Morningstar is shelling out more than $3 million to its departing chief operating officer, Tao Huang. CEO Joe Mansueto confirmed yesterday in the Chicago-based firm's first quarter earnings report that "the majority of the decline [in operating margin for the quarter] was related to a $3.2 million expense for the previously announced separation agreement with [Morningstar's] former chief operating officer."

In January Morningstar revealed that Huang would depart by the end of the month [see The MFWire, 1/10/2011], and later that month the mutual fund ratings firm revealed the separation agreement with Huang [see filing].

Under the terms of that agreement, Morningstar agreed to pay Huang a severance of $3.15 million, half by February 15 in a lump sum and the other half over the course of the next year (while Huang continues to provide Morningstar with consulting services). Morningstar also agreed to pay Huang's accrued 2010 bonus of $600,000. 

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