Good afternoon, and welcome to the 2017 Annual Shareholders Meeting for MSCI Inc. My name is Henry Fernandez. I am the Chairman, Chief Executive Officer and President of MSCI. The polls are open and you may now submit your vote online until we officially close the polls following the formal presentation of the proposals. Please remember that if you have already submitted a proxy, it is not necessary to submit your vote online unless you wish to change your vote.
At our meeting today, I will present the proposals that you are voting on. If you have any questions about the proposals, you may submit them through the web portal. Following the presentation of all proposals, any questions about them will be addressed. Then we will hear the preliminary report of the Inspector of Elections and adjourn the formal annual meeting. I will then proceed with a brief discussion of our results for 2016 Q1 of 2017.
Following this discussion, you will be given another opportunity to ask questions not related to the proposals. Our meeting rules require shareholders wishing to raise questions on topics other than the proposals to wait until that time. I'm also pleased to announce that all of the members of our Board of Directors are with us for the meeting this afternoon. Jonathan Grasmick who is a partner of PricewaterhouseCoopers is also participating and is available to answer your questions. American Election Services, the Inspector of Elections for the meeting is represented here today by Christopher Woods.
Mr. Woods has executed his inspector's oath. The Board picked March 15, 2017 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 meeting that the notice of meeting, the proxy statement and the 2017 annual report to shareholders were mailed to shareholders of record on or about March 31, 2017. We had 90,513,000,000 percent 850 shares outstanding and entitled to vote on the record date.
And more than 90% of those shares are represented today by proxy or virtually constituting for a quorum. The Annual Shareholders' Meeting is therefore now formally called to order. I will begin by presenting the 4 items to be voted on. As a reminder, we will acknowledge any comments or questions submitted by shareholders on the proposals themselves after all proposals have been presented. Item 1 is the election of directors.
The current Board has nominated 12 directors, myself, Andrew Fernandez, Rob Ash, Ben DuPont, Wayne Edmonds, Alice Handy, Kathy Kinney, Wendy Lane, Jack Sparrow. Jack is our newest Director, just having joined the Board in March. So a warm welcome to Jack to his 1st Annual Shareholder Meeting. Linda Riffler, George Sigler, at Journey and Skip Vale. Skip has been our Lead Director since 2010.
Item 2 is the advisory vote to approve the compensation of our named executive officers as described in our 2017 proxy statement. Even though this vote, which is often called a say or pay vote, is a nonbinding vote, the Compensation and Talent Management Committee and the full Board will take the results of the vote into account when making future compensation decisions. Item 3 is the vote on the frequency of future advisory votes to approve the compensation of our named executive officer. Even though this is also a nonbinding vote, the compensation and selling management committee and the full board will take the results of the vote into account. Item 4 is the ratification of PricewaterhouseCoopers as MSCI's independent auditor for the fiscal year ending December 31, 2017.
All of the proposals on the agenda are now being put before the meeting. If any shareholder has a question or would like to make a comment regarding any of the proposals and you have not done so already, please submit your question through the web portal. Since there are no questions or additional proposals to come before the meeting relating to the business of the meeting as set forth in the agenda, this is your final opportunity to vote. Any shareholder who has not voted or wishes to change his or her vote may do so by following the instructions on the web portal. We will now pause to allow for such votes.
The next item is the preliminary report of the Inspector of Elections. Cecilia Adraf, our Corporate Secretary will summarize the report.
The preliminary report of the Inspector of Elections each of the director nominees, representing a majority of those each of the director nominees, representing a majority of votes cast for or against. Approximately 76 0.8% of the votes of common stock represented at this meeting have voted on an advisory basis for the approval of the executive compensation of our named executive officers. Approximately 89.4% of the votes of common stock represented at this meeting have voted on an advisory basis every year for the frequency of future advisory votes to approve our executive compensation. Approximately 95.6 percent of the votes of common stock represented at this meeting have voted for the ratification of our audit committee selection of PricewaterhouseCoopers LLP as the company's independent auditor for 2017. Any ballots cast before the polls close, but not reflected in the preliminary report will be included in the final vote tally.
We will file a report with the SEC containing the final tally no later than 4 days following this meeting. That summarizes the preliminary reports of the Inspector of Elections. I will now turn it back over to Henry.
Thank you, Cecilio. This concludes the formal part of our annual meeting. There being no further business to come before the meeting, the 2017 Annual Meeting of Shareholders of MSCI Inc. Is now adjourned. And now I will give a brief report on the company's full year 2016 and 2017 Q1 financial results.
Please turn to Slide 7 of the presentation, where I will first review our results for full year 2016 released earlier this year and our results for Q1 2017 that were released last Thursday. All comparisons of financial results discussed during this presentation are year over year comparisons, unless otherwise noted. Next, I will provide you with a quick refresher on our corporate strategy and then describe how we're focusing on innovation and driving higher levels of integration within our client activities, our content, our content enabled applications and our services. First, in terms of revenue growth, revenues increased 7% for the full year 2016 and 8% for Q1 2017, driven principally by a 10% and a 13% growth in index revenue, respectively. We're optimistic about the various growth prospects within each of our product lines.
Q1 2017 was the 13th consecutive quarter of year over year double digit growth in index subscription run rate, which is a testament to the strength of our equity index franchise. In analytics, we're aiming for higher growth through our investments and are taking steps to accelerate the next phase in the evolution of the analytics product line. The success of the ESG product line is being driven by the increasing integration of ESG Factors into the mainstream of the investment process everywhere in the world. Finally, the restructuring of the real estate product line is still in process and has resulted in a significant improvement in profitability, but we still have some more work to do. Turning to operational efficiency.
We are focused on increasing the operational capacity of the company through disciplined firm wide expense management and the deployment of capital to high growth potential investment. For fiscal year 2016, operating expenses and adjusted EBITDA expenses decreased by 1% and 2%, respectively. For Q1 'seventeen, operating expenses and adjusted EBITDA expenses increased about 3% each. For full year 2016, adjusted EBITDA increased by 18%, and our adjusted EBITDA margin increased by 4 70 basis points to 49.5%. For Q1 'seventeen, adjusted EBITDA increased by 13%, and our adjusted EBITDA margin increased by 2 20 basis points to 50%.
In 2016, we lowered our effective tax rate by about 180 basis points, primarily driven by our ongoing efforts to better align our tax profile with our global operating push rate. In Q1 'seventeen, our effective tax rate was 28% compared to about 34% effective tax rate in Q1 'sixteen. Finally, in terms of capital optimization, we remain firmly committed to capital optimization by continuing to be strategic investors in our own stock through our share repurchase programs. We have been very opportunistic in repurchasing our stock in order to ensure that we're maximizing value for shareholders. We will continue to follow this strategy.
The weighted average diluted shares outstanding in 2016 declined by 12%, and our gross leverage increased by 0.4x, principally due to the August 2016 private offering of our 4.75 percent senior notes. And for full year 2016, diluted EPS was up 33% on strong operating results, a lower effective tax rate and the impact of share repurchases. Q1 2017 diluted EPS increased 33%. The strong operating results combined with a lower effective tax rate and share repurchases drove a 29% increase in Q1 2017 adjusted EPS. In terms of leverage, we continue to be focused on maintaining over time our gross debt to EBITDA ratio in the 3 to 3.5 times range.
Let us now turn to Slide 8 in which we have a refresher on our business strategy. Our mission is to be a leading provider of mission critical investment decision support tools. To achieve this objective, we must have superior content and a state of the art applications that enable the use of that content. We believe that companies that are best in class at combining that investment solutions content with the workflow applications will grow faster and gain market share over time. With content and applications combined, the opportunity to create new products and new services and new offerings is immense.
And that's exactly what we're doing at MSCI in the investment process for our clients. We are evolving from a product centric focused company to a business model where our tools and our services can help our clients solve their most pressing investment problems and opportunities. We can leverage the 4 powerful attributes listed on this slide to create new offerings and to strengthen the current ones. Leveraging our very unique position in the investment process worldwide and maintaining a deep understanding of our clients' needs will enable us to use a research driven approach to innovate and develop new content in the form of research models or data or analytical concepts and the like. The delivery of our content through our state of the art software applications is an example of our integrated approach to helping clients make better and more informed investment decisions.
Slide 9 further highlights the integrated franchise that MSCI brings to clients. This integration is evident within 3 distinct areas: first, our approach to client relationships then, the development of our content and third, the development of our applications and our services that enable the use of that content by our clients in their critical investment processes. Slide 10 is where we highlight the strength of our client base, which we believe is benefiting from the better integration of a lot of our client initiatives like our strategic account manager program. As shown on the left side of this slide, a growing percentage of our overall run rate is attributable to clients who are buying from all product lines from the company, increasing from 38% of total run rate in the Q1 of 2017, 2015 or about 2 years ago to 47% of total run rate in the Q1 of this year. This growth in clients buying all our products is being driven by our go to market strategies and our ability to better cross sell products, particularly in our relationship to the C level of our clients.
On the right side of the slide, we highlight the run rate from client accounts that are greater than $1,000,000 in run rate. These accounts are growing faster than the overall growth rate for the company and they have the highest levels of retention. Turning to Slide 11, we illustrate the current state of integration of our content by asset classes. MSCI is largely a content company. We are well known mostly for our equity index content, but we are also increasingly being well known for our factors, our ESG or environmental, social, governance criteria, our analytical content and also by the analytical content enabling applications that we are providing to our client base.
On this slide, we highlight the select content that we generate within each asset class as indicated in the top half of the chart as well as select content that is common across all asset classes as indicated on the bottom half of the chart. An example of content integration across asset classes is factor investing content. When you look at our total run rate across the company that is related to equity factors and again across all product lines in the company, it is over $180,000,000 and it is growing at a rate of approximately 13% this past quarter compared to the same period last year. ESG content is another example where we are leveraging the ESG content that we have to create indices. The run rate of ESG indices that is embedded in the index segment and therefore not in the ESG segment is approximately $13,000,000 and it grew by about 55% compared to the prior year.
So one underlying theme in these examples is how the content from one part of the company, especially the non index product line benefit our index segment, which is of course our most valuable and most profitable franchise at Ameziat. On Slide 12, 1314, we highlight the integration of our index, ESG and analytics content as well as the client demand and the trends that are driving the growth in each one of these areas. So first, let us begin with Index on the Slide 12. In our Index segment, we're very much focused on a tighter integration of our content within the segment, but as I said before, also as well across segments in the company such as ESG and analytics. So for example, we're looking at new ways to monetize our index content using new business models and integrating it within our analytics application for delivery to our clients for better use in their investment process.
We are working currently to deliver what we call our index metrics report, which is about our factor index indices through our analytics application, again, for better use and demand by our clients. The client demand for our content, as shown on the right side of the slide, is being driven by globalization of equity investing, which continues unabated, trend towards lower cost index based equity investment products, such as index ETFs and the demand for factors. Next, we highlight the ESG content on Slide 13. Client demand for our ESG content is being driven by investors' focus on ESG criteria to evaluate risk in their portfolios. And as a result, ESG is being integrated into the mainstream of the investment process in most of the world right now.
So for example, our ESG ratings and the content from there is now available on Risk Manager. And some of our clients are accessing ESG content through our BRL1 applications for better accessibility and better use of all those ESG ratings in people's portfolios. Additionally, we're integrating ESG Research and Ratings with factor exposure to provide our clients with an integrated perspective of the overall equity market opportunity set with the lens of factors and ESG and market capitalizations all at once. Lastly, we highlight analytics content and in this case also applications on Slide 14. In the market for risk and performance tools, clients are under pressure, which is causing them to focus on their investment processes more keenly.
They're becoming more efficient and they're becoming more integrated and they look for a more science centric and solutions based approach from their partners such as MSCI. To meet the demand of the changing marketplace, we at MSCI are quickly evolving our analytics product line and are doing this in 3 different ways. 1st, we continue to address the complexity in our clients' investment processes and their portfolios and figuring out ways in which we can help our clients simplify that complexity. 2nd, we're helping our clients achieve efficiencies in their investment processes through a better level of integration in order for them to derive cost savings in this increasingly competitive world for investment managers. And lastly, we're meeting with our clients in order to address their needs for better services and better solutions that are going to help them use this content and all of our solutions in a way that is better for their investment decisions in a more effective and transparent way.
On the Slide 15, we have an update on our capital return activity. We have delivered on our commitment to effectively use our cash to maximize capital return for our shareholders. In the Q1 of 2017 and through April 28, we repurchased and settled a total of 1,100,000 shares at an average price of $82.25 for a total value of $88,700,000 Since 2012, we have returned almost $2,400,000,000 through share repurchases and dividends, and we have repurchased 36,000,000 shares of the company. There is approximately $800,000,000 remaining on our outstanding share repurchase authorization as of April 28 this year. So in sum, capital optimization is still a very essential part of our strategy, and our Board is constantly evaluating the best ways to deploy our capital for maximum return and maximum efficiency.
In summary, we're continuing to execute against the MSCI strategy and delivering great results for our shareholders. And we are very optimistic about the prospects for our continued growth in the company. We will now proceed with our question and answer session. If you have a question, please enter it into the appropriate box on your screen. There are no questions relevant to the business of the company.
Therefore, we would like to thank you for your interest in Embassy and listening to our presentation. Good day.
The conference has now concluded. We thank you for attending today's presentation. You may now disconnect.