(Reuters) - McGraw Hill Financial Inc <MHFI.N> said Douglas Peterson will replace Chief Executive Harold (Terry) McGraw, who will step down after reaching the mandatory retirement age of 65.
McGraw, a member of the 125-year-old company's founding family, will continue as chairman after relinquishing the CEO post on Nov 1.
Peterson is currently president of the company's Standard & Poor's ratings business, which is being sued by the U.S. government for $5 billion for allegedly defrauding investors by inflating credit ratings prior to the global financial crisis.
McGraw has been at the helm for 15 years and was responsible for the sale of the company's textbook business this year.
Peterson joined the company the same year after serving as chief operating officer of Citigroup Inc <C.N> Citibank unit.
McGraw Hill said Peterson would have a base salary of $900,000, while Terry McGraw will be paid a retainer of $400,000 a year.
McGraw Hill was founded by Terry McGraw's great-grandfather in 1888.
McGraw Hill shares rose 1 percent to $56.46 in early trading on the New York Stock Exchange. The shares have risen about 3.3 percent since the company reported stronger-than-expected results at the end of April.
(This story is refiled to correct second paragraph to say McGraw will step down November 1, not October 31. It also corrects fourth paragraph to say textbook business was sold this year, not in 2011.)
(Reporting by Tanya Agrawal in Bangalore; Editing by Sreejiraj Eluvangal and Ted Kerr)