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. 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 and first quarter 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 am also pleased to announce that all of the members of our board of directors are with us for the meeting this afternoon. Jonathan Gralnick, who is a partner at 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 fixed 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 notice of meeting, the proxy statement, and the 2017 Annual Report to Shareholders were mailed to shareholders of record on or about March 31st, 2017. We had 90,513,850 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 a quorum. The annual shareholders meeting is therefore now formally called to order. I will begin by presenting the four 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 one is the election of directors. The current board has nominated 12 directors. Myself, Henry Fernandez, Rob Ashe, Ben duPont, Wayne Edmunds, Alice Handy, Kathy Kinney, Wendy Lane, Jacques Perold.
Jacques is our newest director, just having joined the board in March, so a warm welcome to Jacques to his first annual shareholder meeting. Linda Riefler, George Siguler, Pat Tierney, and Skip Vallee. Skip has been our lead director since 2010. Item two 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 on pay vote, is a non-binding 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 three is the vote on the frequency of future advisory votes to approve the compensation of our named executive officers.
Even though this is also a non-binding vote, the Compensation and Talent Management Committee and the full board will take the results of the vote into account. Item four is the ratification of PricewaterhouseCoopers as MSCI's independent auditor for the fiscal year ending December 31st, 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 who 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 voting is now ended, and the polls are now closed. The next item is the preliminary report of the Inspector of Elections. Cecilia Aza, our Corporate Secretary, will summarize the report.
The preliminary report of the Inspector of Elections indicates that a minimum of approximately 97.7% of the votes of common stock voted for each of the director nominees, representing a majority of votes cast for or against. Approximately 76.8% 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% 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 closed 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 four days following this meeting. That summarizes the preliminary report of the Inspector of Elections. I will now turn it back over to Henry.
Thank you, Cecilia. 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. Now, I will give a brief report on the company's full year 2016 and 2017 first quarter financial results. Please turn to slide seven of the presentation, where I will first review our results for full year 2016, released earlier this year, and our results for first quarter 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, 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 of 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. First quarter 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, 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 2017, 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 470 basis points to 49.5%. For Q1 2017, adjusted EBITDA increased by 13%, and our adjusted EBITDA margin increased by 220 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 footprint. In Q1 2017, our effective tax rate was 28%, compared to about 34% effective tax rate in Q1 2016. 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% senior notes.
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 first quarter 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 eight, 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 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. 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 four 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 nine further highlights the integrated franchise that MSCI brings to clients. This integration is evident within three distinct areas. First, our approach to client relationships. The development of our content. 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 first quarter of 2015, or about two years ago, to 47% of total run rate in the first quarter 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 relationships to the C-levels of our clients.
On the right side of the slide, we highlight the run rate from client accounts that are greater than $1 million 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 million. 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 million, and it grew by about 55% compared to the prior year. One underlying theme in these examples is how the content from one part of the company, especially the non-index product line, benefits our index segment, which is, of course, our most valuable and most profitable franchise at MSCI. On slides 12, 13, and 14, 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. First, let us begin with index on 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. 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 processes. We are working currently to deliver what we call our index metrics reports, which is about our factor indices, through our analytics applications, 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, a trend towards lower cost index-based equity investment products, such as index ETFs, and the demand for factors.
Next, we highlight 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. As a result, ESG is being integrated into the mainstream of the investment process in most of the world right now. For example, our ESG ratings, and the content from there, is now available on RiskManager, and some of our clients are accessing ESG content through our BarraOne 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 exposures 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, they're becoming more integrated, and they look for a more client-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 three different ways. First, 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. Second, 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.
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 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 first quarter of 2017, and through April 28th, we repurchased and settled a total of 1.1 million shares at an average price of $82.25 for a total value of $88.7 million. Since 2012, we have returned almost $2.4 billion through share repurchases and dividends, and we have repurchased 36 million shares of the company.
There is approximately $800 million remaining on our standing share repurchase authorization as of April 28th of this year. 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. 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 MSCI and listening to our presentation today.
The conference is now concluded. We thank you for attending today's presentation. You may now disconnect.