Good afternoon. Sorry for the slight delay. We had some technical difficulties. Welcome to the 2015 annual shareholder meeting for MSCI Inc. My name is Henry Fernandez. I'm Chairman and CEO of MSCI Inc. For those of you joining us virtually, the polls are now open. You may submit your vote online beginning at this time until we officially close the polls following the formal presentation of the proposals. It is now 2:37 P.M. This meeting is officially called to order. I'm also pleased that the following members of our Board of Directors are participating in this afternoon's meeting. Rob Hale, here in person with us in our headquarters in New York. The following directors are dialed in on the phone: Rob Ashe, Benjamin Swan, Wayne Edmunds, Alice Handy, Kathy Kinney, Wendy Lane, Linda Riefler, George Siguler, Pat Ryan, and Kip Vallee.
Kip Vallee is our Lead Director. He has been in that capacity since 2010. Our meeting today, I will present the proposals that you are voting on. Then provide you with an opportunity to ask questions related to the proposals and provide the opportunity for those attending in person to vote. We will hear the preliminary report of the Inspector of Elections and adjourn the formal part of our meeting. I will then proceed with a brief strategic update on our 2014 results. Bob Qutub, our CFO, will also give us an update of our results, especially the first quarter 2015 results, which were released earlier today. After that, we have reserved time for questions not related to the proposals. Our meeting rules require shareholders wishing to raise questions of topics other than the proposals to wait until such time.
At this time, I would like to note that Abhir Singh, who is a Partner at PricewaterhouseCoopers, is also present and is available to answer your questions. Broadridge, the Inspector of Elections for this meeting, is represented here today by Christopher Woods. Our Board of Directors fixed March 4th, 2015, as the record date for determining the shareholders entitled to vote at this meeting. An affidavit is with the Inspector of Elections attesting to the fact that the notice of meeting, the proxy statement, and the 2014 annual report to shareholders were mailed to all shareholders of record on or about March 13th of this year. I will present the three items to be voted upon. Please note that we will give stockholders an opportunity to comment on the proposals themselves after all proposals have been presented. Item one is the election of directors.
The current Board has nominated 12 directors. Myself, Henry Fernandez, Rob Hale, Rob Ashe, Benjamin Swan, Wayne Edmunds, Alice Handy, Catherine Kinney, Wendy Lane, Linda Riefler, George Siguler, Patrick Ryan, and Kip Vallee. Item two is the advisory vote to approve the compensation of our named executive officers as described in the proxy statement. This vote, which is often called a say on pay vote, is a non-binding vote, although the Compensation Committee of our Board and our Board itself will certainly take the results of the vote into account when making future compensation decisions. Item three is the ratification of PricewaterhouseCoopers as MSCI's independent auditor. Please remember that if you have already submitted a proxy, it is not necessary to complete a ballot unless you wish to change your vote. Please raise your hand if you need a ballot.
All the proposals on the agenda are now before the meeting. Are there any questions on the proposals that have come before the meeting? If any shareholder has a question or would like to make a comment regarding any of the proposals, please submit your question through the web portal or raise your hand. Since there are no additional proposals to come before the meeting or questions or comments on those proposals, it is time to vote. The polls are now open to consider all the proposals. If you are voting in person, please complete your ballot and raise your hand so that the ballot can be collected. Any shareholder who hasn't voted or who wishes to change his or her vote may do so by following the instructions provided on the web forum. Okay. The voting is now ended, and the polls are now closed.
The next item is the preliminary report of the Inspector of Elections. Gary Retelny, our Corporate Secretary, will summarize the report.
Thank you, Henry. The preliminary report of the Inspector of Elections indicates that in each case, not less than 89.44% of the votes of common stock voted for the director nominees. Case representing majority of such votes having voted for or against such director nominees. Approximately 93.29% of the votes of common stock represented at this meeting have voted to approve by non-binding vote our executive compensation. Approximately 97.09% of the votes of common stock have voted to ratify our Audit Committee's selection of PricewaterhouseCoopers LLP as the company's independent auditor for 2015. Any ballots cast before the polls closed but not reflected in the preliminary report will be reflected in the final vote tally, which will be available in the next several days, and we will file a report with the SEC containing the final tally. That summarizes the preliminary report, Mr. Chairman.
Thank you, Counsel. This concludes the formal part of our annual shareholder meeting. There being no further business to come before the meeting, the 2015 Annual Meeting of Stockholders of MSCI Inc. is now adjourned. Now I will give you a brief report about the company's 2014 financial results and 2015 first quarter results disclosed earlier today. I would like to provide a strategic update of the company, review our results for 2014, then pass the meeting to Bob Qutub, our CFO, for a review of our first quarter 2015 financial results. Please turn to slide four for the strategic update. In 2014, we delivered solid financial performance and significantly enhanced our business through the investments that we initiated in 2013 to drive our future growth. We are pleased with the progress of our enhanced investment program, which is now largely complete.
We made investments in products, sales, client service, marketing, and many of our corporate functions. These investments, especially the ones in client service and technology, have essentially driven near-term returns, principally in the form of much higher retention rates. We expect that the investment that we have made in sales, in new product development, and also in technology, will deliver returns over the medium term as well in the form of higher sales, higher run rates, and higher revenues. Over the course of the last quarter, we have wound down our spending growth to more normalized levels. We are focused on assessing how things are working to ensure that our investors are rewarded for the patience they have shown as we have executed on this investment program.
Based on the early returns on our investments and our continued focus on ensuring their benefits and payoffs, we returned to positive operating leverage in the first quarter of 2015. We expect to continue to expand our profit margins through 2015. Moving on to capital allocation, in the third quarter of 2014, we announced an enhanced capital return policy with a commitment to return over $1 billion in capital to investors by the end of 2016, excluding an expected annual dividend of $0.72 per share. I am pleased to report that we returned $420 million to investors in 2014 through share buybacks and regular dividends, which includes $100 million that was returned prior to the enhanced capital return announcement that we made in the fall.
We paid a dividend in the first quarter of 2015. Our board just declared our second quarter 2015 dividend. Finally, as part of our continued commitment to ensure that investors can accurately value our franchise, we are in the process of evaluating new ways to increase the transparency in our financial reporting. We expect to introduce new segment reporting in the second half of 2015, and we will work to make sure that this process is as smooth as possible for our investors. Let us turn to slide five for a review of full year 2014 results. MSCI's run rate grew 8%, and adjusting for the impact of foreign exchange, our subscription run rate grew 9%. Revenue grew 9%, driven by strong increases in both recurring subscriptions and asset-based fees.
Adjusted EBITDA was up only 1%, which reflects the effect of $27 million in investments and costs from GMI that flow through our P&L in 2014. Finally, our adjusted EPS grew by 6%, principally due to lower income tax expense and a lower share count. In summary, 2014 was a solid year for us. We significantly expanded our capabilities. We're now in a very strong position to take full advantage of the many growth opportunities that we believe lie ahead of us. Now let me turn it over to Bob Qutub for a review of the first quarter 2015 results that, as I said, we released earlier today. Bob?
Thank you, Henry. Good afternoon. Let's turn here to slide six, and let me cover some highlights of our financial results for the first quarter of 2015 that we released this morning. Our results this quarter were strong, with a 10% growth in adjusted EBITDA expense, with over 10% revenue growth and adjusted EBITDA expense growth of 8%, driving 11% growth in adjusted EBITDA, and a return to positive operating leverage. This was well in advance of our second half 2015 commitment. Our adjusted EBITDA margin increased 67 basis points from the prior year first quarter, 41%. Adjusted EPS was up 9% to $0.50, benefiting from a 4% decline in the weighted average shares outstanding year-over-year from stronger operating results. The increase in share count compared to the fourth quarter reflects the impact of stock-based compensation in the first quarter.
Moving to the next slide here, I want to provide you with a bridge of the year-over-year change in our revenues that we talked about this morning, where total revenues increased $23 million, or 10%, to $263 million. The growth was driven by an increase of $18 million, or 9%, in subscription revenues and an increase of $5 million, or 12%, in asset-based fees. Now turning to the next slide here, I'll provide you with adjusted EBITDA expense trends. Our first quarter adjusted EBITDA expense rose 8% to $155 million as we continued to move to more normalized levels of cost growth. The year-over-year increase was driven by a 13% in compensation expense, partially attributable to a 10% increase in headcount, but also because compensation expense includes a $2.9 million charge of a $3.4 million charge we took in the quarter to terminate a technology project in analytics.
Employees in our emerging market centers increased to 51% in the first quarter of 2015, up from 47% in the first quarter of 2014, and in line with 51% reported in the fourth quarter of 2014. The increase in compensation expense was partially offset by a 3% decline in non-compensation expense. Now turning to the next slide here, we'll provide you with a brief run rate bridge for the quarter. Our reported run rate increased 8%, consisting of a 6% increase in subscription run rate to $840 million and an 18% increase in asset-based fee run rate to $191 million. Adjusting for foreign currency fluctuations, subscription run rate grew 9% year-over-year. This was driven by sales in the first quarter of $29.5 million, and cancels in the quarter were only $12 million. This resulted in aggregate retention of 94.4%.
FX fluctuations had a $25 million rolling four-quarter negative impact on our subscription run rate, and GMI, who we acquired in August of 2014, contributed $7 million to our run rate build year-over-year. Finally, now turning to our asset-based fee run rate, the $29 million increase was driven primarily by a $77 billion period-end increase in ETF AUM linked to MSCI inflows of $75 billion, as I mentioned earlier. Finally, let me close out the slide here for the presentation with some of our key balance sheet indicators as we move into the first quarter of 2015. We entered the quarter with $538 million in cash, which includes about $84 million held offshore. Gross leverage was 1.9 x based on our total debt of $800 million to our trailing 12 months adjusted EBITDA. Within our stated policy of maintaining a stated leverage of [inaudible] .
Finally, as Henry mentioned, our board approved the second quarter dividend of $0.18 per share, which is payable on May 29th. Lastly, note that we're in the market right now with the current ASR, and we remain committed to returning cash to our investors. Let me leave you with the following. Our earnings results for the quarter were strong and solid execution. They reflect the effects of our enhanced investment program, which is driving growth. We're continuing to focus on analytics as we organize the product area designed to drive new growth. Thank you very much.
Thank you, Bob. We will now proceed with our questions and answer session. If you have a question, please raise your hand if you're in the room. For those online, enter into the appropriate box on your screen in the web portal. Since there are no questions, I'd like to conclude the session, thank you very much, everyone, for your interest in MSCI.