the Committee established a funding schedule with the targets set forth in the table below:

Key Executive Short-Term Incentive

Compensation Plan

2012 Operating Income Goal

& Funding Schedule

Non-GAAP adjusted operating income for 2011 upon which the growth goals were calculated was $1,499 million. In early 2012, the Committee established the definition of non-GAAP adjusted operating income to be used for determining the achievement of the performance goals established for incentive compensation purposes. The 2012 reported operating income (including both continuing operations and discontinued operations) of $986 million was adjusted by the Committee to exclude the following:

Non-GAAP adjusted operating income of $1,664 million resulted in growth of 11.0% and funded the 2012 target incentive pool at 187.5% of the payout level. The resulting blended 2012 pool funded at 168.75% of the target level.

How Were Actual 2012 Annual Incentives Determined?

Individual annual incentive payments for our named executive officers, other than the CEO, are recommended to the Committee by the CEO based primarily on his consideration of their individual performance for the year and the funding of the corporate annual incentive pool. As noted above, the corporate annual incentive pool funded at 168.75% of target for 2012.

The amounts for the other named executive officers are reflected in the Summary Compensation Table on page 46 of this Proxy Statement. Mr. McGraw determined that each of the named executive officers performed at a high level of achievement during 2012. The Company does not set specific personal objectives at the beginning of the year for the named executive officers; instead, performance is assessed by Mr. McGraw based on each individual’s contribution to the organization’s key priorities for

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the coming year. In 2012, these included the development of McGraw Hill Financial’s global growth strategy and the implementation of the Growth & Value Plan, which included the separation of McGraw-Hill Education. As noted above, as of the date of this Proxy Statement, for three of our named executive officers, a portion of the annual incentive attributable to the separation of McGraw-Hill Education has not been paid and is not included in the column for non-equity incentive plan compensation in the Summary Compensation Table on page 46 of this Proxy Statement.

The Committee determined Mr. McGraw’s 2012 annual incentive payment would be $2,175,154, or 168.75% of his target award. This decision was based on the 2012 incentive achievement level and the Committee’s review and assessment of Mr. McGraw’s demonstrated 2012 performance and leadership, which included, among other things, the financial performance of the Company, the implementation of the Growth & Value Plan, the separation of McGraw-Hill Education, and the development of a management succession plan for McGraw Hill Financial. As noted above, a portion of Mr. McGraw’s bonus is attributable to the separation of McGraw-Hill Education, including by sale or spin-off, in 2013. As of the date of this Proxy Statement, the separation has not been completed. Accordingly, the portion of the annual incentive attributable to the separation, $96,674, has not been paid and is not included in the column for non-equity incentive plan compensation in the Summary Compensation Table on page 46 of this Proxy Statement.

How was the Long-Term Performance Share Unit Incentive Goal established for 2012?

For the earnings per share growth goal under the 2012 performance share unit award, the Committee established a funding schedule set forth in the following table:

2012 PSU Award Goal & Payment Schedule

Non-GAAP adjusted earnings per share for 2011 upon which the 2012 growth goal was calculated was $2.91.

What Was the 2012 Earnings Per Share Achievement for Purposes of the 2012 Long-Term Incentive Award?

The reported 2012 diluted earnings per share of $1.53 (including continuing operations and discontinued operations) was adjusted by the Committee to exclude:

The resulting 2012 non-GAAP adjusted earnings per share of $3.44 resulted in a funding at 150% for the 2012 long-term incentive award. The last two years of the grant, 2013 and 2014, provide for time-based vesting with earned share units paid out in the first quarter of 2015.

How Are the Annual Incentive Performance Goals Established for 2013?

For the 2013 performance year, the Committee determined that the performance metrics used under the corporate annual incentive plan will be revenue (weighted 25%) and net income (weighted 75%). These performance metrics are intended to strengthen the emphasis on behaviors driving overall growth of the Company.

For the net income performance goal, the Committee established a funding schedule with a 0% funding threshold for 0% growth, 100% funding

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for mid-teens growth and 200% funding for approximately 20% growth.

For the revenue performance goal, the Committee established a funding schedule with a 0% funding threshold for 0% growth, 100% funding for high single digits growth and 200% funding for mid-teens growth.

How Do We Determine the Amount and Type of Our Long-Term Stock-Based Incentives?

Under the Company’s compensation practice prior to 2012, long-term equity incentives for our named executive officers typically consisted of annual awards of performance share units and stock options. The target award amounts are determined to be competitive with median long-term grant values as reflected in the Tower Watson survey results.

However, for purposes of the 2012 long-term incentive grants, management and the Committee determined that, in light of the focus on the separation of the Company into two operating companies in anticipation of the separation of McGraw-Hill Education, no stock options would be granted. As a result, the total value of the 2012 long-term incentive awards was granted in the form of performance share units.

For 2013, we will return to our prior practice of granting a blend of performance share units and stock options. For our named executive officers, performance share units will represent 70% of the total long-term grant value and stock options will represent 30% of the grant value. This mix balances incentives based on stock appreciation and performance factors not directly related to stock price.

How Will the 2013 Performance Share Unit Award Be Designed?

For purposes of the design of the performance share unit award to be granted in 2013 and covering the years 2013, 2014 and 2015, the Committee decided to return to a three-year performance goal using an earnings per share performance metric. The earned share units will then be paid in the form of actual shares to participants in early 2016.

For the three-year earnings per share goal, the Committee established a funding schedule with a 0% funding threshold for 0% growth, 100% funding for mid-teens growth and 200% funding for approximately 20% growth.

How Will the Number of Performance Share Units and Stock Options to be Granted as Stock-Based Incentive Awards be Determined in April 2013?

The 2013 long-term incentive target award opportunity will be expressed as a dollar value, with 70% of the dollar value allocated to performance share units and 30% of the dollar value allocated to options. The target number of performance share units will then be determined by dividing the portion of the dollar value allocated to performance share units by the closing stock price on April 1, 2013. The number of stock options granted will be determined by dividing the portion of the dollar value allocated to stock options by the fair value of each option on the date of grant as determined using a binomial lattice model. We believe this blend of performance share units and stock options provides a balanced approach to promote long-term financial performance, reward for stock price appreciation and provide an appropriate executive retention vehicle.

The resulting target share units then will be subject to the achievement of the 2013 to 2015 non-GAAP adjusted earnings per share performance goals established by the Committee for the Award. The resulting options will then be subject to a three-year vesting schedule.

What Impact Do the Accounting Rules Have on the Type of Equity Awards We Make?

We consider the impact of FASB ASC Topic 718 on the type and mix of our equity awards. Under this accounting standard, performance share unit awards are recorded using fixed award date accounting, and the expense associated with the

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awards varies with the number of performance share units earned, but not with changes in stock price. Stock options are also recorded using fixed award date accounting, and the expense associated with stock options does not vary with changes in stock price.

How Does Our Senior Executive Pay Recovery Policy Work?

In the event of a material recalculation or re-determination of the performance results used to determine the annual and long-term incentive payments to our senior executives, our Senior Executive Pay Recovery Policy provides for the recovery of all or a portion of any overpayment. The Policy applies to any payments made within two years following the expiration of the relevant performance period. We will review the design of our Senior Executive Pay Recovery Policy in light of the requirements under the Dodd-Frank Act and will make any necessary changes to be in compliance with those requirements once final regulations have been issued.

Did We Adjust Outstanding Awards to Take into Account the Special Dividend?

On December 6, 2012, as part of our Growth & Value Plan, our Board of Directors approved a special dividend of $2.50 per share that was paid to our shareholders on December 27, 2012. On December 19, 2012, the Committee approved an adjustment to outstanding equity awards to comply with the award terms and to preserve the value of these awards to participants in light of the dividend.

How Does IRC Section 162(m) Affect Our Executives’ Compensation and Why?

Section 162(m) of the Internal Revenue Code limits the amount of compensation paid to each named executive officer that may be deducted by the Company to $1 million in any year, unless the compensation qualifies as “performance-based.” Our annual cash bonuses and long-term incentive compensation are intended to meet the requirements for performance-based compensation and be fully deductible. However, we do not have a policy requiring that all compensation be deductible. In 2012, approximately $638,000 of the compensation paid to the CEO was not deductible by the Company. It was composed primarily of the portion of the CEO’s base salary above $1 million, the value of dividend equivalents and imputed income on Company-provided perquisites.

How Do We Encourage a Significant Ownership Stake in the Company?

We are committed to ensuring that our executive officers have a significant ownership stake to strengthen the alignment of our executives’ interests with those of our shareholders.

The Company has formal stock ownership guidelines for senior executives that range from five times base salary for the CEO to three times base salary for the other named executive officers. These guidelines are aligned with competitive information on executive stock ownership guidelines. Further, the ownership guidelines will be reduced by one-half for executives covered by these guidelines beginning at age 62. This reduction is intended to permit individuals to begin an orderly process of stock sales to provide for diversification as the executives covered by these guidelines get closer to the Company’s normal retirement age of 65.

Until the guidelines for ownership levels are attained, senior executives must retain 100% of net profit shares realized from the exercise of stock options, the payment of performance share unit awards, and the vesting of any restricted stock awards. Upon attainment of the guidelines for ownership levels, senior executives must continue to retain 50% of any future net profit shares acquired from stock option exercises for six months. Further, the CEO and his direct reports who are under the purview of the Committee are subject to this six-month holding period following voluntary termination of em- ployment, including retirement. Once the required number of shares is attained, future salary increases and changes in stock price will no longer have an impact, unless the executive is promoted to a higher guideline ownership level.

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As of February 1, 2013, for purposes of our Executive Stock Ownership Guidelines, our named executive officers directly owned shares of our common stock valued at the following multiples of the named executive officer’s base salary, with the result that Messrs. McGraw and Vittor met the minimum ownership requirements of the Executive Stock Ownership Guidelines:

Stock Ownership for Named Executive Officers

Do We Prohibit the Hedging and Pledging of Company Common Stock by Our Officers and Directors?

Yes. Under the Company’s revised Insider Trading Policy, no shares of Company stock owned by Directors and officers may be newly pledged after 2012 as security for a loan. In addition, the revised policy continues to provide that Directors and officers are prohibited without exception from engaging in hedging transactions related to Company stock, such as puts, calls, swaps, collars and other arrangements intended to hedge exposure to Company stock or provide protection against declines in the value of Company stock.

No exceptions to the anti-pledging restriction are permitted after 2012. However, prior to 2013, an exception to the prohibition on the pledging of shares of Company stock was permitted for the

CEO based, in part, on the CEO’s decision to continue to maintain a significant portion of his net worth in Company stock and the significant alignment of his interests with those of our shareholders resulting from this decision. In order to allow the CEO to reduce over time and in an orderly manner the number of shares subject to pledge, the Company’s revised policy provides that pledges in existence on January 1, 2013 must be unwound, and the shares released from pledge, by no later than December 31, 2015. As a result of the implementation of these guidelines, the number of shares owned and pledged by the CEO and reported in footnote (e) to the Company Stock Ownership of Management Table on pages 66 and 67 of this Proxy Statement declined by approximately 14% from the number reported in the corresponding footnote in the Company’s 2012 Proxy Statement.

What Retirement and Other Benefits Do We Provide to Our Executives Following Their Termination of Employment and Why?

In connection with their retirement or other termination of employment, our named executive officers will generally be eligible to receive benefits under our savings and retirement plans and, depending on the circumstances of an executive’s termination, severance benefits. These post-termination benefits are described beginning on page 52 of this Proxy Statement. We have previously frozen our legacy supplemental retirement program covering our CEO. In addition, effective as of April 1, 2012, we froze our Employee Retirement Plan of The McGraw-Hill Companies, Inc. and Its Subsidiaries, a defined benefit pension plan covering most of our U.S. employees, including the named executive officers. Our remaining defined contribution plans are provided to executives to allow them to accumulate assets for retirement through a combination of individual savings and Company contributions and to allow participants in these plans the opportunity to direct the investment of these retirement assets.

As discussed below, annual incentives under our Key Executive Short-Term Incentive Compensation Plan and stock options awarded under our 2002 Stock Incentive Plan have a “single trigger” that accelerates vesting or payment on the occurrence of a defined change-in-control, without requiring the executive’s employment to be terminated.

In the case of the short-term incentive awards, the payment will be based on the average of

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payments of the three prior years. In the case of performance share unit awards, the earnings per share goals will be deemed to be fully achieved at target upon a change-in-control that occurs during a performance period under the award. The outstanding long-term incentive awards would then be paid prorata, with the balance of the award remaining subject to the original schedule for vesting and payment. In the case of annual incentive payments and performance share unit awards, we have adopted this approach because it would be impractical, and potentially unfair, following a change-in-control, to continue to measure Company performance based on performance goals that were initially set for a separate, independent enterprise. In the case of stock options, the purpose of accelerated vesting on a change-in-control is to put employee option holders in the same position as our shareholders in enabling them to capture market value appreciation through the date of the change-in-control on unvested equity awards.

As indicated above, none of our named executive officers is a party to an employment agreement, although each of Messrs. Berisford and Callahan are parties to offer letters signed in connection with their initial employment with us. Our severance arrangements with the named executive officers are governed by our Senior Executive Severance Plan, which was originally adopted by our Board of Directors in the late 1980s and is part of a human resources program that has been in place for many years. Our Senior Executive Severance Plan is designed to promote employee loyalty, to provide employees with security and reasonable compensation upon an involuntary termination of employment, and to ensure the continued commitment of employees in the event of a potential or actual change-in-control. The Committee does not take into account the benefits offered under our Senior Executive Severance Plan in setting compensation for our named executive officers.

Generally, upon the delivery by a participant of a general release, the Senior Executive Severance Plan provides for base salary and benefits continuation in the event of a Company-initiated termination (including a “constructive” termination). In general, the severance benefit is service-based, in that longer tenured executives receive larger payment amounts in the event of termination. The maximum benefit is payable under the Senior Executive Severance Plan for all participants, regardless of their years of service, if they terminate employment under specified circumstances following a change-in-control. In addition, following a change-in-control, severance amounts are increased to include the executive’s annual target bonus. The Committee, with the advice of Frederic W. Cook & Co., determined it was necessary to increase the minimum and maximum level of severance benefits payable under the Senior Executive Severance Plan for 2012 in order to foster retention during the implementation of the Growth & Value Plan.

Certain payments that would be provided to our named executive officers in connection with a change-in-control may be classified as “excess parachute payments” under Section 280G of the Internal Revenue Code and may not be deductible as compensation by the Company. In addition, Section 4999 of the Internal Revenue Code imposes an excise tax on executives who receive an excess parachute payment equal to 20% of such amount. The excise tax is not reimbursed or “grossed up” by the Company. Instead, as discussed on page 59 of this Proxy Statement, in certain circumstances, we may “cut back” the amount of severance benefits payable under our Senior Executive Severance Plan if they would not be deductible by the Company under Section 280G.

What Health and Welfare Benefits Do We Provide to Our Executives and Why?

The Company provides a uniform healthcare benefits program for all domestic U.S. employees, including the named executive officers, to provide financial security for employees and their families. The employee healthcare contributions are differentiated by salary levels, with the higher-paid employees required to make larger contributions for their healthcare coverage. For 2013, we provide no supplemental executive healthcare benefits other than a Company-paid annual physical examination for

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the named executive officers and 26 other senior executives. Additionally, 130 executives participate in the Management Supplemental Death and Disability Benefits Plan, which provides a death benefit equal to two times base salary and a supplemental long-term disability benefit equal to 50% of the executive’s monthly earnings, as defined in the Plan, less other Company paid benefits and Social Security benefit payments.

What Perquisites and Other Fringe Benefits Do We Provide to Our Executives and Why?

We provide the following perquisites, which we believe are reasonable and competitive, to our named executive officers to enable them to conduct Company business more effectively and to allow greater focus on the demands of their positions:

Additionally, pursuant to a third-party security study undertaken for the Company, the CEO is required by the Company to use Company-provided aircraft for all air travel. When using Company-provided aircraft for personal travel, the CEO and any passengers traveling with him are required to reimburse the Company for the equivalent of first class commercial airfare. Furthermore, as described on pages 29 and 49 of this Proxy Statement, the Company’s policy limits the cost of personal travel to the Company by requiring reimbursement of the incremental cost to the Company in excess of $200,000 in any year. The CEO is also provided a Company car and security personnel. We believe these security costs are legitimate business expenses, but we recognize that they convey a personal benefit. As such, the incremental cost to the Company for providing them is reported in the Summary Compensation Table on page 46 of this Proxy Statement.

In 2012, the Company adopted a policy which provides for reimbursement of the filing fees for certain filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. These filings are required when a person covered by the Hart-Scott-Rodino Act exceeds certain stock ownership thresholds in the Company specified by the Act. Pursuant to this policy, the Company provided a reimbursement to the CEO for Hart-Scott-Rodino filing fees. This amount is reported for 2012 in the All Other Compensation column of the Summary Compensation Table on page 46 of this Proxy Statement.

We do not provide tax gross-ups in respect of any income recognized by the named executive officers as a result of receiving the reimbursements or perquisites described above.

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2012 Summary Compensation Table

The following table contains information concerning compensation paid or accrued to the named executive officers for services rendered in all capacities to the Company in 2012, 2011 and 2010:

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2012 Grants of Plan-Based Awards Table

The following table includes each grant of an award made to the named executive officers in 2012 under any equity-based and non-equity incentive Plan of the Company:

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Additional Information Concerning the Summary Compensation Table and

Grants of Plan-Based Awards Table