UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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☐ Preliminary Proxy Statement | ☐Confidential, For Use of the Commission Only (as permitted by Rule14a-6(e)(2))
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☒ Definitive Proxy Statement
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☐ Soliciting Material Pursuant to §240.14a-12
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BlackRock, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Generating Long-Term
Shareholder Value
Long-Term
Shareholder
Value
BlackRock’s missionpurpose is to provide betterhelp more and more people experience financial futures for our clients.well-being. Our framework for creating long-term shareholder value is directly aligned with that mission.purpose.
BlackRock, Inc. (“BlackRock” or the ”Company”“Company”) has purposefully builtis a broad,global asset management and technology services firm. We have consistently and systematically invested in our business over time to create a globally diverse investment platform strong technology– with index and active funds, across equities, fixed income, multi-asset class and alternatives, as well as cash strategies – industry-leading portfolio construction and risk management capabilitiestechnology, and adeep global presence, in ordercapital markets expertise. The diversity of BlackRock’s platform, across asset classes, investment styles and regions, positions us to serve clients through market cycles and deliver whole-portfolio solutions to meet clients’ needs in all market environments.
Our diverse platformtheir evolving needs. It also enables us to generate more consistent growth and financial results for shareholders. We believe the stability of our financial results and our approach to continuously and deliberately invest in our business through market cycles. We believe that continuously investing in our platform to meet clients’ evolving needs will enable usenhances BlackRock’s ability to:
Generate
organic growth | Leverage our
and shareholders
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| Return capital to shareholders on a consistent and predictable basis | |||||||||||||||
This framework was developed in close collaboration with our BoardOver the long term, BlackRock has delivered on each of Directors (the “Board” or the “Board of Directors”), and the Board continues to play an active role in overseeing our broader strategy and in measuring our ability to successfully execute it.
BlackRock is focused on positioning its investment platform and technology capabilities in advance of change. Throughout BlackRock’s history, wethese objectives. We have demonstrated an ability to optimizegenerated differentiated organic growth in the most efficient way possible while prudently returning capital to shareholders.and delivered operating margin expansion. We prioritizehave prioritized investment in our business to first drive growth first and then return “excess”excess cash flow to shareholders. Our capital repatriationreturn strategy ishas been balanced between dividends, where we target a40-50% payout ratio, and a consistent share repurchase program.
Our framework for generating long-term shareholder value was developed in close collaboration with our Board of Directors (the “Board”), and the Board actively oversees our broader strategy and measures our ability to successfully execute it.
In 2017,2020, we will continue to make investmentsstrategically and efficiently invest in BlackRock’sBlackRock to optimize future – to grow our technology footprint, to expand our investment capabilitiesgrowth and to further enhance our talent and global reach. We are continuously driven by a responsibility to createdeliver better financial futuresoutcomes for clients, opportunities for employees and to deliver long-term value for shareholders. We will focus on investing in areas we believe have high growth potential such as ETFs, illiquid alternatives and technology, and reinforce our leadership position as a whole portfolio advisor to our clients, while focusing on the long-term sustainability of BlackRock for all of our stakeholders.
“In this environment, our investments in business continuity planning, agile use of technology and strong culture truly differentiate BlackRock, and we remain committed to growing and investing in the business. Throughout the firm’s history, it has been times like these when BlackRock has most distinguished itself with both clients and shareholders.”
Laurence D. Fink
Chairman and
Chief Executive Officer
BlackRock, Inc.
55 East 52nd Street
New York, New York, 10055
April 13, 20179, 2020
To Our Shareholders:
Thank you for your confidence in BlackRock. It is my pleasureBlackRock, especially through these unprecedented times. First and foremost, on behalf of BlackRock and our Board of Directors, we hope that you and your loved ones are healthy and safe during this tragic pandemic. In consideration of health concerns relating to inviteCOVID-19, we are holding BlackRock’s 2020 Annual Meeting of Shareholders virtually. We welcome you to our 2017 Annual Meeting, which will be heldjoin on May 25, 201721, 2020 at 8:00 a.m. EDT at www.virtualshareholdermeeting.com/BLK2020. You may vote your shares via the Lotte New York Palace Hotel.Internet and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/BLK2020. As we do each year, we will review our business and financial results for the year, address the voting items in thethis year’s Proxy Statement and take your questions. WhetherRegardless of whether you plan to attendjoin the meeting, or not, your vote is important, and we encourage you to review the enclosed materials and submit your proxy.
In 2016,my role as Chairman and CEO of BlackRock, I am focused on how our clients, employees and shareholders are impacted by what is happening in the world. We are clearly facing unprecedented territory with COVID-19, and during this time, our people and our clients’well-being is our greatest concern. BlackRock’s biggest responsibility – now more than ever – is to help our clients navigate this market environment and stay focused on long-term returns.
Despite the severe market downdraft, the strong and resilient business foundation that BlackRock has built remains solid. Indeed, we believe we are better positioned than any firm to weather shocks like these and help our clients do the same. In this environment, our investments in business continuity planning, agile use of technology and strong culture truly differentiate BlackRock, and we remain committed to growing and investing in the business. Throughout the firm’s history, it has been times like these when BlackRock has most distinguished itself with both clients and shareholders.
Our 2019 results better position BlackRock to deliver for clients during this volatile period. In 2019, our focus on serving our clients’ long-term needs generated a year dominated by extraordinary macro and geopolitical uncertainty, BlackRock continued to earn clients’ trust and delivered on each component of our framework for value creation. We generated $202record $429 billion of total net inflows, including long-term net inflows of $181 billion, representing 4% annualinflows. For the fifth time in the last seven years, we achieved our aspirational organic growth target, with 7% organic asset growth.growth and 5% organic base fee growth in 2019. We expanded our operating margin during 2016 while continuing to investled the industry in high growth areas, including fixed income ETFs, factor-based investing and sustainable investing, and generated record flows and commitments in our illiquid alternatives business. Continued momentum in ourAladdinbusiness drove record technology services revenue growth, as we neared $1 billion in annual revenue. We executed on our shareholder value framework by delivering revenue and earnings growth, despite a challenging start to the year as a result of significant market volatility in the fourth quarter of 2018. After investing for future growth. Andopportunities, we returned $2.7approximately $3.8 billion of cash to shareholders through a combination of dividends and share repurchases. These
The strength of BlackRock’s results, highlightour resilience and our strategy are directly linked to our diverse and engaged Board, and strong corporate governance and sustainability frameworks. BlackRock’s Board plays an integral role in our governance, strategy, growth and success. It has always been important that our Board functions as a key strategic governing body that constantly challenges our leadership team to evolve and guide BlackRock into the benefitsfuture. It is also critical that we have a robust corporate governance framework to ensure we are executing on our strategy, fulfilling our fiduciary responsibilities to clients and serving all of our differentiated investment, technologystakeholders over the long-term.
As I have articulated in the past, a company’s prospects for growth are inextricably linked to its ability to operate sustainably and riskserve its full range of stakeholders. As an asset management platform andfirm that invests in other companies on our clients’ behalf, we understand the impact of the strategic investments we’ve made over time to build and evolve our business.
Our diversified business model allows us to manageneed for the long-term, investing in future growth areas asoversight, management and disclosure of corporate sustainability initiatives and progress. This includes providing you, our shareholders, with increased transparency regarding how we adapt to stay ahead of clients’ changing needs. In today’s rapidly evolving environment, investors are looking to BlackRock more than ever before,managing sustainability-related questions and the responsibility that we feel for clients has never been greater. We have a responsibility to be a thought and opinion leader for clients. We also have a responsibility to continue to focus on broadening and deepening our investment platform. You can find more detail about BlackRock’s strategy for future growth in my letter to shareholders in this year’s Annual Report.
As both a fiduciary and a public company, we also believe that good corporate governance is critical to maximizing long-term shareholder value. That includes engaging with you our shareholders, to better understand and address issues that are important to you. We are vocal advocates for the adoption of sound corporate governance policies that include strong Board leadership, prudent management practices and transparency. We believe thatThis year, we have implemented such a corporate governance framework, and hope that you will agree as you read the Proxy Statement.
It has always been important that BlackRock’s Board of Directors function as a key strategic partner, challenging our leadership team to be better and more innovative. BlackRock’s Board continues to play an integral role in our growth and success. As BlackRock has evolved, so has our Board’s pursuit of strong corporate governance and standards of excellence, and this year, we’ve included additional information in our Proxy Statement related to BlackRock’s approach to sustainability and the role and evolution of our Board.
As I wrote in my Chairman’s Letter to Shareholders this year, I have always believed in a long-term view. I have advocated for it in letter after letter. And I believe long-term thinking has never been more critical than it is today. Companies and investors with a strong sense of purpose and a long-term approach will be better able to navigate this crisis and its aftermath. At BlackRock, we take a long-term view of markets, and we take a long-term view in the way we run our company. The world will get through this crisis. The economy will recover. And for those investors who keep their eyes not on the shaky ground at our feet, but on the horizon ahead, there are tremendous opportunities to be had in today’s markets.
BlackRock’s commitment is to continue to generate sustainable long-term value for all of our stakeholders, including you, our dedicated shareholders.
Thank you again for your continued commitment to BlackRock. Our Board of DirectorsBlackRock and I look forward to seeing you on May 25, 2017 in New York City.please stay safe.
Sincerely,
Laurence D. Fink
Chairman and Chief Executive Officer
Notice of 20172020 Annual
Annual Meeting
of Shareholders
Annual Meeting of Shareholders
Date and Time
8:00 a.m. EDT | Location
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www.virtualshareholdermeeting.com/BLK2020 | Record Date
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| Monday, March 23, 2020 |
Agenda and Voting Matters
At or before our Annual Meeting, we ask that you vote on the following items:
Voting Matters At or before the 2020 Annual Meeting of Shareholders (“Annual Meeting”), we ask that you vote on the following items:
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Item 1Election of Directors |
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Item 2Approval, in aNon-Binding Advisory Vote, Named Executive Officers |
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Item 3
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Registered Public Accounting Firm |
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Item | |||||||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on Thursday, May 21, 2020: our Proxy Statement and 2019 Annual Report are available free of charge on our website athttp://ir.blackrock.com/
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How to vote:Your vote is important
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Visit the website listed on your proxy card. You will need the control number that appears on your proxy card when you access the web page. | Complete and sign the proxy card | |||||||||||||||||||
| Telephone |
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| If your shares are held in the name of a broker, bank or other nominee: follow the telephone voting instructions, if any, provided on your voting instruction card. If your shares are registered in your name: need the control number that appears on your | This year’s meeting will be virtual. For details on voting your shares during the meeting, see “Questions and Answers about the Annual Meeting and Voting.” | |||||||||||||||||||
Please note that we are furnishing proxy materials and access to our Proxy Statement to our shareholders via our website instead of mailing printed copies to each of our shareholders. By doing so, we save costs and reduce our impact on the environment.
| Beginning on April 9, 2020, we will mail or otherwise make available to each of our shareholders a Notice of Internet Availability of Proxy Materials, which contains instructions on how to access our proxy materials and vote online. If you attend the Annual Meeting Your vote is By Order of the Board of Directors,
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Please note that we are furnishing proxy materials and access to our Proxy Statement to our shareholders via our website instead of mailing printed copies to each shareholder. By doing so, we save costs and reduce our impact on the environment.
Beginning on April 13, 2017, we will mail or otherwise make available to each of our shareholders a Notice of Internet Availability of Proxy Materials, which contains instructions about how to access our proxy materials and vote online. If you attend the Annual Meeting, you may withdraw your proxy and vote in person, if you so choose.
Your vote is important and we encourage you to vote promptly whether or not you plan to attend the 2017 Annual Meeting of Shareholders of BlackRock, Inc.
By Order of the Board of Directors,
R. Andrew Dickson, III Corporate Secretary April | BlackRock, Inc. 55 East 52nd Street, New York, New York 10055 | ||||||||||||||||
Important Notice Regarding the Availability of Proxy Materials for the 2017 Annual Meeting of Shareholders to be held on Thursday, May 25, 2017: Our Proxy Statement and 2016 Annual Report are available free of charge on our website atwww.blackrock.com/corporate/en-us/investor-relations.
Index of Frequently | ||||||||
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11 | ||||||||
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BLACKROCK, INC. 2020 PROXY STATEMENT
Helpful Resources
Where You Can Find
More Information
Annual Meeting
Proxy Statement:
http://ir.blackrock.com/financials/annual-reports-and-proxy
Annual Report:
http://ir.blackrock.com/financials/annual-reports-and-proxy
Voting Your Proxy via the Internet Before the Annual Meeting:
www.proxyvote.com
Board of Directors
http://ir.blackrock.com/board-of-directors
Communications with the Board
http://ir.blackrock.com/governance-overview under the heading “Contact Our Board of Directors”
Governance Documents
http://ir.blackrock.com/governance-overview
Investor Relations
http://ir.blackrock.com
Sustainability
www.blackrock.com/corporate/sustainability
Other
Public Policy “Insights”:
www.blackrock.com/corporate/insights/public-policy
Lobbying Disclosure Act:
www.senate.gov/legislative/lobbyingdisc.htm
Federal Election Commission:
www.fec.gov/data/reports/pac-party
Definition of Certain Terms or Abbreviations | ||
CEO | Chief Executive Officer | |
CFO | Chief Financial Officer | |
Committees | The Audit, Management Development & Compensation, Nominating & Governance, Risk and Executive Committees | |
Compensation Committee | Management Development & Compensation Committee | |
COO | Chief Operating Officer | |
Deloitte | Deloitte & Touche LLP | |
GAAP | Generally Accepted Accounting Principles in the United States | |
GEC | Global Executive Committee | |
Governance Committee | Nominating & Governance Committee | |
NEO | Named Executive Officer | |
NTM | Next Twelve Months | |
NYSE | New York Stock Exchange | |
PAC | Political Action Committee | |
PNC | The PNC Financial Services Group, Inc. | |
RSU | Restricted Stock Unit | |
SEC | Securities and Exchange Commission | |
Traditional LC Peers | Traditional Large Cap Peers refers to Alliance Bernstein, Affiliated Managers Group, Inc., Franklin Resources, Inc., Eaton Vance, Invesco, Legg Mason and T. Rowe Price | |
BLACKROCK, INC. 2020 PROXY STATEMENT
This summary gives youprovides an overview of selected information in this year’s proxy statement.Proxy Statement. We encourage you to read the entire Proxy Statement before voting.
Annual Meeting of Shareholders
Date & Time: | Thursday, May | |||||||||
| www.virtualshareholdermeeting.com/BLK2020 | |||||||||
Record Date: | Monday, March | |||||||||
Voting Matters
Shareholders will be asked to vote on the following matters at the Annual Meeting:
Board Recommendation | Page Reference | ||||||||
ITEM 1.Election of Directors
The Board believes that each of the director nominees |
| Vote FOR each director nominee | 9 | ||||||
ITEM 2.Approval, in aNon-Binding Advisory Vote,
BlackRock seeks anon-binding advisory vote from its shareholders to approve the |  | ||||||||
Vote
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ITEM
The Audit Committee has appointed Deloitte | | VoteFOR | 89 | ||||||
ITEM
The Board believes that the actions requested by the |  | VoteAGAINST | |||||||
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BLACKROCK, INC. 20172020 PROXY STATEMENT 1
Proxy Summary | Governance Highlights
What’s New?
We continually review our approach to corporate governance, culture, sustainability and compensation to make certain that BlackRock is in a position to consistently deliver on its commitment to sustaining a culture of high performance, collaboration, innovation and fiduciary responsibility. We believe providing a broader understanding of our perspectives on these items will be beneficial to you as you consider this year’s voting matters. This year’s updated items include:
| • | Formalizing Board-level oversight of environmental, social and other sustainability matters – see “Board Committees” on page 29 |
| Enhanced disclosure on BlackRock’s approach to sustainability – see “Sustainability at BlackRock” on page 35 |
| • | Enhanced disclosure on our Board’s commitment to engagement with employees – see“Our Board and Culture” and “Beyond the Boardroom” on pages 23 and 25, respectively |
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In this year’s Proxy Statement you will find new content and a new format to help facilitate your understanding of key corporate governance metrics and executive compensation policies. In addition, this year’s Proxy Statement includes a discussion of recent changes to our governance policies, including the adoption of our new Lead Independent Director Guidelines as well as enhanced disclosure on Board and executive succession and compensation.
Board Composition
18(17 director nomineesnominees)
The NominatingBoard believes that its size, albeit larger than the average public company board, is imperative to achieving the diversity of thought, experience and geographical expertise necessary to oversee our large and complex global business. The range of insights and experience produced by our large and diverse Board supports the broad scope and multifaceted nature of BlackRock’s business and strategic growth areas, which include our index funds, illiquid alternatives, retirement solutions and technology services.
The Governance Committee (the “Governance Committee”) regularly reviews the overall composition of the Board and its Committees to assess whether it reflects the appropriate mix of skill sets,skills, experience, backgrounds and qualifications that are relevant to BlackRock’s current and future global strategy, business and governance.strategy.
Board Tenure
The Board considers length of tenure when reviewing nominees in order to maintain an overall balance of experience, continuity and fresh perspective.
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8 years: Average tenure of all director nominees 6 years: Average tenure of independent director nominees | |||
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Board DiversityProfile
The partnership and oversight of a diverse board with proven leadership experience is essential to creating long-term shareholder value.
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Board Independence and Lead Independent DirectorLeadership
Each year the Board reviews and evaluates our Board leadership structure. The Board has appointed Laurence D. Fink as its Chairman and Murry S. Gerber as its Lead Independent Director.
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2 BLACKROCK, INC. 20172020 PROXY STATEMENT
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Proxy Summary | Governance Highlights
Board Refreshment
Thoughtful consideration is continuously given to the composition of our Board in order to maintain an appropriate mix of experience and qualifications, introduce fresh perspectives, and broaden and diversify the views and experience represented on the Board.
Over the past 5 years:
Our Director Nominees
Age at Record Date | Committee Memberships (effective May 21, 2020) | |||||||||||||||||||||||||||
Nominee | Age at Annual Meeting | Primary Occupation | Director Since | Other Public Co. (within 5 years) | Committee Memberships | Primary Occupation | Director since | Audit | Compensation | Governance | Risk | Executive | ||||||||||||||||
Abdlatif YousefAl-Hamad |
79 |
Director General & Chairman, Arab Fund for Economic and Social Development
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2009 |
0 |      | |||||||||||||||||||||||
Bader M. Alsaad | 62 | Former Managing Director of the Kuwait Investment Authority | 2019 | ● | ● | |||||||||||||||||||||||
Mathis Cabiallavetta |
72 |
Former Chairman of UBS, Vice Chairman of Swiss Re Ltd. and Marsh & MacLennan Companies, Inc.
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2007 |
2 |  | 75 | Former Chairman of UBS and former Vice Chairman of Swiss Re Ltd. and of Marsh & MacLennan Companies, Inc. | 2007 | ● | ● | ||||||||||||||||||
Pamela Daley |
64 |
Former Senior Vice President, General Electric Company Corporate Business Development and Senior Advisor to Chairman
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2014 |
3 |   | 67 | Former Senior Vice President of General Electric Company, Corporate Business Development and former Senior Advisor to Chairman | 2014 | ● | ● | ● | |||||||||||||||||
William S. Demchak
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54
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Chairman, CEO and President of PNC Financial Services Group, Inc. (“PNC”)
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2003
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1
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Jessica P. Einhorn |
69 |
Former Dean of Paul H. Nitze School of Advanced International Studies at The Johns Hopkins University; former Managing Director, World Bank
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2012 |
1 | | 72 | Former Dean of Paul H. Nitze School of Advanced International Studies at Johns Hopkins University | 2012 | ● | ● | ||||||||||||||||||
Laurence D. Fink
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64
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Chairman and CEO of BlackRock
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1998
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0
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| 67 | Chairman and CEO of BlackRock | 1999 | ● | |||||||||||||||||||
William E. Ford | 58 | CEO of General Atlantic | 2018 | ● | ● | ● | ||||||||||||||||||||||
Fabrizio Freda |
59 |
President and CEO of The Estée Lauder Companies Inc.
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2012 |
1 |  | 62 | President and CEO of Estée Lauder Companies Inc. | 2012 | ● | |||||||||||||||||||
Murry S. Gerber |
64 |
Former Executive Chairman, Chairman and CEO of EQT Corporation
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2000 |
3
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James Grosfeld |
79 |
Former Chairman and CEO of Pulte Homes, Inc.
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1999 |
2 | | |||||||||||||||||||||||
Murry S. Gerber Lead Independent Director | 67 | Former Executive Chairman, Chairman, President and CEO of EQT Corporation | 2000 | ● | ● | ● | ||||||||||||||||||||||
Margaret L. Johnson | 58 | Executive Vice President of Business Development of Microsoft Corporation | 2018 | ● | ● | |||||||||||||||||||||||
Robert S. Kapito
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60
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President of BlackRock
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2006
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0
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| 63 | President of BlackRock | 2006 | ||||||||||||||||||||
Sir Deryck Maughan |
69 |
Former Senior Advisor, Partner and Managing Director of Kohlberg Kravis Roberts & Co. L.P.
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2006 |
2 | | |||||||||||||||||||||||
Cheryl D. Mills |
52 |
Founder and CEO of BlackIvy Group and former Chief of Staff to Secretary of State Hillary Clinton
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2013 |
0 | | 55 | Founder and CEO of BlackIvy Group and former Chief of Staff to former Secretary of State Hillary Clinton | 2013 | ● | ● | ||||||||||||||||||
Gordon M. Nixon |
60 |
Former President, CEO and Director of Royal Bank of Canada
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2015 |
2 | | 63 | Former President, CEO and Director of Royal Bank of Canada | 2015 | ● | ● | ● | |||||||||||||||||
Charles H. Robbins
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51
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CEO and Director of Cisco Systems, Inc.
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N/A
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1
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| 54 | Chairman and CEO of Cisco Systems, Inc. | 2017 | ● | |||||||||||||||||||
Ivan G. Seidenberg |
70 |
Former Chairman and CEO of Verizon Communications Inc.
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2011 |
2 | | |||||||||||||||||||||||
Marco Antonio Slim Domit |
49 |
Chairman of Grupo Financiero Inbursa, S.A.B. de C.V.
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2011 |
4
| | 51 | Chairman of Grupo Financiero Inbursa, S.A.B. de C.V. | 2011 | ● | ● | ||||||||||||||||||
John S. Varley
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61
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Former CEO of Barclays PLC
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2009
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2
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Susan L. Wagner |
55 |
Former Vice Chairman of BlackRock
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2012 |
2 |
| 58 | Former Vice Chairman of BlackRock | 2012 | ● | ● | ● | |||||||||||||||||
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Mark Wilson | 53 | Former CEO of Aviva plc and former President and CEO of AIA | 2018 | ● | ||||||||||||||||||||||||
Number of Committee Meetings Held in 2019: | Number of Committee Meetings Held in 2019: | 13 | 8 | 6 | 6 | 0 | ||||||||||||||||||||||
| (1) | Ivan G. Seidenberg will not be standing for re-election at the Annual Meeting. |
· Chairperson
BLACKROCK, INC. 20172020 PROXY STATEMENT 3
Proxy Summary | Governance Highlights |
Governance HighlightsPractices
We are vocal advocates for the adoption of sound corporate governance policies that include strong Board leadership and strategic deliberation, prudent management practices and transparency.
Highlights of our governance practices include:
Stock Ownership Guidelines
Our stock ownership guidelines require the Company’s Global Executive Committee (“GEC”) members to own and maintain shares with a target value of:
Our stock ownership guidelines require the Company’s GEC members to own shares with a target value of: • $10 million for the CEO; |
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• $2 million for all other GEC members. | As of December 31, 2019, all NEOs exceeded our stock ownership guidelines. | |||
Shareholder Engagement and Outreach
We conduct shareholder outreach throughout the year to engage with shareholders on issues that are important to you. We report backShareholder engagement is essential to our Board on this engagementongoing review of our corporate governance and on specific issues to be addressed.
executive compensation programs and practices. Executive management, Investor Relations and the Corporate Secretary engage with shareholders on a regular basis with shareholders to understand their perspectives on a variety of corporate governance matters, including executive compensation, corporate governance policies and corporate sustainability practices.
We also communicate with shareholders through a number of routine forums, including quarterlyincluding:
Quarterly earnings presentations, U.S. Securities and Exchange Commission (“SEC”) filings, the Annual Report and Proxy Statement, the annual shareholder meeting, investor meetings and conferences and web communications. presentations;
• SEC filings; • The Annual Report and Proxy Statement; • The annual shareholders meeting; and • Investor meetings, conferences and web communications. | In 2019, we contacted stewardship officers at our top 28 shareholders, representing 43% of our shares outstanding, excluding shares owned by PNC. | |||||
We relay shareholder feedback and trends on corporate governance and sustainability developments to our Board and its standing Committees and work with them to both enhance our governance practices and improve our disclosures.
4 BLACKROCK, INC. 20172020 PROXY STATEMENT
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Proxy Summary | Compensation Discussion and Analysis Highlights
Compensation Discussion and Analysis Highlights
Compensation Policies and Practices
Our commitment to designdesigning an executive compensation program that is consistent with responsible financial and risk management is reflected in the following policies and practices:
What We Do | What We Don’t Do | |||||||
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Incentive Program –BLACKROCK, INC.Pay-for-Performance 2017 PROXY STATEMENT 5 Highlights
| Where to Find it | ||||||||
| Compensation program objectives | “Our Compensation Program” beginning on page 62 | ||||||
| Performance assessments for NEOs based on weighted, | “How We Determine Total Incentive Amounts for NEOs” on page 7 | ||||||
| Assessments include financials as the highest weighted input, including relative and year-over-year performance | “2019 Financial Performance” on page 6 “2019 NEO Compensation and Performance Summaries” beginning on page 69 | ||||||
| Total incentive outcomes tied to formulaic percentage ranges | “Pay and Performance Alignment for NEOs – Total Incentive Award Determination” on page 59 “NEO Total Annual Compensation Summary” on page 8 | ||||||
| Actual performance of historical incentive | “2016 BPIP Award: Actual Performance and Payout” on page 64 | ||||||
BLACKROCK, INC. 2020 PROXY STATEMENT 5
2016Proxy Summary | Compensation Discussion and Analysis Highlights
2019 Financial Performance Highlights1(1),(2)
BlackRock’s 20162019 results demonstratedreflect the strength and stability of our diversified, multi-client platform. Full-year results reflected industry-leadingglobal, diverse investment and technology platform and the benefit of the investments we have made to optimize our strategic positioning. We generated a record $429 billion of total net inflows for the full year, representing 7% organic asset growth, continueddelivered revenue and earnings growth and returned $3.8 billion to shareholders while continuing to invest for growth. However, BlackRock’s strategic decision to continue investing responsibly despite a more challenging revenue capture environment created by market volatility in the fourth quarter of 2018 resulted in an as adjusted operating margin expansion and consistent capital management. Investmentdecline of 60 basis points year-over-year. Long-term investment performance results across our activealpha-seeking and index strategies as of December 31, 20162019 remain strong and are detailed in Part I, Item 1 –Businessof our 20162019 Form10-K.
Differentiated Organic Growth
Organic asset growth of 4% in 2016 contributed to positive Organic Revenue growth2:
Differentiated Organic Growth | Continued Revenue Growth | |||
BlackRock generated record organic assetgrowth of | BlackRockgrew revenueby 2% in 2019, including technology services revenuegrowth of 24% | |||
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Consistent Capital Return | Earnings Per Share Growth | |||
BlackRock returned$3.8 billion | BlackRock grew diluted earnings per share, as adjusted, by 6%, to $28.48, in 2019 | |||
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Consistent Capital Return
$2.7 billion was returned to shareholders in 2016:
Operating Leverage
Operating income, as adjusted, was flat versus 2015. Continued margin expansion was driven by realizing the benefits of scale and expense discipline:
Earnings Growth
As adjusted diluted earnings per share (“EPS”) of $19.29 declined 2% versus 2015:
| Amounts in this section, where noted, are shown on an “as adjusted” basis. For a reconciliation with |
| (2) | Results for 2017 were recast to reflect the adoption of the new revenue recognition standard. For further information, refer to Note 2,Significant Accounting Policies, in the consolidated financial statements in our 2018 Form10-K. |
| (3) | Traditional LC Peers refers to Alliance Bernstein, Affiliated Managers Group, Franklin Resources, Eaton Vance, Invesco, Legg Mason and T. Rowe Price. |
6 BLACKROCK, INC. 20172020 PROXY STATEMENT
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Proxy Summary | Compensation Discussion and Analysis Highlights
How We Pay NEOs
Each of BlackRock’s NEOs, through their various roles and responsibilities, contributes to the firm-wide objectives summarized below. The Compensation Committee uses the associated weightings to assess each NEO. The Compensation Committee’s performance assessment is directly related to each NEO’s total incentive outcome, which includes all variable pay: annual discretionary cash award; annual discretionary deferred equity award and long-term equity awards.
For each NEO’s performance assessment, please refer to the section “2019 NEO Compensation and Performance Summaries” on page 69.
How We Determine Total Incentive Amounts for NEOs
BlackRock Performance % of Award Opportunity
| Measures
| Indicative BlackRock Performance Metrics
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2018
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2019
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Financial Performance
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Net New Business ($ billion)
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$124
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$429
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Net New Base Fee Growth
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2%
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5%
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Operating Income, as adjusted(1) ($ million)
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$5,531
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$5,551
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Year-over-year change
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+5%
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+0%
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Operating Margin, as adjusted(1)
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44.3%
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43.7%
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Year-over-year change
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+ 20bps
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- 60bps
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Diluted Earnings Per Share, as adjusted(1)
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$26.93
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$28.48
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Year-over-year change
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+ 20%
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+ 6%
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Share Price Data | BLK | Traditional LC Peers(2) | ||||||
NTM P/E Multiple(3)
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16.5x
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10.0x
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Annual appreciation/depreciation
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+ 28%
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+ 14%
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Business Strength
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Solve for clients’ evolving needs
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Achieved 7% annual organic asset growth, exceeding 5% target, with $429 billion of net inflows. Inflows demonstrate a record for BlackRock and significant differentiation relative to peers.
Drove strong long-term investment performance across active strategies, with 86%, 76% and 84% of Taxable Fixed Income, Fundamental Equity and Systematic Equity assets, respectively, above benchmark or peer median for the trailing three-year period. Performance, combined with the breadth of BlackRock’s active platform, attracted $110 billion of active net inflows, while the overall industry experienced outflows.
Provided clients with comprehensive whole portfolio solutions, including illiquid alternatives andiShares, both areas of highest demand.
Generated $974 million in annual technology services revenue, through strategic acquisition of eFront and continued momentum inAladdin, representing 24% overall growth in technology services revenue.
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Sharpen execution and accountability
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Simplified BlackRock’s operating model through a firm re- organization and the regionalization of institutional client businesses.
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Lead in a changing world
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Continued investments in key growth areas, includingiShares and illiquid alternatives, generating $226 billion and $14 billion in net inflows, respectively.
Aligned leaders cross-functionally to accelerate the firm’s focus on sustainable investing at the core of risk management, portfolio construction, product design and company engagement. Generated $12 billion in inflows across theiShares Sustainable ETF lineup, ending the year with $22 billion of assets under management.
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Organizational Strength
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Attract and inspire talent
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Took key steps to prepare the next generation of leaders through a firmwide reorganization that provided expanded opportunities for multiple leaders across the firm.
Enhanced succession planning through Talent Bench Reviews, which enables more diverse and complete succession plans, provides deeper insights into potential successors and builds accountability for leadership planning.
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Develop a more diverse and inclusive culture
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Continued to focus on Inclusion & Diversity progress, achieving growth in female representation at senior levels.
Increased the firm’s focus on culture and enablement following leadership challenges in 2019. | |||||||
| (1) | Amounts are shown on an “as adjusted” basis. For a reconciliation with GAAP, please see Annex A. |
| (2) | Traditional LC Peers refers to Alliance Bernstein, Affiliated Managers Group, Franklin Resources, Eaton Vance, Invesco, Legg Mason and T. Rowe Price. |
| (3) | NTM P/E multiple refers to the Company’s share price as of December 31, 2019, divided by the consensus estimate of the Company’s expected earnings over the next 12 months. Sourced from Factset. |
BLACKROCK, INC. 2020 PROXY STATEMENT 7
Proxy Summary | Compensation Discussion and Analysis Highlights
NEO Total Annual Compensation Summary
Following a review of full-year business and individual NEO performance, the Compensation Committee determined 2019 total annual compensation outcomes for each NEO, as outlined in the table below.
2019 Total Incentive Award
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Name
| Base Salary
| Cash
| Deferred Equity
|
Long-Term Incentive Award (BPIP)
| Total Annual Compensation (“TAC”)
| % change in TAC vs. 2018
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Laurence D. Fink | $1,500,000 | $7,750,000 | $ | 4,250,000 | $ | 11,750,000 | $ | 25,250,000 | 5% | |||||||||||||||
Robert S. Kapito | $1,250,000 | $6,250,000 | $ | 3,500,000 | $ | 8,950,000 | $ | 19,950,000 | 5% | |||||||||||||||
Robert L. Goldstein | $ 500,000 | $2,950,000 | $ | 2,000,000 | $ | 4,400,000 | $ | 9,850,000 | 25% | |||||||||||||||
J. Richard Kushel | $ 500,000 | $2,612,500 | $ | 1,662,500 | $ | 2,900,000 | $ | 7,675,000 | 15% | |||||||||||||||
Gary S. Shedlin | $ 500,000 | $2,475,000 | $ | 1,525,000 | $ | 2,700,000 | $ | 7,200,000 | 12% | |||||||||||||||
The amounts listed above as “2019 Total Incentive Award: Deferred Equity” and “2019 Total Incentive Award: Long-Term Incentive Award (BPIP)” were granted in January 2020 in the form of equity and are separate from the cash award amounts listed above as “2019 Total Incentive Award: Cash.” In conformance with SEC requirements, the “2019 Summary Compensation Table” on page 80 reports equity in the year granted but cash in the year earned.
This table excludes awards under a newly adopted carried interest program. For more information about the program, see “Leadership Retention Carry Plan” on page 65.
Pay-for-Performance Compensation Structure for NEOs
Our total annual compensation structure embodies our commitment to align pay with performance. More than 90% of our regular annual executive compensation is performance based and “at risk.” Compensation mix percentages shown below are based on 20162019year-end compensation decisions for individual NEOs by the MDCC.Compensation Committee.
All grants of BlackRock equity, |
The value of the |
For NEOs other than the CEO and President, higher annual incentive awards are subject to higher deferral percentages, in accordance with the |
NEO Total Annual Compensation Summary
Following a review of full-year business and individual NEO performance, the MDCC determined 2016 total annual compensation outcomes for each NEO, as outlined in the table below.
| 2016 Annual Incentive Award | ||||||||||||||||||||||||
Name | Base Salary | Cash | Deferred Equity | Long-Term Incentive Award (“BPIP”) | Total Annual Compensation (“TAC”) | % change in TAC vs. 2015 | ||||||||||||||||||
Laurence D. Fink | $ | 900,000 | $ | 8,000,000 | $ | 4,150,000 | $ | 12,450,000 | $ | 25,500,000 | -2% | |||||||||||||
Robert S. Kapito | $ | 750,000 | $ | 6,500,000 | $ | 3,209,000 | $ | 9,626,000 | $ | 20,085,000 | 1% | |||||||||||||
Robert L. Goldstein | $ | 500,000 | $ | 2,850,000 | $ | 1,900,000 | $ | 2,100,000 | $ | 7,350,000 | 1% | |||||||||||||
J. Richard Kushel | $ | 500,000 | $ | 2,490,000 | $ | 1,540,000 | $ | 1,970,000 | $ | 6,500,000 | 1% | |||||||||||||
Gary S. Shedlin | $ | 500,000 | $ | 2,350,000 | $ | 1,400,000 | $ | 1,850,000 | $ | 6,100,000 | 2% | |||||||||||||
The amounts listed above as “2016 Annual Incentive Award: Deferred Equity“ and “Long-Term Incentive Award (“BPIP”)“ were granted in January 2017 in the form of equity and are separate from the cash award amounts listed above as “2016 Annual Incentive Award: Cash.” In conformance with SEC requirements, the 2016 Summary Compensation Table on page 67 reports equity in the year granted, but cash in the year earned.
8BLACKROCK, INC. 20172020 PROXY STATEMENT
Election of Directors “BlackRock’sBoard plays an integral role in our governance, strategy, growth and success. It has always been important that our Board functions as a key strategic governing body that constantly challenges our leadership team to evolve and guide BlackRock into the future.” Laurence D. Fink Chairman and Chief Executive Officer | Our Board has nominated 17 directors for election at this year’s Annual Meeting on the recommendation of our Governance Committee. Each director will serve until our next annual meeting and until his or her successor has been duly elected, or until his or her earlier death, resignation or retirement. We expect each director nominee to be able to serve if elected. If a nominee is unable to serve, proxies will be voted in favor of the remainder of those directors nominated and may be voted for substitute nominees, unless the Board decides to reduce its total size. If all 17 director nominees are elected, our Board will consist of 17 directors, 14 of whom, representing approximately 82% of the Board, will be “independent” as defined in the NYSE listing standards. Stockholder Agreement with PNC BlackRock’s stockholder agreement with PNC (the “PNC Stockholder Agreement”) provides, subject to the waiver provisions of the PNC Stockholder Agreement, that BlackRock will use its best efforts to cause the election at each annual meeting of shareholders so that the Board will consist of: • No more than 19 directors; • Not less than two nor more than four directors who will be members of BlackRock management; • Two directors who will be designated by PNC; and • The remaining directors being independent for purposes of the rules of the NYSE and not designated by or on behalf of PNC or any of its affiliates. Laurence D. Fink and Robert S. Kapito are members of BlackRock’s management team and are currently members of the Board. PNC has designated one director to the Board, William S. Demchak, Chairman, President and Chief Executive Officer of PNC. PNC has notified BlackRock that for the time being it will not designate a second director to the Board, although it retains the right to do so at any time in accordance with the PNC Stockholder Agreement. PNC has additionally been permitted to invite an observer to attend meetings of the Board as anon-voting guest. The PNC observer is Gregory B. Jordan, the General Counsel and Chief Administrative Officer of PNC. For additional detail on the PNC Stockholder Agreement, see“Certain Relationships and Related Transactions – PNC and its Subsidiaries – PNC Stockholder Agreement” on page 49. |
Our Board has nominated 18 directors for election at this year’s Annual Meeting on the recommendation of our Governance Committee. Each director will serve until our next annual meeting and until his or her successor has been duly elected, or until his or her earlier death, resignation, removal or retirement.
We expect each director nominee to be able to serve if elected. If a nominee is unable to serve, proxies will be voted in favor of the remainder of those directors nominated and may be voted for substitute nominees, unless the Board decides to reduce its total size.
All of the nominees have agreed to serve if elected. If all 18 nominees are elected, BlackRock’s Board will consist of 18 directors, 15 of whom, representing approximately 83% of the Board, will be “independent” as defined in the New York Stock Exchange (the “NYSE”) listing standards.
Stockholder Agreement with The PNC Financial Services Group, Inc.
BlackRock’s stockholder agreement with The PNC Financial Services Group, Inc. (the “PNC Stockholder Agreement”) provides, subject to the waiver provisions of the agreement, that BlackRock will use its best efforts to cause the election at each annual meeting of shareholders so that the Board will consist of:
PNC has designated one member of the Board, William S. Demchak, Chairman, President and Chief Executive Officer of PNC. PNC has notified BlackRock that for the time being it will not designate a second director to the Board, although it retains the right to do so at any time in accordance with the PNC Stockholder Agreement. PNC has additionally been permitted to invite an observer to attend meetings of the Board as anon-voting guest. The PNC observer is Gregory B. Jordan, the General Counsel and Head of Regulatory and Governmental Affairs of PNC. Laurence D. Fink and Robert S. Kapito are members of BlackRock’s management team and are currently members of the Board.For additional detail on the PNC StockholderAgreement, see “Certain Relationships and Related Transactions – Stockholder Agreement with PNC” on page 41.
8BLACKROCK, INC. 20172020 PROXY STATEMENT9
ITEM 1: Election of Directors | Director Nominees |
Majority Vote Standard for Election of Directors
Directors are elected by receiving a majority of the votes cast in uncontested elections, (thewhich means the number of shares voted “for” a director nominee must exceed the number of shares voted “against” that director nominee).nominee. In a contested election, (adirectors are elected by receiving a plurality of the shares represented in person or by proxy at any meeting and entitled to vote on the election of directors. A contested election is a situation in which the number of nominees exceeds the number of directors to be elected), the standard for election of directors would be a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors.elected. Whether an election is contested is determined seven days in advance of when we file our definitive Proxy Statement with the SEC.
Director Resignation Policy
AnyUnder the Board’s Director Resignation Policy, any incumbent director who fails to receive a majority of votes cast in an uncontested election must tender his or her resignation to the Board. The Governance Committee wouldwill then make a recommendation to the Board about whether to accept or reject the resignation or take other action. The Board will act on the Governance Committee’s recommendation and publicly disclose its decision and rationale within 90 days from the date the election results are certified. The director who tenders his or her resignation under the Director Resignation Policy will not participate in the Board’s decision.
The Board established a mandatory retirement age of 75 years for directors, as reflected in BlackRock’s Corporate Governance Guidelines. When the mandatory retirement age of 75 was adopted, the Board determined that it was in the best interest of the Company to allow directors who had already reached the age of 70 to serve until reaching the age of 80.
The Governance Committee oversees the director nomination process. The Governance Committee leads the Board’s annual review of Board performance and reviews and recommends to the Board BlackRock’s Corporate Governance Guidelines, which includeincludes the minimum criteria for membership on the Board.Board membership. The Governance Committee also assists the Board in identifying individuals qualified to become Board members and recommends to the Board a slate of candidates, which may include both incumbent and new director nominees, to submitnominate for election at each annual meeting of shareholders. The Governance Committee also may also recommend that the Board elect new members to the Board to serve until the next annual meeting of shareholders.
Identifying and Evaluating Candidates for Director
The Governance Committee seeks advice on potential director candidates from current directors and executive officers when identifying and evaluating new candidates for director. The Governance Committee also may direct management to engage third-party firms that specialize in identifying director candidates to assist with its search. Shareholders can recommend a candidate for election to the Board by submitting director recommendations to the Governance Committee. For information on the requirements governing shareholder nominations for the election of directors, please seesee “Deadlines for Submission of Proxy Proposals, Nomination of Directors and Other Business of Shareholders”on page 87.98.
The Governance Committee then reviews publicly available information regarding each potential director candidate to assess whether the candidate should be considered further. If the Governance Committee determines that the candidate warrants further consideration, then the Chairperson (or a person designated by the Governance Committee) will contact the candidate. If the candidate expresses a willingness to be considered and to serve on the Board, then the Governance Committee typically requests information from the candidate and reviews the candidate’s accomplishments and qualifications against the criteria described below.
The Governance Committee’s evaluation process does not vary based on whether a candidate is recommended by a shareholder, although the Governance Committee may consider the number of shares held by the recommending shareholder and the length of time that such shares have been held.
BLACKROCK, INC. 2017 PROXY STATEMENT 9
The Board determines annually the independence of directors in accordance with NYSE listing standards and applicable SEC rules. No director is considered independent unless the Board has determined that he or she has no material relationship with BlackRock.
The Board has adopted the Categorical Standards of Director Independence (the “Categorical Standards”) to help determine whether certain relationships between the members of the Board and BlackRock or its affiliates and subsidiaries (either directly or as a partner, shareholder or officer of an organization that has a relationship with BlackRock) are material relationships for purposes of NYSE listing standards. The Categorical Standards provide that the following relationships are not material for such purposes:
Relationships arising in the ordinary course of business, such as asset management, acting as trustee, lending, deposit, banking or other financial service relationships or other relationships involving the provision of products or services, so long as the products and services are being provided in the ordinary course of business and on substantially the same terms and conditions, including price, as would be available to similarly situated customers;
Relationships with companies of which a director is a shareholder or partnerships of which a director is a partner, provided the director is not a principal shareholder of the company or a principal partner of the partnership;
10BLACKROCK, INC. 2020 PROXY STATEMENT
ITEM 1: Election of Directors | Criteria for Board Membership
Contributions made or pledged to charitable organizations of which a director or an immediate family member of the director is an executive officer, director or trustee if (i) within the preceding three years, the aggregate amount of such contributions during any single fiscal year of the charitable organization did not exceed the greater of $1 million or 2% of the charitable organization’s consolidated gross revenues for that fiscal year and (ii) the charitable organization is not a family foundation created by the director or an immediate family member of the director; and
Relationships involving a director’s relative unless the relative is an immediate family member of the director.
As part of its determination, the Board also considers the relationships described under “Certain Relationships and Related Transactions” on page 48.
In March 2020, the Governance Committee made a recommendation to the Board regarding the independence of our directors based on its annual review. In making its independence determinations, the Governance Committee and the Board considered various transactions and relationships between BlackRock and the directors as well as between BlackRock and entities affiliated with a director, including the relationships described under “Certain Relationships and Related Transactions” on page 48. The Governance Committee also considered that Ms. Johnson and Mr. Robbins are employed by organizations that do business with BlackRock, where each of such transactional relationships was for the purchase or sale of goods and services in the ordinary course of BlackRock’s business, and the amount received by BlackRock or such company in each of the previous three years did not exceed the greater of $1 million or 1% of either BlackRock’s or such organization’s consolidated gross revenues. As a result of this review, the Board determined that Mses. Daley, Einhorn, Johnson, Mills and Wagner and Messrs. Alsaad, Cabiallavetta, Ford, Freda, Gerber, Nixon, Robbins, Slim and Wilson are “independent” as defined in the NYSE listing standards and that none of the relationships between these directors and BlackRock are material under the NYSE listing standards. In addition, the Board had previously determined that Sir Deryck Maughan, who retired from the Board effective May 23, 2019, and Ivan G. Seidenberg, who was a director for all of 2019 and is not standing forre-election, were “independent” as defined in the NYSE listing standards.
Following the Annual Meeting, assuming all of the nominated directors are elected, BlackRock’s Board is expected to consist of 17 directors, 14 of whom, representing approximately 82% of the Board, will be “independent” as defined in the NYSE listing standards.
Director Qualifications and Attributes
The Governance Committee and the Board take into consideration a number of factors and criteria inwhen reviewing candidates for nomination to the Board. The Board believes that, at a minimum, a candidatedirector nominee must demonstrate, by significant accomplishment in his or her field, an ability to make a meaningful contribution to the Board’s oversight of the business and affairs of BlackRock. Equally important, a director candidatenominee must have an impeccable record and reputation for honest and ethical conduct in his or her professional and personal activities.
In addition, nominees for director are selected on the basis of experience, diversity, knowledge, skills, expertise, an ability to make independent analytical inquiries, an understanding of BlackRock’s business environment and a willingness to devote adequate time and effort to the responsibilities of the Board.
AlthoughBlackRock and its Board believe diversity in the boardroom is critical to the success of the Company and its ability to create long-term value for our shareholders. The Board has and will continue to make diversity in gender, ethnicity, age, career experience and nationality – as well as diversity of mind – a priority when considering director candidates. The diverse backgrounds of our individual directors help the Board has not set specific goalsbetter evaluate BlackRock’s management and operations and assess risk and opportunities for diversity, it believesthe Company’s business model from a diverse mixvariety of knowledge, experience, skills, backgrounds and viewpointsperspectives. BlackRock’s commitment to Board diversity enhances the Board’s capabilities. In reviewinginvolvement in our Company’s multi-faceted long-term strategy and inspires deeper engagement with management, employees and clients around the world.
Our Board has nominated 17 candidates the Governance Committee takes into consideration a candidate’s professional background, gender, race, national originfor election, 14 of whom are independent. The slate of director nominees includes 5 women, 1 of whom is African American, and age. The Board addresses whether it has achieved an appropriate level6non-U.S. or dual citizens. Several of diversity as part of its consideration of the Board’s compositionour nominees live and work overseas in its annual self-evaluation process. The Governance Committee periodically reviews the overall composition of the Boardcountries and its Committees to assess whether it reflects the appropriate mix of skill sets, experience, backgrounds and qualificationsregions that are relevant tokey areas of growth and investment for BlackRock, including Canada, Mexico, the Middle East and Continental Europe.
BLACKROCK, INC. 2020 PROXY STATEMENT 11
ITEM 1: Election of Directors | Criteria for Board Membership
As BlackRock’s current and future global strategy, business and governance.
has evolved, so has its Board. Our 18slate of director nominees offer a diverse setconsists of qualifications and perspectives and possess a wealth of leadership and professionalsenior leaders, including 12 current or former company CEOs, with substantial experience in areas relevant to BlackRock’s businessfinancial services, consumer products, manufacturing, technology, banking and strategy.energy, as well as several director nominees who have held senior policy and government positions. Core qualifications and areas of expertise represented on our Board include:
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10BLACKROCK, INC. 2017 PROXY STATEMENT
Global Business
Directors bring international business strategy, operations and substantive expertise in international matters relevant to BlackRock’s global business.
Risk Management & Compliance
Directors have experience in risk management and compliance oversight relevant to exercising corporate and fiduciary responsibilities.
Financial Services
Directors possessin-depth knowledge of the financial services industry or asset management and provide valuable perspectives on issues faced by BlackRock.
Public Company & Financial Reporting
Directors have experience in the oversight of internal controls and reporting of public company financial and operating results.
Public Policy & Government/Regulatory Affairs
Directors possess insight and expertise in managing governmental and regulatory affairs relevant to BlackRock’s business operations.
Branding & Marketing
Directors bring expertise in brand development, marketing and sales in local markets at a scale relevant to BlackRock’s global business.
Technology
Directors possess experience in the development and adoption of new technology as well as leading innovation initiatives at companies.
Board Tenure, Retirement Age and Size
Board Tenure. To ensure the Board has an appropriate balance of experience, continuity and fresh perspective, the Board considers, among other factors, length of tenure when reviewing nominees. The average tenure of BlackRock’s director nominees is approximately 8eight years whileand the average tenure forof independent director nominees is 6approximately six years.
FourFollowing the Annual Meeting, assuming all of the nominated directors are elected, there will be six directors, comprising 22%35% of the Board, who have joined the Board within the past five years and bring fresh perspective to Board deliberations. Six directors, comprising 35% of the Board, have served between five and 10 years. Five directors, comprising 30% of the Board, have served more than 10 years and bring a wealth of experience and knowledge concerning BlackRock. Six
Retirement Age. The Board has established a retirement age policy of 75 years for directors, comprising 33%as reflected in our Corporate Governance Guidelines. The Board believes that it is important to monitor its composition, skills and needs in the context of the Company’s long-term strategic goals, and, therefore, may elect to waive the policy as it deems appropriate. The Board believes it is important to balance refreshment with the need to retain directors who have developed, over time, significant insight into the Company and its operations and who continue to make valuable contributions to the Company that benefit our shareholders.
The Board and Governance Committee recognized that Mr. Cabiallavetta will reach the age of retirement under our Corporate Governance Guidelines this year and would not be eligible to be nominated forre-election to the Board at the Annual Meeting absent a waiver of the age limit by the Board. The Board considered Mr. Cabiallavetta’s global and financial expertise, extensive experience with the Company and the benefit his continued service on the Board would provide, particularly with respect to oversight of BlackRock’s European operations and his knowledge of European financial markets. Additionally, the Board considered its ongoing refreshment of directors, noting that, since 2015, six new directors have been added to the Board and seven longer-tenured directors have, or will have by the date of the Annual Meeting, either retired in accordance with BlackRock’s retirement age policy or earlier. After considering these facts and circumstances and upon the recommendation of our Governance Committee, our Board determined that it is in the best interest of the Company and its shareholders to waive the retirement age limit for Mr. Cabiallavetta this year to allow for his nomination for election at the Annual Meeting.
12BLACKROCK, INC. 2020 PROXY STATEMENT
ITEM 1: Election of Directors | Criteria for Board Membership
Board Size. The Board has not adopted a policy that sets a target for Board size and believes the current size and diverse composition of the Board have served between 6is best suited to evaluate management’s performance and 10 years.oversee BlackRock’s global strategy and risk management. The range of insights and experience produced by our large and diverse Board supports the broad scope and multifaceted nature of BlackRock’s business and strategic growth areas, which include our index funds, illiquid alternatives, retirement solutions and technology services.
FollowingAs described in“Board Evaluation Process” on page 27, the 2017 Annual MeetingGovernance Committee and the Board evaluate Board and Committee performance and effectiveness on at least an annual basis and, as part of Shareholders, assumingthat process, ask each director to consider whether the nominated directors are elected, there will be eight directors, comprising 44%size of the Board who have joinedand its standing Committees are appropriate. In response to the 2019 Board and Committee evaluations, our directors commented that, while the size of the Board overis above average, its members were deeply engaged and the past five years and bring fresh perspectivecomposition of the Board reflected diverse experiences, which added richness to Board deliberations.discussions. Additionally, it was noted that thoughtful consideration has been given to the refreshment of Board members and that there is an appropriate mix of new and more experienced board members.
Compliance with Regulatory and Independence Requirements
The Governance Committee takes into consideration regulatory requirements, including competitive restrictions and financial institution interlocks, independence requirements under the NYSE listing standards and our Corporate Governance Guidelines in its review of director candidates for the Board and Boardits Committees. The Governance Committee also considers a director candidate’s current and past positions held, including past and present board and committee memberships, as part of its evaluation.
Service on Other Public Company Boards
Each of our directors must have the time and ability to make a constructive contribution to the Board as well as a clear commitment to fulfilling the fiduciary duties required of directors and serving the interests of the Company’s shareholders. Neither BlackRock’s Chief Executive Officer does notCEO nor President currently serve on the board of directors of any other public company, and none of our current directors serve on more than four public company boards, including BlackRock’s Board.
Consistent with BlackRock’sage-based retirement policy, at least six of BlackRock’s current directors will retire within the next six years. In order to maintain a Board with an appropriate mix of experience and qualifications, the Chair of the Governance Committee, initiatedwith the help of management and an outside consultant, engages in a search foryear-round process to identify and evaluate new director candidates in conjunction with its recurring review of Board member candidates this past year.and Committee composition. Consistent with our long-term strategic goals and the qualifications and attributes described above, early search criteria include significant experience in financial services, the technology sector and consumer branding, as well as experienceinternational experience. Particular emphasis is also placed on diverse candidates currently serving in the Middle East and Asia-Pacific regions. leadership positions.
In FebruaryMarch of this year,2019, the Governance Committee identified Charles H. RobbinsBader M. Alsaad as a candidate with significant leadership skills and experience in international business, the technology fieldMiddle East region and the financial sector, and recommended him to the Board for consideration. Mr. Robbins was recommended for consideration to the Governance Committee by a third party search firm. On April 5, 2017 theThe Board voted unanimously to nominate himMr. Alsaad for election at the 2019 Annual Meeting of Shareholders. On May 23, 2019, our shareholders elected Mr. Alsaad to join our Board.
Board Recommendation
For this year’s election, the Board has nominated 1817 director candidates. The Board believes these director nominees provide BlackRock with the combined depth and breadth of skills, experience and qualities required to contribute to an effective and well-functioning Board. The composition of the current Board reflects a diverse range of skills, qualifications and professional experience that is relevant to our global strategy, business and governance.
The following biographical information about each director nominee highlights the particular experience, qualifications, attributes and skills possessed by eachsuch director nominee that led the Board to determine that he or she should serve as director. All director nominee biographical information is as of March 30, 2017.23, 2020.
The Board of Directors recommends shareholders vote "FOR" the elections of each of the following 17 director nominees.
BLACKROCK, INC. 2020 PROXY STATEMENT 13
ITEM 1: Election of Directors | Director Nominee Biographies
|
BLACKROCK, INC. 2017 PROXY STATEMENT 11
Age Tenure 62 0 Years | ||||||||||
|
Mr.
Qualifications Mr.
Other Public Company Directorships (within the past 5 years)
• | |||||||||||
 Committees • Nominating & Governance • Risk Qualifications • Senior Executive & Corporate Governance • Financial Services • Global Business • Public Policy & Government/Regulatory Affairs • Risk Management & Compliance | ||||||||||||
| Mathis Cabiallavetta
Mr. Cabiallavetta
Qualifications As a former leader of Swiss Re
Other Public Company Directorships (within the past 5 years)
• Swiss Re Ltd. (2008 – | |||||||||||
Age 75 | Tenure 12 Years | |||||||||||
Committees • Audit • Nominating & Governance
Qualifications • • Financial Services • Global Business • Public Company & Financial Reporting • Risk Management & Compliance | ||||||||||||
Age 79 Tenure 8 Years Committees Nominating & Governance Risk Qualifications Senior Executive & Corporate Governance Public Company & Financial Reporting Global Business Public Policy & Government/Regulatory Affairs Risk Management & Compliance Age 72 Tenure 9 Years Committees Audit Risk Nominating & Governance Qualifications Senior Executive & Corporate Governance Public Company & Financial Reporting Global Business Financial Services Risk Management & Compliance
1214 BLACKROCK, INC. 20172020 PROXY STATEMENT
ITEM 1: Election of Directors | Director Nominee Biographies
| ||||||||||
| Pamela Daley
Ms. Daley retired from General Electric Company
Qualifications With over 35 years of transactional experience and more than 20 years as an executive at GE, one of the world’s leading multinational corporations, Ms. Daley brings significant experience and strategic insight to the Board in the areas of leadership development, international operations, transactions, business development and strategy.
Other Public Company Directorships (within the past 5 years)
• BP p.l.c. (2018 – present) • SecureWorks Corp. (2016 – present) • Patheon N.V. (2016 – 2017) • BG Group p.l.c. (2014 – | |||||||
Age 67 | Tenure 6 Years | |||||||
 Committees • Audit (Chair) • Executive • Risk Qualifications • Senior Executive & Corporate Governance • Financial Services • Global Business • Public Company & Financial Reporting • Public Policy & Government/ Regulatory Affairs • Risk Management & Compliance | ||||||||
| William S. Demchak
Mr. Demchak has served as Chairman of the board of directors of PNC since April 2014, as Chief Executive Officer since April 2013 and as President since April 2012. Prior to that, Mr. Demchak held a number of supervisory positions at PNC, including Senior Vice Chairman, Head of Corporate and Institutional Banking and Chief Financial Officer. Before joining PNC in 2002, Mr. Demchak served as the Global Head of Structured Finance and Credit Portfolio for J.P. Morgan Chase & Co. and additionally held key leadership roles at J.P. Morgan prior to its merger with Chase Manhattan Corporation in 2000.
Qualifications As the Chairman, President and Chief Executive Officer of PNC, a large, national, diversified financial services company providing traditional banking and asset management services, Mr. Demchak brings substantial expertise in financial services, risk management and corporate governance to bear as a member of the Board. Mr. Demchak was designated to serve on the Board by PNC pursuant to the PNC Stockholder Agreement.
Other Public Company Directorships (within the past 5 years)
• PNC (2013 – present) (Chairman from | |||||||
Age 57 | Tenure 17 Years | |||||||
Committees • Executive • Risk Qualifications • Senior Executive & Corporate Governance • Branding & Marketing • Financial Services • Public Company & Financial Reporting • Risk Management & Compliance | ||||||||
BLACKROCK, INC. 20172020 PROXY STATEMENT 1315
Age 64 Tenure 3 Years Committees Audit (Chair) Executive Risk Qualifications Senior Executive & Corporate Governance Public Company & Financial Reporting Global Business Financial Services Public Policy & Government/Regulatory Affairs Age 54 Tenure 14 Years Committees Executive Risk Qualifications Senior Executive & Corporate Governance Public Company & Financial Reporting Financial Services Risk Management & Compliance Branding & Marketing
ITEM 1: Election of Directors | Director Nominee Biographies
| ||||||||||
| Jessica P. Einhorn
Ms. Einhorn served as Dean of the Paul H. Nitze School of Advanced International Studies at The Johns Hopkins University from 2002 until June 2012. Prior to becoming Dean, she was a consultant at Clark & Weinstock, a strategic consulting firm. Ms. Einhorn also spent nearly 20 years at the World Bank, concluding as a Managing Director in 1998. Between 1998 and 1999, Ms. Einhorn was a Visiting Fellow at the International Monetary Fund. Prior to joining the World Bank in 1978, she held positions at the U.S. Treasury, the U.S. State Department and the International Development Cooperation Agency of the United States. Ms. Einhorn currently serves as a Director of
Qualifications Ms. Einhorn’s leadership experience in academia and at the World Bank, along with her experience in the U.S. government and at the International Monetary Fund, provides the Board with a unique perspective and anin-depth understanding of international finance, economics and public policy. Through her service with other public companies, Ms. Einhorn also has developed expertise in corporate governance and risk oversight.
Other Public Company Directorships (within the past 5 years)
• Time Warner, Inc. (2005 – | |||||||
72
| Tenure 7 Years | |||||||
Committees • Management Development & Compensation • Risk Qualifications • Senior Executive & Corporate Governance • Financial Services • Global Business • Public Policy & Government/ Regulatory Affairs • Risk Management & Compliance | ||||||||
| Laurence D. Fink
Mr. Fink is
Qualifications As one of the founding principals and Chief Executive Officer of BlackRock since 1988, Mr. Fink brings exceptional leadership skills andin-depth understanding of BlackRock’s businesses, operations and strategy. His extensive and specific knowledge of BlackRock and its business enable him to keep the Board apprised of the most significant developments impacting the Company and to guide the Board’s discussion and review of the Company’s strategy.
Other Public Company Directorships (within the past 5 years)
• None | |||||||
Age 67 | Tenure 20 Years | |||||||
Committees • Executive (Chair) Qualifications • Senior Executive & Corporate Governance • Financial Services • Global Business • Public Company & Financial Reporting • Public Policy & Government/ Regulatory Affairs • Risk Management & Compliance | ||||||||
1416 BLACKROCK, INC. 20172020 PROXY STATEMENT
Age 69 Tenure 4 Years Committees Risk Qualifications Senior Executive & Corporate Governance Global Business Financial Services Public Policy & Government/Regulatory Affairs Risk Management & Compliance Age 64 Tenure 17 Years Committees Executive (Chair) Qualifications Senior Executive & Corporate Governance Global Business Risk Management & Compliance Financial Services Public Company & Financial Reporting Public Policy & Government/Regulatory Affairs
ITEM 1: Election of Directors | Director Nominee Biographies
| William E. Ford Mr. Ford has served as the Chief Executive Officer of
Mr. Ford brings to the Board extensive global investment management experience and financial expertise acquired over his 25 years at General Atlantic, one of the world’s leading growth equity firms. Other Public Company Directorships (within the past 5 years) • IHS Markit Ltd. (2016 – present) • Axel Springer (2016 – April 2018) | |||||||
Age 58 | Tenure 2 Years | |||||||
Committees
• Audit
| Fabrizio Freda
Mr. Freda has served as President,
Qualifications Mr. Freda’s extensive experience in product strategy, innovation and global branding brings valuable insights to the Board. His chief executive experience at Estée Lauder, an established multinational manufacturer and marketer of prestige brands, provides the Board with unique perspectives on
Other Public Company Directorships (within the past 5 years)
• The Estée Lauder Companies Inc. (2009 – present) | |||||||
 Age 62 | Tenure 7 Years | |||||||
Committees • Nominating & Governance Qualifications • Senior Executive & Corporate Governance • Branding & Marketing • Global Business • Risk Management & Compliance • Technology | ||||||||
BLACKROCK, INC. 2020 PROXY STATEMENT 17
ITEM 1: Election of Directors | Director Nominee Biographies
| Murry S. Gerber
Qualifications As a former leader of a large, publicly traded energy production company and as a current or former member of the board of directors of three large, publicly traded companies, Mr. Gerber brings to the Board extensive expertise and insight into corporate operations, management and governance matters, as well as expert knowledge of the energy sector.
Other Public Company Directorships (within the past 5 years)
• U.S. Steel Corporation (2012 – present) • Halliburton Company (2012 – present) | |||||||
Age 67 | Tenure 20 Years | |||||||
Committees • Audit • Executive • Nominating & Governance Qualifications • Senior Executive & Corporate Governance • Global Business • Public Company & Financial Reporting • Risk Management & Compliance • Technology | ||||||||
| Margaret L. Johnson Ms. Johnson has been an Executive Vice President of Business Development at Microsoft Corporation since September 2014. She is responsible for driving strategic business deals and partnerships across various industries. Ms. Johnson joined Microsoft from Qualcomm Incorporated, where she served in various leadership positions across engineering, sales, marketing and business development. She most recently served as Executive Vice President of Qualcomm Technologies, Inc. and President of Global Market Development. Ms. Johnson is an Advisor to Huntington’s Disease Society of America, San Diego Chapter. Qualifications Ms. Johnson brings to the Board substantive experience in the field of technology as well as business and strategic development expertise acquired over her 28 years at Microsoft and Qualcomm. Other Public Company Directorships (within the past 5 years)
• | |||||||
Age 58 | Tenure 2 Years | |||||||
Committees • Audit
Qualifications • Senior Executive & Corporate Governance • Branding & Marketing • Global Business • Public Policy & Government/ Regulatory Affairs • Technology | ||||||||
18BLACKROCK, INC. 20172020 PROXY STATEMENT15
Age 59 Tenure 4 Years Committees Nominating & Governance Qualifications Senior Executive & Corporate Governance Global Business Risk Management & Compliance Technology Branding & Marketing Age 64 Tenure 17 Years Committees Audit Executive Management Development & Compensation (chair) Qualifications 1 Senior Executive & Corporate Governance 4 Public Company & Financial Reporting 3 2 Global Business 3 Risk Management & Compliance 5 Technology
ITEM 1: Election of Directors | Director Nominee Biographies
| ||||||||||
|
| |
 | Robert S. Kapito
Mr. Kapito has been President of BlackRock since 2007 and is a member of BlackRock’s Global Executive Committee and Chairman of the Global Operating Committee. He also serves as a member of the board of directors ofiShares, Inc. Mr. Kapitoco-founded BlackRock in
Qualifications As one of our founding principals, Mr. Kapito has served as an executive leader of BlackRock since 1988. He brings to the Board industry and business acumen in additionto in-depth knowledge about BlackRock’s businesses, investment strategies and risk management, as well as extensive experience overseeingday-to-day operations.
Other Public Company Directorships (within the past 5 years)
• None | |
16BLACKROCK, INC. 2017 PROXY STATEMENT
Age 79 Tenure 17 Years Committees Management Development & Compensation Nominating & Governance Qualifications Senior Executive & Corporate Governance Public Company & Financial Reporting Global Business Financial Services Public Policy & Government/Regulatory Affairs Age 60 Tenure 10 Years Committees None Qualifications Senior Executive & Corporate Governance Global Business Financial Services Risk Management & Compliance Branding & Marketing
Age 63 | Tenure 13 Years | ||||||||
Committees • None Qualifications • Senior Executive & Corporate Governance • Branding & Marketing • Financial Services • Global Business • Risk Management & Compliance | |||||||||
|
| |||||
 | Cheryl D. Mills
Ms. Mills is Founder and Chief Executive Officer of the BlackIvy Group,
Qualifications Ms. Mills brings to the Board a range of leadership experiences from private equity, government and academia, and through her prior service on the boards of corporations andnon-profits, she provides expertise on issues concerning government relations, public policy, corporate administration and corporate governance.
Other Public Company Directorships (within the past 5 years)
• None | |||||
Age 55 | Tenure 6 Years | |||||
Committees • Management Development & Compensation • Nominating & Governance Qualifications • Senior Executive & Corporate Governance • Branding & Marketing • Global Business • Public Policy & Government/ Regulatory Affairs • Risk Management & Compliance | ||||||
BLACKROCK, INC. 20172020 PROXY STATEMENT 1719
Age 69 Tenure 10 Years Committees Audit Executive Management Development & Compensation Risk (Chair) Qualifications Senior Executive & Corporate Governance Public Company & Financial Reporting Global Business Financial Services Risk Management & Compliance Age 52 Tenure 3 Years Committees Management Development & Compensation Qualifications Senior Executive & Corporate Governance Global Business Public Policy & Government/Regulatory Affairs Risk Management & Compliance Branding & Marketing
ITEM 1: Election of Directors | Director Nominee Biographies
| ||||||||||
| Gordon M. Nixon, C.M., O.Ont.
Mr. Nixon
Qualifications With 13 years of experience leading a global financial institution and one of Canada’s largest public companies, Mr. Nixon brings extensive expertise and perspective to the Board on global markets and anin-depth knowledge of the North American market. His experience growing a diversified, global financial services organization in a highly regulated environment also provides the Board with valuable insight into risk management, compensation and corporate governance matters.
Other Public Company Directorships (within the past 5 years)
• BCE Inc. (2014 – present) • George Weston Limited (2014 – present) | |||||||
Age 63 | Tenure 4 Years | |||||||
 Committees • Executive • Management Development & Compensation • Nominating & Governance Qualifications • Senior Executive & Corporate Governance • Financial Services • Global Business • Public Policy & Government/ Regulatory Affairs • Risk Management & Compliance | ||||||||
| Charles H. Robbins
Mr. Robbins serves as the Chairman and Chief Executive Officer of Cisco Systems, Inc.
Qualifications Mr. Robbins
Other Public Company Directorships (within the past 5 years)
• Cisco Systems, Inc. (2015 – present) (Chairman from 2017 – present) | |||||||
Age 54 | Tenure 2 Years | |||||||
Committees • Risk Qualifications • Senior Executive & Corporate Governance • Branding & Marketing • Global Business • Public Policy & Government/ Regulatory Affairs • Technology | ||||||||
1820 BLACKROCK, INC. 20172020 PROXY STATEMENT
Age 60 Tenure 1 Year Committees Management Development & Compensation Risk Qualifications Senior Executive & Corporate Governance Global Business Financial Services Public Policy & Government/Regulatory Affairs Risk Management & Compliance Age 51 Tenure 0 Years Committees None Qualifications Senior Executive & Corporate Governance Global Business Public Policy & Government/Regulatory Affairs Branding & Marketing Technology
ITEM 1: Election of Directors | Director Nominee Biographies
| ||||||||||||
|
| |
 | Marco Antonio Slim Domit
Mr. Slim has been Chairman of the board of directors of Grupo Financiero Inbursa, S.A.B. de C.V. since 1997 and previously served as its Chief Executive Officer
Qualifications Mr. Slim’s experience at Grupo Financiero Inbursa provides the Board with knowledge and expertise in international finance, and particular insight into emerging and Latin American markets. In addition, as a member of the board of directors of several international companies that invest globally, Mr. Slim brings substantive expertise in developing new businesses in international markets, shareholder rights,
Other Public Company Directorships (within the past 5 years)
• Grupo Carso, S.A.B. de C.V. (1991 – present) • Grupo Financiero Inbursa, S.A.B. de C.V. (Chairman from 1997 – present) • Impulsora del Desarrollo y el Empleo en América Latina, S.A.B. de C.V. (Chairman from 2012 – present) | |
Age 51
|
8 Years | |
BLACKROCK, INC. 2017 PROXY STATEMENT 19
Age 70 Tenure 6 Years Committees Audit Executive Nominating & Governance (Chair) Qualifications Senior Executive & Corporate Governance Public Company & Financial Reporting Public Policy & Government/Regulatory Affairs Technology Branding & Marketing Age 48 Tenure 5 Years Committees Audit Qualifications Senior Executive & Corporate Governance Public Company & Financial Reporting Global Business Financial Services Risk Management & Compliance
Committees • Audit • Management Development & Compensation Qualifications • Senior Executive & Corporate Governance • Financial Services • Global Business • Public Company & Financial Reporting • Risk Management & Compliance | ||||||||||
|
| |||||||||
 | Susan L. Wagner
Ms. Wagner retired as
Qualifications As one of the founding principals of BlackRock, Ms. Wagner has over 25 years of experience across various positions. Accordingly, she is able to provide the Board with valuable insight and perspective on risk management, operations and strategy, as well as a broad and deep understanding of the asset management industry.
Other Public Company Directorships (within the past 5 years)
• Apple Inc. (2014 – present) • Swiss Re Ltd. (2014 – present) | |||||||||
Age 58 | Tenure 7 Years | |||||||||
Committees • Audit • Executive • Risk (Chair) Qualifications • Senior Executive & Corporate Governance • Financial Services • Global Business • Public Company & Financial Reporting • Risk Management & Compliance • Technology | ||||||||||
20BLACKROCK, INC. 20172020 PROXY STATEMENT21
Age 60 Tenure 7 Years Committees Audit Qualifications Senior Executive & Corporate Governance Public Company & Financial Reporting Global Business Financial Services Public Policy & Government/Regulatory Affairs Age 55 Tenure 4 Years Committees Risk Qualifications Senior Executive & Corporate Governance Global Business Financial Services Risk Management & Compliance Public Company & Financial Reporting
ITEM 1: Election of Directors | Director Nominee Biographies
| Mark Wilson Mr. Wilson served as the Chief Executive Officer of Aviva plc (Aviva), a multinational insurance company headquartered in the UK, from January 2013 to October 2018. Prior to joining Aviva, Mr. Wilson worked in Asia for 14 years, including as Chief Executive Officer of AIA Group Limited, a leadingpan-Asian company. Mr. Wilson is recognized for his leadership on sustainability issues and is a member of the UN Business and Sustainable Development Commission. Qualifications As the former Chief Executive Officer of Aviva, Mr. Wilson brings to the Board extensive experience in Europe and Asia and his operational and executive expertise in the insurance and pensions industry and in international finance provides the Board with an experienced outlook on international business strategy, development and sustainability. Other Public Company Directorships (within the past 5 years) • Aviva plc (2013 – October 2018) | |||||||
Age 53 | Tenure 2 Years | |||||||
Committees • Risk Qualifications • Senior Executive & Corporate Governance • Financial Services • Global Business • Public Company & Financial Reporting • Public Policy & Government/ Regulatory Affairs | ||||||||
22BLACKROCK, INC. 2020 PROXY STATEMENT
BlackRock’s corporate governance framework is a set of principles, guidelines and practices that support sustainableconsistent financial performance and long-term value creation for our shareholders.
Our commitment to corporate governance is integral to our business and reflects not only regulatory requirements, NYSE listing standards and broadly recognized governance practices, but also effective leadership and oversight by our senior management team and Board.
We regularly conduct callsmeet with our shareholders to solicit feedback on our corporate governance framework. We make an effortstrive to incorporate this feedback through enhanced policies, processes and disclosure.
Our Corporate Governance Framework
Our Board is committed to maintaining the highest standards of corporate governance at BlackRock. Our Board is guided by our Corporate Governance Guidelines, which provide a framework for the governance of the Company and the responsibilities of our Board. The Corporate Governance Guidelines address director qualifications, director orientation and continuing education, director access to management and independent advisors and Board responsibilities, as well as the annual performance evaluations of the Board and its standing Committees.
Because corporate governance practices evolve over time, our Board reviews and approves our Corporate Governance Guidelines, committeeCommittee charters and other governance policies at least once a year and approves or updates them as necessary and appropriate.
Our Additionally, both the Board is guided byand management recognize that creating long-term value for the Company’s shareholders requires consideration of the concerns of our other stakeholders and interested parties including clients, employees and the communities in which BlackRock operates, as covered in our Corporate Governance Guidelines, which address director responsibilities, director access to management, director orientation and continuing education, director retirement and the annual performance evaluations of the Board and Board Committees. The Board recently amended the Corporate Governance Guidelines to have the Governance Committee consider the periodic rotation of Committee members and Committee chairs as a means of introducing fresh perspectives and broadening and diversifying the views and experience represented on the Board’s Committees.Guidelines.
The full textversions of our Corporate Governance Guidelines, Board Committee Charters, Code of Business Conduct and Ethics and other corporate governance policies are available on our website atwww.blackrock.com under the headings “Our“Our Company and Sites / Our FirmAbout BlackRock / Investor Relations / Corporate Governance”Governance / Governance Overview.”
BLACKROCK, INC. 2017 PROXY STATEMENT 21
BlackRock’s culture is vital to our success BlackRock’s culture is a key differentiator of our strategy and helps to drive our results and long-term growth. Our culture embraces our fiduciary commitment to serve clients and stay ahead of their needs. Our culture unifies the firm and helps to reinforce ethical behavior at all levels. Our approach to instilling, reinforcing and enhancing our culture is deliberate and intentional. To learn more, please visit our websitewww.blackrock.com. |
“It is more important than ever that our culture helps us maximize performance and drive excellence every day.”
Laurence D. Fink
Chairman and Chief Executive Officer
BLACKROCK, INC. 2020 PROXY STATEMENT 23
Corporate Governance | Our Board:“EngagedBoard and vital to our success”Culture
AtOur Board is deeply engaged in understanding the culture at BlackRock we
We believe our Board should have a strong understanding of BlackRock’s culture, because it is the foundation for our Company’s strategic plans. We believe our Board should be deeply engaged, provide informed and frankhonest guidance and feedback and maintain an open dialogue with management based on a clear understanding of our short and long-term strategic plan.plans.
BlackRock’s Board plays an integral oversight role in our growth and success. At each Board meeting, we review components of our strategy with our Directors and engage in constructive dialogue, which our leadership team embraces. These discussions are not without disagreement — and those tough
Oversight of Growth Strategy Our Board plays an integral oversight role in our growth and success. At each Board meeting, we review components of our long-term strategy with our directors and engage in constructive dialogue, which our leadership team embraces. These discussions are not without disagreement – and those honest conversations push us to make the difficult decisions required to build a better BlackRock. | A Global Perspective Twice a year, Board and standing Committee meetings are held outside of New York, including one set of meetings held outside of the United States. Theseoff-site meetings provide our directors with an opportunity to meet with employees and management based outside of our New York corporate headquarters, focus on reviewing regional strategies and engage with local clients and government officials. These meetings provide our directors with firsthand exposure to BlackRock’s corporate culture and how employees globally demonstrate BlackRock’s principles and purpose. In 2019, the Board traveled to Seattle, Washington and Milan, Italy foroff-site Board meetings. | |||
Role in Talent Development Building a generation of future leaders is vital to BlackRock’s long-term success. Accordingly, our Board plays an active part in our talent development and dedicates at least one meeting per year to talent review. As part of its review, the Board evaluates whether we have the right people in the right places to execute our long-term strategy, examines the results of Employee Opinion Surveys and provides oversight of management to ensure that we are developing people to fill key roles in the future. For more information, please refer to“BlackRock’s Approach to Human Capital Management” on page 36. | Employee Engagement & Additional Resources Our directors have full and free access to all BlackRock officers and employees at any time to address questions, comments or concerns. Our directors may arrange these meetings independently and without the presence of senior management. Additionally, the Board and its Committees have the power to hire independent legal, financial or other advisors without approval from, or consultation with, BlackRock management. | |||
Embracing Best Practices Our Board also takes an active role in ensuring we embrace “best practices” in corporate governance. Members of the Governance Committee are briefed on significant trends and developments in corporate governance and regulatory issues, including briefings from BlackRock’s Investment Stewardship and Global Public Policy teams, as well as feedback from shareholders. In 2019, we acted on feedback from our shareholders to enhance disclosure on how the Board approaches its composition and refreshment as well as Board size. For more information, see “Governance Highlights,” “Board Refreshment,”“Board Tenure, Retirement Age and Size” and “Board Refreshment Process” on pages 2, 3, 12 and 28, respectively. | ||||
24BLACKROCK, INC. 2020 PROXY STATEMENT
The Board plays an active part in our talent development as well, dedicating at least one meeting per year to talent
to ensure we have the right people in the right places to execute our strategy, as well as to make certain we are developing others to fill these roles in the future. Building a generation of leaders open to both
Corporate Governance | Our Board and external ideas is vital to BlackRock’s long-term success.Culture
Our Board also takes an active role in ensuring we embrace “best practices” in corporate governance. In 2016, we incorporated feedback from shareholders on proxy access policies and practices to inform management’s proposal for proxy access that was voted on and approved in 2016.
| Beyond the Boardroom | ||||||
On-site Visits to BlackRock Offices In addition to Board and Committee off-site meetings, members of our Board are encouraged to make on-site visits to other BlackRock offices. During 2019, our newest Board member, Bader M. Alsaad, participated in BlackRock’s “Meet the Board” program – a series of globally broadcast, “fire-side” chats and town halls designed to give directors an opportunity to engage with employees directly and allow employees an opportunity to ask questions and get to know members of the Board. In the same year, our directors participated in a technology showcase led by BlackRock employees of all levels who specialize in technology development as part of the Company’s tech 2025 strategy, and experienced first-hand our technology and where it is leading us. Our Investment Stewardship team (“BIS”) hosts an annual Director Dialogue Day, where employees, members of management and independent directors of other companies engage on topics such as BIS’s engagement priorities, emerging trends in U.S. corporate governance and compensation and public policy affecting long-term investments. BlackRock’s directors are invited to, and have attended this event in the past. | ||||||
Director Orientation Under the oversight of management and the Board, BlackRock provides each new director with an orientation program conducted over the course of the first three months of their tenure. The orientation program includes the opportunity to rotate through each of the Board’s standing Committees and participate in presentations by senior management to familiarize our new directors with BlackRock’s: | ||||||
• Financial position and strategic plans; • Significant financial, accounting and risk management policies; | • Compliance programs, conflict policies, Code of Business Conduct and Ethics and other controls; and • Principal officers and internal and independent auditors. | |||||
Directors also have full and free access to all BlackRock officers and employees and are encouraged to meet with members of management to further enhance their familiarity with BlackRock’s business and strategy. | ||||||
Continuing Education All directors are encouraged to attend continuing educational programs offered by BlackRock or sponsored by universities, stock exchanges or other organizations related to fulfilling their duties as Board or Committee members. For example, members of our Audit Committee have participated in conferences and symposiums hosted by our independent registered public accounting firm, Deloitte. Every week our directors receive summaries and copies of press coverage, analyst reports and current events relating to our business. | ||||||
Individual Discussions and Mentoring Management Outside of regularly scheduled Board and Committee meetings, our directors may have discussions with each other and our CEO at their discretion. Directors have access to management at any time and are encouraged to have small group or individual meetings, as necessary. All directors are encouraged to meet with management outside of Board and Committee meetings and several directors have established informal mentoring relationships with key members of senior management. | ||||||
The partnership and oversight of a strong and multi-faceted Board with diverse perspectives rooted in deep experience in finance, industry, academia and government is essential to creating long-term shareholder value.
BLACKROCK, INC. 2020 PROXY STATEMENT 25
Corporate Governance | Our Board Leadership Structure
Our Board Leadership Structure
Why our Board leadership structure is right for BlackRock
Our Board and Governance Committee regularly review and evaluate the Board’s leadership structure. Mr. Fink serves as both BlackRock’s Chief Executive OfficerCEO and Chairman of the Board, which the Board has determined is the most appropriate and effective leadership structure for the Board and the Company at this time. Mr. Fink has served in this capacity since founding BlackRock in 1988 and, as such, brings over 2530 years of strategic leadership experience and an unparalleled knowledge of BlackRock’s business, operations and risks to his role as Chairman of the Board.
The Board does not have a policy on whether the roles of the Chairman and CEO should be separated but believes the current combination of the two roles provides BlackRock with, among other things, a clear and effective leadership structure to communicate the Company’s business and long-term strategy to its clients, shareholders and the public. The combinedChairman-CEOIn addition, the Board believes that this structure also providesallows for robust and frequent communication between the Board’s independent directors and management and enables the Board to better understand the Company and work with management to enhance shareholder value.
Under our Lead Independent Director Guidelines, when the positions of Chief Executive Officer and Chairman of the Company. To further facilitate coordination withBoard are combined or the Chairman is not independent, the independent directors will appoint a Lead Independent Director. The Lead Independent Director will then be appointed annually by BlackRock’s independent directors and serve until a successor is duly appointed and qualified, his or her removal or resignation, or he or she is no longer an independent member of the Board. Although appointed annually, we generally expect the Lead Independent Director to serve for more than one year.
The Board believes the role and responsibilities of the Lead Independent Director help to ensure the exercise of independent judgment by the Board and further facilitate coordination with the independent directors annually select one of its independent members to serve as the Lead Independent Director.directors.
22BLACKROCK, INC. 2017 PROXY STATEMENT
Our Lead Independent Director: Murry S. Gerber Serving since 2017 |
•
•
|
|
Under our guidelines, the Lead Independent Director will be elected annually by BlackRock’s independent directors and serve until a successor is appointed. Although elected annually, we generally expect the Lead Independent Director to serve for more than one year.
The full versions of our Lead Independent Director Guidelines, Corporate Governance Guidelines, Board Committee Charters, Code of Business Conduct and Ethics and other corporate governance policies are available on our website atwww.blackrock.com under the headings “Our Company and Sites / Our Firm / Investor Relations / Corporate Governance”.
|
| |||
BLACKROCK, INC. 2017 PROXY STATEMENT 23
Executive Sessions
Executive sessions ofnon-management directors are held at everymost regularly scheduled round of Board meetings, totalingand six executive sessions were held in 2016.2019. Each session is chaired by the Lead Independent Director, who facilitates discussion of the Company’s strategy, key governance issues, succession planning and the performance of senior executives. Anynon-management director may request that an additional executive session be scheduled. At least once a year, an executive session is held offor only those directors determined to be “independent,” within the meaning of the listing standards of the NYSE.
The full versions of our Lead Independent Director Guidelines and other corporate governance policies are available on our website athttp://ir.blackrock.com under the headings “Governance / Governance Overview.”
26BLACKROCK, INC. 2020 PROXY STATEMENT
Corporate Governance | Board EvaluationsEvaluation Process
The effectiveness of the Board and its Committees is critical to BlackRock’s success and to the protection of our shareholders’ long-term interests. To ensure their effectiveness, the Board and each standing Committee annually conduct comprehensive annual self-evaluationsevaluations to identify and assess areas for improvements. Tailored assessments, conducted through questionnaires, are reviewed and updated in consultation with the
BLACKROCK, INC. 2020 PROXY STATEMENT 27
Corporate Governance Committee and the Lead Independent Director. These assessments focus on | Board and Committee performance, effectiveness and contributions to BlackRock, as well as meeting agendas, Refreshment Process
Board composition, Board processes, meeting dynamics and access to resources and senior management.Refreshment Process
The Governance Committee reviews each director’s responsesis responsible for identifying and evaluating potential director candidates, reviewing Board and Committee composition and making recommendations to the questionnairesfull Board. This ongoing process includes:
Director Recruitment In order to maintain a Board with an appropriate mix of experience and shares the results of the Committee evaluations with each of the Chairpersons of the Audit, MDCC and Risk Committees. As part of the annual self-evaluation and periodically throughout the year, the Chairman and/or the Lead Independent Director meet with the independent directors on an individual basis to discuss Board, Committee and individual director performance and effectiveness. The Chair ofqualifications, the Governance Committee, along with the Chairmanhelp of management and an outside consultant, engages in a year-round process to identify and evaluate director candidates in conjunction with its recurring review of Board and Committee composition. Director Onboarding All new directors participate in an extensive orientation program, enabling him or her to quickly enhance their strategic value to our board. Board Committee Rotation The Governance Committee also considers the periodic rotation of Committee members and Committee Chairs to introduce fresh perspectives and to broaden and diversify the views and experience represented on the Boards standing Committees. Board and Committee Evaluations Annual Board and Committee evaluations help identify director skills that would enhance Board effectiveness. The Governance Committee actively engages in Board succession planning to anticipate the future needs of the Board and Lead Independentits standing Committees. Director provideTenure, Retirement Age Policy To ensure the Board withhas an appropriate balance of experience, continuity and fresh perspective, the Board considers length of tenure when reviewing nominees. The average tenure of BlackRocks director nominees is approximately eight years, while the average tenure for independent director nominees is approximately six years. The Board has established a summaryretirement age of 75 years for directors. Our tenure and age-based retirement practices help the Board to anticipate future Board turnover. The Board Directors Unanimously recommends you vote FOR the approval of the questionnaires and additional feedback received from individual directors annually in the fall.
Based on responses from this year’s self-assessment, the Board increased the amountcompensation of time allocated to executive sessions and enhanced the processes by which director candidates are evaluated and reviewed by the Board.
Succession Planning
Our Board plays an integral oversight role in talent development by recognizing the importance of succession planning for the CEO and other key executives at BlackRock. The Board, in consultation with the MDCC, dedicates at least one meeting per year to talent to ensure BlackRock has the right people in place to execute our long-term strategic plans and appropriate succession for key individuals. The Board also works with the MDCC to consider potential successors to the CEO in the event of an emergency or the CEO’s retirement. Our CEO recommends and evaluates potential successors for BlackRock’s top executives, along with a review of any development plans for these individuals.NEOs.
2428 BLACKROCK, INC. 20172020 PROXY STATEMENT
Corporate Governance | Board Committees |
Each Committee is governed by a Board-approved Charter.
Board Committee Meetings and Members
The Board has five committees: anCommittees: the Audit Committee, the MDCC, aCompensation Committee, the Governance Committee, athe Risk Committee and anthe Executive Committee. Below is a summary of our current Committee structure and membership information.
Member | Audit | Management Development & Compensation | Nominating & Governance | Risk | Executive | Audit
| Compensation
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INDEPENDENT DIRECTORS | ||||||||||||||||||||
Abdlatif Y. Al-Hamad | l | l | ||||||||||||||||||
Bader M. Alsaad | ● | ● | ||||||||||||||||||
Mathis Cabiallavetta | l | l | l | ● | ● | |||||||||||||||
Pamela Daley | l | l | l | ● | ● | ● | ||||||||||||||
Jessica P. Einhorn | l | ● | ● | |||||||||||||||||
William E. Ford | ● | ● | ||||||||||||||||||
Fabrizio Freda | l | ● | ||||||||||||||||||
Murry S. Gerber (Lead Independent Director) |
l |
l |
l | ● | ● | ● | ||||||||||||||
James Grosfeld | l | l | ||||||||||||||||||
Sir Deryck Maughan | l | l | l | l | ||||||||||||||||
Margaret L. Johnson | ● | ● | ||||||||||||||||||
Cheryl D. Mills | l | ● | ● | |||||||||||||||||
Gordon M. Nixon | l | l | ● | ● | ● | |||||||||||||||
Charles H. Robbins | ● | |||||||||||||||||||
Ivan G. Seidenberg | l | l | l | ● | ● | ● | ||||||||||||||
Marco Antonio Slim Domit | l | ● | ● | |||||||||||||||||
John S. Varley | l | |||||||||||||||||||
Susan L. Wagner | l | ● | ● | ● | ||||||||||||||||
Mark Wilson | ● | |||||||||||||||||||
NON-INDEPENDENT DIRECTORS | ||||||||||||||||||||
Laurence D. Fink | l | ● | ||||||||||||||||||
Robert S. Kapito | ||||||||||||||||||||
William S. Demchak | l | l | ● | ● | ||||||||||||||||
Number of Meetings Held in 2016 | 14 | 8 | 6 | 6 | 0 | |||||||||||||||
Number of Meetings Held in 2019
| 13
| 8
| 6
| 6
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🌑● Chairperson
The Board met seveneight times during 2016.2019. In 2016,2019, each nominated directorof our directors attended at least 75% of the aggregate of: (i) the total number of meetings of the Board held during the period for which such director was a member of the Board and (ii) the total number of meetings held by all Committees of the Board on which such director served, if any, during the periodsperiod served by such director. Directors are encouraged to and do attend the annual meetings of BlackRock shareholders. All 1917 directors who were serving on the Board and nominated for re-election in 2019 attended the 20162019 Annual Meeting of Shareholders. Ivan G. Seidenberg will not be standing forre-election at the Annual Meeting.
BLACKROCK, INC. 2020 PROXY STATEMENT 29
Corporate Governance | Board Committees
Board Committee Refreshment
The Governance Committee considers the periodic rotation of Committee members and Committee Chairs to introduce fresh perspectives and to broaden and diversify the views and experience represented on Boardthe Committees.
On March 9, 2017,14, 2019, the Board appointed Ms. Einhorn and Messrs. Seidenberg and Slim to serve as members of the MDCC, and Ms. Mills and Mr. Nixon to serve as members of the Governance Committee, effective May 24, 2017.
BLACKROCK, INC. 2017 PROXY STATEMENT 25
In addition, the Board appointed Mr. SeidenbergWagner to serve as Chair of the MDCCRisk Committee and Mr. Nixon to serve as Chaira member of each of the Governance Committee,Audit and in connection with thatExecutive Committees, each appointment effective May 23, 2019. Ms. Wagner brings risk management, operations and strategy experience, as well as a deep understanding of the asset management industry as one of the founding principals of the Company.
On November 20, 2019, the Board appointed Mr. NixonAlsaad to serve as a member of the Risk Committee and a member of the Governance Committee, each appointment effective January 28, 2020. Mr. Alsaad brings expertise in international business strategy and global capital markets as well as experience in investments and the financial sector.
On March 18, 2020, the Board appointed Mr. Ford to serve as Chair of the Compensation Committee and as a member of the Executive Committee, each appointment effective May 25, 2017. At such time, Messrs. Gerber21, 2020. Mr. Ford brings extensive management expertise and Seidenberg will conclude their servicea valuable perspective on international finance from his experience as ChairsChief Executive Officer of General Atlantic, one of the MDCCworld’s leading growth equity firms.
Outlined below are the Board’s Committees with brief descriptions of each Committee’s membership, roles and Governance Committee, respectively.responsibilities as of the date of this Proxy Statement.
Audit Committee | ||||||||||||||
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Role and Responsibilities
The Audit Committee’s primary responsibilities include oversight of: the integrity of BlackRock’s financial statements and public filings; the independent auditor’s qualifications and independence; the performance of BlackRock’s internal audit function and independent auditor; and BlackRock’s compliance with legal and regulatory requirements. It also prepares an Audit Committee Report as required by the SEC rules for inclusion in this Proxy Statement (see page 77).
The Audit Committee:
The Audit Committee is also responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit BlackRock’s financial statements. The Audit Committee exercises sole authority to approve all audit engagement fees and terms associated with the retention of Deloitte.
In addition to ensuring the regular rotation of the lead audit partner as required by law, the Audit Committee is involved in the selection of, and reviews and evaluates, the lead audit partner and considers whether, in order to ensure continuing auditor independence, there should be periodic rotation of the independent registered public accounting firm.
The Audit Committee regularly holds separate sessions with BlackRock’s management, internal auditors and Deloitte.
The Board has determined that no member of the Audit Committee has any material relationship with BlackRock and each such member is “independent” as defined in the NYSE listing standards and the applicable SEC rules. Furthermore, the Board has determined that each member of the Audit Committee is “financially literate,” as such qualification is interpreted by the Board based on its business judgment, qualifies as an “audit committee financial expert,” as defined in the applicable SEC rules, and has accounting and related financial management expertise within the meaning of the NYSE listing standards.
26BLACKROCK, INC. 2017 PROXY STATEMENT
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Pamela Daley |
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William E. Ford | Murry S. Gerber Margaret L. Johnson | Marco Antonio Slim Domit Susan L. Wagner | |||||
Role and Responsibilities
Role and Responsibilities The Audit Committee’s primary responsibilities include oversight of the integrity of BlackRock’s financial statements and public filings, the independent registered public accounting firm’s qualifications, performance and independence, the performance of BlackRock’s internal audit function and BlackRock’s compliance with legal and regulatory requirements. The Audit Committee receives reports on: | ||||||||||
• The progress and results of the internal audit program, as provided by BlackRock’s Head of Internal Audit, and approves BlackRock’s internal audit plan; • External audit findings, as provided by BlackRock’s independent registered public accounting firm, Deloitte; • Financial controls regarding compliance with the Sarbanes-Oxley Act of 2002, as prepared by the Head of Financial Controls and presented by management; • The Company’s Risk Management program, as provided by BlackRock’s Chief Risk Officer; | • Financial updates, as provided by the Chief Financial Officer; • Cybersecurity updates, as provided by the Chief Information Security Officer; • Compliance updates, as provided by the Chief Compliance Officer; • Litigation, regulatory and material ethics matters, as provided by BlackRock’s Chief Legal Officer; and • Risk matters addressed at the Risk Committee, as provided by the Chair of the Risk Committee. | |||
Additionally, as part of the Audit Committee’s responsibility for oversight of the Company’s major financial risk exposures, the Audit Committee reviews and discusses with management the Company’s approach to assessing and managing risk in coordination with the Risk Committee. The Audit Committee is also responsible for the appointment, compensation, retention and oversight of the work of the independent registered public accounting firm retained to audit BlackRock’s financial statements. The Audit Committee approves all audit engagement fees and terms associated with the retention of Deloitte. In addition to ensuring the regular rotation of the lead audit partner, as required by law, the Audit Committee selects, reviews and evaluates the lead audit partner and determines whether there should be periodic rotation of the independent registered public accounting firm. The Audit Committee regularly holds separate sessions with BlackRock’s management, internal auditors and Deloitte. The Board has determined that each member of the Audit Committee is “independent” as defined in the NYSE listing standards and applicable SEC rules, is “financially literate,” and has accounting and related financial management expertise within the meaning of the NYSE listing standards. All members of the Audit Committee, with the exception of Margaret L. Johnson, qualify as “audit committee financial experts” under applicable SEC rules. | ||||
30BLACKROCK, INC. 2020 PROXY STATEMENT
Additional information on the MDCC’s processes and procedures for consideration of NEO compensation is addressed in the MDCC Report on page 46 and “Compensation Discussion and Analysis” beginning on page 47.Corporate Governance | Board Committees
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Role and Responsibilities
BLACKROCK, INC. 2017 PROXY STATEMENT 27
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Ivan G. Seidenberg |
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Jessica P. Einhorn William E. Ford | Margaret L. Johnson Cheryl D. Mills | Gordon M. Nixon Marco Antonio Slim Domit | |||||
Role and Responsibilities | ||||||||||
• Reviewing and approving corporate goals and objectives relevant to CEO compensation, evaluating the CEO’s performance in light of those goals and objectives and determining and approving the CEO’s overall compensation levels based on this evaluation; • Reviewing BlackRock’s executive compensation program and establishing the compensation framework of BlackRock’s executive officers; • Periodically reviewing and approving director compensation; • Reviewing, approving, recommending to the Board, or delegating to management the oversight of, BlackRock’s benefits plans; • Considering and discussing the results of the advisory“say-on-pay” vote; | • Providing oversight of BlackRock’s executive compensation program and determining whether our program remains effective to attract, motivate and retain senior officers capable of making significant contributions to BlackRock’s long-term success; • Reviewing, assessing and making reports and recommendations to the Board on BlackRock’s talent development and succession planning, with an emphasis on performance and succession at the highest management levels; and • Appointment, compensation and oversight of the work of any compensation consultant, legal counsel or other advisor retained by the Compensation Committee. | |||
The Board has determined that each member of the Compensation Committee is “independent” as defined in the NYSE listing standards and applicable SEC rules, qualifies as a“non-employee director” under applicable SEC rules and is an “outside director” within the meaning of the Internal Revenue Code. Additional information on the Compensation Committee’s processes and procedures for consideration of NEO compensation is addressed in the “Management Development &Compensation Committee Report” on page 55 and “Compensation Discussion and Analysis” beginning on page 56. | ||||
Nominating & Governance Committee | ||||||||||
Chair | Gordon M. Nixon | Members(1) | Bader M. Alsaad Mathis Cabiallavetta | Fabrizio Freda Murry S. Gerber | Cheryl D. Mills Ivan G. Seidenberg |
Role and Responsibilities | ||||||||||
• Recommending to the Board criteria for the selection of new directors to serve on the Board; • Identifying individuals qualified to become members of the Board; • Recommending to the Board the director nominees for the next annual meeting of shareholders or candidates to fill vacancies or newly created directorships that may occur between annual meetings; • Recommending to the Board members for each Committee; • Leading the Board in its annual review of the Board’s performance; | • Evaluating and recommending to the Board corporate governance policies, practices and guidelines applicable to the Company; • Overseeing BlackRock’s Related Persons Transaction Policy; • Reviewing the Company’s engagement with shareholders on governance matters and considering shareholder proposals and proposed responses; and • Periodically reviewing corporate governance trends, best practices and regulations applicable to the corporate governance of the Company. | |||
This year, the Board formalized the review of corporate and investment stewardship-related policies and programs and significant publications relating to environmental (including climate change), social and other sustainability matters at the Governance Committee. Additionally, in furtherance of BlackRock’s overarching purpose, the Governance Committee also took on responsibility for periodic reviews of the Company’s philanthropic programs and related strategy, as well as the Company’s public policy and advocacy activities, including lobbying priorities, political contributions and memberships in trade associations. The Board has determined that each member of the Governance Committee is “independent” as defined in the NYSE listing standards and applicable SEC rules. | ||||
| (1) | Susan L. Wagner served as a member of the Governance Committee until May 23, 2019. |
BLACKROCK, INC. 2020 PROXY STATEMENT 31
Corporate Governance | Board Committees
Risk Committee | ||||||||||
Chair | Susan L. Wagner | Members | Bader M. Alsaad Pamela Daley | William S. Demchak Jessica P. Einhorn | Charles H. Robbins Mark Wilson |
Role and Responsibilities
The Risk Committee assists the Board with its oversight of the Company’s levels of risk, risk assessment, risk management and related policies and processes in connection with the following types of risk and related areas:
Enterprise Risks
Fiduciary Risks
| • | Investment risks being taken on behalf of clients in their portfolios or accounts; |
| • | Risks of default by client counterparties; and |
| • | Pricing and valuation risk that BlackRock’s counterparties misprice assets in client portfolios or accounts. |
Other
| • | Reputational risk; and |
| • | Any other areas of risk delegated to the Risk Committee by the Board. |
The Committee regularly reviews a detailed risk profile report prepared by the Chief Risk Officer which covers a wide range of topics and potential issues that could impact BlackRock.
The Risk Committee also reviewed and discussed with management the Risk Factors included in the 20162019 Form10-K and received reports from members of management responsible for identifying and monitoring these risks.
Executive Committee | ||||||||||||
Chair |
Laurence D. Fink | |||||||||
| Pamela Daley William S. Demchak | Murry S. Gerber
| Ivan G. Seidenberg Susan L. Wagner |
Role and Responsibilities
The Executive Committee has all the powers of the Board, except as prohibited by applicable law, the PNC Stockholder Agreement and BlackRock’s Amended and Restated Bylaws (“Bylaws”), and except to the extent another Committee has been accorded authority over the matter. The Executive Committee may meet to exercise such powers between meetings of the Board.
The Executive Committee will only meet if a quorum for a full Board meeting cannot be obtained between regular meetings for emergency business.
2832 BLACKROCK, INC. 20172020 PROXY STATEMENT
Corporate Governance | Board Committees |
Board and Committee Oversight of Strategy
The Board actively engages with senior management by providing guidance on the formation and implementation of strategic initiatives. On an annual basis, our Global Head of Corporate Strategy previews the Board’s agenda with the Governance Committee, focusing on business reviews and the strategic topics for the coming year, and receives its feedback and input. Based on this agenda, members of senior management and business leads will brief directors on the strategic opportunities, priorities and implementation of strategy for their respective lines of business. These presentations serve as the basis for an active, ongoing dialogue between the Board and senior management about strategic risks and opportunities facing BlackRock and its lines of business.
Board and Committee Oversight of Risk Management
The Board The Risk, Audit,
The Board’s standing Committees report to the full Board at least | ||||||||||||||
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Responsible for overseeing risks associated with | Governance Committee
Responsible for overseeing risks related to Board and Committee succession and other corporate governance policies and practices. | |||||||||||
BLACKROCK, INC. 2020 PROXY STATEMENT 33
Corporate Governance | Board Committees
Board and Committee Oversight of Cybersecurity Our Board is actively engaged in the oversight of BlackRock’s cybersecurity and information security programs. Our Risk Committee receives reports on the Company’s cybersecurity program and developments in information security at each meeting from our Chief Information Security Officer. Additionally, on an annual basis, senior members of BlackRock’s technology, risk and information security teams provide a comprehensive overview of BlackRock’s cyber risk and information security program to a joint session of the Risk and Audit Committees. Our global information security team, in collaboration with our technology risk team and independent third parties, assesses both risks and changes in the cyber environment and adjusts our cybersecurity program as needed. |
Cybersecurity Governance Highlights:
• BlackRock invests in threat intelligence and participates in financial services industry and government forums to • BlackRock routinely performs penetration tests. • BlackRock’s cyber risk program incorporates external expertise. |
RoleBoard and Committee Oversight of Sustainability
BlackRock’s Board has overall responsibility for oversight of BlackRock’s Investment Stewardship and Corporate Sustainability activities. Additionally, the Governance Committee is directly responsible for overseeing:
Investment Stewardship Social Impact Corporate Sustainability
With respect to Investment Stewardship, the Governance Committee periodically reviews the group’s policies, programs and significant publications relating to environmental (including climate change), social and other sustainability matters in coordination with the other standing Committees of the Board RiskBoard.
In addition, the duties of the Governance Committee
The Risk Committee regularly include reviews of BlackRock’s philanthropic program (“Social Impact”) and its strategy, which is focused on efforts to support a detailed risk profile report prepared by the Chief Risk Officer which coversmore inclusive and sustainable economy.
Finally, BlackRock is deeply committed to sustainability as an organization and we have implemented a wide range of topicssustainability initiatives over the last several years that help BlackRock deliver value to all stakeholders over the long-term.
The oversight of the Governance Committee provides an additional layer of accountability to assist in BlackRock’s progress on these important initiatives for the benefit of all stakeholders. As appropriate, the Committee makes recommendations on these matters to be reviewed by the full Board.
34BLACKROCK, INC. 2020 PROXY STATEMENT
Corporate Governance | Sustainability at BlackRock
As an asset manager, we believe that a company’s ability to integrate sustainable business practices into its strategy and operations is integral to delivering long-term value. We also recognize the importance of leading by example, both through the transparency we provide to stakeholders on material and relevant sustainability issues and undertaking sustainable business practices.
| In our day-to-day operations | In our business activities | |
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Operating a sustainable corporation We recognize the importance of ensuring the long-term sustainability of our firm to deliver the best outcomes for clients and shareholders. Human capital is central to BlackRocks long-term sustainability. We strive to offer best-in-class benefits and develop our people through strategic training and leadership programs. We seek to advance diversity and inclusion in all forms across the organization. We manage our environmental impact of our operations by pursuing a strategy that seeks to decouple company growth from our impact on the environment. Making Sustainable Investing Our Standard Over the past few years, more and more of our clients have focused on the impact of sustainability on their portfolios. Because sustainable investment options have the potential issues that could impact BlackRock. These issues include, among other matters, investment performance, contractually indemnified risks, investment risksto offer clients better outcomes, we are making sustainability integral to the way BlackRock manages risk, constructs portfolios, designs products, and counterparty risksengages with companies. We are deepening the integration of its asset management activities, balance sheet risks, business continuity risks, including those related to natural disasters or terrorist attacks, risks related to financial crimesenvironmental, social, and fraud, and other operational risks.
The Risk Committee engages the Company’s keygovernance (ESG) factors into risk management executivesand active investment processes across BlackRock. We are putting ESG analysis at the center of our technology platform by integrating measurement tools that deepen our understanding of material ESG risks into Aladdin. Making a Positive Social Impact In February 2020, BlackRock made a charitable contribution of 15.6 million shares of PennyMac Financial Services, Inc. with a market value of $589 million to fund the firms social impact efforts to advance a more inclusive and sustainable economy. BlackRocks Social Impact team identifies, funds and partners with high-potential organizations to test and build evidence for innovative solutions with potential long-term impact, strong leadership and measurable outcomes. The team also supports and empowers BlackRocks employees to give back to their communities. Responsible Stewards of Our Clients Assets Investment stewardship is an essential component of our fiduciary responsibility. BlackRocks Investment Stewardship team engages with companies to understand how they are managing and disclosing sustainability-related risks. The Investment Stewardship team uses its voice as an investor to encourage companies to adopt business practices consistent with delivering sustainable long-term financial returns. The team performs independent research and analysis, carefully arriving at proxy vote decisions that are consistent with its voting guidelines and that it believes are in the best long-term economic interest of our clients. The team is increasing transparency in its stewardship practices and intensifying engagement with companies on the frameworksustainability-related matters. The first phase of work has focused on tackling financial insecurity. In 2019, BlackRock committed $50 million to launch a new Emergency Savings Initiative to build, test and pilot custom short-term savings tools and strategies for risk management within BlackRock and the process for actively identifying adverse events and/or circumstances relevantpeople living on low incomes. We are committed to BlackRock’s objectives and activities,cultivating diversity in all forms as well as risk management roles, policiesbuilding a strong culture one in which inclusion and responsibilities.belonging are paramount. we believe that sustainability-integrated portfolios can provide better risk-adjusted returns to investor holding boards accountable where the team believes there are shortfalls.
BLACKROCK, INC. 20172020 PROXY STATEMENT 2935
Corporate Governance | Sustainability at BlackRock
Recent Milestones
BlackRock is committed to providing transparency on meaningful sustainability-related information to stakeholders. We made significant progress in 2019 and we are working to further enhance our corporate sustainability strategy and disclosure in the years ahead.
| • Centralized function for corporate sustainability disclosure and accelerated corporate sustainability strategy. • Evolved grass roots employee-driven Green Teams into an official BlackRock Employee Network. The Green Team Network’s mission is to provide a forum for colleagues to connect around their shared passion for improving BlackRock’s sustainability as a firm, to create and lead sustainability initiatives within our offices and to steward conservation efforts within the communities in which we operate. • Launched Emergency Savings Initiative, a $50 million philanthropic commitment to help people living on low-to moderate-incomes gain access to and increase usage of savings strategies and tools to help them establish an important safety net. • BlackRock actively participated in the Vatican’s second dialogue on “The Energy Transition & Care for Our Common Home,” where we signed two statements calling for improved climate risk disclosure and underscoring the need for an effective carbon pricing regime. | |
• Launched The BlackRock Foundation and a philanthropic commitment of $589 million to promote an inclusive and sustainable economy. • JoinedClimate Action 100+, an investor-led initiative to encourage the world’s largest corporate greenhouse gas emitters to take necessary action on climate change. • Published firstSASB-aligned disclosure, which includes information regarding our workforce diversity, risk management and incorporation of ESG factors in our investment management processes. • Published disclosure around thecarbon footprint of our operations. • Announced acceleration of sustainable investing efforts, makingsustainability our new standard for investing. | ||
BlackRock’s Approach to Human Capital Management
As a human capital-intensive business, our long-term sustainability depends on our people. And as BlackRock grows, the importance of our talent strategy has only intensified. For those reasons, we are committed to taking a differentiated approach to talent and culture.
Culture, Inclusion and Diversity
At BlackRock, we are committed to cultivating and advancing diversity in all forms as well as building a strong culture – one in which inclusion and belonging are paramount, where all BlackRock citizens strive to be open and inclusive leaders and teammates. Our culture is what unifies our employees across our diverse business model, ensures we are best positioned to serve our diverse clients globally and propels BlackRock’s continuous evolution. Our culture is rooted in our guiding principles, which you can read more about on our website atwww.blackrock.com.
Talent Vision and Strategy
Our people and culture are critical to BlackRock’s long-term success. As such, our talent vision and strategy focus on:
Enabling high-performing teams that generate career opportunities for our people, create future leaders of the firm and thought leaders in the industry.
Creating an environment of inclusion, belonging and diversity, where we work with purpose and everyone feels seen, heard and known.
Promoting emotional ownership and entrepreneurship throughout BlackRock.
36BLACKROCK, INC. 2020 PROXY STATEMENT
Corporate Governance | BlackRock’s Approach to Human Capital Management
Our talent vision and strategy must be implemented in the context of an evolving BlackRock business – we continue to be one of the world’s largest and most diversified asset managers in a rapidly evolving industry. In order to reflect the ongoing transformation in our industry, we are focused on:
Reinforcing our culture and diversity as a source of competitive advantage.
Delivering a consistent, fair and high-quality experience for our people.
Designing an organizational model that supports a diversified asset management and growing technology business.
Developing a scalable technology platform to effectively manage our human capital operations and processes.
Talent Development
We believe a critical driver of our firm’s future growth is our ability to grow leaders. We are committed to identifying and developing talent to help those employees accelerate their growth and achieve their career goals.
Employee Career Development We provide developmental opportunities for our employees through a robust set of formal and informal programs. | ||||||
BlackRock Academiesfocus on enabling employees to build skills and thought leadership in specific facets of our business. | • These educational experiences and resources include topics such as client relationships, technology, investments, compliance, leadership and management, and professional development. | |||||
Knowing BlackRock Coreis a set of resources and immersive experiences built around a series of Harvard Business School case studies about the Company. | • Resources and experiences that are designed to help employees explore our history and engage in shaping our future. | |||||
Leadership programs,such as the Women’s Leadership Forum, Enterprise Leadership Acceleration at BlackRock, and Leadership Excellence and Development,make a differentiated investment in our high potential, strong performing employees as we strive to deepen, enhance and diversify our leadership bench. | • These programs are intense, year-long experiences that include structured learning, assessments, external coaching, sponsorship andhands-on work, and provide a blend of full cohort, small group and individually tailored development. | |||||
Employee Feedback
We value continuous dialogue with our employees about their experiences. We have several employee feedback mechanisms including:
2019 Employee Opinion Survey highlights 89% are proud to work at BlackRock 88% believe we are living our mission of creating a better financial future for our clients |
Each year, we directly address employee feedback received through these mechanisms. We believe the high participation rates reflect conviction among employees that their responses will lead to action by management.
Employee Networks
We provide additional forums and opportunities for employees with diverse backgrounds, experiences and perspectives to connect with one another and shape our culture through our Employee Networks. These networks are sponsored by senior leaders and are designed by employees, for employees.
BLACKROCK, INC. 2020 PROXY STATEMENT 37
Corporate Governance | BlackRock’s Approach to Human Capital Management
In 2020, we launched the Green Team Network. Its mission is to provide a forum for colleagues to connect around their shared passion for improving BlackRock’s sustainability as a firm, to create and lead sustainability initiatives within our offices and to steward conservation efforts within the communities in which we operate. Climate change is not just important to driving investment outcomes; it is something about which BlackRock employees are personally passionate.
Transparency and Accountability
Transparency and accountability are critical to informing and improving our recruiting and development practices as we seek to continually create a more inclusive and diverse workforce. We track and monitor voluntarily disclosed diversity data to review hiring, promotion and attrition at the firm, regional and functional levels. We also review performance data and promotion and compensation information to ensure fair and objective decision-making. During the firm’s Quarterly Business Reviews of each business unit, senior management engages in focused conversations with each business about their plans and progress with respect to diversity and inclusion.
We deliberately align employee incentives with the risk and performance frameworks of the firm. BlackRock’spay-for-performance philosophy connects individual, business and company results to employee compensation, providing employees with opportunities to share in the firm’s growth and success.
Board Oversight of Human Capital Management
Our Board plays a critical role in the oversight of talent and culture at BlackRock and devotes one full meeting annually to anin-depth review of BlackRock’s culture, talent development, retention and recruiting initiatives, inclusion and diversity strategy, leadership and succession planning and employee feedback. Employee feedback and metrics on talent and diversity initiatives are shared with and reviewed by the Board on a regular basis. Moreover, senior leaders are held accountable for progress on diversity through bonus pool allocations and individual compensation decisions.
The Board and Compensation Committee routinely engage with senior leadership on talent and culture. The Compensation Committee oversees our GEC’s compensation and bonus pools, which are determined, in part, by how members of the GEC deliver against annual organizational strength objectives. For a discussion on how organizational strength objectives, such as attracting and inspiring talent and developing a more diverse and inclusive culture, are factored into performance assessments of BlackRock’s NEOs, see “2019 NEO Compensation and Performance Summaries” beginning on page 69.
38BLACKROCK, INC. 2020 PROXY STATEMENT
Corporate Governance | Corporate Governance Practices and Policies
Corporate Governance Practices and Policies
Director IndependenceManagement Succession Planning
TheOur Board determines annuallyrecognizes the independenceimportance of directors in accordance with NYSE listing standards. No director is considered independent unlesssuccession planning for the Board has determined that he or she has no material relationship withCEO and other key executives at BlackRock. The Board, in consultation with the Compensation Committee, dedicates at least one full meeting per year to talent development review to ensure BlackRock has adopted categorical standardsthe right people in place to assist it in determining whether certain relationships between the members of the Boardexecute our long-term strategic plans and BlackRock or its affiliates and subsidiaries (either directly or as a partner, shareholder or officer of an organization that has a relationship with BlackRock) are material relationshipsappropriate succession for purposes of NYSE listing standards. The categorical standards provide that the following relationships are not material for such purposes:key individuals.
DURING THESE REVIEWS, THE BOARD DISCUSSES:
| • | Our succession process and pipeline, including diversity, inclusion and Company culture goals for building future senior leaders; |
| • | Potential successors to the CEO in the event of an emergency or the CEO’s retirement; and |
| • | CEO recommendations and evaluations of potential successors for BlackRock’s top executives, along with a review of any development plans for these individuals. |
Retaining Key Leaders. In the fourth quarter of 2017, we granted long-term incentive awards in the ordinary courseform of business, such as asset management, acting as trustee, lending, deposit, banking or other financial service relationships or other relationships involving the provisionperformance-based stock options to a select group of products or services, so long as the products and services are being providedsenior leaders who we believe will play critical roles in the ordinary course of business andBlackRock’s future. For more information about these awards, see“Performance-Based Stock Options” on substantially the same terms and conditions, including price, as would be available to similarly situated customers;
As part of its determination, the Board also considered the relationships described under “Certain Relationships and Related Transactions.” Following its review, the Board of Directors has determined that Mmes. Daley, Einhorn, Mills and Wagner and Messrs.Al-Hamad,page 65. Cabiallavetta, Freda, Gerber, Grosfeld, Komansky, Maughan, Nixon, O’Brien, Robbins, Seidenberg, Slim and Varley are “independent” as defined in the NYSE listing standards and that none of the relationships between such directors and BlackRock are material under the NYSE listing standards. Following the 2017 Annual Meeting of Shareholders, assuming the nominated directors are elected, BlackRock’s Board is expected to consist of 18 directors, 15 of whom, representing approximately 83% of the Board, will be “independent” as defined in the NYSE listing standards.
BlackRock Public Policy Engagement Transparency and Protecting InvestorsPolitical Participation Policies
As part of our responsibilities to our shareholders and clients, BlackRock advocates for public policies that we believe are in our shareholders’ and clients’ long-term best interests. We support regulationthe creation of regulatory regimes that increasesincrease financial market transparency, protectsprotect investors and facilitatesfacilitate responsible growth of capital markets, while preserving consumer choice and properly balancing benefits versus implementation costs. BlackRock comments on public policy topics through, among other things, our published ViewPoints, which examine public policy issues and assess their implications for investors, and through comment letters and consultation responses that we submit to policy makers. We believe in the value of open dialogue and transparency on these important issues; our position papers and letters are available on the “News & Insights—“Insights – Public Policy”Policy” section of our website.
Governance of Public Policy Engagement
BlackRock believes that responsible corporate citizenship requires active engagement in legislative and regulatory processes. Our engagement with policy makers and advocacy on public policy issues is coordinated by our Government Relations andGlobal Public Policy team (“Public Policy team”).Group. Members of the Global Public Policy teamGroup work closely with the Company’sBlackRock’s business and legal teams to identify legislative and regulatory priorities, both regionally and globally, that will protect investors, increase shareholder value and facilitate responsible economic growth.
30BLACKROCK, INC. 2017 PROXY STATEMENT
The head of the Global Public Policy teamGroup is a member of the Company’sBlackRock’s Global Executive and Operating Committees and regularly briefs these committees on our public policy priorities and related advocacy efforts. In addition,BlackRock’s Chief Legal Officer and the head of the Global Public Policy also attends the meetings ofGroup regularly brief both the Board’s Risk Committee and keepsGovernance Committees to keep directors apprised of, and engaged in, the Company’sBlackRock’s legislative and regulatory priorities and advocacy initiatives. The Global Public Policy teamGroup and executive leadership regularly meet with and exchange views on legislation and regulatory priorities with public officials and policy makers, regionally and globally, and provide such individuals with educational materials to help inform their decisions.
Trade Associations
As part of the Company’sBlackRock’s engagement in the public policy process, BlackRock participates in a number of trade organizationsassociations that advocate for and shape public policy positions that are important to the asset management industry groups. The principal trade associationand the global business community. Trade associations also provide educational, training and professional networking opportunities for their members. BlackRock participates in these associations for such opportunities and to help build consensus on issues that we belong to is the Investment Company Institute. We also actively participatebelieve will serve investors, increase shareholder value and facilitate responsible economic growth. Our membership and participation in the Asset Management Group of the Securities Industry and Financial Markets Association, the European Fund and Asset Management Association and the Investment Association. The Company makes payments to these organizations including membership fees and/or dues. However, BlackRock doesis not controlan endorsement of all the activities and positions of these entities and may not always be aware of the entities’ activities. We recognize that these organizations and groups represent numerous other companies andorganizations. Accordingly, there may be instances where their positions on certain issues diverge from those of BlackRock.
BLACKROCK, INC. 2020 PROXY STATEMENT 39
Corporate Governance | Corporate Governance Practices and Policies
As an asset manager, BlackRock focuses on issues that impact the asset management industry and the clients for whom we act as agent in managing assets. In general, BlackRock’s efforts are focused at the national or regional level, rather than at a state-specific level.
Political Participation
Our ability to engage policy makers and participate in the public policy arena is subject to extensive laws and regulations at the international, federal, state and local levels. Under United States federal law, BlackRock may not contribute corporate funds or makein-kind contributions to candidates for federal office or to national party committees. In addition to federal limits on corporate political action, our political contributions at the state and local level in the United States are governed by Municipal Securities Rulemaking Board RuleG-37, SEC Rule206(4)-5 of the Investment Advisers Act of 1940 and CFTC Rule 23.451, as well as applicable state and local law. Accordingly, BlackRock does not contribute corporate funds to candidates, political party committees, political action committees or any political organization exempt from federal income taxes under Section 527 of the Internal Revenue Code. Although permitted under federal law, BlackRock has also voluntarily elected not to spend corporate funds directly on independent expenditures, including electioneering communications. In addition, BlackRockcommunications, and does not currently engage in state-level“grassroots lobbying” or support or oppose ballot initiatives. Information about BlackRock’s lobbying on asset management industry issues. Allactivities, including contributions required to be disclosed under the Lobbying Disclosure Act, areis publicly available at http://lobbyingdisclosure.house.gov.www.senate.gov/legislative/lobbying.
BlackRock maintains a federal political action committee (“PAC”)PAC that is funded in accordance with applicable federal law on a voluntary basis by U.S.-based employees of the Company. The PAC makes contributions at the federal level on abi-partisan basis consistent with the Company’s contribution policies and public policy goals and without regard to the private political preferences of management. As required by law, all political contributions by the PAC are reported to the Federal Election Commission and are publicly disclosed at www.fec.gov.
BlackRock maintains compliance processes designed to ensure that its activities are conducted in accordance with this policyour Public Policy Engagement and Political Participation Policies and all relevant laws governing political contributions in the United States. All employees are required to annually review and acknowledge their compliance responsibilities regarding political contributions and must submit all of their proposed personal political contributions to our Legal and Compliance Department to determine if such contributions are consistent with applicable legal restrictions.
BLACKROCK, INC. 2017 PROXY STATEMENT 31
Shareholder Engagement and Outreach
Our Shareholder Engagement Process
We conduct shareholder outreach throughout the year to engage with shareholders on issues that are important to them. We report back to our Board on this engagement as well as specific issues that need to be addressed.
ENGAGEMENT Executive management, Investor Relations and the Corporate Secretary engage on a regular basis with shareholders to solicit feedback on a variety of corporate governance matters, including but not limited to executive compensation, corporate governance policies and corporate sustainability practices. Our directors have also engaged directly with shareholders during the last two years. COMMUNICATION BlackRock also routinely interacts and communicates with shareholders through a number of other forums, including quarterly earnings presentations, SEC filings, the Annual Report and Proxy Statement, the annual shareholder meeting, investor meetings and conferences and web communications. FEEDBACK We share our shareholder feedback and trends and developments about corporate governance matters with our Board and its Committees as we seek to enhance our governance and sustainability practices and improve our disclosures. + +
Also see “Compensation Discussion and Analysis”Analysis” beginning on page 4756 for a discussion of our compensation related shareholder engagement initiatives and our historicalsay-on-pay vote results.results.
40BLACKROCK, INC. 2020 PROXY STATEMENT
Corporate Governance | Communications with the Board
Shareholders and other interested parties may contact any member (or all members) of the Board, any Board Committee or any ChairpersonChair of any such Committee by mail or electronically. To do so, correspondence should be addressed to the Board or any individual director or group or committee of directors by either name or title.
Correspondence may be sent by:
|
Mail:
BlackRock, Inc. Attn: Board of Directors c/o Corporate
New York, New York |
|
Online:
Go to the BlackRock website atwww.blackrock.com. Under the headings“Our | |||||
BlackRock’s Corporate Communications, Investor Relations and Legal and Compliance Departments and the Corporate Secretary will review all communications received for the sole purpose of determiningto determine whether the contents represent a message toor matter for our directors.directors’ review. Requests for a meeting with any member of the Board will also be reviewed accordingly and, if appropriate, arranged by Investor Relations and the Corporate Secretary. Concerns relating to accounting, internal controls or auditing matters are brought to the attention of the Chairperson of the Audit Committee and handled in accordance with procedures established byfor reporting certain matters to the Audit Committee.
Shareholders are encouraged to visit the “Our Firm“Governance / Investor Relations / CompanyGovernance Overview & Governance”” page of the BlackRock website atwww.blackrock.comhttp://ir.blackrock.com to see the Corporate Governance Guidelines, Code of Business Conduct and Ethics, Code of Ethics for Chief Executive and Senior Financial Officers and additional information about BlackRock’s Board and its Committees and corporate governance policies.
The charters for each of the Audit Committee, the MDCC,Compensation Committee, the Governance Committee, the Risk Committee and the Executive Committee can be found at the same website address. In addition, BlackRock intends to satisfy any disclosure requirements regarding any amendment to, or waiver from, a provision of the Code of Ethics for Chief Executive and Senior Financial Officers by posting such information on its corporate website.
BlackRock will provide a copy of these documents without charge to each shareholder upon written request. Requests for copies should be addressed to the Corporate Secretary, BlackRock, Inc., 5540 East 52nd Street, New York, New York 10055.
10022.
32BLACKROCK, INC. 2017 PROXY STATEMENT
20162019 Director Compensation
Directors receive compensation, including feesretainers and reimbursements of expenses, for their service and dedication to our Company. We recognize the substantial time and effort required to serve as a director of a large global investment firm. The goal of our director compensation program is to help attract, motivate and retain directors capable of making significant contributions to the long-term success of our Company. In order to align the interest of our directors with the interests of our shareholders, our independent directors are required to own and maintain a minimum target number of shares, having a value equivalent to five times their annual board retainer.as described below.
The MDCCCompensation Committee is responsible for reviewing director compensation periodically and making recommendations to the Board. The MDCC reviews the Board’s compensation levels semi-annually. The MDCCCompensation Committee also reviews the Boarddirector compensation practices of peer corporations. For more information on these peer groups, please refer to “Role“Role of the Compensation Consultant and Competitive Benchmarking”Consultant” on page 57.67.
HOW OUR DIRECTOR COMPENSATION PROGRAM ALIGNS WITH LONG-TERM SHAREHOLDER INTERESTSHow Our Director Compensation Program Aligns with Long-Term Shareholder Interests
BLACKROCK, INC. 20172020 PROXY STATEMENT 3341
Corporate Governance | 2019 Director Compensation |
In 2018, the Compensation Committee engaged its independent compensation consulting firm, Semler Brossy, to conduct a competitive market study of our director compensation program. Based on the study’s findings, and in light of increasing demands and engagement from our Board, the Compensation Committee determined that it was appropriate to simplify and modify our director compensation program effective as of the 2018 Annual Meeting of Shareholders. The Compensation Committee determined that the modifications made in 2018 to total director compensation preserve our program’s emphasis on deferred equity compensation, which aligns the interests of our directors with the performance of the firm in addition to promoting long-term shareholder interests, and that no changes to our director compensation program were necessary for 2019.
20162019 Elements of Director Compensation
For services provided in 2019, each independent director received an annual retainer paid quarterly in arrears at an annualized rate of $85,000, as well as Committee annual retainers paid quarterly in arrears at the following annualized rates: $40,000 for Chair, and $25,000 for members of, the Audit Committee; and $30,000 for Chairs, and $15,000 for members of, the Compensation, Governance and Risk Committees. Our Lead Independent Director received an additional annual retainer paid quarterly in arrears at an annualized rate of $100,000. In addition, each independent director had the right to elect to receive BlackRock common stock valued at an equivalent fair market value in lieu of all or a portion of his or her annual retainer and Committee annual retainers.
In addition, each independent director received an annual equity grant, awarded in deferred stock units valued at $240,000 and granted on the last business day of the first quarter of 2019. These deferred stock units are fully vested on the date of grant and are generally settled in shares of BlackRock common stock on the earlier of the third anniversary of the date of grant and the date the director ceases to be a member of the Board. Directors also have a right to elect, no later than December of the prior calendar year, to receive their annual retainers in the form of deferred stock units that are fully vested on the date of grant, and to elect for such deferred stock units, as well as deferred stock units granted as part of the annual equity grant, to be settled in shares of BlackRock common stock in a lump sum on the date the director ceases to be a member of the Board or in five equal installments beginning on the date the director ceases to be a member of the Board and continuing on each of the next four anniversaries of such date.
The following table shows the elements of director compensation provided by BlackRock for services in 2016. For 2016, each independent director received a Board Annual Retainer of $75,000 plus meeting fees of $1,500, paid quarterly in January, April, July, and October, based on service during the prior quarter. At least $25,000 of the annual retainer, or a pro rata portion thereof in the event that a director’s service is less than a full year, is paid in the form of BlackRock common stock. Each director who received compensation had the right to elect to receive BlackRock common stock in lieu of all or a portion of his or her annual Board and Committee retainers in excess of $25,000.
In addition, deferred stock units valued at $150,000 were granted on the last business day of the first quarter of 2016. These deferred stock units vest immediately and are settled in shares of BlackRock common stock on the last day of the month in which the third anniversary of the date of grant occurs. Deferred stock units have no voting rights. Dividend equivalents accrue and are paid in the form of cash. Additional cash compensation was paid for certain committees and other services, as described below.2019.
Director Compensation Element | Payment or Value of Equity | |||||||
Board Service(1) |
| |||||||
Annual Retainer(1) | $ 75,000 (at least $25,000 in common stock) | |||||||
Annual Equity Grant(2) | $ 150,000 Deferred Stock Units | |||||||
Board Meeting Fees(1) | $ 1,500 | |||||||
Lead Independent Director | $ 40,000 | |||||||
Committee Service | ||||||||
Committee Annual Retainers(1) | Chair | Member | ||||||
Audit | $ 30,000 | $ 15,000 | ||||||
MDCC | $ 20,000 | $ 10,000 | ||||||
Nominating and Governance | $ 15,000 | $ 5,000 | ||||||
Risk | $ 15,000 | $ 5,000 | ||||||
Committee Meeting Fees(1) | $ 1,000 | $ 1,000 | ||||||
Director Compensation Element
| Payment or Value of Equity
| |||||||||
Board Service(1) |
Board Service Annual Payments Cash/Equity
| |||||||||
Annual Retainer(2) | $ 85,000 | |||||||||
Annual Equity Grant(3) | $240,000 | deferred stock units | ||||||||
Lead Independent Director
|
|
$100,000
|
| |||||||
Committee Service(2) | ||||||||||
Committee Annual Retainers | Chair | Member | ||||||||
Audit Committee | $ 40,000 | $ 25,000 | ||||||||
Compensation Committee | $ 30,000 | $ 15,000 | ||||||||
Governance Committee | $ 30,000 | $ 15,000 | ||||||||
Risk Committee | $ 30,000 | $ 15,000 | ||||||||
| (1) | Directors have the right to elect to receive their annual retainers in the form of BlackRock common stock. Directors also have a right to elect, no later than December of the prior calendar year, to receive their annual retainers in the form of deferred stock units that are fully vested on the date of grant, and to elect for such deferred stock units, as well as deferred stock units granted as part of the annual equity grant, to be settled in shares of BlackRock common stock in a lump sum on the date the director ceases to be a member of the Board |
| (2) | Retainers |
Annual award granted on the last business day of the first quarter of each year to all directors serving on that date and delivered on the earlier of (i) the third anniversary of the date of grant and (ii) the date |
3442 BLACKROCK, INC. 20172020 PROXY STATEMENT
Corporate Governance | 2019 Director Compensation |
20162019 Total Director Compensation
Directors in 20162019 who were also employees of BlackRock or designees of PNCPNC’s designee are not listed in the table below because they did not receive compensation for serving as directors or committeeCommittee members. In 2016,2019, directors who were not employees of BlackRock or designees of PNC each received the amounts detailed in the tableset forth below and were also reimbursed for reasonable travel and related expenses. Each director who received compensation receivedhad the right to elect to receive BlackRock common stock valued at least $25,000an equivalent fair market value in lieu of all or a portion of his or her annual retainer, or a pro rata portion in the event that a director’s service is less than a full year, in the form of BlackRock common stock.retainers. In addition, each director who received compensation had the right to elect to receive their annual retainers in the form of deferred stock units, and to elect for such deferred stock units, as well as deferred stock units granted as part of the annual equity grant, to be settled in shares of BlackRock common stock in lieua lump sum on the date the director ceases to be a member of allthe Board or in five equal installments beginning on the date the director ceases to be a portionmember of his or her annualthe Board and Committee retainers in excesscontinuing on each of $25,000.the next four anniversaries of such date.
20162019 Total Director Compensation Table
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | Total ($) |
Fees Earned or
| Stock Awards
| Total ($)
| ||||||||||||||||||
Abdlatif Y.Al-Hamad | 80,500 | 175,000 | 255,500 | |||||||||||||||||||||
Bader M. Alsaad(3) |
| 70,607 |
|
| 0 |
|
| 70,607 |
| |||||||||||||||
Mathis Cabiallavetta | 113,000 | 175,000 | 288,000 |
| 124,223 |
|
| 239,755 |
|
| 363,978 |
| ||||||||||||
Pamela Daley | 106,000 | 175,000 | 281,000 |
| 138,791 |
|
| 239,755 |
|
| 378,546 |
| ||||||||||||
Jessica P. Einhorn | 71,500 | 175,000 | 246,500 |
| 115,361 |
|
| 239,755 |
|
| 355,116 |
| ||||||||||||
William E. Ford |
| 124,534 |
|
| 239,755 |
|
| 364,289 |
| |||||||||||||||
Fabrizio Freda | 70,000 | 175,000 | 245,000 |
| 99,249 |
|
| 239,755 |
|
| 339,004 |
| ||||||||||||
Murry S. Gerber | 126,000 | 175,000 | 301,000 |
| 225,000 |
|
| 239,755 |
|
| 464,755 |
| ||||||||||||
James Grosfeld | 89,000 | 175,000 | 264,000 | |||||||||||||||||||||
David H. Komansky | 80,000 | 175,000 | 255,000 | |||||||||||||||||||||
Sir Deryck Maughan | 119,250 | 175,000 | 294,250 | |||||||||||||||||||||
Margaret L. Johnson |
| 124,223 |
|
| 239,755 |
|
| 363,978 |
| |||||||||||||||
Sir Deryck Maughan(4) |
| 70,223 |
|
| 239,755 |
|
| 309,978 |
| |||||||||||||||
Cheryl D. Mills | 78,500 | 175,000 | 253,500 |
| 114,436 |
|
| 239,755 |
|
| 354,191 |
| ||||||||||||
Gordon M. Nixon | 87,500 | 175,000 | 262,500 |
| 129,121 |
|
| 239,755 |
|
| 368,876 |
| ||||||||||||
Thomas H. O’Brien | 137,000 | 175,000 | 312,000 | |||||||||||||||||||||
Charles H. Robbins |
| 99,249 |
|
| 239,755 |
|
| 339,004 |
| |||||||||||||||
Ivan G. Seidenberg | 107,500 | 175,000 | 282,500 |
| 129,121 |
|
| 239,755 |
|
| 368,876 |
| ||||||||||||
Marco Antonio Slim Domit | 89,000 | 175,000 | 264,000 |
| 123,936 |
|
| 239,755 |
|
| 363,691 |
| ||||||||||||
John S. Varley | 91,000 | 175,000 | 266,000 | |||||||||||||||||||||
Susan L. Wagner | 69,000 | 175,000 | 244,000 |
| 136,893 |
|
| 239,755 |
|
| 376,648 |
| ||||||||||||
Mark Wilson |
| 98,833 |
|
| 239,755 |
|
| 338,588 |
| |||||||||||||||
| (1) | Includes |
| (2) | Includes the annual |
| (3) | Mr. Alsaad joined the |
Changes for 2017
During 2016, based on the MDCC’s recommendation, the full Board voted to:
| (4) | Sir Deryck retired from the Board effective May 23, 2019. |
BLACKROCK, INC. 20172020 PROXY STATEMENT 3543
Corporate Governance | Other Executive Officers |
In addition to Messrs. Fink and Kapito, whose biographical information is included on pages 1416 and 1619, respectively, the following is a list of individuals serving as executive officers of BlackRock as of the date of this Proxy Statement, each of whom also serves on BlackRock’s GEC. All of BlackRock’s executive officers serve at the discretion of the Board or Chief Executive Officer.and CEO.
age |
Senior Managing Director, has been Head of Asia Pacific since 2019. In this role, Ms. Buckingham is responsible for all business activities in the |
|
|
Robert L. Goldstein age |
Senior Managing Director, has been Chief Operating Officer |
J. Richard Kushel age |
Senior Managing Director, has been |
age |
Senior Managing Director, has been Head of EMEA since 2017. Ms. Lord also chairs the | |
Mark S. McCombe age 54 | Senior Managing Director, has been Chief Client Officer since 2019. Previously, he served as Head of Americas from 2017 to 2019, Global Head and Chairman of BlackRock Alternative Investors 2012. |
Christopher J. Meade age |
Senior Managing Director, has been Chief Legal Officer of BlackRock since 2016 and General Counsel since 2015. Before joining BlackRock in 2015, Mr. Meade was the General Counsel of the U.S. Department of the Treasury. Previously, |
36BLACKROCK, INC. 2017 PROXY STATEMENT
Gary S. Shedlin age |
Senior Managing Director, has been Chief Financial Officer of BlackRock since 2013. Prior to joining BlackRock, Mr. Shedlin was Vice Chairman, Investment Banking and a Managing Director in the Financial Institutions Group at Morgan Stanley from 2010 to 2013. Prior to that, Mr. Shedlin worked at Citigroup from 2004 to 2010, where he most recently served as Chairman of the Financial Institutions Group. Previously, Mr. Shedlin Group at Lazard Ltd. |
age | Senior Managing Director, has been Head of International and of Corporate Strategy since 2019. From 2011 to 2019, Mr. Wiedman served as Global | |
44BLACKROCK, INC. 2020 PROXY STATEMENT |
|
Common and Preferred
Stock
Common Stock
The following table includes certain information about the beneficial ownership of BlackRock’s voting securities as of March 31, 20172020, by: (i) each
Each person who is known by BlackRock to own beneficially more than 5% of any class of outstanding voting securities of BlackRock; (ii) each
Each of BlackRock’s directors and nominees; (iii) each
Each of the executive officers named in the 20162019 Summary Compensation Table; and (iv) all
All of BlackRock’s executive officers and directors as a group.
Except as otherwise noted, each individual exercises sole voting power or investment power over the shares of voting securities shown. The number of shares of voting securities shown in the following Security Ownership Table as beneficially owned by each director and executive officer is determined under the rules of the SEC. The information is not necessarily indicative of beneficial ownership for any other purpose. For purposes of the Security Ownership Table, beneficial ownership includes any shares of voting securities as to which the individual has sole or shared voting power or investment power and also any shares of common stock which the individual has the right to acquire within 60 days of March 31, 2017,2020, through the exercise of any option, warrant or right. All fractional shares have been rounded to the nearest whole number.
BLACKROCK, INC. 20172020 PROXY STATEMENT 3745
Ownership of BlackRock Common and Preferred Stock | Common Stock |
As of March 31, 2017,2020, there were 161,798,937154,262,618 shares of BlackRock’s common stock outstanding.
| Amount of beneficial ownership of common stock(1) | Percent of common stock outstanding | |||||||
The PNC Financial Services Group, Inc. and affiliates(2) | 34,582,105 | 21.37 | % | |||||
One PNC Plaza | ||||||||
249 Fifth Avenue | ||||||||
Pittsburgh, PA 15222 | ||||||||
Norges Bank (The Central Bank of Norway)(3) | 8,552,813 | 5.28 | % | |||||
Bankplassen 2 | ||||||||
PO Box 1179 Sentrum | ||||||||
NO 0107 Oslo, Norway | ||||||||
| Abdlatif YousefAl-Hamad | 4,767 | * | ||||||
| Mathis Cabiallavetta(4) | 5,092 | * | ||||||
| Pamela Daley | 1,607 | * | ||||||
| William S. Demchak | 1,200 | * | ||||||
| Jessica P. Einhorn | 1,452 | * | ||||||
| Laurence D. Fink | 1,041,711 | * | ||||||
| Fabrizio Freda | 2,442 | * | ||||||
| Murry S. Gerber | 38,686 | * | ||||||
| Robert L. Goldstein | 29,048 | * | ||||||
| James Grosfeld | 513,780 | * | ||||||
| Robert S. Kapito | 411,144 | * | ||||||
| David H. Komansky | 9,115 | * | ||||||
| J. Richard Kushel(4) | 158,700 | * | ||||||
| Sir Deryck Maughan | 9,921 | * | ||||||
| Cheryl D. Mills | 1,124 | * | ||||||
| Gordon M. Nixon | 252 | * | ||||||
| Thomas H. O’Brien(4) | 15,072 | * | ||||||
| Charles H. Robbins | — | * | ||||||
| Ivan G. Seidenberg | 11,330 | * | ||||||
| Gary S. Shedlin | 9,123 | * | ||||||
| Marco Antonio Slim Domit | 2,538 | * | ||||||
| John S. Varley | 1,846 | * | ||||||
| Susan L. Wagner(4) | 494,629 | * | ||||||
| All directors and executive officers as a group (28 persons)(4) | 3,005,160 | 1.86 | % | |||||
Amount of beneficial ownership
| Percent of common stock
| Deferred/ Restricted Stock Units(2)
| Total
| |||||||||||||
The PNC Financial Services Group, Inc. and affiliates |
| 34,042,326 | (3) | 21.94 | % | – |
| 34,042,326 | (3) | |||||||
One PNC Plaza 249 Fifth Avenue Pittsburgh, PA 15222 | ||||||||||||||||
The Vanguard Group, Inc. |
| 8,998,815 | (4) | 5.82 | % | – |
| 8,998,815 | (4) | |||||||
100 Vanguard Blvd. Malvern, PA 19355 | ||||||||||||||||
Bader M. Alsaad | 48 | * | 0 | 48 | ||||||||||||
Mathis Cabiallavetta(5) | 6,674 | * | 884 | 7,558 | ||||||||||||
Pamela Daley | 3,823 | * | 884 | 4,707 | ||||||||||||
William S. Demchak | 1,200 | * | 0 | 1,200 | ||||||||||||
Jessica P. Einhorn | 2,868 | * | 884 | 3,752 | ||||||||||||
Laurence D. Fink | 819,439 | * | 17,578 | 837,017 | ||||||||||||
William E. Ford | 9,565 | * | 884 | 10,449 | ||||||||||||
Fabrizio Freda | 4,384 | * | 884 | 5,268 | ||||||||||||
Murry S. Gerber | 40,057 | * | 884 | 40,941 | ||||||||||||
Robert L. Goldstein | 33,491 | * | 8,367 | 41,858 | ||||||||||||
Margaret L. Johnson | 186 | * | 884 | 1,070 | ||||||||||||
Robert S. Kapito(5) | 384,760 | * | 14,314 | 399,074 | ||||||||||||
J. Richard Kushel(5) | 155,881 | * | 7,157 | 163,038 | ||||||||||||
Cheryl D. Mills | 2,887 | * | 884 | 3,771 | ||||||||||||
Gordon M. Nixon | 1,193 | * | 884 | 2,077 | ||||||||||||
Charles H. Robbins | 630 | * | 884 | 1,514 | ||||||||||||
Ivan G. Seidenberg | 13,550 | * | 884 | 14,434 | ||||||||||||
Gary S. Shedlin | 10,525 | * | 6,366 | 16,891 | ||||||||||||
Marco Antonio Slim Domit | 3,958 | * | 884 | 4,842 | ||||||||||||
Susan L. Wagner | 476,220 | * | 884 | 477,104 | ||||||||||||
Mark Wilson | 104 | * | 884 | 988 | ||||||||||||
All directors and executive officers as a group (27 persons)(5) | 2,025,321 | 1.31 | % | 91,963 | 2,117,284 | |||||||||||
| * | The number of shares of common stock held by such individual is less than 1.0% of the outstanding shares of common stock. |
| (1) | Does not include |
| (2) | Does not include BPIP Awards. |
| (3) | Based on the Schedule 13G of The PNC Financial Services Group, Inc. and affiliates filed on February |
Based on the Schedule 13G of |
Includes shares of BlackRock common stock held jointly, indirectly and/or in trust (other than shares the beneficial ownership of which has been disclaimed). |
38BLACKROCK, INC. 2017 PROXY STATEMENT
Preferred Stock
As of March 31, 2017,2020, there were 823,188 shares of BlackRock’s Series Bnon-voting convertible participating preferred stock issued and outstanding, which has a liquidation preference of $0.01 per share (the “Series B Preferred Stock”), and 246,522 shares of BlackRock’s Series Cnon-voting convertible participating preferred stock issued and outstanding, which has a liquidation preference of $40.00 per share (the “Series C Preferred Stock”). As of March 31, 2017,2020, PNC owned all issued and outstanding shares of our Series B Preferred Stock and Series C Preferred Stock.
46BLACKROCK, INC. 2020 PROXY STATEMENT
Delinquent Section 16(a) BeneficialReports
Ownership Reporting
Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires our directors, Section 16 officers and persons who own more than 10% of a registered class of BlackRock’s equity securities to file reports of holdings of, and transactions in, BlackRock shares with the SEC and the NYSE. To the best of BlackRock’s knowledge, based solely on copies of such reports and representations from these reporting persons, we believe that in 2016,2019, our directors, Section 16 officers and 10% holders met all applicable SEC filing requirements, except for one late Form 4 filing made on behalf of Mr. ShedlinCheryl D. Mills reporting a transaction on December 22, 2016,31, 2019 due to an administrative error.a technical error that occurred when the Company attempted to timely file the Form 4 report.
BLACKROCK, INC. 20172020 PROXY STATEMENT 3947
Related Transactions
As of March 31, 2017,2020, PNC beneficially owned approximately 21.2%22.0% of BlackRock’s common stock outstanding and 21.7%22.4% of BlackRock’s capital stock, which includes outstanding common stock and nonvotingnon-voting preferred stock.
William S. Demchak, Chairman, President and Chief Executive Officer of PNC, serves as a director of BlackRock. Although PNC has a right to, and reserves the right to do so under the PNC Stockholder Agreement, PNC has elected not to appoint a second director to the Board at this time. In addition, PNC has been permitted to invite anon-voting observer to attend Board meetings. Gregory B. Jordan, General Counsel & Head of Regulatory and Governmental AffairsChief Administrative Officer of PNC, is the PNC observer.
BlackRock provides investment advisory and administration services to certain PNC subsidiaries and separate accounts for a fee based on assets under management. The amount of investment advisory and administration fees earned from PNC and its affiliates in relation to these services in 20162019 totaled $3.4$1.9 million.
BlackRock provides risk management advisory and technology services to PNC’s corporate and line of business asset/liability management committees, for which it received an annual fee of $6.8$8.5 million for 2016.2019. BlackRock also recorded revenue of $2.7$2.8 million related tonon-discretionary trading services.
BlackRock incurred expenses of $1.9$2.1 million to PNC affiliates in 20162019 for service fees related to certain retail and institutional clients.
Transactions between BlackRock Funds and Client Accounts and PNC and its Subsidiaries
From time to time in the ordinary course of our business, acting predominantly as agent for its clients, BlackRock effects transactions in securities and other financial assets with PNC and its subsidiaries. The amount of compensation or other value received by PNC in connection with those transactions is dependent on the capacity in which it participates in each of them, as principal or agent for other principals, and the type of security or financial asset involved. PNC may also act as the underwriter of securities purchased by BlackRock-managed funds and accounts. We principally engage in fixed income transactions with PNC. PNC (including its subsidiaries) was among one of BlackRock’s many fixed income trading counterparties in 2016.2019. Fixed income transactions are typically not traded on a commission basis and, accordingly, the amounts earned by PNC and its subsidiaries on such transactions cannot be determined.
PNC may, from time to time in the ordinary course of business, make loans to funds or separately managed accounts or commit to make future loans on substantially the same terms as those prevailing at the time for comparable loans to third parties and may enter into caps, hedges or swaps in connection with these loans. BlackRock may be an investor in orco-investor alongside these funds and accounts. BlackRock products and client accounts also enter into a variety of other arrangements with PNC and its subsidiaries on an arm’s length basis in the ordinary course of business. Such arrangements include, but are not limited to, serving as custodian or transfer agent or providing principal protection warranties as well as book value protection andco-administration,sub-administration, fund accounting, networking, leases of office space to PNC or its subsidiaries, bank account arrangements, derivative transactions, letters of credit, securities lending, loan servicing and other administrative services for BlackRock-managed funds and accounts. In certain instances, the fees that may be incurred by BlackRock funds or other products are capped at a fixed amount. In these cases, BlackRock may be responsible for payment of fees incurred in excess of these caps and amounts would be reflected in the fees for administrative services described above. Additionally, PNC or its subsidiaries or affiliates may invest in BlackRock funds or other products or buy or sell assets to or from BlackRock funds and separate accounts.
4048 BLACKROCK, INC. 20172020 PROXY STATEMENT
Certain Relationships and Related Transactions | PNC and its Subsidiaries |
PNC Stockholder Agreement with PNC
BlackRock is a party to the PNC Stockholder Agreement, which governs PNC’s ownership interests in and relationship with BlackRock. BlackRock and PNC are also parties to a registration rights agreement. The following table describes certain key provisions of the PNC Stockholder Agreement as amended and restated.
Share Ownership | The PNC Stockholder Agreement provides for a limit on the percentage of BlackRock capital stock that may be owned by PNC at any time
In addition, PNC may not acquire any shares of BlackRock from any person other than BlackRock or a person that owns 20% or more of the total voting power of the capital stock of BlackRock (other than itself) if, after such acquisition, it would hold capital stock of BlackRock representing more than 90% of the PNC voting ownership cap. | |
Prohibited
Actions | PNC is prohibited from taking part in, soliciting, negotiating with, providing information to or making any statement or proposal to any person, or making any public announcement, with respect to:
•
•
•
•
•
•
•
•
• | |
Additional
of Voting Securities | The PNC Stockholder Agreement gives PNC the right, in any issuance of BlackRock voting stock, (1) to purchase an amount of such stock or, at PNC’s option, Series B Preferred Stock, upon such issuance that would result in PNC holding the lesser of (a) the PNC ownership cap or (b) an ownership percentage in BlackRock equal to what it held prior to the issuance and (2) if as a result of such stock issuance PNC’s beneficial ownership of the total voting power of BlackRock capital stock decreases to less than 38%, to exchange such number of shares of Series B Preferred Stock for shares of common stock on aone-for-one basis such that following the stock issuance, PNC will beneficially own shares of voting securities representing not more than 38% of the total voting power of BlackRock capital stock, unless such issuance constitutes a public offering and would not, together with any stock issuance constituting a public offering since September 29, 2006, after taking into account any share repurchases by BlackRock since September 29, 2006 and transfers by PNC, decrease PNC’s total voting power to 90% or less of the PNC ownership cap. |
BLACKROCK, INC. 2017 PROXY STATEMENT 41
Share Repurchase | If BlackRock engages in a share repurchase, BlackRock may require PNC to sell an amount of securities to BlackRock that will cause its beneficial ownership of BlackRock capital stock not to exceed its total ownership cap or voting ownership cap. | |
BLACKROCK, INC. 2020 PROXY STATEMENT 49
Certain Relationships and Related Transactions | PNC and its Subsidiaries
Transfer
| PNC may not transfer any capital stock of BlackRock beneficially owned by it, except for transfers to its respective affiliates and transfers in certain other specified categories of transactions, | |
Right of Last Refusal | PNC must notify BlackRock if it proposes to sell shares of BlackRock capital stock in a privately negotiated transaction. Upon receipt of such notice, BlackRock will have the right to purchase all of the stock being offered, at the price and terms described in the notice. These notification requirements and purchase rights do not apply in the case oftax-free transfers to charitable organizations or foundations andtax-deferred transfers. | |
Corporate
| Board Designation: The PNC Stockholder Agreement provides that BlackRock will use its best efforts to cause the election at each annual meeting of
•
•
•
Of the current directors, William S. Demchak was designated by PNC. PNC has elected not to appoint a second director to the Board at this time, though it reserves the right to do so. In addition, PNC has been permitted to invite anon-voting observer to attend Board meetings. Gregory B. Jordan, General Counsel &
Voting Agreement:PNC has agreed to vote all of its voting shares in accordance with the recommendation of the Board on all matters to the extent consistent with the provisions of the PNC Stockholder Agreement, including the election of directors.
Approvals: Under the PNC Stockholder Agreement, the following may not be done without prior approval of all of the independent directors, or at leasttwo-thirds of the directors, then in office:
•
•
•
•
|
42BLACKROCK, INC. 2017 PROXY STATEMENT
• | ||
50BLACKROCK, INC. 2020 PROXY STATEMENT
Certain Relationships and Related Transactions | PNC and its Subsidiaries
•
•
•
Committees: Consistent with applicable laws, rules and regulations, the Audit Committee, the | ||
Significant
| The PNC Stockholder Agreement prohibits BlackRock or its affiliates from entering into any transaction with PNC or its affiliates, unless such transaction was in effect as of September 29, 2006, is in the ordinary course of business of BlackRock or has been approved by a majority of the directors of BlackRock, excluding those appointed by the party wishing to enter into the transaction. |
Termination of the PNC Stockholder Agreement
The PNC Stockholder Agreement will terminate on the first day on which PNC and its affiliates own less than 5% of the capital stock of BlackRock, unless PNC sends a notice indicating its intent to increase its beneficial ownership above such threshold within 10 business days after it has fallen below such threshold, and PNC buys sufficient capital stock of BlackRock within 20 business days after PNC has sent notice that it has fallen below 5% of BlackRock capital stock such that it continues to own greater than 5% of BlackRock capital stock.
Transactions with BlackRock Directors, Executive Officers and
Other Related Parties
From time to time, certain directors, their family members and related charitable foundations may have investments in various BlackRock investment vehicles or accounts. For certain types of products and services offered by BlackRock’s subsidiaries, BlackRock directors may receive discounts that are available to our employees generally. In addition, certain of the companies or affiliates of the companies that employ BlackRock’s independent directors may have investments in various BlackRock investment vehicles or accounts.accounts or may receive advisory, technology and risk management services. These investments and services are entered into in the ordinary course of business on substantially the same terms as those prevailing at the time for comparable transactions with similarly situated customers and eligible employees.
How We Review, Approve or Ratify Transactions with Related Persons
On February 27, 2007, the Board adopted a written policy regarding related person transactions, which governs and establishes procedures for approving and ratifying related person transactions.
The policy defines a related person transaction as any transaction or arrangement in which the amount involved exceeds $120,000, where BlackRock or any of its subsidiaries is a participant and a related person has a direct or indirect material interest. For purposes of the policy, a “related person” is any person who is, or was during the last fiscal year, a BlackRock director or executive officer, or a director nominee, or any person who is a beneficial owner of more than 5% of any class of BlackRock’s voting securities, or any immediate family member of any of the foregoing persons.
BLACKROCK, INC. 2017 PROXY STATEMENT 43
Related person transactions must be approved or ratified by a majority of the uninterested members of the Governance Committee or the Board. In the event it is not practicable for BlackRock to wait for approval until the next meeting of the Governance Committee or the Board, the Chairperson of the Governance Committee may approve the transaction. In reviewing any related person transaction, all of the relevant facts and circumstances must be considered, including:
The related person’s relationship to BlackRock and his or her interest in the transaction;
The benefits to BlackRock;
The impact on a director’s independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer;
The availability of comparable products or services that would avoid the need for a related person transaction; and
The terms of the transaction and the terms available to unrelated third parties or to employees generally.
BLACKROCK, INC. 2020 PROXY STATEMENT 51
Certain Relationships and Related Transactions | Transactions with BlackRock Directors, Executive Officers and Other Related Parties
PNC Approval Process
The policy provides that transactions (other than transactions in the ordinary course of business) with PNC are governed by the special approval procedures detailed in the PNC Stockholder Agreement. Those approval procedures prohibit BlackRock or its affiliates from entering into any transaction (other than any transaction in the ordinary course of business) with PNC or its affiliates unless such transaction was in effect as of September 29, 2006 or has been approved by a majority of the directors of BlackRock, excluding those designated for appointment by the party wishing to enter into the transaction. Of the current directors, William S. Demchak was designated by PNC.
Prior to the adoption of this policy, related person transactions, including certain of the transactions described above under “—“— PNC and its Subsidiaries” and “—“— PNC Stockholder Agreement with PNC”,” were reviewed with the Board at the time of entering into such transactions.
52BLACKROCK, INC. 2020 PROXY STATEMENT
and Compensation Committee
Committee Interlocks and Insider
Insider Participation
The members of the MDCCCompensation Committee during 20162019 were Ms.Mses. Einhorn, Johnson and Mills and Messrs. GerberFord, Nixon, Seidenberg (Chairperson), Komansky, Grosfeld, Maughan and Nixon.Slim. No member of the MDCCCompensation Committee was, during the fiscal year, an officer or employee, or formerly an officer or employee, involved in any related person transactions requiring disclosure in this Proxy Statement.
No executive officer of BlackRock served (i) as a membera:
Member of the Compensation Committee (or other Board committee performing equivalent functions or, in the absence of any such committee, the entire Board) of another entity, one of whose executive officers served on the MDCCCompensation Committee of BlackRock, (ii) as a directorBlackRock;
Director of another entity, one of whose executive officers served on the MDCCCompensation Committee of BlackRock,BlackRock; or (iii) as a member
Member of the Compensation Committee (or other Board committee performing equivalent functions or, in the absence of any such committee, the entire Board) of another entity, one of whose executive officers served as a director of BlackRock.
44BLACKROCK, INC. 20172020 PROXY STATEMENT53
Approval, in aNon-Binding
Non-BindingAdvisory Vote, of the Compensation
on Compensation for Named Executive Officers
We are asking our shareholders to approve the compensation of our named executive officers (“NEOs”)NEOs as disclosed in this Proxy Statement.
While this vote is advisory, and not binding on ourthe Company, it will provide information to our Board and the MDCCus regarding investor sentiment about our executive compensation philosophy, policies and practices. Our Board and the MDCCWe value the opinions of our shareholders and, to the extent there is any significant vote against the compensation of our NEOs as disclosed in this Proxy Statement, we will consider our shareholders’ concerns and the MDCCCompensation Committee will evaluate whether any actions are necessary to address those concerns.
Before You Vote
In considering your vote, we encourage shareholders to review the information on BlackRock’s compensation policies and decisions regarding theour NEOs presented in the discussion regarding the MDCCsummary of our executive compensation practices on page 46,77, as well as “Compensationour “Compensation Discussion and Analysis”Analysis” beginning on page 47.56.
Ourpay-for-performance compensation philosophy is structured to align management’s interests with
our shareholders’ interests. A significant portion of total compensation for executives is closely linked to BlackRock’s financial and operational performance as well as BlackRock’s common stock price performance. BlackRock has adopted strong governance practices for its employment and compensation programs. Compensation programs are reviewed annually to ensure that they do not promote excessive risk taking.
Board Recommendation
|
|
The Board of Directors Unanimously recommends you vote FOR the approval of the compensation of our NEOs.
54BLACKROCK, INC. 20172020 PROXY STATEMENT45
and Compensation Committee
Committee Report
Management Development and& Compensation Committee Report on Executive Compensation for Fiscal Year 20162019
The MDCCCompensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of RegulationS-K with management and has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
MEMBERS OF THE MANAGEMENT DEVELOPMENT AND& COMPENSATION COMMITTEE
Murry S. Gerber,Ivan G. Seidenberg, Chair
James GrosfeldJessica P. Einhorn
David H. KomanskyWilliam E. Ford
Sir Deryck MaughanMargaret L. Johnson
Cheryl D. Mills
Gordon M. Nixon
Marco Antonio Slim Domit
46
BLACKROCK, INC. 20172020 PROXY STATEMENT55
Compensation Discussion and Analysis
Introduction
BlackRock’s executive compensation program is designed to align management incentives with the long-term interests of our shareholders. Our total annual compensation structure embodies our commitment to align pay with performance. This Compensation Discussion and Analysis (“CD&A”) provides shareholders with information about BlackRock’s business and 20162019 financial performance, our disciplined compensation approach and 20162019 compensation decisions for our NEOs, listed below.
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Table of Contents
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BLACKROCK, INC. 2017 PROXY STATEMENT 47
Laurence D. Fink Chairman and Chief Executive Officer | Robert S. Kapito President | Robert L. Goldstein Chief Operating Officer | J. Richard Kushel Global Head of Multi-Asset Strategies and Global Fixed Income | Gary S. Shedlin Chief Financial Officer | ||||
Table of Contents
| 3. Compensation Determination Process | ||||
| Compensation Timeline and Process | 66 | |||
| Competitive Pay Positioning - Market Data | 67 | |||
| Role of the Compensation Consultant | 67 | |||
| Risk Assessment of Compensation Plans | 68 | |||
| 4. 2019 NEO Compensation and Performance Summaries | ||||
| Linking Pay and Performance | 69 | |||
| 5. Compensation Policies and Practices | ||||
| Summary of Executive Compensation Practices | 77 | |||
| Executive Compensation Tables | ||||
| 2019 Summary Compensation Table | 80 | |||
| CEO Pay Ratio for 2019 | 87 | |||
| Equity Compensation Plan Information | 88 | |||
56BLACKROCK, INC.2020 PROXY STATEMENT
Introduction1.
Introduction
Shareholder Engagement on Executive Compensation
Our Board recognizes the importance of executive compensation decisions to our shareholders. The annualsay-on-pay advisory vote provides our shareholders with the opportunity to:
Evaluate our executive compensation philosophy, policies and practices;
Evaluate the alignment of the compensation of BlackRock’s NEOs with BlackRock’s results; and
Cast an advisory vote to approve the compensation of BlackRock’s NEOs.
At the 20162019 Annual Meeting of Shareholders, thesay-on-pay advisory vote received majority support, with 91%approximately 96% of the votes cast in favor of our executive compensation.compensation policies, practices and determinations. Our Board encourages an open and constructive dialogue with shareholders on compensation to ensure alignment on policies and practices.
The MDCC considered shareholder input when it designed the CEO and President compensation framework as well as
the BlackRock Performance Incentive Plan (“BPIP”) awards and this year’s annual frequency of thesay-on-pay advisory vote.
As in prior years, we engagedinvite all shareholders into provide feedback to us on our compensation programs. In advance of this year’s annual meetingAnnual Meeting, we extended engagement requests to shareholders representing 43% of outstanding shares (excluding shares owned by PNC) to incorporate their views as we continue to enhance our compensation programs.
Shareholders who provided feedback generally reported that executive compensation at BlackRock was reasonable and well-aligned to performance. No consistent or prevalent concerns were raised from our engagements.
BlackRock Shareholder Value Framework
BlackRock is committed to delivering long-term shareholder value. While our financial results can at times, be affected by global capital market conditions that are beyond our control, management has the ability to influence key drivers of shareholder value.
As described below, BlackRock’s framework for long-term value creation is based on our ability to:
BlackRock’s commitment to delivering shareholder value is aligned with the way we manage our business. By putting clients’ interests first and delivering investment, solutions, risk managementportfolio construction and technology solutions to help them meet their objectives, we are able to buildgrow our business organically,by adding new assets under management (“AUM”) and growing
risk management andincreasing technology offerings,services revenue, resulting in turn,driving Organic Revenue growth.1(1).
ScaleBlackRock’s scale is one of the firm’s key strategic advantages and is an important driver ofoperating leverage that benefits our operating marginclients and clientsshareholders. We take advantage of scale in numerous areas of our business including through our index-based investment strategies, brand spend, and technology platform, including ourAladdin business.business, and our external vendor relationships.
BlackRock’sIn addition to leveraging our scale, investing for the long-term is a key element of our strategy. Our diversified platform, in terms of styles, products, client types and geographies, enables us to generategenerates more stable cash flowsflow through market cycles, positioning and positions BlackRock to firstconsistently invest for future growth while prudently managing discretionary expenses and then to return capital to our shareholders.For more details, refer to “Business“Business Outlook” on page 3235 of our 2016 2019Form10-K 10-K..
During 2016,2019,we returned $2.7$3.8 billion to our shareholdersthrough a combination of share repurchases and dividends.dividends.
Organic Revenue growth is a measure of the expected annual revenue impact of BlackRock’s total net new business in a given year, including net new |
48BLACKROCK, INC. 20172020 PROXY STATEMENT57
Organic Growth + Operating Leverage + Capital Management = EPS Growth
 |
Compensation Discussion and Analysis | BlackRock 2019 Performance
BlackRock 20162019 Performance1(1),(2)
BlackRock’s 20162019 results reflect the strength of our continued commitmentglobal, diverse investment and technology platform and the benefit of the investments we have made to optimize our strategic positioning. We generated a record $429 billion of total net inflows for the full year, representing 7% organic asset growth, of our diverse investment, technologydelivered revenue and risk management capabilitiesearnings growth and returned $3.8 billion to shareholders while continuing to invest for growth. However, BlackRock’s strategic decision to continue investing responsibly despite a more challenging revenue capture environment created by market volatility in the most efficient manner possible. Full-year results reflected industry-leading organic growth, continuedfourth quarter of 2018 resulted in an as adjusted operating margin expansion and consistent capital management. Investmentdecline of 60 basis points year-over-year. Long-term investment performance results across our activealpha-seeking and index strategies as of December 31, 20162019 remain strong and are includeddetailed in Part I, Item 1— Business of our 20162019 Form10-K.
Differentiated Organic Growth
OrganicBlackRock generated record organic asset growth of 4%7% in 2016 contributed2019
Continued Revenue Growth
BlackRock grew revenue 2% in 2019, including record technology services revenue growth2: of 24%
| • |
Consistent Capital Return
$2.7BlackRock returned $3.8 billion was returned to shareholders in 2016:2019
Operating Leverage
Operating income, as adjusted, was flat versus 2015. Continued margin expansion was driven by realizing the benefits of scale and expense discipline:
Earnings Per Share Growth
As adjustedBlackRock grew diluted earnings per share, (“EPS”) of $19.29 declined 2% versus 2015:as adjusted, by 6%, to $28.48, in 2019
Amounts in this section, where noted, are shown on an “as adjusted” basis. For a reconciliation with |
| (2) | Results for 2017 were recast to reflect the adoption of the new revenue recognition standard. For further information, refer to Note 2,Significant Accounting Policies, in the consolidated financial statements in our 2018 Form10-K. |
| (3) | Traditional LC Peers refers to Alliance Bernstein, Affiliated Managers Group, Franklin Resources, Eaton Vance, Invesco, Legg Mason and T. Rowe Price. |
58BLACKROCK, INC. 2020 PROXY STATEMENT
Compensation Discussion and Analysis | Our Compensation Framework
Our annual total compensation program for NEOs includes base salary, annual incentive awards (cash and deferred equity) and long-term performance-based incentive awards.
Pay and Performance Alignment for NEOs – Total Incentive Award Determination
Under the NEO total incentive award determination framework, the Compensation Committee assesses each NEO’s performance individually, based on the three categories outlined below. Each category is assigned a weighting factor, with 50% of the award opportunity dependent on BlackRock’s financial performance, 30% dependent on BlackRock’s business strengths and 20% dependent on BlackRock’s organizational strengths.
At the beginning of the year, the Compensation Committee and management engages in a rigorous review and approval of objectives for the CEO, President and other NEOs. The objectives reinforce BlackRock’s shareholder value framework and commitment to serving client needs holistically and through market cycles. Throughout the year, the Compensation Committee receives updates on the Company’s performance against these goals and objectives. At the end of the year, the Compensation Committee assesses each NEO’s performance against these objectives, while considering internal performance measures and peer group comparisons.
The Compensation Committee’s performance assessment directly impacts each NEO’s total incentive outcome, which includes all variable pay (annual discretionary cash award, annual discretionary deferred equity award and long-term equity awards). Based on the Compensation Committee’s performance assessment, total incentive awards can range from 0% to 125% of the prior year’s total incentive pay.
Once the total incentive award is determined, the Compensation Committee determines the appropriate mix between cash, deferred equity and long-term equity. For all NEOs, at least half of their total incentive award is delivered through equity. Additionally, for Messrs. Fink and Kapito, at least half of their equity awards are delivered through the BPIP Awards, which are contingent on future financial performance rather than time-based vesting.
Each NEO, through their various roles and responsibilities, contributes to the firm-wide objectives summarized below. For the NEO performance assessments, please refer to the section“2019 NEO Compensation and Performance Summaries”on page 69.
| (1) | For reconciliation with GAAP, please see Annex A. |
| (2) | Total incentive includes the NEO’s annual discretionary cash award, annual discretionary deferred equity award and long-term equity award. |
| (3) | 2019 total incentive compensation is calculated using 2018 total incentive outcome multiplied by performance incentive percentage. |
BLACKROCK, INC. 20172020 PROXY STATEMENT 4959
Compensation Discussion and Analysis | NEO Total Annual Compensation Summary
NEO Total Annual Compensation Summary
Following a review of full-year business and individual NEO performance, the Compensation Committee determined 2019 total annual compensation outcomes for each NEO, as outlined in the table below.
2019 Total Incentive Award
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Name
| Base Salary
| Cash
| Deferred Equity
|
Long-Term
| Total Annual
| % change in
| Performance Assessment
| |||||||||||||||||||||
Laurence D. Fink | $ | 1,500,000 |
| $ | 7,750,000 |
| $ | 4,250,000 |
| $ | 11,750,000 |
| $ | 25,250,000 |
|
| 5 | % |
| Meets/Exceeds |
| |||||||
Robert S. Kapito | $ | 1,250,000 |
| $ | 6,250,000 |
| $ | 3,500,000 |
| $ | 8,950,000 |
| $ | 19,950,000 |
|
| 5 | % |
| Meets/Exceeds |
| |||||||
Robert L. Goldstein | $ | 500,000 |
| $ | 2,950,000 |
| $ | 2,000,000 |
| $ | 4,400,000 |
| $ | 9,850,000 |
|
| 25 | % |
| Far Exceeds |
| |||||||
J. Richard Kushel | $ | 500,000 |
| $ | 2,612,500 | $ | 1,662,500 | $ | 2,900,000 | $ | 7,675,000 | 15 | % |
| Far Exceeds |
| ||||||||||||
Gary S. Shedlin | $ | 500,000 |
| $ | 2,475,000 |
| $ | 1,525,000 |
| $ | 2,700,000 |
| $ | 7,200,000 |
|
| 12 | % |
| Far Exceeds |
| |||||||
The amounts listed above as “2019 Total Incentive Award: Deferred Equity” and “2019 Total Incentive Award: Long-Term Incentive Award (BPIP)” were granted in January 2020 in the form of equity and are separate from the cash award amounts listed above as “2019 Total Incentive Award: Cash.” In conformance with SEC requirements, the2019 Summary Compensation Table on page 80 reports equity in the year granted, but cash in the year earned.
This table excludes awards under a newly-adopted carried interest program. For more information about the program, see “Leadership Retention Carry Plan” on page 65.
Pay-for-Performance Compensation Structure for NEOs
Our total annual compensation structure embodies our commitment to align pay with performance. More than 90% of our regular annual executive compensation is performance based and “at risk.” Compensation mix percentages shown below are based on 20162019year-end compensation decisions for individual NEOs by the MDCC.Compensation Committee.
All grants of BlackRock equity, |
The value of the |
For NEOs other than the CEO and President, higher annual incentive awards are subject to higher deferral percentages, in accordance with the Company-wide deferral policy, as detailed on page |
NEO Total Annual Compensation Summary
Following a review of full-year business and individual NEO performance, the MDCC determined 2016 total annual compensation outcomes for each NEO, as outlined in the table below.
| 2016 Annual Incentive Award | ||||||||||||||||||||||||
Name | Base Salary | Cash | Deferred Equity | Long-Term Incentive Award (“BPIP”) | Total Annual Compensation (“TAC”) | % change in TAC vs. 2015 | ||||||||||||||||||
Laurence D. Fink | $ | 900,000 | $ | 8,000,000 | $ | 4,150,000 | $ | 12,450,000 | $ | 25,500,000 | -2% | |||||||||||||
Robert S. Kapito | $ | 750,000 | $ | 6,500,000 | $ | 3,209,000 | $ | 9,626,000 | $ | 20,085,000 | 1% | |||||||||||||
Robert L. Goldstein | $ | 500,000 | $ | 2,850,000 | $ | 1,900,000 | $ | 2,100,000 | $ | 7,350,000 | 1% | |||||||||||||
J. Richard Kushel | $ | 500,000 | $ | 2,490,000 | $ | 1,540,000 | $ | 1,970,000 | $ | 6,500,000 | 1% | |||||||||||||
Gary S. Shedlin | $ | 500,000 | $ | 2,350,000 | $ | 1,400,000 | $ | 1,850,000 | $ | 6,100,000 | 2% | |||||||||||||
The amounts listed above as “2016 Annual Incentive Award: Deferred Equity” and “Long-Term Incentive Award (“BPIP”)” were granted in January 2017 in the form of equity and are separate from the cash award amounts listed above as “2016 Annual Incentive Award: Cash.” In conformance with SEC requirements, the 2016 Summary Compensation Table on page 67 reports equity in the year granted, but cash in the year earned.
5060 BLACKROCK, INC. 20172020 PROXY STATEMENT
64-65% of total annual compensation is awarded in equity 96% of
Compensation Discussion and Analysis | Pay-for-Performance - Chairman and CEO
Pay-for-Performance – Chairman and CEO
The graph below reflects BlackRock’s financial growth as well as CEO total compensation is variabledecisions during the period from 2010 to 2019. We strive to keep pay decisions aligned with performance.
Pay-for-Performance – Other NEOs
We strive to keep pay decisions aligned with performance. Our rigorous assessment and based on performance 53-54% of total annual compensation is awardedpay determination process has resulted in equity 92-93% ofdisciplined pay levels that have been outpaced by financial and market value growth over time, as demonstrated by CEO pay in the chart above. The average year-over-year total compensation is variablegrowth for the CEO and based onthe President was 0% and +2%, respectively, since 2010. The average year-over-year total compensation growth for the other NEOs (excluding the CEO and the President) was +2% since 2010. The year-to-year decisions have been made to align compensation with annual performance Base Salary (Cash) <4% of pay $900k $750k Base Salary (Cash) 7-8% of pay Annual Incentive (Cash) 31-32% of pay $8.00M 100% of target $6.5M 100% of target Annual Incentive (Cash3) 38-39% of pay Annual Incentive (Deferred Equity1,2) 16% of pay $4.15M $3.21M Annual Incentive (Deferred Equity1,2,3) 23-26% of pay Long-Term Incentive (BPIP) (Performance Based Equity1,2) 48-49% of pay $12.45M 75% of equity is awarded in BPIP $9.63M 75% of equity is awarded in BPIP Long-Term Incentive (BPIP) (Performance Based Equity1,2) 29-30% of payand our talent strategy.
BLACKROCK, INC. 2020 PROXY STATEMENT 61
 |
2.
Our Compensation Program
Program
Compensation Program Objectives
Our compensation program is designed to:
Appropriately allocate BlackRock’s financial resultsprofitability between shareholders and employees;
Determine overall compensation based on a combination of firm, business area and individual employee performance;
Align the interests of our senior-level employees, including NEOs, with those of shareholders through the use of long-term performance-based equity awards and accumulation of meaningful share ownership positions;
Discourage excessive risk-taking; and
Attract, motivate and retain high-performing employees.
Element/How it is Paid | Purpose | Description | ||
Base Salary Cash | To provide competitive fixed compensation based on knowledge, skills, experience and responsibilities. | Base salary is a relatively small portion of total annual compensation for NEOs and other senior-level employees; this approach allows BlackRock to effectively manage its fixed expenses.
Base salary levels are reviewed periodically in light of market practices and changes in responsibilities.
| ||
Cash and Deferred Equity (Time-vested RSUs)
Terms: The deferred equity portion of the annual incentive award is converted into a fixed number of RSUs using a conversion price.(1)
The deferred equity portion of the annual incentive award vests in equal installments over the three years following grant.
Dividend equivalents accumulate during the vesting period and are paid following delivery of shares.
Expense is recognized over the | To reward achievement of goals and objectives.
Aligns with Company-wide performance and business
|
Annual incentive award determinations do not rely on a specific
| ||
| (1) | For |
62BLACKROCK, INC. 20172020 PROXY STATEMENT51
Compensation Elements:Discussion and AnalysisContinued | Compensation Elements
Element/How it is Paid | Purpose | Description | ||
Long-Term Incentive Award
(
Terms: The target BPIP The final number of RSUs delivered at settlement is variable based on certain financial metrics achieved over a three-year performance period.
Dividend equivalents accumulate during the vesting period and are paid in cash after the performance period with respect to the number of shares that are delivered in settlement of the award.
Expense, based on the expected number of awards to be delivered, is recognized over the vesting period.
| To recognize the scope of an individual employee’s role, business expertise and leadership skills.
To recognize prior year performance and anticipate continued performance and long-term focus over a multi-year period.
Aligns the interests of senior-level employees with those of shareholders by aligning compensation with long-term drivers of shareholder |
The Compensation Committee considers the role and influence of the NEO on setting long-term strategy and in executing long-term objectives in determining individual award
The performance-based RSUs are settled in a number of shares of common stock that is determined based on
The maximum number of shares that may be earned under the program is equal to 165% of the base number of RSUs granted. No shares will be earned in the event of negative Organic Revenue growth and Operating Margin, as adjusted, below a threshold level of performance over a three-year performance period. More details on the 2019 BPIP Awards are provided below. | ||
| (1) | For |
BlackRock Performance Incentive Plan (“BPIP”)(BPIP)
BlackRock believes in aligning the interests of our senior-level employees, including our NEOs, with those of our shareholders and in closely aligning compensation with long-term performance.
In January 2015, BPIP was designed to further align compensation with the adviceBlackRock’s framework for long-term shareholder value creation. A portion of the MDCC’s independenteach NEO’s incentive compensation consultant, Semler Brossy,for 2019 was provided in the MDCC approved a new form of performance-based equity awards, referreda BPIP Award granted in January 2020. In addition to recognizing an NEO’s performance in the prior year, the BPIP Awards are intended to incent continued performance and focus over a multi-year period. BlackRock is focused on balancing investment to drive future Organic Revenue growth and the impact those investments have on Operating Margin, as adjusted.
Each year, the Compensation Committee approves the BPIP awards,Awards and Award Determination Matrix, following a comprehensive review of future performance goals and expectations, potential pay outcomes for employees, shareholder input and market trends. BPIP was designed to further align compensation with management’s long-term creation of shareholder value.
Each NEO was granted a BPIP award in January 2015 and January 2016 as part of his or her incentive compensation for their 2014 and 2015 performance, respectively. Similarly, a portion of each NEO’s incentive compensation for 2016 was in the form of a BPIP award granted in January 2017. In addition to recognizing an NEO’s performance in the prior year, the BPIP awards are intended to incentivize continued performance and long-term focus over a multi-year period. The January 2017 BPIP grants are described in further detail below.
BlackRock is focused on achieving the right balance of investing in our business to drive growth in Organic Revenue, and the impact those investments have on our expense base and Operating Margin, as adjusted. For purposes of BPIP awards granted prior to 2017, Organic Revenue did not include fees generated from BlackRock’s cash management business. In recognition of the increasing strategic importance of this business in a potential rising interest rate environment, Organic Revenue for purposes of BPIP awards granted in 2017 includes fees generated from cash management.
BPIP awardsAwards are granted in the form of RSUs that vest after three years. The number of shares vesting under BPIP is based on the attainment of specified levels of Organic Revenue growth and Operating Margin, as adjusted, over athe three-year performance period. Awards are settled in the form of common stock.
The 2019 BPIP Award Determination Matrix (performance period beginning January 1, 2020 and ending on December 31, 2022) is outlined below. Additionally, we have included the actual performance and payout for the 2016 BPIP Award, which vested on January 31, 2020 (performance period began January 1, 2017, and ended on December 31, 2019).
52BLACKROCK, INC. 20172020 PROXY STATEMENT63
|
Compensation Discussion and Analysis | BlackRock Performance Incentive Plan (BPIP)
BPIP
BPIP is tied to two key drivers of shareholder value – Organic Revenue growth and Operating Margin, as adjusted, over a three-year performance period – that are directly influenced by BlackRock’s senior-level employees across market cycles.
•Organic Revenue growth is a measure of the expected annual revenue impact of BlackRock’s total net new business in a given year, including net
• Operating Margin, as adjusted, is a measure of BlackRock’s ability to efficiently manage our expense base in the context of the revenue we generate.
|
Similar to previous2019 BPIP awards, the January 2017 BPIP awards have a three-year performance period that commenced on January 1, 2017 and ends on December 31, 2019. Each BPIP award consists of a “base” number of RSUs granted to the recipient. Distributions will be in the form of common stock.Award Determination Matrix
BPIP AWARD DETERMINATION:Performance Period (2020-2022)
For all outstandingthe 2019 BPIP Awards granted in January 2020, the number of shares that a recipient ultimately receives upon settlement will be equal to the base number of RSUs granted, multiplied by a percentage determined in accordance with the January 20172019 BPIP Award Determination Matrix below. The percentage will be determined by BlackRock’s average annual average Organic Revenue growth and Operating Margin, as adjusted, during the performance period; performance between two adjacent points on the matrix will be extrapolated.interpolated.
A summary version of the matrix for the January 20172019 BPIP Awards granted in January 2020 is set forthshown below.
JANUARY 2017 BPIP AWARD DETERMINATION MATRIX
3-yr Average Organic Revenue growth ($ million)
| ||||||||||||||||||||||||
3-yr Average Operating Margin, as Adjusted
| <=0
| 400
| 600
| 800
| >=1,000
| |||||||||||||||||||
>=50.5% |
| 100% |
|
| 122% |
|
| 133% |
|
| 149% |
|
| 165% |
| |||||||||
48.5% |
| 83% |
|
| 111% |
|
| 122% |
|
| 138% |
|
| 154% |
| |||||||||
46.5% |
| 67% |
|
| 100% |
|
| 111% |
|
| 127% |
|
| 143% |
| |||||||||
44.5% |
| 50% |
|
| 83% |
|
| 100% |
|
| 116% |
|
| 133% |
| Target Level | ||||||||
42.5% |
| 33% |
|
| 67% |
|
| 83% |
|
| 105% |
|
| 122% |
| |||||||||
40.5% |
| 17% |
|
| 50% |
|
| 67% |
|
| 92% |
|
| 111% |
| |||||||||
<=38.5% |
| 0% |
|
| 33% |
|
| 50% |
|
| 75% |
|
| 100% |
| |||||||||
| 3-yr Average Organic Revenue ($M) | ||||||||||||||||||||||
3-yr Average | <=0 | 200 | 400 | 600 | >=800 | |||||||||||||||||
| >=49.0% | 100% | 116% | 133% | 149% | 165% | |||||||||||||||||
| 47.0% | 83% | 105% | 122% | 138% | 154% | |||||||||||||||||
| 45.0% | 67% | 92% | 111% | 127% | 143% | |||||||||||||||||
| 43.0% | 50% | 75% | 100% | 116% | 133% | Target Level | ||||||||||||||||
| 41.0% | 33% | 58% | 83% | 105% | 122% | |||||||||||||||||
| 39.0% | 17% | 42% | 67% | 92% | 111% | |||||||||||||||||
| <=37.0% | 0% | 25% | 50% | 75% | 100% | |||||||||||||||||
If target levelTarget Level performance is achieved (i.e., during the three-year performance period, BlackRock has average annual Organic Revenue equal to $400growth equals $600 million and average annual Operating Margin, as adjusted, equal to 43.0%equals 44.5%), then a participant will receive a number of shares equal to 100% of the base number of units granted to the participant.
If during the three-year performance period, BlackRock has zero or negative average annual Organic Revenue growth and average annual Operating Margin, as adjusted, 37.0%of 38.5% or less, then the participant will not be entitled to a distribution of any shares under theirhis or her 2020 BPIP Award.
If maximum level performance is achieved, then a participant will receive the maximum number of shares (meaning that during the performance period, BlackRock delivered average annual Organic Revenue growth equal to or greater than $1 billion and an average annual Operating Margin, as adjusted, equal to or greater than 50.5%). The maximum number of shares a participant may receive under BPIP is equal to 165% of the base number of units.
2016 BPIP Award: Actual Performance and Payout
Performance Period (2017-2019)
For the 2016 BPIP Awards granted in January 2017 as part of 2016 NEO incentive compensation, the number of shares that a recipient received upon settlement was equal to the base number of RSUs granted, multiplied by 110.9%, which was determined in accordance with the 2016 BPIP award.Award Determination Matrix. The percentage was determined by BlackRock’s average annual Organic Revenue growth and Operating Margin, as adjusted, during the January 1, 2017 to December 31, 2019 performance period.
BlackRock achieved above Target Level results in the 2017-2019 performance cycle, with three-year average annual Organic Revenue growth of $466 million and Operating Margin, as adjusted, of 44.0%. This resulted in the recipients’ award units settling at 110.9% of the base number of units granted.
64BLACKROCK, INC. 20172020 PROXY STATEMENT53
Compensation Discussion and Analysis | BlackRock Performance Incentive Plan (BPIP)
Actual Payout – Example
If during the three-year performance period, BlackRock were to deliver average Organic Revenue of $600 million and average Operating Margin, as adjusted, of 43%, then a recipient receiving a BPIP award valued at $2.0 million in January 2017 would receive a distribution of 6,182 shares, or 116% of the base number of RSUs granted. Outlined below is an example of how this above-target level achievement would be calculated.
JANUARY 2017 BPIP GRANT: EXAMPLE
BPIP Award Value | $2 million | |||
For Performance Year 2016 and in anticipation of continued performance and long-term focus over a multi-year period | ||||
| $375.22 | |||
The average of the high and low prices per share of common stock of BlackRock on January 17, 2017 (the grant date) | ||||
Base number of units granted | 5,330 | |||
Determined by dividing the dollar value of the recipient’s award by the conversion price |
| ($2,000,000 / $375.22) | ||
Actual Performance Results(1) | $466 million | |||
Jan 1, 2017 to Dec 31, 2019 | ( | |||
Jan 1, 2017 to Dec 31, 2019 |
| 44.0% ( | ||
Resulting Award Payout (%) Based on Award Determination Matrix | 110.9% | |||
Resulting Award Payout (Number of units) |
| |||
Base number of units granted x Award Payout (%) | ||||
If maximum level performance is achieved, then a participant will receive the maximum number of shares (meaning that during the performance period, BlackRock delivered average Organic Revenue equal to or greater than $800 million and average Operating Margin, as adjusted, equal to or greater than 49%).The maximum number of shares a participant may receive under BPIP is equal to 165% of the base number of units.
Our compensation program for NEOs continues to include base salary, annual incentive awards (cash and deferred equity) and long-term performance-based incentive awards.
Annual Incentive Awards – Pay and Performance Alignment for CEO and President
Under this program, target annual cash incentive awards (“cash bonus”) have been established at $8.0 million and $6.5 million for our CEO and President, respectively. Actual cash bonuses can range from 0% up to a maximum of 125% of the target amount ($10.0 million and $8.125 million for the CEO and President, respectively). To determine the actual cash bonus amount, the MDCC used the framework below to assess individual performance. The MDCC created three categories and assigned a weighting factor to each, with 50% of the award opportunity dependent on BlackRock’s financial performance. To assess improvement in our business and organizational strengths, the MDCC uses internal BlackRock performance measures and may also consider peer group comparisons.
The MDCC maintains discretion in setting the final awards in order to determine the quality of the outcomes and to reflect the executives’ ability to adapt to the evolving business environment throughout the year.
54BLACKROCK, INC. 2017 PROXY STATEMENT
|
How We Determine Annual Cash Bonus Amounts for our CEO and President
|
| |||||
|  | |||||
|
| (5,330 x 110.9%) |
| |||
|  | |||||
| (1) | For further details on the 2016 BPIP Awards granted in January 2017, including the full Award Determination Matrix, please refer to page 53 of BlackRock’s 2017 Proxy Statement. |
Leadership Retention Carry Plan
In addition2019, BlackRock adopted a carried interest incentive program, referred to as the annualBlackRock Leadership Retention Carry Plan, pursuant to which senior-level employees (excluding the CEO), as may be determined by the Compensation Committee from time to time, are eligible to receive grants of percentage points entitling them to receive a portion of the total carried interest distributions payable to BlackRock, Inc. from participating BlackRock carry funds. Participating carry funds consist of BlackRock carry vehicles that had an initial close during the period commencing in the year of grant of the percentage points and ending on the date of the participant’s termination of employment. In 2019, Mr. Kapito received an award of percentage points under the BlackRock Leadership Retention Carry Plan in order to promote his long-term retention and drive future growth.
Carried interests generally represent the right to receive distributions only if distributions are made to investors in the participating carry funds following the realization of an investment and a specified return is achieved with respect to such investments. Consequently, the actual amount of any potential carried interest distributions received by BlackRock, Inc., and therefore any participant in the BlackRock Leadership Retention Carry Plan, is solely a function of the performance of the eligible carry fund and the realization of its underlying investments. For these reasons, the Compensation Committee believes that participation in the BlackRock Leadership Retention Carry Plan aligns the interests of participants with those of our shareholders by closely aligning compensation with the long-term performance of our business.
Recognizing the long-term nature of private investment funds, the cash distributions, if any, with respect to any percentage points granted under the BlackRock Leadership Retention Carry Plan will only be paid over a multi-year period beginning after the participant has terminated his or her employment due to qualified retirement (or by virtue of death or disability), subject to his or her execution of a release of claims and continued compliance with any applicable restrictive covenant obligations following such qualifying termination. Participants will not receive any cash distributions in the event of a termination of employment for any other reason. Any payments received under the BlackRock Leadership Retention Carry Plan will be treated as ordinary income and not long-term capital gains.
Performance-Based Stock Options
BlackRock has a robust leadership plan that is reviewed regularly by the Compensation Committee and the full Board, including ongoing succession planning and development initiatives for the senior leadership team. In the fourth quarter of 2017, BlackRock implemented a key component of our long-term management succession plan by granting long-term incentive awards in the MDCC expectsform of performance-based stock options to continuea select group of senior leaders, excluding the CEO and President, who we believe will play critical roles in BlackRock’s future. We did not grant performance-based stock options to make annual equityany of our NEOs in 2019 and we do not consider these awards to both Mr. Fink and Mr. Kapito, with at least halfbe part of such equity awards being long-term and contingent on future financial or other business performance requirements.
How We Determine Other NEO Compensationour regular annual compensation determinations.
DETERMINATION OF OTHER NEOs’ ANNUAL INCENTIVE COMPENSATION IS BASED ON:
INPUTS TO INDIVIDUAL NEO TOTAL ANNUAL COMPENSATION DECISIONS INCLUDE:
The deferred equity component of each of our other NEOs’ annual incentive award is determined by a Company-wide deferral policy. Higher annual incentive awards are subject to higher deferral percentages. All long-term equity-based incentive awards granted under BPIP are funded and awarded separately from the total bonus pool and are determined on a subjective basis as part of the MDCC’s total annual compensation decision.
BLACKROCK, INC. 20172020 PROXY STATEMENT 5565
Compensation3.
Compensation
Determination Process
Compensation Decision Timeline and Process
The MDCCCompensation Committee structures the timing and process for determining individual NEO compensation to ensureso that compensation is appropriately aligned with the financial performance of BlackRock. This also ensures recognition of individual NEO leadership and operating contributions toward achieving our overall strategic priorities.
At the beginning of each year, management reviews the annual budget with the MDCC. The MDCC and CEO establish financial and business goals and objectives. These goals and objectives provide the context for an evaluation of performance atyear-end.
The MDCC regularly meets with the CFO to review YTD actual and projected financial information and reviews and certifies full-year financial information afteryear-end. Throughout the year, all members of the Board review strategic plans, financial and business results, talent development and succession planning, as well as other areas relevant to BlackRock’s performance.
The MDCC also reviews other measures of our financial, investment and operating performance, market intelligence on compensation and information about market conditions. In December, management reports on absolute and/or relative performance metrics compared to major competitors, year-over-year and budget. These metrics include growth in revenues, operating income, net income, operating margin and net new inflows of AUM and other quantitative and strategic measures.
5666 BLACKROCK, INC. 20172020 PROXY STATEMENT
Jan* Mar* May* Jul* Sep* Nov* Dec Jan* Set Goals and Objectives Review Budget Set CEO Goals and Objectives Monitor and Evaluate Performance ReviewYear-to-date (“YTD”) Financials Review YTD Financials Review YTD Financials Review YTD Financials Review YTD Financials Review YTD Financials ReviewYear-end Financials Assess Preliminary Performance Review Peer Market Data Review Consultant Reports on Compensation Review Preliminary NEO Performance Discuss NEO Pay Assess Final Performance and Determine Compensation Review Final NEO Performance Approve NEO Pay Approve BPIP Award Determination Matrix
 |
Our compensation consultant also provides an independent report on publicly disclosed financial informationCompensation Discussion and provides compensation information for certain publicly traded asset management companies to understand performance and trends in compensation among public asset managers (as described in “Role of the Compensation Consultant andAnalysis | Competitive Benchmarking” below).Pay Positioning – Market Data
In December, during an executive session with the MDCC, the CEO reviews the performance of all individual NEOs against business goals and objectives. During an executive session that excludes all members of management, thenon-management directors assess the performance of the CEO against business goals and objectives.
In January, the MDCC reviews and certifiesyear-end financial results and other performance metrics as well as external data for comparison. The MDCC then determines final total annual incentive award amounts for each of our NEOs. The MDCC determines annual cash incentive award amounts for the CEO and President utilizing the annual cash incentive award framework, based on financial performance, business strength and organizational strength, supported by performance measures.
The MDCC also determines equity awards made through BPIP, our long-term incentive award. This timing allows the MDCC to consider full-year individual NEO performance assessments along with full-year financial andnon-financial results in its final determination of compensation. The MDCC also determines the Award Determination Matrix for the three-year BPIP performance cycle. In setting financial performance requirements for the BPIP, the MDCC considers BlackRock’s past performance and the current market environment. Compensation decisions are made on a total annual compensation basis, with consideration of each element of compensation, as described on pages 51 to 52.
Competitive Pay Positioning -– Market Data
ManagementBlackRock engages McLagan Partners (“McLagan”), a compensation consultant that specializes in conducting proprietary compensation surveys and interpreting compensation trends. ManagementThe Company used McLagan surveys to (1) evaluate BlackRock’sits competitive position overall, as well asincluding by functional business and by title, and (2) make comparisons on an individual NEO basis, where survey data was available and appropriate.
Survey results were analyzed to account for differences in the scale and scope between BlackRock and other survey participants.
Survey participants include both stand-alone, publicly traded asset management companies as well as a broader set of privately held or subsidiary asset management organizations for which publicly available compensation data is not available. Confidentiality obligations to McLagan and to its survey participants prevent BlackRock from disclosing the companies included in the surveys. Survey participants include stand-alone, publicly traded asset management companies as well as privately held or subsidiary asset management organizations for which publicly available compensation data is not available.
The MDCCCompensation Committee reviews market data to understand compensation practices and trends in the broader marketplace. Individual NEO compensation decisions are primarily based on assessments of individual NEO and Company performance.
Role of the Compensation Consultant and Competitive Benchmarking
In 2016,2019, the MDCCCompensation Committee continued to engage Semler Brossy to providefor objective advice on the compensation practices and the competitive landscape for the compensation of BlackRock’s executive officers.
Semler Brossy reports directly to the MDCCCompensation Committee and interacts with BlackRock management when necessary and appropriate in carrying out assignments.appropriate. Semler Brossy provides services only to the MDCCCompensation Committee as an independent consultant and does not have any other consulting engagements with, or provide any other services to, BlackRock. The independence of Semler Brossy has been assessed according to factors stipulated by the SEC and the MDCCCompensation Committee concluded that no conflict of interest exists that would prevent Semler Brossy from independently advising the MDCC.
BLACKROCK, INC. 2017 PROXY STATEMENT 57
Compensation Committee.
A representative from Semler Brossy met with the MDCCCompensation Committee in formal Committee meetings and at key points throughout the year to provide objective advice to the MDCCCompensation Committee on existing and emerging compensation practices among financial services companies, as well as companies in the asset management sector. The representative from Semler Brossy reviewed publicly disclosedalso meets with the Compensation Committee in executive sessions throughout the year to discuss compensation informationpractices and industry pay trends.
The Compensation Committee, with assistance from Semler Brossy, reviews the composition of our peer group to ensure the group continues to serve as an appropriate market reference for certain publicly traded asset managementexecutive compensation purposes. In considering the composition of our peer group, the Compensation Committee considers companies to understand trendsthat are in compensation among public asset managers, including:our industry or have similar lines of business, are competitors for our executive talent, are large, complex organizations with global reach and/or are similarly sized from a revenue and market cap perspective. Our peer group reflects our current scale, business and strategic priorities.
2019 PEER GROUP
Affiliated Managers Group
Ameriprise Financial
Bank of New York Mellon Charles Schwab |
Franklin Resources
Invesco Morgan Stanley |
Northern Trust
State Street
T. Rowe Price Group | ||
The broader suite of companies inAs previously noted, the McLagan analyses, which include both publicly traded companies as well as private companies offersin a variety of industries and sectors, offer additional comparisons through which BlackRock can understand the competitiveness of its executive compensation programs overall, by functional business and by title/individual. Semler Brossy independently reviewed the results and the companies included in the McLagan analyses. BlackRock does not engage in formal benchmarking in setting executive compensation levels.
Compensation Discussion and Analysis | Risk Assessment of Compensation Plans
Risk Assessment of Compensation Plans
Our employee compensation program isprograms are structured to discourage excessive and unnecessary risk taking. The Board recognizes that potential risks to BlackRock may be inherent in employee compensation programs. The BoardCompensation Committee periodically reviews BlackRock’s executiveemployee compensation program annuallyprograms to ensure that it isthey are structured so as not to unintentionally promote excessive risk taking. As a result of this annual review,these periodic reviews, we believe that theour employee compensation plansprograms are appropriately structured and do not pose risks that couldare reasonably likely to have a materially adverse effect on BlackRock.
The MDCCCompensation Committee considers the following when evaluating whether employee compensation plans and policiesprograms encourage BlackRock employees to take unreasonable risks:
Performance goals that are reasonable in light of past performance and market conditions;
Longer-term expectations for earnings and growth;
The base salary component of compensation does not encourage risk taking because it is a fixed amount;
A greater portion of annual compensation is deferred at higher annual incentive award levels; and
Deferred compensation is delivered in the form of equity, vests over time, and the value is therefore dependent on the future performance of BlackRock.BlackRock; and
BlackRock’s Clawback Policy and stock ownership guidelines.
Essential to the success of BlackRock’s business model is the ability to both understand and manage risk. These fundamentals are inherent in the design of our employee compensation programs, which reward employees for strong performance in their management of client assets and in managing risk within the risk profiles appropriate to each of BlackRock’s clients.BlackRock client. As such, employees are not rewarded for engaging in high-risk transactions outside of established parameters.
Our compensation practices reinforce the fundamentals of BlackRock’s business model in that they:
Do not provide undue incentives for short-term planning or action toward short-term financial rewards;
Do not reward unreasonable risk;risk-taking; and
Provide a reasonable balance between the risks that are inherent in the business of investment management, risk management and advisory services.
The Company’s operating income, as adjusted, on which compensation is primarily based, does not include net investment income or gains/losses on BlackRock’s seed orco-investments. While BlackRock may make seed orco-investments in its various funds alongside clients, it does not engage in proprietary trading.
5868 BLACKROCK, INC. 20172020 PROXY STATEMENT
|
2016Compensation Discussion and Analysis | 4. 2019 NEO Compensation
and Performance Summaries
4.
2019 NEO Compensation and Performance Summaries
Here we provide 2016 compensationthe 2019 NEO performance assessments and total incentive award decisions
As outlined in “Our Compensation Framework” on page 59, the Compensation Committee assesses each NEO against financial performance objectives (50%), business strength objectives (30%) and organizational strength objectives (20%). The performance assessments have a direct link to the total incentive outcome (annual discretionary cash award, annual discretionary deferred equity award, and long-term equity awards) for each NEO and a summary of his individual performance accomplishments relative to achieving BlackRock’s annual andNEO.
long-termBLACKROCK, INC. performance goals. 2020 PROXY STATEMENT 69
Compensation Discussion and Analysis | 4. 2019 NEO Compensation and Performance Summaries
Laurence D. Fink
Chairman and CEO |
2019 Compensation |
Responsibilities:
Mr. Fink guides and oversees BlackRock’s long-term strategic direction to deliver value for clients and shareholders.
He is responsible for senior leadership development and succession planning, defining and reinforcing BlackRock’s mission and culture, and engaging with key strategic clients, industry leaders, regulators and policy makers. | ||||||||||
(Thousands)
| ||||||||||||
Base Salary | $ | 1,500 |
| |||||||||
Annual Incentive Award – Cash | $ | 7,750 |
| |||||||||
Annual Incentive Award – Equity | $ | 4,250 |
| |||||||||
Long-Term Incentive Award | $ | 11,750 |
| |||||||||
Total Annual Compensation | $ | 25,250 |
| |||||||||
|
|
|
|
Overall Assessment: Meets/Exceeds Mr. Fink led the successful execution of BlackRock’s strategy throughout 2019, which delivered strong financial results, record net inflows and overall outperformance relative to Traditional LC Peers(2). He drove the firm’s focus on delivering differentiated solutions to clients and oversaw continued investments in key growth areas, includingiShares, illiquid alternatives and technology, to meet clients’ changing needs. Mr. Fink increased his focus on Organizational Strength, where the firm faced challenges in its leadership and employee representation. Overall, the Compensation Committee’s assessment of Mr. Fink’s performance resulted in a Meets/Exceeds determination. Based on the performance assessment, the Compensation Committee set Mr. Fink’s 2019 total compensation at $25.25 million, up 5% from 2018. |
Compensation Scorecard | ||||||||||||
| Performance Category | Performance Highlights | Assessment | ||||||||||
Financial Performance
|
• Achieved record-high revenue and earnings growth in 2019, despite entering the year with lower AUM as a result of significant fourth quarter 2018 market volatility.
• Generated record annual net inflows of $429 billion, representing 7% organic asset growth and 5% organic base fee growth.
• Continued to generate differentiated organic growth and financial results, leading to stock price outperformance and a 50% P/E multiple premium versus Traditional LC Peers at 2019 year-end.
|
Meets/Exceeds | ||||||||||
| Measures |
BlackRock Performance
| |||||||||||
2018
|
2019
| |||||||||||
Net New Base Fee Growth |
2% |
5% | ||||||||||
Operating Income, as adjusted(1) ($ million) | $5,531 | $5,551 | ||||||||||
Operating Margin, as adjusted(1) | 44.3% | 43.7% | ||||||||||
Diluted Earnings Per Share, as adjusted(1) | $26.93 | $28.48 | ||||||||||
| Share Price Data |
BlackRock | Traditional LC Peers(2) Average | ||||||||||
NTM P/E Multiple(3) | 16.5x | 10.0x | ||||||||||
% Change in Share Price vs. Prior Year | +28% | +14% | ||||||||||
| (1) | Amounts are shown on an “as adjusted” basis. For a reconciliation with GAAP, please see Annex A. |
| (2) | Traditional LC Peers refers to Alliance Bernstein, Affiliated Managers Group, Franklin Resources, Eaton Vance, Invesco, Legg Mason and T. Rowe Price. |
| (3) | NTM P/E multiple refers to the Company’s share price as of December 31, 2019, divided by the consensus estimate of the Company’s expected earnings over the next 12 months. Sourced from Factset. |
70BLACKROCK, INC. 2020 PROXY STATEMENT
Compensation Discussion and Analysis | 4. 2019 NEO Compensation and Performance Summaries
| |||||||||||||||||||
| Category |
| Assessment | ||||||||||||||||
Business Strength | Solve for clients’ evolving needs • In partnership with Mr. • Oversaw the acquisition of eFront, strengthening BlackRock’s • Engaged in more than 400 client meetings and external events with institutions, governments and central banks around the world bringing relevant perspectives back to the business and increasing BlackRock’s ability to respond to client needs. • Continued to deepen client partnerships and serve as a key thought leader for BlackRock’s clients and shareholders.
| ||||||||||||||||||
Far Exceeds | |||||||||||||||||||
Sharpen execution and accountability • Simplified BlackRock’s operating model through a firm re-organization and the regionalization of institutional client businesses. These changes allowed BlackRock to allocate resources to the highest growth areas, while ensuring the consistent delivery of the entire platform. • Recognizing shifts in client demand, drove BlackRock to leverage its scale and expertise to deliver outsourced Chief Investment Officer (“OCIO”) solutions and cash management solutions for clients, resulting in 2019 net inflows of $16 billion and $93 billion, respectively. | |||||||||||||||||||
Lead in a changing world • Continued to oversee investments in three future growth areas, includingiShares, illiquid alternatives and technology. • Oversaw significant momentum in illiquid alternatives, generating $14 billion of net inflows, driven by demand for infrastructure, real estate, Long Term Private Capital (“LTPC”) and private credit. • Guided Mark Wiedman, Head of International and of Corporate Strategy, in the formation of a task force to accelerate BlackRock’s focus on sustainable investing at the core of risk management, portfolio construction, product design and company engagement. | |||||||||||||||||||
Organizational Strength |
Attract and
|
| ||||||||
| ||||
| ||||
• |
| |||
• |
| |||
| ||||
| ||||
BLACKROCK, INC. 2017 PROXY STATEMENT 59
| ||||||||||
| ||||||||||
| ||||||||||
| ||||||||||
| ||||||||||
| ||||||||||
| Partially Meets
| |||||||||
Develop a more diverse and inclusive culture • |
• Expanded female representation at the senior level from 28.4% to 28.9% at the firm. However, missed the publicly-stated goal of 30% of female representation in • In partnership with Mr. Kapito, exited two executives for personal conduct violations. These departures were necessary to
| |||||||||
BLACKROCK, INC. 2020 PROXY STATEMENT 71
Compensation Discussion and Analysis | 4. 2019 NEO Compensation and Performance Summaries
Robert S. Kapito
President |
2019 Compensation |
Responsibilities:
Mr. Kapito is responsible for executing BlackRock’s strategic plans and overseeing the global business operations of the Company.
He ensures connectivity and coordination of operating processes across all groups in the organization, in part through his leadership, along with Mr. Goldstein, of the Global Operating Committee.
He is also responsible for spearheading initiatives to drive investment performance and the results within each of BlackRock’s businesses. | ||||||||||
(Thousands)
| ||||||||||||
Base Salary | $ | 1,250 |
| |||||||||
Annual Incentive Award – Cash | $ | 6,250 |
| |||||||||
Annual Incentive Award – Equity | $ | 3,500 |
| |||||||||
Long-Term Incentive Award | $ | 8,950 |
| |||||||||
Total Annual Compensation | $ | 19,950 |
| |||||||||
|
| ||||
|
Compensation Scorecard | ||||||||||||||||
| Performance Category
| Performance Highlights
| Assessment
| ||||||||||||||
Financial Performance
|
Meets/Exceeds | |||||||||||||||
• Mr. Kapito’s operational responsibility for BlackRock’s distribution channels and client-facing businesses, including maintaining relationships with key intermediary partners, contributed to 7% organic asset growth and 5% organic base fee growth.
• Guided robust and efficient processes and leadership for the oversight and management of record AUM of $7.43 trillion, including nearly $2 trillion in active, nearly $5 trillion iniShares ETFs & Index and nearly $550 billion in cash management strategies.
• Led industry growth and adoption of key ETF categories, resulting in BlackRock’s record $112 billion of net inflows in fixed income ETFs, while also capturing the #1 share in industry factor and sustainable ETF flows.
• Delivered on day-to-day oversight of the firm’s business operations, partnering with Mr. Goldstein and Mr. Shedlin to manage an Operating Margin, as adjusted, of 43.7%, down 60 basis points from 2018. The decrease reflected BlackRock’s strategic decision to continue investing responsibly in 2019, despite the growth challenges of entering 2019 with headwinds created by market volatility and declines in the fourth quarter of 2018.
| ||||||||||||||||
| Measures |
2018
|
2019
| ||||||||||||||
Operating Income, as adjusted(1) ($ million)
|
$5,531
|
$5,551
| ||||||||||||||
Operating Margin, as adjusted(1)
|
44.3%
|
43.7%
| ||||||||||||||
Diluted Earnings Per Share, as adjusted(1)
|
$26.93
|
$28.48 | ||||||||||||||
Business Strength
|
Solve for clients’ evolving needs
• Led strong long-term investment performance across active products, achieving $110 billion of active net inflows while the industry experienced overall active outflows.
|
Far Exceeds | ||||||||||||||
Actively managed AUM above benchmark or peer median
|
1-Yr
|
3-Yr
|
5-Yr
| |||||||||||||
Taxable Fixed Income
| 87%
| 86%
| 89%
| |||||||||||||
Tax-Exempt Fixed Income
| 61%
| 79%
| 77%
| |||||||||||||
Fundamental Equity
| 71%
| 76%
| 82%
| |||||||||||||
Systematic Equity | 54% | 84% | 82% | |||||||||||||
• Oversaw the $1.4 billion close of the BlackRock Science & Technology Trust II, BlackRock’s largest closed-end fund launch in the last seven years and the industry’s largest in the last five years.
• Continued to play an integral role in expanding client relationships, sponsoring multiple “client summits” across business lines globally.
| ||||||||||||||||
| (1) | Amounts are shown on an “as adjusted” basis. For a reconciliation with GAAP, please see Annex A. |
6072 BLACKROCK, INC. 20172020 PROXY STATEMENT
Compensation Discussion and Analysis | 4. 2019 NEO Compensation and Performance Summaries | |
| Performance Highlights | Assessment | ||||||||||||||||||
Sharpen execution and accountability • Realigned global institutional client segments and restructured its leadership to drive growth across the Americas, Europe and Asia. • Streamlined the firm’s product governance structure with more robust product management roles and oversight across asset classes.
|
| |||||||||||||||||||
|
| |||
|
| |||||
| ||||||
| ||||||
| ||||||
| ||||||
BLACKROCK, INC. 2017 PROXY STATEMENT 61
Organizational Strength | Attract and inspire talent • Continued to lead key programs and committees to engage key talent across the firm, which proved to be crucial after a firm reorganization early in the year. • Elevated key leaders across the investment businesses and drove progress in developing deep and diverse succession plans. | |||||||||||
Partially Meets
| ||||||||||||
Develop a more diverse and inclusive culture • | Continued to increase BlackRock’s focus on inclusion and diversity, particularly across the investment teams through the Growing More Great Investors initiative.
• While exemplifying our culture and principles internally, partnered with Mr. Fink
| |||||||||||
| ||||||||||||
| ||||||||||||
| ||||||||||||
| ||||||||||||
BLACKROCK, INC. 2020 PROXY STATEMENT 73
Compensation Discussion and Analysis | 4. 2019 NEO Compensation and Performance Summaries
Robert L. Goldstein
COO |
2019 Compensation |
Responsibilities:
As COO, Mr. Goldstein is responsible for ensuring that the Company’s investment, client, risk analytics, technology and operating functions have the necessary connectivity, coordination and scalable processes in place to succeed.
Mr. Goldstein also leads the BlackRock Solutions (“BRS”) business, delivering investment and risk analytics technology to clients.
Mr. Goldstein co-chairs, along with Mr. Kapito, the BlackRock Global Operating Committee. He also co-chairs, along with Mr. Shedlin, the Planning, Budgeting and Alignment (“PBA”) Committee, which is responsible for developing the Company’s budget, evaluating new initiatives aimed at driving growth and achieving strategic objectives of the firm. | ||||||||||
(Thousands)
| ||||||||||||
| Base Salary | $ | 500 | ||||||||||
Annual Incentive Award – Cash | $ | 2,950 | ||||||||||
Annual Incentive Award – Equity | $ | 2,000 | ||||||||||
Long-Term Incentive Award | $ | 4,400 | ||||||||||
Total Annual Compensation | $ | 9,850 | ||||||||||
| ||||||||||||
|
| |||||||||||
| Performance Highlights
| |||
| ||||
Financial Performance
|
• Under Mr. Goldstein’s leadership, BlackRock generated a record $974 million of 2019 technology services revenue and 24% year-over-year growth. Mr. Goldstein enhanced BlackRock’s range of technology capabilities by enhancing and expandingAladdin to
| |||
• Delivered on day-to-day oversight of the firm’s business operations, partnering with Mr. Kapito and Mr. Shedlin to manage an Operating Margin, as adjusted, of 43.7%, down 60 basis points from 2018. The decrease reflected BlackRock’s strategic decision to continue investing responsibly in 2019, despite a more challenging overall revenue capture environment created by market volatility in the fourth quarter of 2018. |
Far Exceeds | |||
62BLACKROCK, INC. 2017 PROXY STATEMENT
|
|
| |||||||||||
Business Strength
|
• Increased risk management protocols, enhancing connectivity of risk management groups across the firm and streamlining the firm’s ability to respond to issues effectively and efficiently. • Led the PBA Committee, with co-chair Mr. Shedlin, in establishing a reallocation framework to direct resources into high-growth areas. • As Head of BlackRock Solutions, oversaw strategic partnerships and multiple implementations across BRS, involving the delivery of technology solutions and servicing tools. Mr. Goldstein drove the successful acquisition of eFront, which elevated the capabilities of BlackRock’s technology platform. He was critical to the integration of eFront employees and oversaw development efforts on a joint offering to clients.Aladdin and eFront are now being used by over 900 clients in 68 countries, including 16 wealth managers that have 35,000 financial advisors serving millions of end investors. | Far Exceeds | ||||||||||
Organizational Strength
| • Shared key insights with business leaders on the future of the firm through its talent initiatives and committees, most notably during the roll-out of Talent Bench Reviews in 2019. • Upgraded leadership across technology teams, hiring a Head of theAladdin Product Group and providing stretch opportunities for key leaders inAladdin Wealth. He also provided strategic direction to ensure the right leadership was in place in the technology operations group. • Mr. Goldstein’s focus on inclusion and diversity progress has led to an increase in female representation across technology services groups. He has personally sponsored stretch roles for senior leaders in technology groups and across the firm. | Far Exceeds | ||||||||||
74BLACKROCK, INC. 2020 PROXY STATEMENT
Compensation Discussion and Analysis | 4. 2019 NEO Compensation and Performance Summaries
J. Richard Kushel
Head of Multi-Asset Strategies and Global Fixed Income |
2019 Compensation |
Responsibilities:
As Global Head of Multi-Asset Strategies (“MAS”) and Global Fixed Income (“GFI”) and with oversight of Client Portfolio Solutions (“CPS”), Mr. Kushel is responsible for the firm’s multi-asset and global fixed income products, asset allocation and client portfolio solutions capabilities.
As Global Head of MAS and GFI and with oversight of CPS, Mr. Kushel oversees management of a variety of balanced funds and bespoke mandates for a diversified client base that leverages broad investment expertise in global equities, bonds, currencies and commodities and BlackRock’s extensive risk management capabilities.
| ||||||||||
(Thousands)
| ||||||||||||
| Base Salary | $ | 500 | ||||||||||
| Annual Incentive Award – Cash | $ | 2,613 | ||||||||||
Annual Incentive Award – Equity | $ | 1,663 | ||||||||||
Long-Term Incentive Award | $ | 2,900 | ||||||||||
Total Annual Compensation | $ | 7,675 | ||||||||||
Overall Assessment: Far Exceeds In 2019, Mr. Kushel played a critical role in BlackRock’s record asset gathering and strong financial performance. Under his leadership, MAS, GFI and CPS generated strong organic growth and delivered improved investment performance relative to benchmarks. Mr. Kushel’s focus on strategic and organizational initiatives had a positive impact on the investment teams’ high-performance culture. Overall, the Compensation Committee’s assessment of Mr. Kushel’s performance resulted in a Far Exceeds determination. Based on the performance assessment, the Compensation Committee set Mr. Kushel’s 2019 total compensation at $7.675 million, up 15% from 2018. |
| Performance Highlights
| |||
Assessment
| ||||
|
| Under Mr. Kushel’s leadership, MAS generated $19 billion in net new business and had strong investment performance across the portfolio, driven by macro factor, global tactical allocation and income strategies. • GFI generated $264 billion in net new business, reflecting strength across active, index andiShares strategies. GFI continued to deliver strong long-term investment performance, with 87%, 86% and 89% of Taxable Fixed Income products above benchmark or peer median for the trailing one-, three- and five-year period, respectively. • Growth in CPS continued to accelerate, with strong flows across both institutional and wealth clients and strong investment performance. |
| |||||||||
Business Strength
| • Directly engaged with and fostered key long-term client relationships that are expected to drive future growth for the firm. • In partnership with Mr. Kapito, re-structured and assigned new leadership in certain investment teams, resulting in tangible performance improvement. • Positioned CPS to address increased client demand for outsourced mandates, model portfolios and OCIO capabilities by unifying BlackRock’s capabilities in CPS andAladdin, enabling BlackRock to reach and serve more clients than ever before. | Far Exceeds | ||||||||||
Organizational Strength
|
• Led progress in gender representation, growing the female investor population in MAS and elevating senior female investors in GFI. • Continued to develop a more inclusive investment culture across his groups, highlighted by the roll-out of career aspiration sessions and mentorship programs. | Meets/Exceeds | ||||||||||
BLACKROCK, INC. 2020 PROXY STATEMENT 75
Compensation Discussion and Analysis | 4. 2019 NEO Compensation and Performance Summaries
Gary S. Shedlin
CFO |
2019 Compensation |
Responsibilities:
As CFO, Mr. Shedlin is responsible for managing BlackRock’s overall financial condition, including resource and capital allocation, and expense discipline.
He is also responsible for overseeing all corporate finance functions, including financial planning and analysis, accounting, finance operations and controls, tax, treasury, investor relations, corporate development and corporate sustainability.
Mr. Shedlin also co-chairs, along with Mr. Goldstein, the PBA Committee, which makes recommendations regarding the Company’s budget, evaluating new initiatives aimed at driving growth, and achieving strategic objectives.
| ||||||||||
(Thousands)
| ||||||||||||
| Base Salary | $ | 500 | ||||||||||
| Annual Incentive Award – Cash | $ | 2,475 | ||||||||||
Annual Incentive Award – Equity | $ | 1,525 | ||||||||||
Long-Term Incentive Award | $ | 2,700 | ||||||||||
Total Annual Compensation | $ | 7,200 | ||||||||||
Overall Assessment: Far Exceeds In 2019, Mr. Shedlin meaningfully contributed to BlackRock’s success through prudent resource and capital allocation, while providing insights across a variety of strategic initiatives. He drove progress in Organizational Strength across the Finance function and at the firm more broadly. The Compensation | ||||||||||||
| Committee’s assessment of Mr. Shedlin’s performance resulted in a Far Exceeds determination, and based on the performance assessment, the Compensation Committee set Mr. Shedlin’s total compensation at $7.2 million, up 12% from 2018. |
| Performance Highlights | Assessment | ||
Financial Performance
| • Drove BlackRock’s capital management strategy, returning $3.8 billion to shareholders in 2019, highlighted by a strategic $1.3 billion share repurchase in March 2019. He also oversaw the allocation of over $750 million of new seed and co-investment capital to support growth, leading to BlackRock’s investment portfolio exceeding $3 billion for the first time. • Delivered savings through cost-effective resource allocation across the firm. • Delivered day-to-day oversight of the firm’s business operations, partnering with Mr. |
Meets/Exceeds | ||
Business Strength
| • Oversaw and executed several key strategic investments and acquisitions for the firm, highlighted by the successful $1.3 billion acquisition and related financing of eFront. • Led the PBA Committee, with co-chair Mr. Goldstein, in establishing a reallocation framework to direct resources into growth areas. • �� In partnership with enterprise leaders, engaged on multiple market entry options in strategic geographies and across businesses. • Oversaw the Finance functions’ support of the • Played a critical role in the |
Far Exceeds | ||
Organizational Strength
| • Strengthened the Finance leadership bench, led • Continued to develop • Led year-over-year improvement in | Meets/Exceeds | ||
76BLACKROCK, INC. 20172020 PROXY STATEMENT63
5.
Compensation Policies
and Practices
Summary of Executive Compensation Practices
Our compensation program reflects our commitment to responsible financial and risk management and is exemplified by the following policies and practices:
What We Do |
What We Don’t Do | |||||||||
| Review pay and performance alignment;
|
| ||||||||
| Balance short- and long-term incentives, cash and equity and fixed and variable pay elements; | |||||||||
| Maintain a clawback policy that allows for the recoupment of annual and long-term performance-based compensation in the event that financial results require a significant restatement due to the actions of an employee; | |||||||||
| Require one-year minimum vesting for awards granted under our Stock Plan, | |||||||||
| Maintain meaningful stock ownership and retention guidelines for GEC members; | |||||||||
| Maintain trading policies that: | |||||||||
• Prohibit all employees from short selling BlackRock securities; • Prohibit Section 16 officers and directors from pledging BlackRock securities as collateral for a loan (among other items); • Prohibit Section 16 officers and directors from engaging in any transactions that have the effect of hedging the economic risks and rewards of BlackRock securities; | ||||||||||
| Limit perquisites; | |||||||||
| Assess and mitigate risk in compensation plans, as described in“RiskAssessment of Compensation Plans”on page 68; | |||||||||
| Solicit an annual advisory vote on executive compensation in order to provide shareholders with a frequent opportunity to give feedback on compensation programs; and | |||||||||
| Annually review the independence of the Compensation Committee’s independent compensation consultant. | |||||||||
64
BLACKROCK, INC. 20172020 PROXY STATEMENT77
 |
Compensation Discussion and Analysis | 5. Compensation Policies and Practices
Our stock ownership guidelines require the Company’s GEC members to own and maintain a target number of shares (i.e., shares owned outright, not including unvested shares or unexercised stock options), the dollar amount of which is set out below. Until these stock ownership guidelines are met, GEC members must retain 50% of the net(after-tax) shares delivered from BlackRock equity awards. The MDCCCompensation Committee monitors the progress made by our NEOsGEC in achieving their stock ownership guidelines and, if circumstances warrant, may modify the guidelines and/or time frames for one or more members of our NEOs.
As of December 31, 2016, all of our NEOs exceeded the stated stock ownership guidelines.GEC.
$10 million for the CEO;
$5 million for the President; and
$2 million for all other GEC members.
As of December 31, 2019, all of our NEOs exceeded the stock ownership guidelines.
Prohibition on Hedging and Pledging BlackRock Securities
BlackRock has a policy that prohibits the hedging or pledging of BlackRock securities by BlackRock’s Section 16 officers and directors. Pursuant to this policy, BlackRock’s Section 16 officers and directors are prohibited from:
Using BlackRock securities as collateral in a margin account;
Pledging BlackRock securities as collateral; or
Engaging in any transactions that have the effect of hedging the economic risks and rewards of BlackRock securities held by such Section 16 officer or director.
All performance-based compensation (including annual and long-term incentive awards and all equity compensation) is subject to BlackRock’s Clawback Policy and is subject to recoupment if an employee is found to have engaged in fraud or willful misconduct that caused the need for a significant restatement of BlackRock’s financial statements.
Benefits
BlackRock provides medical, dental, life and disability benefits and retirement savings vehicles in which all eligible employees may participate. Our NEOs also have the option to participate in a comprehensive health exam offered to our executives. BlackRock makes contributions to 401(k) accounts of itsour NEOs on a basis consistent with other employees. None of our NEOs participate in any Company-sponsored defined benefit pension program.
Other benefits include voluntary deferrals of all or a portion of the cash element of the NEO’sour NEOs’ annual incentive awards pursuant to the Amended and Restated BlackRock, Inc. Voluntary Deferred Compensation Plan (the “VDCP”).
Severance
Our NEOs are eligible for standard severance benefits under the Severance Plan in the event of involuntary termination of employment without cause (as defined under the Severance Plan) by BlackRock. The Severance Plan provides a lump sum cash payment equal to two weeks of salary per year of service, with a minimum of 12 weeks and a maximum of 54 weeks, to all U.S.-based employees who are involuntarily terminated without cause in conjunction with a reduction in force or position elimination.
Perquisites
PerquisitesThe Compensation Committee considers perquisites and other benefits available to our NEOs, such as financial planning, investment opportunityofferings and personal use of travel services are consideredto be a reasonable part of the executive compensation program. In approving these, the Committee considers their purpose and alignment to BlackRock’s compensation philosophy, as well as external market practices.
A financial planning perquisite is offered to our NEOs. In addition, investment offerings may be provided without charging management or performance fees consistent with the terms offered to other employees who meet the same applicable legal requirements.
Transportation services are provided by BlackRock and/or third-party suppliers and are made available to our NEOs for business and personal use. Messrs. Fink and Kapito are required by the Board to utilize private airplane services for all business and personal travel in the interest of protecting their personal security. BlackRock incurs incremental costs to provide these services, though these costs are capped below a level the Compensation Committee considers reasonable. NEOs must reimburse BlackRock for a portion of the cost of personal airplane services.
Transportation services are provided by BlackRock and/or third-party suppliersbeyond the cap, and are made available to our NEOs for business and personal use.Mr. Fink did so in 2019. The compensation attributed to each of our NEOs for 20162019 for perquisites is described in footnote (3)(4) to the “2016“2019 Summary Compensation Table” on page 67.80.
78BLACKROCK, INC. 2020 PROXY STATEMENT
Compensation Discussion and Analysis | 5. Compensation Policies and Practices
Tax Reimbursements
BlackRock did not provide tax reimbursements for any perquisites or other compensation paid to our NEOs.
BLACKROCK, INC. 2017 PROXY STATEMENT 65
Tax Deductibility of Compensation
Section 162(m) of the Internal Revenue Code generally limits the tax deductibility of compensation paid to any “covered employee” of a public companyexecutive officers subject to $1.0Section 162(m) (the “Covered Employees”) to $1 million during any fiscal year unless such compensation qualifies as “performance-based.” In general,“performance-based” (although this exception was severely limited beginning in 2018, as described below). Historically, the Company intends to structureadministered its incentive compensation arrangements in a manner that would comply with these tax rules. However, the MDCCCompensation Committee maintains the flexibility to paynon-deductible incentive compensation if it determines it is in the best interest of the Company and its shareholders.
The MDCC establishes the method for calculating theTax Cuts and Jobs Act, enacted on December 22, 2017, substantially modified Section 162(m) compliant aggregate cap (the “Aggregateand, among other things, eliminated the performance-based exception to the $1 million deduction limit effective as of January 1, 2018. As a result, beginning in 2018, compensation paid to Covered Employees in excess of $1 million is generally nondeductible, whether or not it is performance-based. In addition, beginning in 2018, the Covered Employees include any individual who served as the CEO or CFO at any time during the taxable year and the three other most highly compensated officers (other than the CEO and CFO) for the taxable year. Once an individual becomes a Covered Employee for any taxable year beginning after December 31, 2016, that individual will remain a Covered Employee for all future years, including following any termination of employment.
The Tax Cuts and Jobs Act includes a transition relief rule under which the changes to Section 162(m) Cap”) for annual incentive awardsdescribed above will not apply to each of our NEOs
compensation payable pursuant to a written binding contract that was in effect on November 2, 2017 and is not materially modified after that date. To the shareholder-approved Amendedextent applicable to our existing contracts and Restated BlackRock, Inc. 1999 Annual Incentive Performance Plan (the “Performance Plan”). The Aggregate 162(m) Cap, as well as each NEO’s maximum allocable portionawards, the Company may avail itself of this transition relief rule. To maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals in the best interest of the overall Aggregate 162(m) Cap (the “Individual 162(m) Caps”), are calculated each year in accordanceCompany and its shareholders, the Compensation Committee does not limit its actions with the requirements ofrespect to executive compensation to preserve deductibility under Section 162(m) if the Compensation Committee determines that doing so is in the best interests of the Internal Revenue Code. Neither the Aggregate 162(m) Cap nor the Individual 162(m) Caps serve as a basis for the MDCC’s compensation decisions for our NEOs; instead, these caps serve to establish a ceiling on the amount of annual incentive awards which the MDCC can award to the NEOs on a tax deductible basis. In determining final awards for each NEO, the MDCC ensures that such awards do not exceed the NEO’s Individual 162(m) Cap.Company and its shareholders.
66BLACKROCK, INC. 20172020 PROXY STATEMENT79
|
Summary ofCompensation Discussion and Analysis | Executive Compensation Tables
The following 20162019 Summary Compensation Table sets forthcontains information concerning compensation provided by BlackRock for the years indicated to the NEOs. Pursuant to SEC rules, the below compensation table below includes only those equity-based awards granted in a particular year and not any awards granted afteryear-end, even if awarded for services in that year. It additionally discloses any cash compensation earned in a particular year, even if such payments are made afteryear-end.
20162019 Summary Compensation Table
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards (Fair Value of Awards) ($)(2) | All Other Compensation ($)(3) | Total ($) | ||||||||||||||||||
Laurence D. Fink | 2016 | $ | 900,000 | $ | 8,000,000 | $ | 16,379,581 | $ | 193,250 | $ | 25,472,831 | |||||||||||||
Chairman and | 2015 | $ | 900,000 | $ | 8,720,000 | $ | 15,979,630 | $ | 193,000 | $ | 25,792,630 | |||||||||||||
Chief Executive Officer | 2014 | $ | 900,000 | $ | 9,120,000 | $ | 13,649,708 | $ | 192,750 | $ | 23,862,458 | |||||||||||||
Robert S. Kapito | 2016 | $ | 750,000 | $ | 6,500,000 | $ | 12,149,508 | $ | 224,425 | $ | 19,623,933 | |||||||||||||
President | 2015 | $ | 750,000 | $ | 7,085,000 | $ | 12,279,750 | $ | 224,175 | $ | 20,338,925 | |||||||||||||
| 2014 | $ | 750,000 | $ | 6,955,000 | $ | 10,537,135 | $ | 222,730 | $ | 18,464,865 | ||||||||||||||
Robert L. Goldstein | 2016 | $ | 500,000 | $ | 2,850,000 | $ | 3,899,900 | $ | 49,425 | $ | 7,299,325 | |||||||||||||
Senior Managing Director and | 2015 | $ | 500,000 | $ | 2,850,000 | $ | 4,024,823 | $ | 23,723 | $ | 7,398,546 | |||||||||||||
Chief Operating Officer | 2014 | $ | 500,000 | $ | 2,975,000 | $ | 3,624,619 | $ | 17,750 | $ | 7,117,369 | |||||||||||||
J. Richard Kushel | 2016 | $ | 500,000 | $ | 2,490,000 | $ | 3,429,662 | $ | 49,425 | $ | 6,469,087 | |||||||||||||
Senior Managing Director and | 2015 | $ | 500,000 | $ | 2,490,000 | $ | 3,429,610 | $ | 49,175 | $ | 6,468,785 | |||||||||||||
Head of Multi-Asset Strategies Group(4) | ||||||||||||||||||||||||
Gary S. Shedlin | 2016 | $ | 500,000 | $ | 2,350,000 | $ | 3,149,532 | $ | 18,250 | $ | 6,017,782 | |||||||||||||
Senior Managing Director and | 2015 | $ | 500,000 | $ | 2,350,000 | $ | 3,224,672 | $ | 18,000 | $ | 6,092,672 | |||||||||||||
Chief Financial Officer | 2014 | $ | 500,000 | $ | 2,375,000 | $ | 2,699,839 | $ | 5,000 | $ | 5,579,839 | |||||||||||||
Name and Principal Position
| Year
| Salary ($)
| Bonus ($)(1)
| Stock Awards (Fair Value of ($)(2)
|
Performance-Based
| All Other
| Total ($)
| |||||||||||||||||||||
Laurence D. Fink Chairman and Chief Executive Officer |
|
2019 |
|
$ |
1,500,000 |
|
$ |
7,750,000 |
|
$ |
14,750,004 |
|
|
— |
|
$ |
308,250 |
|
$ |
24,308,254 |
| |||||||
|
2018 |
|
$ |
1,500,000 |
|
$ |
7,750,000 |
|
$ |
17,049,844 |
|
|
— |
|
$ |
243,500 |
|
$ |
26,543,344 |
| ||||||||
|
2017 |
|
$ |
900,000 |
|
$ |
10,000,000 |
|
$ |
16,599,733 |
|
|
— |
|
$ |
243,500 |
|
$ |
27,743,233 |
| ||||||||
Robert S. Kapito President |
|
2019 |
|
$ |
1,250,000 |
|
$ |
6,250,000 |
|
$ |
11,499,899 |
|
|
— |
|
$ |
257,151 |
|
$ |
19,257,050 |
| |||||||
|
2018 |
|
$ |
1,250,000 |
|
$ |
6,250,000 |
|
$ |
13,140,275 |
|
|
— |
|
$ |
201,694 |
|
$ |
20,841,969 |
| ||||||||
|
2017 |
|
$ |
750,000 |
|
$ |
8,125,000 |
|
$ |
12,834,775 |
|
|
— |
|
$ |
274,675 |
|
$ |
21,984,450 |
| ||||||||
Robert L. Goldstein Senior Managing Director and Chief Operating Officer |
|
2019 |
|
$ |
500,000 |
|
$ |
2,950,000 |
|
$ |
4,399,808 |
|
|
— |
|
$ |
46,125 |
|
$ |
7,895,933 |
| |||||||
|
2018 |
|
$ |
500,000 |
|
$ |
2,950,000 |
|
$ |
4,425,029 |
|
|
— |
|
$ |
55,280 |
|
$ |
7,930,309 |
| ||||||||
|
2017 |
|
$ |
500,000 |
|
$ |
3,275,000 |
|
$ |
3,999,470 |
|
$ |
10,460,528 |
|
$ |
54,500 |
|
$ |
18,289,498 |
| ||||||||
J. Richard Kushel Senior Managing Director and Global Head of Multi-Asset Strategies and Global Fixed Income |
|
2019 |
|
$ |
500,000 |
|
$ |
2,612,500 |
|
$ |
3,462,238 |
|
|
— |
|
$ |
46,125 |
|
$ |
6,620,863 |
| |||||||
|
2018 |
|
$ |
500,000 |
|
$ |
2,712,500 |
|
$ |
3,600,293 |
|
|
— |
|
$ |
50,455 |
|
$ |
6,863,248 |
| ||||||||
|
2017 |
|
$ |
500,000 |
|
$ |
2,950,000 |
|
$ |
3,509,763 |
|
$ |
7,845,347 |
|
$ |
49,425 |
|
$ |
14,854,535 |
| ||||||||
Gary S. Shedlin Senior Managing Director and Chief Financial Officer |
|
2019 |
|
$ |
500,000 |
|
$ |
2,475,000 |
|
$ |
3,474,958 |
|
|
— |
|
$ |
13,250 |
|
$ |
6,463,208 |
| |||||||
|
2018 |
|
$ |
500,000 |
|
$ |
2,475,000 |
|
$ |
3,599,726 |
|
|
— |
|
$ |
18,500 |
|
$ |
6,593,226 |
| ||||||||
|
2017
|
|
$
|
500,000
|
|
$
|
2,700,000
|
|
$
|
3,249,781
|
|
$
|
7,845,347
|
|
$
|
18,500
|
|
$
|
14,313,628
|
| ||||||||
| (1) | Bonus.These amounts represent the cash portion of discretionary annual bonuses for the respective periods awarded pursuant to |
As described on page |
| (2) | Stock Awards.Reflects the grant date fair value of awards made during each calendar year as determined pursuant to FASB ASC Topic 718. For complete valuation assumptions of the awards, see Note |
| (3) | Performance-Based Option Awards.In the fourth quarter of 2017, BlackRock implemented a key strategic part of our long-term management succession plan by granting long-term incentive awards in the form of performance-based stock options to a select group of senior leaders, excluding the CEO and President, who we believe will play critical roles in BlackRock’s future. Amounts reflect the grant date fair value of performance-based option awards made during the calendar year as determined pursuant to FASB ASC Topic 718. For complete valuation assumptions of the awards, see Note 18 to the consolidated financial statements in our 2019 Form10-K. |
| (4) | All Other Compensation.For each of the NEOs, |
80BLACKROCK, INC. 20172020 PROXY STATEMENT67
2016Compensation Discussion and Analysis | Executive Compensation Tables
2019 Grants of Plan-Based Awards
The following table sets forth information concerning equity incentive plan-based compensation provided by BlackRock in 20162019 to our NEOs.
| Estimated Future Payouts Under Equity Incentive Plan Awards |
Estimated Future Payouts Under Equity
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date(1) | Date of Committee Action | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares or Units (#) | Grant Date Fair Value of Stock and Option Awards(4) | Grant Date(1)
| Date of
| Threshold
| Target
| Maximum
| All Other
| Grant Date Fair
| ||||||||||||||||||||||||||||||||||||||||||
Laurence D. Fink | 1/19/2016 | 1/13/2016 | (2) | 13,828 | $ | 4,094,747 | 1/17/2019 |
| 1/14/2019 | (2) | 10,358 | $ | 4,250,043 | |||||||||||||||||||||||||||||||||||||||||||
| 1/19/2016 | 1/13/2016 | (3) | 0 | 41,486 | 68,451 | $ | 12,284,834 | 1/17/2019 |
| 1/14/2019 | (3) | — | 25,590 | 42,224 | $ | 10,499,961 | ||||||||||||||||||||||||||||||||||||||||
Robert S. Kapito | 1/19/2016 | 1/13/2016 | (2) | 10,257 | $ | 3,037,303 | 1/17/2019 |
| 1/14/2019 | (2) | 8,530 | $ | 3,499,987 | |||||||||||||||||||||||||||||||||||||||||||
| 1/17/2019 |
| 1/14/2019 | (3) | — | 19,497 | 32,170 | $ | 7,999,912 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 1/19/2016 | 1/13/2016 | (3) | 0 | 30,772 | 50,773 | $ | 9,112,205 | |||||||||||||||||||||||||||||||||||||||||||||||||
Robert L. Goldstein | 1/19/2016 | 1/13/2016 | (2) | 6,416 | $ | 1,899,906 | 1/17/2019 |
| 1/14/2019 | (2) | 4,874 | $ | 1,999,875 | |||||||||||||||||||||||||||||||||||||||||||
| 1/19/2016 | 1/13/2016 | (3) | 0 | 6,754 | 11,144 | $ | 1,999,994 | 1/17/2019 |
| 1/14/2019 | (3) | — | 5,849 | 9,651 | $ | 2,399,932 | ||||||||||||||||||||||||||||||||||||||||
J. Richard Kushel | 1/19/2016 | 1/13/2016 | (2) | 5,200 | $ | 1,539,824 | 1/17/2019 |
| 1/14/2019 | (2) | 4,295 | $ | 1,762,303 | |||||||||||||||||||||||||||||||||||||||||||
| 1/17/2019 |
| 1/14/2019 | (3) | — | 4,143 | 6,836 | $ | 1,699,935 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 1/19/2016 | 1/13/2016 | (3) | 0 | 6,382 | 10,530 | $ | 1,889,838 | |||||||||||||||||||||||||||||||||||||||||||||||||
Gary S. Shedlin | 1/19/2016 | 1/13/2016 | (2) | 4,727 | $ | 1,399,759 | 1/17/2019 |
| 1/14/2019 | (2) | 3,717 | $ | 1,525,141 | |||||||||||||||||||||||||||||||||||||||||||
| 1/19/2016 | 1/13/2016 | (3) | 0 | 5,909 | 9,749 | $ | 1,749,773 | 1/17/2019 |
| 1/14/2019 | (3) | — | 4,752 | 7,841 | $ | 1,949,817 | ||||||||||||||||||||||||||||||||||||||||
| (1) | Grant Date.Grant date is the date on which approved award values were converted to a number of |
| (2) | These January |
| (3) | These January |
| (4) | Grant Date Fair Value of Stock and Option Awards. Reflects the grant date fair value of awards as determined pursuant to FASB ASC Topic 718. For complete valuation assumptions of the awards, see Note |
68BLACKROCK, INC. 20172020 PROXY STATEMENT81
|
Compensation Discussion and Analysis | Executive Compensation Tables
20162019 Outstanding Equity Awards at FiscalYear-End
| Option Awards | Stock Awards |
Performance-Based Option Awards
|
Stock Awards
| |||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Grant Date
|
Equity Incentive Plan
| Option
| Option Expiration Date
|
Number of
|
Market Value of Stock That Have
| ||||||||||||||||||||||||||||||||||||
Laurence D. Fink | 1/18/2013 | — | — | — | 37,472 | (2) | $ | 14,259,595 | 1/17/2017 | — | — | — |
| 3,687 | (2) | $ | 1,853,455 | |||||||||||||||||||||||||||||||
| 1/17/2017 | — | — | — |
| 36,796 | (3) | $ | 18,497,349 | ||||||||||||||||||||||||||||||||||||||||
| 1/17/2014 | — | — | — | 9,298 | (3) | $ | 3,538,261 | 1/16/2018 | — | — | — |
| 5,414 | (2) | $ | 2,721,618 | ||||||||||||||||||||||||||||||||
| 1/17/2014 | — | — | — | 24,322 | (2) | $ | 9,255,494 | 1/16/2018 | — | — | — |
| 18,462 | (3) | $ | 9,280,847 | ||||||||||||||||||||||||||||||||
| 1/16/2015 | — | — | — | 7,746 | (3) | $ | 2,947,663 | 1/17/2019 | — | — | — |
| 10,358 | (2) | $ | 5,206,967 | ||||||||||||||||||||||||||||||||
| 1/16/2015 | — | — | — | 35,202 | (4) | $ | 13,395,769 | 1/17/2019 | — | — | — |
| 26,460 | (3) | $ | 13,301,442 | ||||||||||||||||||||||||||||||||
| 1/19/2016 | — | — | — | 13,828 | (3) | $ | 5,262,107 | |||||||||||||||||||||||||||||||||||||||||
| 1/19/2016 | — | — | — | 39,411 | (4) | $ | 14,997,462 | |||||||||||||||||||||||||||||||||||||||||
Robert S. Kapito | 1/18/2013 | — | — | — | 29,583 | (2) | $ | 11,257,515 | 1/17/2017 | — | — | — |
| 2,851 | (2) | $ | 1,433,198 | |||||||||||||||||||||||||||||||
| 1/17/2014 | — | — | — | 7,091 | (3) | $ | 2,698,409 | 1/17/2017 | — | — | — |
| 28,450 | (3) | $ | 14,301,815 | ||||||||||||||||||||||||||||||||
| 1/17/2014 | — | — | — | 19,201 | (2) | $ | 7,306,749 | 1/16/2018 | — | — | — |
| 4,136 | (2) | $ | 2,079,167 | ||||||||||||||||||||||||||||||||
| 1/16/2015 | — | — | — | 5,952 | (3) | $ | 2,264,974 | 1/16/2018 | — | — | — |
| 14,275 | (3) | $ | 7,176,043 | ||||||||||||||||||||||||||||||||
| 1/16/2015 | — | — | — | 27,051 | (4) | $ | 10,293,988 | 1/17/2019 | — | — | — |
| 8,530 | (2) | $ | 4,288,031 | ||||||||||||||||||||||||||||||||
| 1/19/2016 | — | — | — | 10,257 | (3) | $ | 3,903,199 | 1/17/2019 | — | — | — |
| 20,160 | (3) | $ | 10,134,432 | ||||||||||||||||||||||||||||||||
| 1/19/2016 | — | — | — | 29,233 | (4) | $ | 11,124,326 | |||||||||||||||||||||||||||||||||||||||||
Robert L. Goldstein | 1/18/2013 | — | — | — | 16,566 | (2) | $ | 6,304,026 | 1/17/2017 | — | — | — |
| 1,688 | (2) | $ | 848,558 | |||||||||||||||||||||||||||||||
| 1/17/2017 | — | — | — |
| 6,205 | (3) | $ | 3,119,254 | ||||||||||||||||||||||||||||||||||||||||
| 12/4/2017 | 108,190 | 513.5 | 12/4/2026 | (4) |
| — |
| — | ||||||||||||||||||||||||||||||||||||||||
| 1/17/2014 | — | — | — | 1,959 | (3) | $ | 745,478 | 1/16/2018 | — | — | — |
| 2,737 | (2) | $ | 1,375,890 | ||||||||||||||||||||||||||||||||
| 1/17/2014 | — | — | — | 8,960 | (2) | $ | 3,409,638 | 1/16/2018 | — | — |
| — |
| 3,114 | (3) | $ | 1,565,408 | |||||||||||||||||||||||||||||||
| 1/16/2015 | — | — | — | 3,926 | (3) | $ | 1,494,000 | 1/17/2019 | — | — | — |
| 4,874 | (2) | $ | 2,450,160 | ||||||||||||||||||||||||||||||||
| 1/16/2015 | — | — | — | 5,874 | (4) | $ | 2,235,292 | 1/17/2019 | — | — | — |
| 6,048 | (3) | $ | 3,040,330 | ||||||||||||||||||||||||||||||||
| 1/19/2016 | — | — | — | 6,416 | (3) | $ | 2,441,545 | |||||||||||||||||||||||||||||||||||||||||
| 1/19/2016 | — | — | — | 6,416 | (4) | $ | 2,441,545 | |||||||||||||||||||||||||||||||||||||||||
J. Richard Kushel | 1/18/2013 | — | — | — | 17,750 | (2) | $ | 6,754,585 | 1/17/2017 | — | — | — |
| 1,368 | (2) | $ | 687,694 | |||||||||||||||||||||||||||||||
| 1/17/2014 | — | — | — | 1,554 | (3) | $ | 591,359 | 1/17/2017 | — | — | — |
| 5,822 | (3) | $ | 2,926,719 | ||||||||||||||||||||||||||||||||
| 1/17/2014 | — | — | — | 8,832 | (2) | $ | 3,360,929 | 12/4/2017 | 81,142 | 513.5 | 12/4/2026 | (4) |
| — |
| — | ||||||||||||||||||||||||||||||||
| 1/16/2015 | — | — | — | 2,986 | (3) | $ | 1,136,292 | 1/16/2018 | — | — | — |
| 2,354 | (2) | $ | 1,183,356 | ||||||||||||||||||||||||||||||||
| 1/16/2015 | — | — | — | 5,550 | (4) | $ | 2,111,997 | 1/16/2018 | — | — |
| — |
| 2,373 | (3) | $ | 1,192,907 | |||||||||||||||||||||||||||||||
| 1/19/2016 | — | — | — | 5,200 | (3) | $ | 1,978,808 | 1/17/2019 | — | — | — |
| 4,295 | (2) | $ | 2,159,097 | ||||||||||||||||||||||||||||||||
| 1/19/2016 | — | — | — | 6,062 | (4) | $ | 2,306,833 | 1/17/2019 | — | — | — |
| 4,284 | (3) | $ | 2,153,567 | ||||||||||||||||||||||||||||||||
Gary S. Shedlin | 1/17/2014 | — | — | — | 1,254 | (3) | $ | 477,197 | 1/17/2017 | — | — | — |
| 1,244 | (2) | $ | 625,359 | |||||||||||||||||||||||||||||||
| 1/17/2014 | — | — | — | 7,680 | (2) | $ | 2,922,547 | 1/17/2017 | — | — | — |
| 5,467 | (3) | $ | 2,748,261 | ||||||||||||||||||||||||||||||||
| 1/16/2015 | — | — | — | 2,763 | (3) | $ | 1,051,432 | 12/4/2017 | 81,142 | 513.5 | 12/4/2026 | (4) |
| — |
| — | ||||||||||||||||||||||||||||||||
| 1/16/2015 | — | — | — | 5,286 | (4) | $ | 2,011,534 | 1/16/2018 | — | — | — |
| 2,060 | (2) | $ | 1,035,562 | ||||||||||||||||||||||||||||||||
| 1/19/2016 | — | — | — | 4,727 | (3) | $ | 1,798,813 | 1/16/2018 | — | — |
| — |
| 2,743 | (3) | $ | 1,378,906 | |||||||||||||||||||||||||||||||
| 1/19/2016 | — | — | — | 5,613 | (4) | $ | 2,135,971 | 1/17/2019 | — | — | — |
| 3,717 | (2) | $ | 1,868,536 | ||||||||||||||||||||||||||||||||
| 1/17/2019 | — | — | — |
| 4,914 | (3) | $ | 2,470,268 | ||||||||||||||||||||||||||||||||||||||||
| (1) | Market Value of Shares or Units of Stock That Have Not Vested.Amounts reflect theyear-end value of |
| (2) | One-third of these RSUs |
These BPIP Awards vest subject to the Company’s attainment of certain financial targets during the three-year performance period commencing with the year of grant. The number of units shown reflects the number of shares that the NEO would receive upon settlement of the award assuming actual performance relative to the performance targets through December 31, |
| (4) | In the fourth quarter of 2017, BlackRock implemented a key strategic part of our long-term management succession plan by granting long-term incentive awards in the form of performance-based stock options to a select group of senior leaders, excluding the CEO and President, who we believe will play critical roles in BlackRock’s future. These awards represent performance-based option awards granted to Messrs. Goldstein, Kushel and Shedlin in connection with the strategic initiative.One-third of these performance-based stock options will vest on each of the fifth, sixth and seventh anniversaries of the date of grant, provided a stock price hurdle of at least 25% growth from the strike price of $513.50 (the closing stock price on the date of grant) is met and maintained for 20 consecutive trading days within five years of grant and positive Organic Revenue growth during the performance period is achieved. The term of the stock options is nine years. Consistent with the intent of these grants, if a participant voluntarily terminates employment for any reason, including retirement, all unvested awards are forfeited. |
82BLACKROCK, INC. 20172020 PROXY STATEMENT69
2016Compensation Discussion and Analysis | Executive Compensation Tables
2019 Option Exercises and Stock Vested
The following table sets forth information concerning the number of shares acquired and the value realized by our NEOs during the fiscal year ended December 31, 20162019 on the exercise of options or the vesting and/or settlement of RS and RSUs.
| Option Awards | Stock Awards |
Option Awards
|
Stock Awards
| |||||||||||||||||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | Number of
| Value
| Number of
| Value Realized on
| ||||||||||||||||||||||||
Laurence D. Fink | — | — | 56,898 | $ | 17,880,765 |
|
— |
|
|
— |
|
|
52,738 |
|
$ |
21,534,508 |
| |||||||||||||||
Robert S. Kapito | — | — | 44,261 | $ | 13,909,462 |
|
— |
|
|
— |
|
|
39,294 |
|
$ |
16,044,919 |
| |||||||||||||||
Robert L. Goldstein | — | — | 23,385 | $ | 7,348,970 |
|
— |
|
|
— |
|
|
11,989 |
|
$ |
4,895,468 |
| |||||||||||||||
J. Richard Kushel | 28,007 | $ | 5,169,304 | 24,263 | $ | 7,624,890 |
|
— |
|
|
— |
|
|
10,699 |
|
$ |
4,368,723 |
| ||||||||||||||
Gary S. Shedlin | — | — | 5,007 | $ | 1,573,500 |
|
— |
|
|
— |
|
|
9,793 |
| $ | 3,998,776 | ||||||||||||||||
| (1) |
| Value realized reflects (i) the closing price per share of BlackRock common stock on the day prior to the vesting date, multiplied by (ii) the number of |
20162019 Nonqualified Deferred Compensation
Name | Executive Contributions in Last Fiscal Year ($) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings (Losses) in Last Fiscal Year ($)(1) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($) | Executive
|
Registrant
| Aggregate
| Aggregate
| Aggregate
| ||||||||||||||||||||||||||||||
Laurence D. Fink | — | — | $ | 232,584 | — | $ | 2,042,006 |
|
— |
|
|
— |
|
$ |
688,474 |
|
|
— |
|
$ |
2,995,450 |
| ||||||||||||||||||
Robert S. Kapito | — | — | $ | 5,270 | — | $ | 214,182 |
|
— |
|
|
— |
|
$ |
15,335 |
|
|
— |
|
$ |
238,208 |
| ||||||||||||||||||
Robert L. Goldstein | — | — | $ | 495,948 | $ | 252,418 | $ | 10,507,693 |
|
— |
|
|
— |
|
$ |
(2,726,297 |
) |
$ |
3,262,560 |
|
$ |
7,182,731 |
| |||||||||||||||||
J. Richard Kushel | — | — | $ | 53,993 | — | $ | 1,216,747 |
$ |
542,500(2) |
|
|
— |
|
$ |
346,802 |
|
|
— |
|
$ |
3,049,275 |
| ||||||||||||||||||
Gary S. Shedlin | — | — | — | — | — |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| ||||||||||||||||||||
| (1) | Represents earnings on balances in the VDCP (as |
| (2) | The amount of Mr. Kushel’s contribution to the VDCP is included in the $2,712,500 shown for 2018 for Mr. Kushel in the Bonus column of the 2019 Summary Compensation Table. |
Voluntary Deferred Compensation Plan
BlackRock maintains the Amended and Restated BlackRock, Inc. Voluntary Deferred Compensation Plan (“VDCP”),VDCP, which allows participants to elect to defer between 1% and 100% of the cash element of their annual incentive compensation that is not mandatorily deferred under another arrangement. The participants must specify a deferral period of up to 10 years and distributions may be in up to 10 installments. The benchmark investments available for the NEOs are the same as those for all other participants. Deferred amounts and any benchmark returns are vested at the time of deferral or crediting, as applicable, under the VDCP.
Potential Payments Upon Termination or Change in Control
As described previously, the NEOs do not have individual employment, severance or change in control agreements with BlackRock.
Pursuant to the terms of the applicable equity award agreements, an NEO whose employment is terminated may be entitled to accelerated vesting and payment (or continued eligibility for vesting and payment) with respect to such NEO’s outstanding awards. In addition, upon a termination of employment by the Company without cause, an NEO may be eligible to receive severance benefits under the Severance Plan. The applicable terms and estimated payment amounts with respect to the foregoing are set forth in the tables on pages 72 to 73,84 and 86, in each case assuming a termination of employment of the NEO on December 30, 2016.
Upon a change in control of BlackRock or a termination of an NEO’s employment for any reason, such NEO’s VDCP balance would be paid out. All outstanding VDCP balances were fully vested as of December 31, 2016. Accordingly, no amounts have been included in the table on page 72 below with respect to VDCP balances. For additional information, please refer to the “2016 Nonqualified Deferred Compensation” table above.2019.
70BLACKROCK, INC. 20172020 PROXY STATEMENT83
Compensation Discussion and Analysis | Executive Compensation Tables
Treatment of Outstanding Equity Awards Upon Termination of Employment or a Change in Control
|
Treatment of Outstanding Equity Awards Upon Termination of Employment or
a Change in Control
Type of Award | Voluntary Resignation | Termination For Cause | Involuntary Termination Without Cause(1) | Qualified Retirement / Disability | Death | |||||||||||||||
RSUs Granted as Part of Annual Incentive Awards(“Year-End Awards”) | Unvested | Unvested | Awards will continue to vest in accordance with their schedule following termination. Any portion of the award that remains unvested on theone-year anniversary of termination will become fully vested on that date. | Awards will continue to | ||||||||||||||||
| Immediate vesting and settlement. | |||||||||||||||||||
RSUs Granted as BPIP Awards | Unvested | Unvested | Awards granted | Awards granted after January 2017 will continue to be eligible to fully vest following the end of the performance period, subject to attainment of the applicable performance targets andnon-engagement in any Competitive Activity prior to the vesting date. If termination occurs within the12-month period following a change in control, awards granted will fully vest at target level. | Awards will continue to | Awards will continue to be eligible to fully vest following the end of the performance period, subject to attainment of the applicable performance targets. | ||||||||||||||
Performance-Based Option Awards | Unvested awards are forfeited; vested but unexercised awards remain exercisable for a 90-day period following separation. | Unvested awards are forfeited; vested and unexercised awards are cancelled. | Awards will vest on a pro rata basis with respect to each tranche (based on length of service during the vesting period), plus aone-year service credit, and will remain exercisable through the full term, subject to achievement of the applicable performance conditions. If termination occurs within the12-month period following a change in control, awards will fully vest and remain exercisable through the full term. | Qualified Retirement: Unvested awards are forfeited; vested but unexercised awards remain exercisable for a 90-day period following separation. Disability:Awards will | Awards will continue to be eligible to fully vest on each vesting date, subject to achievement of the applicable performance conditions. Any vested options will remain exercisable through the full term. | |||||||||||||||
| (1) | Treatment described in the event of a termination without cause following a change in control applies if outstanding awards are assumed or substituted by the |
84BLACKROCK, INC. 2020 PROXY STATEMENT
Compensation Discussion and Analysis | Executive Compensation Tables
Voluntary Deferred Compensation Plan:Upon a change in control of BlackRock, Inc. or a termination (with respect to deferrals prior to the 2016 plan year) of an NEO’s employment for any reason, such NEO’s VDCP balance would be paid out. Upon a termination of an NEO’s employment for any reason with respect to deferrals for the 2016 plan year and beyond, such NEO’s VDCP balance would be paid in accordance with their deferral election. All outstanding VDCP balances were fully vested as of December 31, 2019. Accordingly, no amounts have been included in the table on page 86 with respect to VDCP balances. For additional information, please refer to the“2019 Nonqualified Deferred Compensation” table on page 83.
Leadership Retention Carry Plan:Percentage points granted under the Leadership Retention Carry Plan in 2019 had no grant date fair value as determined pursuant to FASB ASC Topic 718. In the event of a termination of employment due to voluntary resignation, termination for cause or involuntary termination without cause, all percentage points granted are forfeited. In the event of a termination of employment due to qualified retirement, death or disability, each recipient would begin receiving cash distributions in accordance with the schedule described below, with respect to his or her percentage points granted under the BlackRock Leadership Retention Carry Plan, subject to the execution of a release of claims and compliance with restrictive covenant obligations. An initial distribution would be made on the first payroll date following June 30th of the calendar year immediately following the year in which the qualifying termination occurs, with additional distributions occurring on the first payroll dates following the dates that are 48 and 108 months, respectively, following the initial distribution date. In each case, the distributions would be based on the actual carried interest distributions to BlackRock, Inc. from the participating BlackRock carry funds as of the applicable measurement date; provided that, each of first two distributions will be limited to 80% of the distributions calculated as of the applicable measurement date. For purposes of each distribution, the measurement date will be December 31st preceding the year in which the distribution is made. For additional information, please refer to “Leadership Retention Carry Plan” on page 65.
BLACKROCK, INC. 20172020 PROXY STATEMENT 7185
Compensation Discussion and Analysis | Executive Compensation Tables
Potential Payments Upon Termination of Employment or a Change in Control
The amounts in the table below reflect an assumed termination of employment on December 30, 201631, 2019 and are based on the closing price of BlackRock common stock on December 30, 2016,31, 2019, which was $380.54.$502.70. Any amounts payable upon or due to an NEO’s termination by BlackRock other than for cause, due to the NEO’s disability or upon a qualified retirement (as such terms are defined in the applicable award agreements) are subject to the NEO’s (i) execution of a release of claims against BlackRock and (ii) continued compliance with covenants restricting the NEO’s solicitation of clients or employees of BlackRock for theone-year period following termination.
Name | Involuntary Termination Without Cause | Involuntary a Change in Control(8) | Death / Disability / Qualified Retirement | Voluntary Resignation / Termination for Cause | ||||||||||||
Laurence D. Fink | ||||||||||||||||
Year-End Awards(1) | $ | 11,748,031 | $ | 11,748,031 | $ | 11,748,031 | $ | 0 | ||||||||
Challenge Awards(2) | $ | 17,344,633 | $ | 17,344,633 | $ | 17,344,633 | $ | 0 | ||||||||
BPIP Awards(3), (4), (5) | $ | 18,394,923 | $ | 29,182,852 | $ | 28,393,231 | $ | 0 | ||||||||
Severance(6) | $ | 934,615 | $ | 934,615 | $ | 0 | $ | 0 | ||||||||
Total(7) | $ | 48,422,202 | $ | 59,210,131 | $ | 57,485,895 | $ | 0 | ||||||||
Robert S. Kapito | ||||||||||||||||
Year-End Awards(1) | $ | 8,866,582 | $ | 8,866,582 | $ | 8,866,582 | $ | 0 | ||||||||
Challenge Awards(2) | $ | 13,692,971 | $ | 13,692,971 | $ | 13,692,971 | $ | 0 | ||||||||
BPIP Awards(3), (4), (5) | $ | 14,001,969 | $ | 22,003,964 | $ | 21,418,313 | $ | 0 | ||||||||
Severance(6) | $ | 778,846 | $ | 778,846 | $ | 0 | $ | 0 | ||||||||
Total(7) | $ | 37,340,368 | $ | 45,342,363 | $ | 43,977,866 | $ | 0 | ||||||||
Robert L. Goldstein | ||||||||||||||||
Year-End Awards(1) | $ | 4,681,023 | $ | 4,681,023 | $ | 4,681,023 | $ | 0 | ||||||||
Challenge Awards(2) | $ | 7,440,318 | $ | 7,440,318 | $ | 7,440,318 | $ | 0 | ||||||||
BPIP Awards(3), (4), (5) | $ | 3,048,886 | $ | 4,805,459 | $ | 4,676,837 | $ | 0 | ||||||||
Severance(6) | $ | 423,077 | $ | 423,077 | $ | 0 | $ | 0 | ||||||||
Total(7) | $ | 15,593,304 | $ | 17,349,877 | $ | 16,798,177 | $ | 0 | ||||||||
J. Richard Kushel | ||||||||||||||||
Year-End Awards(1) | $ | 3,706,460 | $ | 3,706,460 | $ | 3,706,460 | $ | 0 | ||||||||
Challenge Awards(2) | $ | 7,874,895 | $ | 7,874,895 | $ | 7,874,895 | $ | 0 | ||||||||
BPIP Awards(3), (4), (5) | $ | 2,880,688 | $ | 4,540,603 | $ | 4,418,830 | $ | 0 | ||||||||
Severance(6) | $ | 500,000 | $ | 500,000 | $ | 0 | $ | 0 | ||||||||
Total(7) | $ | 14,962,042 | $ | 16,621,958 | $ | 16,000,185 | $ | 0 | ||||||||
Gary S. Shedlin | ||||||||||||||||
Year-End Awards(1) | $ | 3,327,442 | $ | 3,327,442 | $ | 3,327,442 | $ | 0 | ||||||||
Challenge Awards(2) | $ | 974,182 | $ | 974,182 | $ | 974,182 | ||||||||||
BPIP Awards(3), (4), (5) | $ | 2,723,525 | $ | 4,260,145 | $ | 4,147,505 | $ | 0 | ||||||||
Severance(6) | $ | 115,385 | $ | 115,385 | $ | 0 | $ | 0 | ||||||||
Total(7) | $ | 7,140,534 | $ | 8,677,154 | $ | 8,449,130 | $ | 0 | ||||||||
Name | Involuntary Termination Without Cause | Involuntary Termination Without Cause Following a Change in Control | Qualified Retirement / | Voluntary Resignation / Termination for Cause | ||||||||||||
Laurence D. Fink | ||||||||||||||||
Year-End Awards(1) | $ | 9,782,039 | $ | 9,782,039 | $ | 9,782,039 | — | |||||||||
BPIP Awards(2), (3), (4) | $ | 41,079,639 | $ | 42,410,286 | $ | 41,079,639 | — | |||||||||
Severance(9) | $ | 1,557,692 | $ | 1,557,692 | — | — | ||||||||||
Total(11) | $ | 52,419,370 |
| $ | 53,750,017 |
| $ | 50,861,678 |
|
| — |
| ||||
Robert S. Kapito | ||||||||||||||||
Year-End Awards(1) | $ | 7,800,396 | $ | 7,800,396 | $ | 7,800,396 | — | |||||||||
BPIP Awards(2), (3), (4) | $ | 31,612,290 | $ | 32,645,841 | $ | 31,612,290 | — | |||||||||
Severance(9) | $ | 1,298,077 | $ | 1,298,077 | — | — | ||||||||||
Total(10), (11) | $ | 40,710,762 |
| $ | 41,744,314 |
| $ | 39,412,685 |
|
| — |
| ||||
Robert L. Goldstein | ||||||||||||||||
Year-End Awards(1) | $ | 4,674,607 | $ | 4,674,607 | $ | 4,674,607 | — | |||||||||
BPIP Awards(2), (3), (4) | $ | 7,724,991 | $ | 7,923,055 | $ | 7,724,991 | — | |||||||||
Option Awards(5), (6), (7), (8) | — | — | — | — | ||||||||||||
Severance(9) | $ | 500,000 | $ | 500,000 | — | — | ||||||||||
Total(11) | $ | 12,899,598 |
| $ | 13,097,662 |
| $ | 12,399,598 |
|
| — |
| ||||
J. Richard Kushel | ||||||||||||||||
Year-End Awards(1) | $ | 4,030,146 | $ | 4,030,146 | $ | 4,030,146 | — | |||||||||
BPIP Awards(2), (3), (4) | $ | 6,273,193 | $ | 6,429,533 | $ | 6,273,193 | — | |||||||||
Option Awards(5), (6), (7), (8) | — | — | — | — | ||||||||||||
Severance(9) | $ | 519,231 | $ | 519,231 | — | — | ||||||||||
Total(11) | $ | 10,822,570 |
| $ | 10,978,910 |
| $ | 10,303,339 |
|
| — |
| ||||
Gary S. Shedlin | ||||||||||||||||
Year-End Awards(1) | $ | 3,529,457 | $ | 3,529,457 | $ | 3,529,457 | — | |||||||||
BPIP Awards(2), (3), (4) | $ | 6,597,435 | $ | 6,778,910 | $ | 6,597,435 | — | |||||||||
Option Awards(5), (6), (7), (8) | — | — | — | — | ||||||||||||
Severance(9) | $ | 134,615 | $ | 134,615 | — | — | ||||||||||
Total(11) | $ | 10,261,507 |
| $ | 10,442,981 |
| $ | 10,126,892 |
|
| — |
| ||||
| (1) | This reflects an amount equal to (i) the number of unvested |
| (2) |
72BLACKROCK, INC. 2017 PROXY STATEMENT
|
| BPIP Awards upon an involuntary termination without cause (other than following a change in control): |
86BLACKROCK, INC. 2020 PROXY STATEMENT
Compensation Discussion and Analysis | Executive Compensation Tables
| relative to the performance targets through December 31, |
BPIP Awards upon an involuntary termination without cause within 12 months following a change in control: |
| (4) | BPIP Awards upon a termination due to death, disability or qualified retirement: For January 2017 BPIP Awards, the value shown reflects an amount equal to (i) the number of shares that the NEO would receive upon settlement of the award, assuming actual performance through December 31, 2019 multiplied by (ii) $502.70 (the closing price of BlackRock common stock on December 31, 2019). For both January 2018 and January 2019 BPIP Awards, the value shown reflects an amount equal to (i) the number of shares that the NEO would receive upon settlement of the award, assuming actual performance relative to the performance targets through December 31, 2019 and target-level performance for the remainder of the applicable performance period, multiplied by (ii) |
| (5) | In the fourth quarter of 2017, we implemented a key strategic part of our long-term management succession plan by creating equity incentive grants of performance-based stock options for a select group of senior leaders, excluding the CEO and President, who we believe will play critical roles in BlackRock’s future. These awards were part of a strategic initiative and we do not consider them to be part of our regular annual compensation. |
| (6) | Option Awards upon an involuntary termination without cause: Assuming a termination date of December 31, 2019, the closing price of BlackRock common stock was $502.70 as of such date and, therefore, the stock price hurdle would not have been met. The amounts shown represent the value of a pro rata portion of unvested options as of December 31, 2019, at the closing price on that date. The pro rata portion (with respect to each tranche) which can be earned based on, and subject to, the achievement of the performance conditions is determined by multiplying the unvested options at termination of employment by a fraction, the numerator of which is the number of full months, rounded down, the executive was employed from the date of grant through the termination date plus 12 months, and the denominator of which is the number of full months elapsed from the grant date through the applicable vesting date. |
| (7) | Option Awards upon a termination without cause within 12 months following a change in control or due to death or disability: Assuming a termination date of December 31, 2019, the closing price of BlackRock common stock was $502.70 as of such date and, therefore, the stock price hurdle would not have been met. The amounts shown represent the value of unvested options as of December 31, 2019. |
| (8) | Option Awards upon qualified retirement: all unvested options will be forfeited. |
| (9) | Reflects the amount that would have been payable to the NEO in a lump sum pursuant to the Severance Plan, assuming the NEO’s termination of employment by BlackRock other than for cause on December |
Total value for Mr. Kapito includes an award of percentage points under the BlackRock Leadership Retention Carry Plan in order to promote his long-term retention and drive future growth. The award has a reasonable estimated value of $0, assuming a termination date of December 31, 2019 and initial distribution date of June 30, 2020. |
| (11) | Total values forYear-End Awards, |
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of RegulationS-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of our CEO:
For 2019, our last completed fiscal year:
The median of the annual total compensation of all employees of our Company (other than our CEO) was $133,644; and
The annual total compensation of our CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $24,308,254.
Based on this information, the ratio of our CEO’s annual total compensation to the median of the annual total compensation of all employees was 182:1. This result is broadly consistent with our historical pay practices.
BLACKROCK, INC. 2020 PROXY STATEMENT 87
Compensation Discussion and Analysis | CEO Pay Ratio for 2019
2019 CEO Pay Ratio = 182:1
Methodology
To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee and our CEO, we took the following steps:
| 1. | Selection of Determination Date. We determined that, as of December 31, 2019, our employee population consisted of approximately 16,200 employees globally (as reported in Item 1,Business, in our 2019 Form10-K). This population included all of our full-time and part-time employees. |
Identification of Median Employee.To identify the |
We identified our median employee using this compensation measure, which was consistently applied to all our employees included in the calculation.We did not make anycost-of-living adjustments in identifying the “median employee.” |
| 3. | Calculation of Annual Total Compensation.Once we identified our median employee, we combined all the elements of such employee’s compensation for 2019 in accordance with the requirements of Item 402(c)(2)(x) of RegulationS-K, resulting in annual total compensation of $133,644. The difference between such employee’s total compensation and the reported amount for the ratio calculation is the contributions made by BlackRock under its tax qualified defined contribution (401(k)) plan for 2019 to such employee, which totaled $7,744. |
For our CEO’s annual total compensation, we used the amount reported in the “Total” column (column (j)) of our2019 Summary Compensation Table included in this Proxy Statement on page 80. |
Equity Compensation Plan Information
The following table summarizes information, as of December 31, 2016,2019, relating to BlackRock equity compensation plans pursuant to which grants of options, restricted stock, restricted stock unitsRSUs or other rights to acquire shares of BlackRock common stock may be granted from time to time.
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities available for issuance under equity compensation plans (excluding securities reflected in first column) | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities available for | ||||||||||||||||||
Approved | ||||||||||||||||||||||||
BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan | 4,344,605 | (1) | N/A | (2) | 5,918,096 |
| 4,920,515 | (1) | $ | 513.50 | (2) | 7,197,212 | ||||||||||||
Amended and Restated BlackRock, Inc. Employee Stock Purchase Plan | — | N/A | 570,352 | (3) | — | N/A |
| 472,529 | (3) | |||||||||||||||
Total Approved by Shareholders | 4,344,605 | 6,488,448 | 4,920,515 | 7,669,741 | ||||||||||||||||||||
Not Approved | ||||||||||||||||||||||||
None | — | N/A | — | — | N/A | — | ||||||||||||||||||
Total Not Approved by Shareholders | — | N/A | — | — | N/A | — | ||||||||||||||||||
Total | 4,344,605 | 6,488,448 | 4,920,515 | 7,669,741 | ||||||||||||||||||||
| (1) | Includes |
| (2) | Represents the weighted-average exercise price of |
| (3) | Includes |
BLACKROCK, INC. 2017 PROXY STATEMENT 73
Non-Binding Advisory Vote on Frequency of Future Executive Compensation Advisory Votes
We are asking shareholders to recommend whether futurenon-binding shareholder votes to approve the compensation of our NEOs (that is, votes similar to thenon-binding vote in Item 2 on page 45) should occur every one, two or three years.
Why we recommend that our shareholders select a frequency of one year.
After careful consideration, the Board has determined that future advisory votes on executive compensation that occur every year is most appropriate for our Company, and the Board recommends that you vote for aone-year interval for future advisory votes on executive compensation.
The Board believes that an annual advisory vote on executive compensation will allow our shareholders to provide us with their input on our compensation philosophy, policies and practices as disclosed in the Proxy Statement on a timely basis. Additionally, an annual advisory vote on executive compensation is consistent with our policy of seeking input from, and engaging in discussions with, our shareholders on corporate governance matters and our executive compensation philosophy, policies and practices. We understand that our shareholders may have different views as to what is the best approach for the Company, and we look forward to hearing from our shareholders on this proposal.
The option of one year, two years or three years that receives the greatest number of votes cast by shareholders will be the frequency for future advisory votes on executive compensation recommended by shareholders. However, this vote is advisory andnon-binding. While the Board intends to follow the frequency receiving the greatest number of votes, it may decide that it is in the best interests of BlackRock and its shareholders to hold future advisory votes on executive compensation more or less frequently than the option recommended by shareholders.
Board Recommendation
|
2019. |
7488 BLACKROCK, INC. 20172020 PROXY STATEMENT
Ratification of the Appointment
of the Independent Registered
Public Accounting Firm
The Audit Committee is responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit BlackRock’s financial statements. The Audit Committee conducts a comprehensive annual evaluation of the independent registered public accounting firm’s qualifications, performance and independence.independence, and takes into account the insight provided to the Audit Committee and the quality of information provided on accounting issues, auditing issues and regulatory developments. The Audit Committee also considers whether, in order to ensure continuing auditor independence, there should be periodic rotation of the independent registered public accounting firm, taking into consideration the advisability and potential costs and impact of selecting a different firm.
At its meeting on March 8, 2017,17, 2020, the Audit Committee appointed Deloitte to serve as BlackRock’s independent registered public accounting firm for the 20172020 fiscal year. Deloitte or its predecessors have served as BlackRock’s independent registered public accounting firm since 2002.
The Audit Committee exercises sole authority to approve all audit engagement fees and terms associated with the retention of Deloitte & Touche LLP.Deloitte. In addition to ensuring the regular rotation of the lead audit partner as required by law, the Audit Committee is involved in the selection of, and reviews and evaluates, the lead audit partner.
The Audit Committee evaluated Deloitte’s institutional knowledge and experience, quality of service, sufficiency of resources and quality of the Board believeteam’s communications and interactions as well as the team’s objectivity and professionalism. As a result, the Audit Committee believes that the continued retention of Deloitte & Touche LLP to serve as BlackRock’s independent registered public accounting firm is in the best interests of the Company and its shareholders, andshareholders. Accordingly, we are asking shareholders to ratify the appointment of Deloitte & Touche LLP. Deloitte.
Although ratification is not required by our Bylaws or otherwise, the Board is submitting the appointment of Deloitte & Touche LLP to our shareholders for ratification because we value our shareholders’ views on this appointment and as a matter of good corporate governance. In the event that shareholders fail to ratify the appointment, it will be considered a recommendation to the Board and the Audit Committee to consider the selection of a different firm. Even if the appointment is ratified, the Audit Committee may in its discretion select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders.
Representatives of Deloitte & Touche LLP are expected to be present at the Annual Meeting and will have an opportunity to make a statement, if they so desire, and will be available to respond to appropriate questions.
BLACKROCK, INC. 20172020 PROXY STATEMENT 7589
Fees Incurred by BlackRock for Deloitte & Touche LLP
Aggregate fees incurred by BlackRock for the fiscal years ended December 31, 20162019 and 2015,2018, for BlackRock’s independent registered public accounting firm, Deloitte, & Touche LLP, the member firms of Deloitte Touche Tohmatsu Limited, and their respective affiliates, are set forth below.
| 2019 | 2018 | |||||||||||||||
| 2016 | 2015 | |||||||||||||||
Audit Fees(1) | $ | 15,626,000 | $ | 16,011,200 | $ | 18,362,000 | $ | 17,930,000 | ||||||||
Audit-Related Fees(2) | $ | 4,246,000 | $ | 4,342,700 | $ | 3,892,000 | $ | 3,766,000 | ||||||||
Tax Fees(3) | $ | 1,243,000 | $ | 798,300 | $ | 1,432,000 | $ | 948,000 | ||||||||
All Other Fees(4) | $ | 462,000 | $ | 233,000 | $ | 765,000 | $ | 829,000 | ||||||||
Total | $ | 21,577,000 | $ | 21,385,200 | $ | 24,451,000 | $ | 23,473,000 | ||||||||
| (1) | Audit Fees consisted of fees for the audits of the consolidated financial statements and reviews of the condensed consolidated financial statements filed with the SEC onForms10-K and10-Q, respectively, as well as work generally only the independent registered public accounting firm can be reasonably expected to provide, such as statutory audits and review of documents filed with the |
| (2) | Audit-Related Fees consisted principally of assurance and related services pursuant to Statement on Standards for Attestation Engagements (SSAE) No. |
| (3) | Tax Fees consisted of fees for all services performed by the independent registered public accounting firm’s tax personnel, except those services specifically related to the audit and review of the financial statements, and consisted principally of tax compliance and reviews of tax returns for certain sponsored investment funds. |
| (4) | All Other Fees consisted of fees paid to the independent registered public accounting firm other than audit, audit-related or tax services. All Other Fees included services related to regulatory advice, technology subscriptions and translation services. |
Deloitte also provides audit, audit-related and tax services directly to certain of our affiliated investment companies, unit trusts and partnerships. Fees paid to Deloitte directly by these funds for services were $25,000,000 and $22,800,000 for the fiscal years ended December 31, 2019 and 2018, respectively. Such fees do not include fees paid to Deloitte by registered investment companies.
Audit CommitteePre-Approval Policy
In accordance with the BlackRockBlackRock’s Audit CommitteePre-Approval Policy (the“Pre-Approval Policy”), all audit andnon-auditservices performed for BlackRock by BlackRock’s independent registered public accounting firmDeloitte werepre-approved by the Audit Committee. The Audit Committee which concluded that the provision of such services by Deloitte & Touche LLP was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The responsibility forpre-approval of audit and permittednon-audit services includespre-approval of the fees for such services and the other terms of the engagement.services. Periodically, the Audit Committee reviews andpre-approves all audit, audit-related, tax and other services that are performed by BlackRock’s independent registered public accounting firm for BlackRock. In the intervals between the scheduled meetings of the Audit Committee, the Audit Committee delegatespre-approval authority under thePre-Approval Policy to the Chair of the Audit Committee. The Chair or designee must report anypre-approval decisions under thePre-Approval Policy to the Audit Committee at its next scheduled meeting.
Board Recommendation
|
|
The Board of Directors unanimously recommends a vote "FOR" the ratification of Deloitte LLP as BlackRock's independent registered public account firm for the fiscal year 2020.
7690 BLACKROCK, INC. 20172020 PROXY STATEMENT
The Audit Committee’s primary responsibilities are to assist the Board with oversight of the integrity of BlackRock’s financial statements and public filings, the independent auditor’s qualifications and independence, the performance of BlackRock’s internal audit function and independent auditor and BlackRock’s compliance with legal and regulatory requirements. For more information about our Audit Committee’s responsibilities, see “Board“Board Committees – The Audit Committee”Committee” under “Item“Item 1 –Election– Election of Directors”Directors” and our Audit Committee Charter.
It is not the duty of the Audit Committee to prepare BlackRock’s financial statements, to plan or conduct audits or to determine that BlackRock’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles.GAAP in the United States. BlackRock’s management is responsible for preparing BlackRock’s financial statements and for maintaining internal control over financial reporting and disclosure controls and procedures. The independent registered public accounting firm is responsible for auditing theBlackRock’s financial statements and internal control over financial reporting, expressing an opinion as to whether those audited financial statements fairly present, in all material respects, the financial position, results of operations and cash flows of BlackRock in conformity with generally accepted accounting principlesGAAP in the United States.States and expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
In performing our oversight role, we have reviewed and discussed BlackRock’s audited financial statements with management and with Deloitte, & Touche LLP, BlackRock’s independent registered public accounting firm for 2016 (“Deloitte”).2019.
We have further discussed with Deloitte the matters required to be discussed under the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) standards.and the SEC.
We have received from Deloitte the written disclosures required by applicable PCAOB rules regarding Deloitte’s independence, discussed with Deloitte its independence and considered whether thenon-audit services provided by Deloitte are compatible with maintaining its independence.
Based on the review and discussions referred to above, we recommended to the Board, and the Board approved, inclusion of the audited financial statements in BlackRock’s Annual Report on Form10-K for the year ended December 31, 20162019 for filing with the SEC.
MEMBERS OF THE AUDIT COMMITTEE
Pamela Daley, Chair
Mathis Cabiallavetta
William E. Ford
Murry S. Gerber
Sir Deryck Maughan
Thomas H. O’Brien
Ivan G. SeidenbergMargaret L. Johnson
Marco Antonio Slim Domit
John S. VarleySusan L. Wagner
BLACKROCK, INC. 20172020 PROXY STATEMENT 7791
Shareholder Proposal —–
Proxy Voting RecordProduction of a Report on the
Executive Compensation“Statement on the Purpose of a
The Stephen M. Silberstein Revocable Trust (the “Proponent”), 29 Eucalyptus Road, Belvedere, CA 94920,Corporation”
Trio Foundation, the holder of 58222 shares of common stock (according to information provided to BlackRockand represented by the Proponent),As You Sow, 2150 Kittredge Street, Suite 450, Berkeley, California 94704, has advised us that it intends to introduce the following resolution:resolution, which isco-sponsored by Chela Blitt TTEE Chela Blitt Trust DTD 04/10/1998 and James McRitchie Roth IRA:
Whereas:Whereas BlackRock, like all investment managers, is responsible for voting proxies of companies, our Company’s Chairman and Chief Executive Officer (CEO) Larry Fink, in its portfolios. It hasAugust 2019, signed a fiduciary responsibility (or duty) to vote proxies in a responsible manner, including ensuring executive pay is sufficiently tied to performance and discourages excessive and unwarranted CEO pay.
From July 1, 2015 through June 30, 2016, BlackRock approved, with Its “Say on Pay” proxy votes, 99 percent of CEO pay packages In the S&P 500 companies. This level of support was higher than that of other investment managers; the average approval rating of 200 fund families surveyed was 89% percent support.
We find BlackRock’s voting record inconsistent with evidenceBusiness Roundtable (BRT) “Statement on the ways CEO pay impacts corporation long term performance. BlackRock’s publication “Our ApproachPurpose of a Corporation,” (Statement) committing our Company to Executive Compensation” states that it will oppose advisory votes in specific cases,serveall stakeholders including when: “We determine that compensation is excessive relative to peers without appropriate rationale or explanation, including the appropriateness of the company’s selected peers.”employees, customers, supply chain, communities where we operate, and shareholders.
The companyCEO has voted in favoralso made other remarks implying the importance of most executive compensation advisory votes (Saya company’s public purpose. In his 2018 annual letter to CEOs Larry Fink wrote:
Stakeholders are demanding that companies exercise leadership on Pay proposals). Yet, a report by As You Sow, The 100 Most Overpaid CEOS, shows that when viewed over the long term, growth in executive compensation of S&P 500 companies has generally outpaced performance.
Numerous academic studies, including Lucien Bebchuck’s “Pay Without Performance”, have shown a history of growing executive pay disconnected from company performance. Even when companies purport to link performance, in reality they often do not. For example, improved company performance is frequently determined by forces outside the executives’ control. Other analyses have highlighted weak performance targets, for example revenue growth merely equal to the inflation rate.
At BlackRock’s annual meeting on May 25, 2016, over 6 million shares were voted in favor of the Steven Silberstein trust proposal on proxy voting practices on compensation. The shares voted in favor of the proposal represented significant shareholder support. Among those that supported the proposal were pension the giants California Public Employees’ Retirement System and Ohio Public Employees Retirement System. Investment companies have a fiduciary responsibility to act in the best interest of their customers and an obligation to vote accordingly. It is not in the best interests of investors, or BlackRock’s shareholders, to have ever-escalating CEO pay, or even high CEO pay, at the companies in which they invest.
Resolved: Shareowners request that the Board of Directors issue a report to shareholders by December 2017, at reasonable cost, omitting proprietary information, which evaluates options for BlackRock to bring its voting practices in line with its stated principle of linking executive compensation and performance, including adopting changes to its proxy voting guidelines, adopting best practices of other asset managers and independent rating agencies, and including a broader range of research sourcesissues. And they are right to: a company’s ability to manage environmental, social, and principles for interpreting compensation data. Such reportgovernance matters demonstrates the leadership and good governance that is so essential to sustainable growth, which is why we are increasingly integrating these issues into our investment process.
Existing governance documents evolved in an environment of shareholder primacy, but the Statement articulates a new purpose, moves away from shareholder primacy, and includes commitment to all stakeholders. The Statement may be beneficial to associate with our brand, however, the Statement, as company policy, may conflict with Delaware law unless integrated into Company governance documents, including bylaws, Articles of Incorporation, and/or Committee Charters.
Company actions should assess whether and howalso become integrated with the proposed changes would advanceStatement. The Company currently engages in various actions that seem to contradict the interests of its clients and shareholders.Statement. As an example related to climate:
Data show that BlackRock holds companies with reserves in fossil fuels amounting to a staggering 9.5 gigatonnes of CO2 emissions – or 30 percent of total energy-related carbon emissions from 2017. BlackRock has the highest ratio of coal investments compared to overall size among the ten largest fund managers. A report from German NGO Urgewald showed that Blackrock is the largest investor in companies building new coal power capacity across the world with a total investment of over $11 billion USD.
BlackRock’s 2019 publicly reported proxy voting record reveals consistent votes against virtually all climate-related resolutions (having voted for only 6 of 52 such resolutions), including requests for enhanced disclosure or adoption of greenhouse gas reduction goals, even where independent experts advance a strong business and economic case for support.
Although the Statement of Purpose implies accountability to stakeholders, without clear mechanisms in place to implement the Purpose, this broadened standard couldreduce accountability to shareholders and in effect, ensure accountabilityto none.
78Resolved: Shareholders request our Board prepare a report based on a review of the BRT Statement of the Purpose of a Corporation, signed by our Chairman and Chief Executive Officer, and provide the board’s perspective regarding how our Company’s governance and management systems should be altered to fully implement the Statement of Purpose.
Supporting Statement
Implementation may include, at Board discretion, actions including amending the bylaws or articles of incorporation to integrate the new “Purpose,” establishing new goals or metrics linked to executive or board compensation, providing for representation of stakeholders in governance of our Company, and making recommendations to shareholders regarding logistics for implementation.
92 BLACKROCK, INC. 20172020 PROXY STATEMENT
Item 4: Shareholder Proposal – Production of a Report on the “Statement on the Purposeof a Corporation” | The Board of Directors’ Statement in Opposition |
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BLACKROCK, INC. 2017 PROXY STATEMENT 79
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Board Recommendation
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80BLACKROCK, INC. 2017 PROXY STATEMENT
Shareholder Proposal —
Production of an Annual Report on Certain Trade Association and Lobbying Expenditures
The American Federation of Labor and Congress of Industrial Organizations(“AFL-CIO”), 815 16th St. NW, Washington DC 20006, the holder of 72 shares of common stock, has advised us that it intends to introduce the following resolution:
Whereas, we believe in full disclosure of our company’s direct and indirect lobbying activities and expenditures to assess whether our company’s lobbying is consistent with BlackRock’s expressed goals and in the best interests of shareholders.
Resolved, the shareholders of BlackRock request the preparation of a report, updated annually, disclosing:
For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which BlackRock is a member. Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels. The report shall be presented to the Audit Committee of the Board or other relevant oversight committees of the Board and posted on the company’s website.
Supporting Statement
As shareholders, we encourage transparency and accountability in BlackRock’s use of corporate funds to influence legislation and regulation. Transparent reporting of all lobbying activity will reveal whether company assets are being used for objectives contrary to BlackRock’s long-term interests.
According to the Center for Responsive Politics, BlackRock spent approximately $2.5 million dollars annually on federal lobbying expenditures in 2014 and 2015 (https://www.opensecrets.org/lobby/clientsum.php?id=D000021872). These figures do not include lobbying expenditures to influence legislation in states or countries where BlackRock operates and disclosure requirements are uneven or absent. In addition, BlackRock does not disclose the dollar amounts of its payments to trade associations or the amounts used by these trade associations for lobbying.
For these reasons, we urge you to vote FOR this proposal.
BLACKROCK, INC. 2017 PROXY STATEMENT 81
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The Board has carefully considered the proposal and believes that the Company already operates in accordance with principles and commitments consistent with the Business Roundtable’s “Statement on the Purpose of a Corporation” (the “BRT Statement”), and that no changes to the Company’s existing governance and management systems are required.
As noted in BlackRock’s public statements and reports, our leadership has long believed that embracing purpose is central to achieving a company’s full potential. This was highlighted in Mr. Fink’s letter to public company CEOs in 2018, where he noted that “[w]ithout a sense of purpose, . . . [a company] will ultimately lose the license to operate from key stakeholders.” Mr. Fink reemphasized these thoughts in his 2020 letter, where he stressed purpose as the “engine of long-term profitability.”
Moreover, in 2016, the BlackRock Board amended the Company’s Corporate Governance Guidelines to better reflect our commitment to our purpose by specifically acknowledging that long-term value creation for shareholders requires consideration of the concerns of our other stakeholders and interested parties, including clients, employees and the communities in which we operate.
We believe our corporate governance and management frameworks are designed to help us achieve our purpose, which is to help more and more people experience financial well-being. We also recently launched a Corporate Sustainability website that further enhances our public disclosure and the transparency of our practices. Our Corporate Sustainability website highlights the many ways that we serve our clients, deliver value for our shareholders, support and develop our employees and give back to our communities.
Consistent with our publicly stated principles and commitments, BlackRock’s operations are carried out with the oversight and guidance of the Board. The Board has reviewed the BRT Statement, as well as the proposal, and determined that no alteration of the Company’s governance and management systems, including its Bylaws or certificate of incorporation, are necessary in light of the fact that the Company – with the oversight of the Board and consistent with its fiduciary duties – already operates in accordance with the principles set forth in the BRT Statement. In reaching this determination, the Board considered the Company’s public statements, actions and commitments with regard to each of the topics addressed in the BRT Statement as described below.
1. Delivering value to our customers.
At BlackRock’s core are principles that guide us in our mission to create better financial futures for our clients. Our principles are published on our corporate website and distributed to all employees. These principles define who we are and how we operate:
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| • | We are passionate about performance. We take emotional ownership of every aspect of the work we do, prizing strong subject matter expertise and an insatiable appetite to learn. |
| • | We are One BlackRock. We know that working in silos is not conducive to our best work. We pride ourselves on our solutions that result from the constant collaboration between our diverse teams. |
| • | We are innovators. We are proud of our long history of innovation, driving continuous change to help investors achieve their goals. This culture of innovation has been, and continues to be, the foundation of our success. |
2. Investing in our employees.
As an asset manager, our firm is heavily dependent on our people. On our Corporate Sustainability website, as well as in this Proxy Statement under “BlackRock’s Approach to Human Capital Management,” we disclose how we invest in our employees and retain and develop talent; our focus on diversity and inclusion; and our approach to unifying culture and encouraging innovation.
3. Dealing fairly and ethically with our suppliers.
Our Supplier Code of Conduct & Ethics (“Supplier Code”), which is publicly disclosed, outlines the minimum expectations and standards that we have for our suppliers in relation to human rights, inclusion and diversity, environmental sustainability and integrity and ethics in management practices. Moreover, as stated in the Supplier Code, BlackRock is committed to seeking out qualified diverse businesses from historically underrepresented groups, including companies owned and operated by minorities, women, military veterans, disabled veterans, people with disabilities and members of the LGBT+ community. Through our Global Supplier Diversity Program, we aim to achieve a diverse slate of suppliers that reflects all the markets, clients and communities we serve.
BLACKROCK, INC. 2020 PROXY STATEMENT 93
Item 4: Shareholder Proposal – Production of a Report on the “Statement on the Purposeof a Corporation” | The Board of Directors’ Statement in Opposition
4. Supporting the communities in which we work.
Our philanthropic efforts date back many years and have consistently focused on furthering our purpose to help more and more people experience financial well-being. Most recently, we created The BlackRock Foundation and contributed 15.6 million shares of PennyMac Financial Services, Inc. with a market value of $589 million, to fund social impact efforts focused on advancing a more inclusive and sustainable economy. We believe this charitable contribution – in line with our purpose as a firm – will support our commitment to creating greater financial well-being and advancing sustainability in our communities.
5. Generating long-term value for shareholders.
Since BlackRock’s founding, we have worked to anticipate our clients’ needs and to help clients manage risk and achieve their investment goals. In January, we announced that, consistent with our principles, we are accelerating our efforts to integrate ESG insights into our investment processes. This was driven by our belief that sustainability-related factors can affect economic growth, asset values and financial markets and is consistent with BlackRock’s responsibility as a fiduciary dedicated to overseeing and growing the value of our clients’ assets over the long-term. By focusing on our clients’ needs, we generate long-term value for our shareholders.
Moreover, we note that the proponents’ supporting statement is particularly focused on the voting practices of our Investment Stewardship team as it relates to climate-related proposals. While our Investment Stewardship team has engaged with companies for some time on climate change issues, as noted in our public announcements in January, the team is intensifying its focus and engagement with companies on sustainability-related risks. The Investment Stewardship team also has committed to enhancing the transparency of its stewardship practices, including with respect to votes and engagements with companies on these topics. We believe that investment stewardship is an essential component of our fiduciary responsibility and that this enhanced transparency to our clients and broader set of stakeholders will further align the Company with the BRT Statement.
Accordingly, the Board does not believe that a report based on a review of the BRT Statement is necessary because the Company actions and disclosures already embody the commitments included in the BRT Statement.
Board Recommendation
The Board of Directors unanimously recommends that you vote "AGAINST" this proposal.
8294 BLACKROCK, INC. 20172020 PROXY STATEMENT
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BLACKROCK, INC. 2017 PROXY STATEMENT 83
Questions and Answers aboutAbout the Annual Meeting and Voting
Who is entitled to vote?
Holders of record of BlackRock common stock at the close of business on March 30, 201723, 2020 are entitled to receive notice and to vote their shares of BlackRock common stock at the 2017 Annual Meeting of Shareholders.Meeting. As of March 30, 2017, 161,792,94723, 2020, 154,261,305 shares of BlackRock’s common stock, par value $0.01 per share, were outstanding. Holders are entitled to one vote per share.
A list of shareholders entitled to vote at the Annual Meeting will be available at the Annual Meeting and can be made available beginning 10 days prior to the Annual Meeting, between the hours of 8:45 a.m. and 4:30 p.m., Eastern Time, at our principal executive offices at 55 East 52nd Street, New York, New York 10055, by writing to the Corporate Secretary of BlackRock at: c/o Corporate Secretary, BlackRock, Inc., 5540 East 52nd Street, New York, New York 10055.10022. The list will also be accessible during the Annual Meeting by visitingwww.virtualshareholdermeeting.com/BLK2020 and entering the control number provided on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials.
How docan I attend and vote at the Annual Meeting?
In consideration of recent public health concerns relating to COVID-19, the Annual Meeting will be held virtually; you will not be able to attend the Annual Meeting in person.
You are entitled to participate in the Annual Meeting if you were a shareholder as of the close of business on the record date, March 23, 2020, or hold a legal proxy provided by your bank, broker or nominee for the Annual Meeting.
Attending the Annual Meeting:To attend the Annual Meeting, visitwww.virtualshareholdermeeting.com/BLK2020. You will be asked to enter the control number found on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials.
Voting During the Annual Meeting:If you were a shareholder as of the record date, or you hold a legal proxy provided by your bank, broker or nominee for the Annual Meeting, you may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting.
TechnologySupportfor the Annual Meeting:If you have difficulty accessing the Annual Meeting, please call 1-800-586-1548 (U.S.) or 1-303-562-9288 (international) on the day of the meeting. Technicians will be available to assist you.
Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting. For information on how to vote prior to the Annual Meeting, see“How can I vote my shares without attending the Annual Meeting and what are the voting deadlines?”
How can I vote my shares without attending the Annual Meeting and what are the voting deadlines?
You may submit a proxy by telephone, via the Internet or by mail.
| Submitting a Proxy by Telephone: You can submit a proxy for your shares by telephone until 11:59 p.m. Eastern Time on May | |
| Submitting a Proxy via the Internet: You can submit a proxy via the internet until 11:59 p.m. Eastern Time on May | |
| Submitting a Proxy by Mail: Mark your proxy card, date, sign and return it to Broadridge Financial Solutions in the postage-paid envelope provided (if you received your proxy materials by mail) or return it to BlackRock, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717. Proxy cards returned by mail must be received no later than the close of business on May |
By casting your vote in any of the three ways listed above, you are authorizing the individuals listed onnamed in the proxy to vote your shares in accordance with your instructions.
84BLACKROCK, INC. 2017 PROXY STATEMENT
What is required to attend the Annual Meeting?
You are entitled to attend the Annual Meeting only if you were, or you hold a valid legal proxy naming you to act as a representative for, a holder of BlackRock common stock at the close of business on March 30, 2017. Shareholders, or their valid legal proxies, planning to attend the Annual Meeting in person mustrequest an admission ticket in advance of the Annual Meeting by visitingwww.proxyvote.com and following the instructions provided (you will need the16-digit “control” number included on your proxy card, voter instruction or form of notice). Tickets will be issued to registered and beneficial owners. Requests for admission tickets will be processed in the order they are received and must be requested no later than May 24, 2017. Please note that seating is limited and requests for tickets will be accepted on a first-come, first-served basis. In addition to your admission ticket, please bring a form of government-issued photo identification, such as a driver’s license, state-issued identification card or passport, to gain entry to the Annual Meeting. If you were the beneficial owner of shares held in the name of a bank, broker or other holder of record, you or your representative must also bring proof of your stock ownership as of the close of business on March 30, 2017, such as an account statement or similar evidence of ownership. The use of mobile phones, pagers, recording or photographic equipment, tablets and/or computers is not permitted at the Annual Meeting. If you are unable to provide valid photo identification or if we are unable to validate that you were a shareholder (or that you are authorized to act as a legal proxy for a shareholder) or you cannot comply with the other procedures outlined above for attending the Annual Meeting in person, we will not be able to admit you to the Annual Meeting.
In the event you submit your proxy and you attend the Annual Meeting, you may revoke your proxy and cast your vote personally at the Annual Meeting. If your shares are held in the name of a bank, broker or other holder of record, you must obtain a proxy, executed in your favor, from the holder of record, to be able to vote at the Annual Meeting.
All shares that have been properly voted, and not revoked, will be voted at the Annual Meeting. If you sign and return your proxy card but do not give voting instructions, the shares represented by that proxy will be voted as recommended by the BoardBoard.
If you were a shareholder as of Directors.the record date, or you hold a legal proxy provided by your bank, broker or nominee for the Annual Meeting, you can also vote via the Internet during the Annual Meeting by following the instructions atwww.virtualshareholdermeeting.com/BLK2020.
BLACKROCK, INC. 2020 PROXY STATEMENT 95
Annual Meeting Information | Questions and Answers About the Annual Meeting and Voting
Will I be able to participate in the virtual Annual Meeting in the same way that I would be able to participate in an in-person annual meeting?
We have taken steps to ensure that the format of the virtual Annual Meeting affords shareholders the same rights and opportunities to participate as they would at an in-person meeting. We have also determined to enhance shareholder access, participation and communication by providing shareholders the ability to submit questions in advance of the meeting.
You may submit a question in advance of the meeting atwww.proxyvote.com after logging in with your control number found on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials. Questions may also be submitted during the Annual Meeting throughwww.virtualshareholdermeeting.com/BLK2020. Questions will be limited to one per shareholder.
How will voting on any other business be conducted?
If any other business is properly presented at the Annual Meeting for consideration, the persons named in the proxy will have the discretion to vote on those matters for you. AtAs of the date of this Proxy Statement, went to press, we did not know of any other business to be raised at the Annual Meeting.
May I revoke my vote?
Proxies may be revoked at any time before they are exercised by:
Written notice to the Corporate Secretary of BlackRock;
Submitting a proxy on a later date by telephone or Internet (only your last telephone or Internet proxy will be counted) before 11:59 p.m. Eastern Time on May 24, 2017;20, 2020;
Timely delivery of a valid, later-dated proxy; or
Attending the Annual Meeting virtually and voting. Attendance at the meeting will not cause your previously granted proxy to be revoked unless you specifically so request.
For shares held beneficially in street name, you may change your vote by submitting new voting instructions to your bank, broker or nominee following the instructions it has provided, or, if you have obtained a legal proxy from your bank, broker or nominee giving you the right to vote your shares, by attending the Annual Meeting.
What is a quorum?
A quorum is necessary to hold a valid meeting. The presence, in person or by proxy, of the holders of a majority of the votes entitled to be cast by the shareholders entitled to vote at the Annual Meeting is necessary to constitute a quorum.
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Virtual attendance at the Annual Meeting constitutes presence in person for purpose of a quorum at the meeting.
What is the effect of a brokernon-vote or abstention?
Abstentions and broker“non-votes”,non-votes,” if any, are counted as present and entitled to vote for purposes of determining a quorum. A broker“non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner. If a nominee has not received instructions from the beneficial owner, the nominee may vote these shares only on matters deemed “routine” by the NYSE. The election of directors, approval of NEO compensation approval of the frequency of future advisory votes on executive compensation and the shareholder proposalsproposal are not deemed “routine” by the NYSE and nominees have no discretionary voting power for these matters. The ratification of the appointment of an independent registered accounting firm is deemed a “routine” matter on which nominees have discretionary voting power.
What vote is required in order to approve each of the proposals?
Each share of our common stock outstanding on the record date will be entitled to one vote on each of the 1817 director nominees and one vote on each other matter. Directors receiving a majority of votes cast (number of shares voted “for” a director must exceed the number of shares voted “against” that director) will be elected as a director. Abstentions and broker“non-votes” will be disregarded and have no effect on the outcome of the Item 1 vote to elect directors. A majority of the votes of shares of common stock represented and entitled to vote at the Annual Meeting is required for Item 2, the approval of NEO compensation, Item 4,3, the ratification of Deloitte & Touche LLP as BlackRock’s independent registered public accounting firm for the 20172020 fiscal year, and Items 5 and 6,Item 4, the approval of the shareholder proposals.proposal. Abstentions will be treated as a vote “against” and “brokernon-votes” will have no effect on such matters. The frequency of the advisory vote on executive compensation, Item 3, receiving the greatest number of votes (every one, two or three years) will be considered the frequency recommended by shareholders. Abstentions and broker“non-votes” will therefore have no effect on that vote.
Who will count the votes and how can I find the results of the Annual Meeting?
Broadridge Financial Solutions, our independent tabulating agent, will count the votes. We will publish the voting results in aForm8-K filed within four business days of the Annual Meeting.
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Annual Meeting Information | Important Additional Information
Important Additional Information
Cost of Proxy Solicitation
We will pay the expenses of soliciting proxies. Proxies may be solicited in person or by mail, telephone and electronic transmission on our behalf by directors, officers or employees of BlackRock or its subsidiaries, without additional compensation. We will reimburse brokerage houses and other custodians, nominees and fiduciaries that are requested to forward soliciting materials to the beneficial owners of the stock held of record by such persons.
Multiple Shareholders Sharing the Same Mailing Address or “Householding”
In order to reduce printing and postage costs, we have undertaken an efforttry to deliver only one Notice of Internet Availability of Proxy Materials or, if applicable, one Annual Report and one Proxy Statement to multiple shareholders sharing a mailing address. This delivery method, called “householding”,“householding,” will not be used if we receive contrary instructions from one or more of the shareholders sharing a mailing address. If your household has received only one such copy, we will promptly deliver promptly a separate copy of the Notice of Internet Availability of Proxy Materials or, if applicable, the Annual Report and the Proxy Statement to any shareholder who sends a written request to the Corporate Secretary at the address provided in the Notice of 20172020 Annual Meeting of Shareholders.
You may also notify us thatif you would like to receive separate copies of the Notice of Internet Availability of Proxy Materials or, if applicable, BlackRock’s Annual Report and Proxy Statement in the future by writing to the Corporate Secretary. Shareholders who participate in householding will continue to be able to access and receive separate proxy cards. If you are submitting a proxy by mail, each proxy card should be marked, signed, dated and returned in the enclosed self-addressed envelope.
86BLACKROCK, INC. 2017 PROXY STATEMENT
If your household has received multiple copies of BlackRock’s Annual Report and Proxy Statement, you can request the delivery of single copies in the future by marking the designated box on the attached proxy card.
If you own shares of common stock through a bank, broker or other nominee and receive more than one Annual Report and Proxy Statement, contact the holder of record to eliminate duplicate mailings.
Confidentiality of Voting
BlackRock keeps all proxies, ballots and voting tabulations confidential as a matter of practice. BlackRock allows only Broadridge Financial Solutions to examine these documents. Occasionally, shareholders provide written comments on their proxy cards, which are then forwarded to BlackRock management by Broadridge Financial Solutions.
Available Information
BlackRock makes available free of charge through its website atwww.blackrock.comhttp://ir.blackrock.com, under the headings “Our Firm“Financials / Investor Relations / SEC Filings”,Filings,” its Annual Reports to Shareholders, Annual Reports on Form10-K, Quarterly Reports on Form10-Q, Current Reports on Form8-K, Proxy Statements and form of proxy and all amendments to these reports no later than the day on which such materials are first sent to security holders or made public.
BlackRock will provide, without charge to each shareholder upon written request, a copy of BlackRock’s Annual Reports to Shareholders, Annual Reports on Form10-K, Quarterly Reports on Form10-Q, Current Reports on Form8-K, Proxy Statements and form of proxy and all amendments to those reports.
Written requests for copies can be made by:
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| Mail: Corporate Secretary of BlackRock, 10022
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| Telephone:(212) 810-5300
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| Email:invrel@blackrock.com
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Copies may also be accessed electronically by means of the SEC homepage on the Internet atwww.sec.gov. The Annual Report onForm10-K for the year ended December 31, 20162019 is not part of the proxy solicitation materials.
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Annual Meeting Information | Deadlines for Submission of Proxy Proposals, Nomination of Directors and Other Business of Shareholders
Deadlines for Submission of Proxy Proposals, Nomination of Directors and Other Business of Shareholders
Proposals to be Considered for Inclusion in BlackRock’s Proxy Materials
Shareholders who wish to present proposals for inclusion in the proxy materials to be distributed by us in connection with our 20182021 Annual Meeting of Shareholders must submit their proposals to BlackRock’s Corporate Secretary on or before December 14, 2017.10, 2020.
Director Nominations for Inclusion in BlackRock’s Proxy Materials (Proxy Access)
A shareholder (or a group of up to 20 shareholders) who has owned at least 3% of our shares continuously for at least three years and has complied with the other requirements in our Bylaws may nominate and include in BlackRock’s proxy materials director nominees constituting up to 25% of our Board. Notice of a proxy access nomination for consideration at our 20182021 Annual Meeting of Shareholders must be received no later than December 14, 201710, 2020 and no earlier than November 14, 2017.
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10, 2020.
Other Proposals and Nominations
Apart from the Exchange Act Rule14a-8 and our proxy access bylaw that address the inclusion of shareholder proposals or shareholder nominees in our proxy materials, under our Bylaws, certain procedures are provided thatmust be followed for a shareholder must follow to nominate persons for election as directors or to introduce an item of business at an annual meeting of shareholders.
We must receive the notice of your intention to introduce a nomination or proposed item of business at our 20182021 Annual Meeting:Meeting of Shareholders:
Not less than 120 days nor more than 150 days prior to the anniversary of the mailing date of BlackRock’s proxy materials for the immediately preceding annual meeting of shareholders; or
Not later than 10 days following the day on which notice of the date of the annual meeting was mailed to shareholders or public disclosure of the date of the annual meeting was made, whichever comes first, in the event that next year’s annual meeting is not held within 3025 days before or after the anniversary date of the immediately preceding annual meeting.
Assuming that our 20182021 Annual Meeting of Shareholders is held within 3025 days of the anniversary of the 2017 Annual Meeting, we must receive notice of your intention to introduce a nomination or other item of business at the 20182021 Annual Meeting of Shareholders by December 14, 201710, 2020 and no earlier than November 14, 2017.10, 2020.
Additional Requirements
Under our Bylaws, any notice of proposed business must include a description of the business and the reasons for bringing the proposed business to the meeting, any material interest of the shareholder in the business and certain other information about the shareholder. Any notice of a nomination or a proxy access nomination for director nominees must provide information about the shareholder and the nominee, as well as the written consent of the proposed nominee to being named in the proxy statement and to serve as a director if elected.
BlackRock’s Bylaws specifying the advance notice requirements for proposing business or nominations, and for proposing proxy access nominations, are available on BlackRock’s website atwww.blackrock.comwww.sec.gov under the heading “Investor Relations”.
Address to Submit Proposals and Nominations
In each case, proxyProxy proposals, proxy access nominations and nominations for director nominees and/or an item of business to be introduced at an annual meeting of shareholders must be submitted in writing to the Corporate Secretary, of BlackRock, 5540 East 52nd Street, New York, New York 10055.NY 10022.
The Board of Directors knows of no other business to be presented at the meeting. If, however, any other business should properly come before the meeting, or any adjournment thereof, it is intended that the proxy will be voted in accordance with the best judgment of the persons named in the proxy.
By Order of the Board of Directors,
R. Andrew Dickson, III
Corporate Secretary
8898 BLACKROCK, INC. 20172020 PROXY STATEMENT
Non-GAAP Reconciliation
Non-GAAP Financial Measures
BlackRock reports its financial results in accordance with GAAP;generally accepted accounting principles in the United States (“GAAP”); however, management believes evaluating the Company’s ongoing operating results may be enhanced if investors have additionalnon-GAAP financial measures. Management reviewsnon-GAAP financial measures to assess ongoing operations and for the reasons described below, considers them to be effective indicators,helpful, for both management and investors, ofin evaluating BlackRock’s financial performance over time. Management also usesnon-GAAP financial measures as a benchmark to compare its performance with other companies and to enhance the comparability of this information for the reporting periods presented.Non-GAAP measures may pose limitations because they do not include all of BlackRock’s revenue and expense. BlackRock’s management does not advocate that investors consider suchnon-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.Non-GAAP measures may not be comparable to other similarly titled measures of other companies.
Management uses both GAAP andnon-GAAP financial measures in evaluating BlackRock’s financial performance. Adjustments to GAAP financial measures(“non-GAAP adjustments”) include certain items management deems nonrecurring or that occur infrequently, transactions that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow.
Computations for all periods are derived from the consolidated statements of income as follows:
(1) Operating income, as adjusted, and operating margin, as adjusted:
Management believes operating income, as adjusted, and operating margin, as adjusted, are effective indicators of BlackRock’s financial performance over time and, therefore, provide useful disclosure to investors. Management believes that operating margin, as adjusted, reflects the Company’s long-term ability to manage ongoing costs in relation to its revenues. The Company uses operating margin, as adjusted, to assess the Company’s financial performance and to determine the long-term and annual compensation of the Company’s senior-level employees. Furthermore, this metric is used to evaluate the Company’s relative performance against industry peers, as it eliminates margin variability arising from the accounting of revenues and expenses related to distributing different product structures in multiple distribution channels utilized by asset managers.
| (in millions) | 2016 | 2015 | 2014 | 2019 | 2018 | 2017(1) | ||||||||||||||||||
Operating income, GAAP basis | $ | 4,570 | $ | 4,664 | $ | 4,474 | $ | 5,551 | $ | 5,457 | $ | 5,254 | ||||||||||||
Non-GAAP expense adjustments: | ||||||||||||||||||||||||
Restructuring charge | 76 | — | — | — | 60 | — | ||||||||||||||||||
PNC LTIP funding obligation | 28 | 30 | 32 | — | 14 | 15 | ||||||||||||||||||
Compensation expense related to appreciation (depreciation) on deferred compensation plans | — | 1 | 7 | |||||||||||||||||||||
Reduction of indemnification asset | — | — | 50 | |||||||||||||||||||||
Operating income, as adjusted | 4,674 | 4,695 | 4,563 | 5,551 | 5,531 | 5,269 | ||||||||||||||||||
Product launch costs and commissions | — | 5 | 11 | 61 | 13 | — | ||||||||||||||||||
Operating income used for operating margin measurement | $ | 4,674 | $ | 4,700 | $ | 4,574 | $ | 5,612 | $ | 5,544 | $ | 5,269 | ||||||||||||
Revenue, GAAP basis | $ | 11,155 | $ | 11,401 | $ | 11,081 | $ | 14,539 | $ | 14,198 | $ | 13,600 | ||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||
Distribution and servicing costs | (429 | ) | (409 | ) | (364 | ) | ||||||||||||||||||
Amortization of deferred sales commissions | (34 | ) | (48 | ) | (56 | ) | ||||||||||||||||||
Distribution fees | (1,069 | ) | (1,155 | ) | (1,183 | ) | ||||||||||||||||||
Investment advisory fees | (616 | ) | (520 | ) | (480 | ) | ||||||||||||||||||
Revenue used for operating margin measurement | $ | 10,692 | $ | 10,944 | $ | 10,661 | $ | 12,854 | $ | 12,523 | $ | 11,937 | ||||||||||||
Operating margin, GAAP basis | 41.0% | 40.9% | 40.4% | 38.2 | % | 38.4 | % | 38.6 | % | |||||||||||||||
Operating margin, as adjusted | 43.7% | 42.9% | 42.9% | 43.7 | % | 44.3 | % | 44.1 | % | |||||||||||||||
| (1) | Results for 2017 were recast to reflect the adoption of the new revenue recognition standard. For further information, refer to Note 2,Significant Accounting Policies, in the consolidated financial statements in our 2018 Form10-K. |
BLACKROCK, INC. 20172020 PROXY STATEMENT A-1
Annex A:Non-GAAP |
Operating income, as adjusted,includesnon-GAAP expense adjustments. TheIn 2018, a restructuring charge, primarily comprised of severance and accelerated amortization expense of previously granted deferred compensation awards, has been excluded to provide more meaningful analysis of BlackRock’s ongoing operations and to ensure comparability among periods presented. In 2018 and 2017, the portion of compensation expense associated with certain long-term incentive plans (“LTIP”) funded, or to be funded, through share distributions to participants of BlackRock stock held by PNC has been excluded because it ultimately does not impact BlackRock’s book value. Compensation expense associated with appreciation (depreciation) on investments related to certain BlackRock deferred compensation plans has been excluded, as returns on investments set aside for these plans, which substantially offset this expense, are reported in nonoperating income (expense). In 2016, a restructuring charge primarily comprised of severance and accelerated amortization expense of previously granted deferred compensation awards has been excluded to provide more meaningful analysis of BlackRock’s ongoing operations and to ensure comparability among periods presented. In 2014, general and administration expense relating to the reduction of an indemnification asset has been excluded since it is directly offset by a tax benefit of the same amount and, consequently, does not impact BlackRock’s book value.
Operating income used for measuring operating margin, as adjusted, is equal to operating income, as adjusted, excluding the impact of product launch costs (e.g.closed-end fund launch costs) and related commissions. Management believes the exclusion of such costs and related commissions is useful because these costs can fluctuate considerably and revenue associated with the expenditure of these costs will not fully impact BlackRock’s results until future periods.
Revenue used for calculating operating margin, as adjusted, excludesis reduced to exclude all of the Company’s distribution fees, which are recorded as a separate line item on the consolidated statements of income, as well as a portion of investment advisory fees received that is used to pay distribution and servicing costs paidcosts. For certain products, based on distinct arrangements, distribution fees are collected by the Company and then passed-through to related partiesthird-party client intermediaries. For other products, investment advisory fees are collected by the Company and other third parties. Management believes such costs represent a benchmarkportion is passed-through to third-party client intermediaries. However, in both structures, the third-party client intermediary similarly owns the relationship with the retail client and is responsible for distributing the product and servicing the client. The amount of revenue passed through to external parties who distributedistribution and investment advisory fees fluctuates each period primarily based on a predetermined percentage of the Company’s products.value of AUM during the period. These fees also vary based on the type of investment product sold and the geographic location where it is sold. In addition, management believes the exclusion of such costs is useful because it creates consistencyCompany may waive fees on certain products that could result in the treatment for certain contracts for similar services, which duereduction of payments to the terms of the contracts, are accounted for under GAAP on a net basis within investment advisory, administration fees and securities lending revenue. Amortization of deferred sales commissions is excluded from revenue used for operating margin measurement, as adjusted, because such costs, over time, substantially offset distribution fee revenue the Company earns. For each of these items, BlackRock excludes from revenue used for operating margin, as adjusted, the costs related to each of these items as a proxy for such offsetting revenue.third-party intermediaries.
(2) Compensation and benefitsexpense-to-revenue ratio, as adjusted:
| (in millions) | 2016 | 2015 | 2014 | |||||||||
Employee compensation and benefits, GAAP basis | $ | 3,880 | $ | 4,005 | $ | 3,829 | ||||||
LessNon-GAAP expense adjustments: | ||||||||||||
PNC LTIP funding obligation | 28 | 30 | 32 | |||||||||
Compensation expense related to appreciation (depreciation) on deferred compensation plans | — | 1 | 7 | |||||||||
Employee compensation and benefits, as adjusted | $ | 3,852 | $ | 3,974 | $ | 3,790 | ||||||
Revenue, GAAP basis | $ | 11,155 | $ | 11,401 | $ | 11,081 | ||||||
Compensation and benefitsexpense-to-revenue ratio, GAAP basis | 34.8% | 35.1% | 34.6% | |||||||||
Compensation and benefitsexpense-to-revenue ratio, as adjusted | 34.5% | 34.9% | 34.2% | |||||||||
A-2BLACKROCK, INC. 2017 PROXY STATEMENT
(3) Net income attributable to BlackRock, Inc., as adjusted:
| (in millions, except per share data) | 2016 | 2015 | 2014 | |||||||||
Net income attributable to BlackRock, GAAP basis | $ | 3,172 | $ | 3,345 | $ | 3,294 | ||||||
Non-GAAP adjustments: | ||||||||||||
Restructuring charge (including $23 tax benefit) | 53 | — | — | |||||||||
PNC LTIP funding obligation, net of tax | 19 | 22 | 25 | |||||||||
Income tax matters | (30 | ) | (54 | ) | (9 | ) | ||||||
Net income attributable to BlackRock, as adjusted | $ | 3,214 | $ | 3,313 | $ | 3,310 | ||||||
Diluted weighted-average common shares outstanding(1) | 166.6 | 169.0 | 171.1 | |||||||||
Diluted earnings per common share, GAAP basis(1) | $ | 19.04 | $ | 19.79 | $ | 19.25 | ||||||
Diluted earnings per common share, as adjusted(1) | $ | 19.29 | $ | 19.60 | $ | 19.34 | ||||||
(in millions, except per share data) | 2019 | 2018 | 2017(1) | |||||||||
Net income attributable to BlackRock, Inc., GAAP basis | $ | 4,476 | $ | 4,305 | $ | 4,952 | ||||||
Non-GAAP adjustments: | ||||||||||||
Restructuring charge, net of tax | — | 47 | — | |||||||||
PNC LTIP funding obligation, net of tax | — | 12 | 11 | |||||||||
The 2017 Tax Act: | ||||||||||||
Deferred tax revaluation (noncash) | — | — | (1,758 | ) | ||||||||
Deemed repatriation tax | — | — | 477 | |||||||||
Other income tax matters | 8 | (3 | ) | 16 | ||||||||
Net income attributable to BlackRock, Inc., as adjusted | $ | 4,484 | $ | 4,361 | $ | 3,698 | ||||||
Diluted weighted-average common shares outstanding(2) | 157.5 | 161.9 | 164.4 | |||||||||
Diluted earnings per common share, GAAP basis(2) | $ | 28.43 | $ | 26.58 | $ | 30.12 | ||||||
Diluted earnings per common share, as adjusted(2) | $ | 28.48 | $ | 26.93 | $ | 22.49 | ||||||
| (1) | Results for 2017 were recast to reflect the adoption of the new revenue recognition standard. For further information, refer to Note 2,Significant Accounting Policies, in the consolidated financial statements in our 2018 Form10-K. |
| (2) | Nonvoting participating preferred stock is considered to be a common stock equivalent for purposes of determining basic and diluted earnings per share calculations. |
Management believes net income attributable to BlackRock, Inc., as adjusted, and diluted earnings per common share, as adjusted, are useful measures of BlackRock’s profitability and financial performance. Net income attributable to BlackRock, Inc., as adjusted, equals net income attributable to BlackRock, Inc., on a GAAP basis, adjusted for significant nonrecurring items, charges that ultimately will not impact BlackRock’s book value or certain tax items that do not impact cash flow.
See aforementioned discussion regarding operating income, as adjusted, and operating margin, as adjusted, for information on the PNC LTIP funding obligation and the restructuring charge.
For each period presented, thenon-GAAP adjustment related to the restructuring charge and PNC LTIP funding obligation was tax effected at the respective blended rates applicable to the adjustments. Amounts forThe 2017 noncash deferred tax revaluation benefit of $1,758 million and the other income tax matters represent net noncash (benefits) expensewere primarily associated with the revaluation of certain deferred tax liabilities related to intangible assets and goodwill. Amounts have been excluded from the as adjusted results as these items will not have a cash flow impact and to ensure comparability among periods presented. A deemed repatriation tax expense of $477 million has been excluded from the 2017 as adjusted results due to theone-time nature and to ensure comparability among periods presented.
Per share amounts reflect net income attributable to BlackRock, Inc., as adjusted, divided by diluted weighted average common shares outstanding.
A-2BLACKROCK, INC. 20172020 PROXY STATEMENTA-3
Mission Statement on Sustainability
Making Sustainability the Standard for Investing at BlackRock
BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary, BlackRock is deeply committed to helping our clients build resilient and well-constructed portfolios that are critical to achieving their long-term goals. Because sustainable investment options have the potential to offer clients better outcomes, we are making sustainability integral to the way BlackRock manages risk, constructs portfolios, designs products and engages with companies.
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BlackRock’s mission is to create a better financial future for our clients. As we pursue this mission, we are guided by BlackRock’s Principles — that is, our shared understanding of who we are, what we stand for and how we conduct ourselves each and every day.
BlackRock, Inc.
55 East 52nd Street,
New York, New York 10055
blackrock.com
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E25737-P91601 KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED, DATED AND RETURNED.
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Investment Integration We are integrating sustainability considerations | Sustainable Solutions We are investing. | Research & Insights We are developing research and | ||||||||||||||||
Data and Analytics We are making more data and analytics available to all investors and our clients, powered byAladdin. | ||||||||||||||||||
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our investment stewardship with companies we invest in on behalf of clients. |
| Corporate Sustainability
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A+ for Strategy & Governance in the Principles for Responsible Investment (“PRI”) Assessment Report. | ||||||||||||||
A- by the Carbon Disclosure Project (CDP), compared to the financial services sector average of C. | #1 in the Financial industry in the inaugural U.S. Transparency Awards | Best Investor Engagement Award by the Chartered Governance Institute (formerly known as the Institute of Corporate Secretaries and Administrators) | ||||||||||||
V.1.1
SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/BLK2020 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE -1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided (if you received your proxy materials by mail) or return it to BlackRock, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717. If you vote your proxy by Internet or telephone, you do NOT need to mail back your proxy card. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E95661-P34391 THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY BLACKROCK, INC. A. The Board of Directors recommends a vote FOR all nominees listed in Item 1, FOR Item 2 and FOR Item 3. 1. Election of Directors Nominees: 1a. Bader M. Alsaad 1b. Mathis Cabiallavetta 1c. Pamela Daley 1d. William S. Demchak 1e. Jessica P. Einhorn 1f. Laurence D. Fink 1g. William E. Ford 1h. Fabrizio Freda 1i. Murry S. Gerber 1j. Margaret L. Johnson 1k. Robert S. Kapito 1l. Cheryl D. Mills 1m. Gordon M. Nixon 1n. Charles H. Robbins 1o. Marco Antonio Slim Domit 1p. Susan L. Wagner 1q. Mark Wilson For Against Abstain Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. For Against Abstain 2. Approval, in anon-binding advisory vote, of the compensation for named executive officers. 3. Ratification of the appointment of Deloitte LLP as BlackRock’s independent registered public accounting firm for the fiscal year 2020. B. Shareholder Proposal - The Board of Directors recommends a vote For Against Abstain AGAINST Item 4. 4. Shareholder Proposal - Production of a Report on the “Statement on the Purpose of a Corporation.” For address changes and/or comments, please check this box and write them on the back where indicated. All shares will be voted as instructed above. In the absence of instructions, all shares will be voted with respect to registered shareholders that return a signed proxy card, FOR all nominees listed in Item 1, FOR Item 2, FOR Item 3 and AGAINST Item 4, and with respect to participants in the BlackRock, Inc. Retirement Savings Plan, in the manner required or permitted by the governing plan documents. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date BLACKROCK, INC. NEW YORK, NEW YORK 10055
2017
BLACKROCK, INC. 2020 ANNUAL MEETING OF SHAREHOLDERS
May 25, 2017
21, 2020 8:00 AM, local time
The Lotte New York Palace Hotel
455 Madison Avenue
New York, New York 10022
WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING.
BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
Internet and telephone voting are available through 11:59 PM Eastern Time on May 24, 2017.
Your Internet or telephone vote authorizes the named proxies to vote the shares in the same manner
as if you marked, signed and returned your proxy card.
EDT www.virtualshareholdermeeting.com/BLK2020 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
E25738-P91601
E95662-P34391 PROXY
FOR ANNUAL MEETING OF SHAREHOLDERS
BLACKROCK, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Gary S. Shedlin and R. Andrew Dickson, III, and each of them, as proxies, each with full power of substitution, and authorizes them to represent and to vote, as designated on the reverse side of this form, all shares of common stock of BlackRock, Inc. held of record by the undersigned as of March 30, 2017,23, 2020, at the 20172020 Annual Meeting of Shareholders to be held on May 25, 2017,21, 2020, beginning at 8:00 AM, local time,EDT, at The Lotte New York Palace Hotel, 455 Madison Avenue, New York, New York 10022,www.virtualshareholdermeeting.com/BLK2020, and in their discretion, upon any business that may properly come before the meeting or any adjournment of the meeting, in accordance with their best judgment.
If no other indication is made on the reverse side of this form, the proxies shall vote FOR all nominees listed in Item 1, FOR ItemItems 2 ONE YEAR for Itemand 3 FOR Item 4, AGAINST Item 5 and AGAINST Item 6.
4. This proxy may be revoked at any time prior to the time voting is declared closed by giving the Corporate Secretary of BlackRock, Inc. written notice of revocation or a subsequently dated proxy, or by casting a ballot at the meeting.
If the undersigned is a participant in the BlackRock, Inc. Retirement Savings Plan (the “RSP”), then the undersigned hereby directs Bank of America, N.A., FSB, as Trustee of the RSP to vote all the shares of BlackRock common stock credited to the undersigned’s account as indicated on the reverse side at the meeting and at any adjournment(s) thereof.
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(If Address Changes/Comments: _______________________________________________________________________________ ________________________________________________________________________________________________________ (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side
V.1.1
Review pay and performance alignment;
No ongoing employment agreements or guaranteed compensation arrangements
No
