UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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2018 PROXY STATEMENT Notice of Annual Meeting May 23, 2018 New York, New York
Generating Long-Term
ShareholderDelivering Value
to All
BlackRock’s mission isStakeholders to provide better financial futures for our clients. Our framework for creating long-term shareholder value is directly aligned with that mission.Generate
Durable Returns For
Shareholders
BlackRock, Inc. (“BlackRock” or the “Company”) has strategically investedis a global asset manager with approximately 16,500 employees in more than 30 countries. Our purpose is to help more and more people experience financial well-being and we do this by helping millions of people invest to build savings, making investing easier and more affordable, advancing sustainable investing and contributing to a broad,more resilient economy. By operating with a strong sense of purpose each and every day, we position ourselves to deliver better outcomes for clients no matter the market environment, create opportunities for employees, support communities and generate more consistent financial results for shareholders.
We have continuously invested in our business to build the world’s largest and most comprehensive investment platform across active and index funds, with solutions ranging from illiquid alternatives to cash management strategies. Our diverse investment platform strongis supported by our technology and risk management capabilitiessystem, Aladdin®, which helps us better identify risks and a global footprint to meet clients’ needs in all market environments.
Our diverseopportunities and make portfolios more resilient for our clients. The stability of BlackRock’s globally integrated asset management and technology platform enables us to generatedrives strong, long-term performance and consistent financial results, which allows us to continuously and continuouslydeliberately invest in our business through market cycles. We believe that continuously investing in our platform to meet clients’ evolving needs enables usand enhances BlackRock’s ability to:
Generate | Leverage our scale
| Return capital to | ||||||||
differentiated | for the benefit of all |
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organic growth | stakeholders |
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ThisOver the long term, BlackRock has delivered on each of these pillars. We have generated differentiated organic growth and delivered operating margin expansion. We have prioritized investment in our business to first drive growth and then returned excess cash flow to shareholders. Our capital return strategy has been balanced between dividends, where we target a 40-50% 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 continues to play an active role in overseeingactively oversees our broader strategy and in measuring our ability to successfully execute it.
BlackRock remains focused on investing for the future. Throughout BlackRock’s history, we have demonstrated an ability to optimize organic growth in the most efficient way possible while prudently returning capital to shareholders. We prioritize investment in our business to first drive growth and then return “excess” cash flow to shareholders. Our capital return strategy is balanced between dividends, where we target a 40-50% payout ratio, and a consistent share repurchase program.
In 2018,2021, we will continue to strategically and efficiently invest in BlackRock’sBlackRock to optimize future –growth to growbenefit all of our stakeholders. We will accelerate investments in areas we believe have high growth potential such as ETFs, illiquid alternatives and technology; keep active management at the heart of BlackRock; lead as a whole portfolio advisor across asset managementclasses; and technology capabilities, to expandfurther integrate sustainability across our geographic footprint and to further enhance our talent – to ensure we are meeting our daily responsibilities to our clients and delivering financial returns for shareholders.platform.
“The hardships experienced by people globally in 2020, and the inequities further exacerbated by the pandemic, have only strengthened BlackRock’s sense of responsibility to help millions of people invest to build savings; make investing easier and more affordable; advance sustainable investing; and contribute to a more resilient economy.” Laurence D. Fink Chairman and Chief Executive Officer |
BlackRock, Inc.
55 East 52nd Street
New York, New York, 10055
April 13, 2018[●], 2021
To Our Shareholders:
ThankJust as BlackRock is a fiduciary to our clients, helping them invest for the future, I recognize many of you are investing in BlackRock to achieve your own long-term goals and I want to thank you for your continued support and confidence in BlackRock. It is my pleasureour company. More than 13 months after COVID-19 became a global health crisis, we are still confronting its impacts daily. On behalf of BlackRock and our Board of Directors, we hope that you and your loved ones are staying healthy and safe.
In consideration of continued health concerns relating to inviteCOVID-19, we are once again holding BlackRock’s Annual Meeting of Shareholders virtually. We welcome you to our 2018 Annual Meeting, to be heldjoin us on May 23, 201826, 2021 at 8:00 a.m. EDT at www.virtualshareholdermeeting.com/BLK2021. 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/BLK2021. 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.
As BlackRock celebrates its 30th anniversary thisOver the past year, I have the opportunity to reflectCOVID-19 pandemic has enveloped the entire globe and changed it permanently. It has both exacted a horrific human toll and transformed the way we live – the way we work, learn, access medicine, and much more. While we face great challenges ahead on the most pressing issues facing investors todaypath to recovery, I am a long-term optimist and how BlackRock must continueam encouraged by the positive societal changes that are emerging from this pandemic. As I wrote in January, we are seeing an acceleration in the tectonic shift towards sustainability and people, companies and governments working together to adaptconfront the global threat of climate change. In one of the great triumphs of modern science, multiple vaccines were developed in record time. And importantly, the pandemic has amplified the need for companies to operate with a clear sense of purpose and serve clients’ needs effectively. Itall of their stakeholders – customers, employees and communities – in order to deliver long-term, durable returns for their shareholders.
I am incredibly proud of BlackRock’s unwavering commitment to living our purpose and maintaining a clear long-term vision throughout these challenging times. The hardships experienced by people globally in 2020, and the inequities further exacerbated by the pandemic, have only strengthened BlackRock’s sense of responsibility to help millions of people invest to build savings; make investing easier and more affordable; advance sustainable investing; and contribute to a more resilient economy.
Our strong 2020 performance is a great privilegetestament to the trust our clients place in us to help them navigate uncertain markets and responsibilityour ability to manage the assets entrusted to us, most of which are invested for long-term goals such as retirement. Just as we believe in the importance and benefits of clients investing for the long-term, we also approach BlackRock with that same future perspective. You can find more detail about BlackRock’s purpose and strategy for future growth in my letter to shareholders in this year’s Annual Report.
In 2017, BlackRock continued to deliver on each component of our framework for creating long-term shareholder value, while simultaneously investing in our business.meet their needs. Our diverse global investment platform – with active and index strategies across all asset management platform, industry leadingclasses, integrated technology, data and risk management, capabilities and thought leadership enabledglobal scale and connectivity enables us to generate $367deliver strong and consistent investment performance and more stable outcomes for clients. Our differentiated approach is resonating with clients and, as a result, they entrusted BlackRock with $391 billion of net new assets in 2020. We saw incredible momentum across our entire business during the year: we generated record net inflows into active equity, sustainable, cash and alternative strategies and had more than $1 billion of net inflows during the year, representing 7% organic asset growthin each of 19 countries and 104 different products, reflecting the truststrength and depth of our diversified platform. Our technology services business eclipsed $1 billion in annual revenue for the first time, as the pandemic has accelerated the need for robust operating and risk management technology. And we have earned from clients to help solve their most difficult investment challenges. We continued to investexecuted on our shareholder value framework by delivering revenue, operating income and earnings growth. After investing back in our business for future growth while simultaneously expandingto serve all our operating margin andstakeholders, we returned $2.8approximately $3.8 billion of cash to shareholders through a combination of dividends and share repurchases.
The executionstrength and consistency of BlackRock’s results, regardless of the market environment, are directly linked to our strategy is dependent on adiverse and engaged Board, and strong corporate governance framework. Whether acting as a fiduciary for clients or shareholders, we believe that good corporateand sustainability frameworks. BlackRock’s Board plays an integral role in our governance, is critical to meeting our overall objectives. That includes engaging with you, our shareholders, to better understand and address issues that are important to you. To support our mission of creating better financial futures for clients, we are vocal advocates for the adoption of sound corporate governance policies that include strong Board leadership, prudent management practices and thoughtful strategic deliberations. We believe that BlackRock has implemented such a set of principles, guidelines and practices that support sustainable financialstrategy, growth and long-term value creation for shareholders and hope that you will agree as you read the Proxy Statement.
success. It has always been important that BlackRock’sour Board of Directors functions as a key strategic and governing body that both challenges and advises our leadership team and guides BlackRock into the future. It is also critical that we have a robust corporate governance framework to be betterensure we are executing on our strategy, fulfilling our fiduciary responsibilities to clients and serving all of our stakeholders over the long-term.
BlackRock is committed to living our purpose of helping more and more innovative. BlackRock’s Board continues to play an integral rolepeople experience financial well-being. It is critical that we continue aggressively investing in our governance, growthbusiness to serve clients, inspire our employees and success.support our communities, so we can continue delivering durable profits for you, our shareholders, and make a positive impact on society. Now, more than ever, compassion and forward-thinking will be essential to our future.
Thank you again for your continued commitment to BlackRock. Our Board of DirectorsBlackRock and I look forwardhope to seeingsee you on May 23, 2018 in New York City.person next year.
Sincerely,
Laurence D. Fink
Chairman and Chief Executive Officer
Just as we believe in the importance and benefits of clients investing for the long-term, we also approach BlackRock with that same future perspective.
Notice of 2018
Annual Meeting
of Shareholders
Annual Meeting of Shareholders
PRELIMINARY COPY — SUBJECT TO COMPLETION
Notice of 2021
Annual Meeting of
Shareholders
Annual Meeting of Shareholders
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8:00 a.m. EDT | BLK2021 |
Agenda and Voting Matters
At or before ourthe 2021 Annual Meeting of Shareholders (“Annual Meeting”), we ask that you vote on the following items:
Proposal | Board Recommendation | Page Reference | ||||||
Item 1 Election of Directors | ![]() | Vote FOR each director nominee |
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Item 2Approval, in a Non-Binding Advisory Vote, of the Compensation for Named Executive Officers | ![]() | Vote FOR | 53 | |||||
Item 3 Ratification of the Appointment of the Independent Registered Public Accounting Firm | ![]() | Vote FOR | 91 | |||||
Items 4A-4CApproval of Amendments to Our Amended and Restated Certificate of Incorporation (the “Charter”) to (i) provide shareholders with the right to call a special meeting, (ii) eliminate certain supermajority vote requirements and (iii) eliminate certain provisions that are no longer applicable and make certain other technical revisions | ![]() | Vote FOR | 94 | |||||
Item 5 Shareholder Proposal – Production of a Report on the “Statement on the Purpose of a Corporation” | ![]() | Vote AGAINST |
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Item 6 Shareholder Proposal – Amend Certificate of Incorporation to Convert to a Public Benefit Corporation | ![]() | Vote AGAINST |
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Your vote is important — How to vote:
Internet | ||||||||
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Telephone | During the Meeting | |||||||
If your shares are held in the name of
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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 of our shareholders. By doing so, we save costs and reduce our impact on the environment. Beginning on April [●], 2021, 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 virtually, you may withdraw your proxy and vote online during the Annual Meeting if you so choose. Your vote is important and we encourage you to vote promptly, whether or not you plan to attend the Annual Meeting. By Order of the Board of Directors,
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It’s easier and faster to receive future shareholder materials electronically. Remember, you can change your preference at any time. To sign up for electronic delivery: If your shares are registered in your name, please visit www.proxyvote.com and follow the instructions. If your shares are held in the name of a broker, bank or other nominee, please contact them for instructions on how to sign up for electronic delivery. | |||||
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R. Andrew Dickson III Corporate Secretary April [●], 2021 | BlackRock, Inc. 55 East 52nd Street, New York, New York 10055 |
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting to be held on Wednesday, May 26, 2021: our Proxy
Statement and 2020 Annual Report are available free of charge on our
website at http://ir.blackrock.com/
Index of Frequently Requested Information |
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BlackRock’s Impact on its People | 38 |
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Sustainability at BlackRock | 36 |
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Board Diversity | 13 |
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CEO Pay Ratio | 89 |
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Clawback Policy | 80 | |||||||||||
Director Independence | 12 | |||||||||||
Hedging and Pledging Policy | 80 | |||||||||||
Peer Group | 66 | |||||||||||
Public Policy Engagement | 42 | |||||||||||
Stock Ownership Guidelines for Directors | 44 | |||||||||||
Stock Ownership Guidelines for NEOs | 80 | |||||||||||
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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.
BLACKROCK, INC. 2021 PROXY STATEMENT
Beginning on April 13, 2018, 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
Helpful Resources
Where You Can Find
More Information
Annual Meeting you may withdraw your proxy and vote in person, if you so choose.
Proxy Statement:
http://ir.blackrock.com/financials/annual-reports-and-proxy
Annual Report:
http://ir.blackrock.com/financials/annual-reports-and-proxy
Voting Your vote is important and we encourage you to vote promptly whether or not you plan to attendProxy via the 2018 Internet Before the
Annual Meeting of Shareholders of BlackRock, Inc.Meeting:
By Order of the 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
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Important Notice Regarding the Availability of Proxy Materials for the 2018 AnnualMeeting of Shareholders to be held on Wednesday, May 23, 2018: our ProxyStatement and 2017 Annual Report are available free of charge on our website atwww.blackrock.com/corporate/en-us/investor-relations
AUM | Assets under Management | ||||
Chief Executive Officer | |||||
CFO | Chief Financial Officer | ||||
Committees | The Audit, Management Development & Compensation, Nominating, Governance & Sustainability, Risk and Executive Committees | ||||
Compensation Committee | Management Development & Compensation Committee | ||||
COO | Chief Operating Officer | ||||
Deloitte | Deloitte & Touche LLP | ||||
ESG | Environmental, social and governance | ||||
GAAP | Generally Accepted Accounting Principles in the United States | ||||
GEC | Global Executive Committee | ||||
Committee | Nominating, Governance & Sustainability 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 | ||||
Peers | |||||
T. Rowe Price |
BLACKROCK, INC. 2021 PROXY STATEMENT 1
This summary provides an overview of selected information in this year’s Proxy Statement. We encourage you to read the entire Proxy Statement before voting.
Annual Meeting of Shareholders
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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 | 11 | |||||||||
ITEM 2.Approval, in a Non-Binding Advisory Vote, of the Compensation for Named Executive Officers
BlackRock seeks anon-binding advisory vote from its shareholders to approve the compensation of the | ![]() |
| VoteFOR | 53 | |||||||
ITEM 3.
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The Audit Committee has appointed Deloitte | ![]() |
Vote FOR | 91 | ||||||||
ITEMS 4A-4C.Approval of Amendments to Our Charter The Board recommends that shareholders approve amendments to BlackRock’s Charter, which would (i) provide shareholders with the right to call a special meeting, (ii) eliminate certain supermajority vote requirements and (iii) eliminate certain provisions that are no longer applicable and make certain other technical revisions. | ![]() |
VoteFOR | 94 | ||||||||
ITEM 5.Shareholder Proposal
The Board believes that the actions requested by the proponent are unnecessary and not in the best interest of our shareholders. | ![]() |
| VoteAGAINST | 99 |
BLACKROCK, INC. 2018 PROXY STATEMENT 1
ITEM 6. Shareholder Proposal – Amend Certificate of Incorporation to Convert to a Public Benefit Corporation The Board believes that the actions requested by the proponent are unnecessary and not in the best interest of our shareholders. | ![]() | Vote AGAINST | 102 |
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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:
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• | Enhanced disclosure on human capital management, including our Diversity, Equity and Inclusion strategy – see “BlackRock’s Impact on its People” on page 38 |
• | Enhanced disclosure on Board diversity – see “Board Profile and | |||
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Board Composition
(1816 director nominees)
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 of our Board supports BlackRock’s business and strategic growth areas, which include our diverse platform of alpha-seeking active, index and cash management investment strategies across asset classes, as well as technology services and advisory services and solutions.
The Governance Committee (the “Governance Committee”) regularly reviews the overall composition of the Board and its Committees to assess whether they reflectit 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. Over the course of the past year, the Governance Committee identified three new candidates with strong senior executive, international, technology and financial services experience who were elected to the Board in March of this year.strategy.
Board Tenure(1)
The Board considers length of tenure when reviewing nominees in order to maintain an overall balance of experience, continuity and fresh perspective.
![]() | 8 years: Average tenure of | |
all director nominees | ||
6 years: Average tenure of | ||
independent director nominees | ||
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:
(1) | Percentages do not sum to 100% due to rounding. |
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Proxy Summary | Governance Highlights
5 director nominees
(28%)
6 director nominees
(33%)
5 years:Average tenure of independent director nominees
Board Profile
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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.
Board Profile and Diversity
The partnership and oversight of a diverse board with proven leadership experience is essential to creating long-term shareholder value.
BlackRock 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 diverse backgrounds of our individual directors help the Board better oversee BlackRock’s management and operations and assess risk and opportunities for the Company’s business model from a variety of perspectives. | ||||||||
Director self-identification of race/ethnicity: • 1 Black / African American • 1 Hispanic / Latin American • 1 Middle-Eastern / North African |
The Board has and will continue to make diversity in gender, race/ethnicity, age, career experience and nationality – as well as diversity of mind – a priority when considering director candidates.
Board and Committee Oversight of Environmental, Social and Sustainability Matters
BlackRock’s governance of climate and sustainability-related matters reflects our commitment to strong leadership and oversight at the senior management and Board levels. BlackRock’s Board engages with senior leaders on near- and long-term business strategy and reviews management’s performance in delivering on our framework for long-term value creation, including as it relates to sustainability. Additionally, the Governance Committee is directly responsible for overseeing:
![]() | Investment Stewardship | ![]() | Social Impact | ![]() | Corporate Sustainability | ![]() | Public Policy | |||||||||||||||||||||
The Governance Committee periodically reviews corporate and investment stewardship-related policies, programs and significant publications relating to environmental (including climate change), social and other sustainability matters. | The Governance Committee reviews BlackRock’s philanthropic program (“Social Impact”) and its strategy, which is focused on efforts to support a more inclusive and sustainable economy. | The Governance Committee periodically reviews BlackRock’s corporate sustainability program, including through reports from BlackRock’s Corporate Sustainability team, which is responsible for overseeing efforts to incorporate sustainability into BlackRock’s business practices, operations and strategy and setting environmental sustainability objectives and strategy for our operations. | The Governance Committee has oversight of the Company’s corporate political activities and periodically reviews BlackRock’s public policy and advocacy activities, including public policy priorities, political contributions and memberships in trade associations. |
Governance Committee oversight 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 Governance Committee makes recommendations on these matters to the full Board.
4 | BLACKROCK, INC. 2021 PROXY STATEMENT |
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2BLACKROCK, INC. 2018 PROXY STATEMENT
Proxy Summary | Governance Highlights
Our Director Nominees
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Bader M. Alsaad | 63 | Chairman of the Board and Director General of the Arab Fund for Economic & Social Development | 2019 |
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Pamela Daley | 68 | Former Senior Vice President of Corporate Business Development, General Electric Company | 2014 | ● |
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Jessica P. Einhorn | 73 | Former Dean of Paul H. Nitze School of Advanced International Studies at Johns Hopkins University | 2012 |
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Laurence D. Fink | 68 | Chairman and CEO of BlackRock | 1999 |
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William E. Ford | 59 | Chairman and CEO of General Atlantic | 2018 |
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Fabrizio Freda | 63 | President and CEO of Estée Lauder Companies Inc. | 2012 |
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Murry S. Gerber Lead Independent Director | 68 | Former Chairman and CEO of EQT Corporation | 2000 | ● |
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Margaret “Peggy” L. Johnson | 59 | CEO of Magic Leap, Inc. | 2018 | ● | ● |
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Robert S. Kapito | 64 | President of BlackRock | 2006 |
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Cheryl D. Mills | 56 | Founder and CEO of BlackIvy Group | 2013 |
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Gordon M. Nixon | 64 | Former President and CEO of Royal Bank of Canada | 2015 |
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Charles H. Robbins | 55 | Chairman and CEO of Cisco Systems, Inc. | 2017 |
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Marco Antonio Slim Domit | 52 | Chairman of Grupo Financiero Inbursa, S.A.B. de C.V. | 2011 | ● | ● |
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Hans E. Vestberg | 55 | Chairman and CEO of Verizon Communications, Inc. | N/A | ● |
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Susan L. Wagner | 59 | Former Vice Chairman of BlackRock | 2012 | ● |
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Mark Wilson | 54 | Co-Chairman and CEO of Abacai | 2018 | ● |
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Number of Committee Meetings Held in 2020: |
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● Chairperson |
BLACKROCK, INC. 2021 PROXY STATEMENT | ![]() |
Our Director Nominees
Committee Memberships | ||||||||||||||||||
Nominee
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| Compensation
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Mathis Cabiallavetta |
73 |
Former Chairman of UBS, Vice Chairman of Swiss Re Ltd. and of Marsh & MacLennan Companies, Inc.
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2007 | ●
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Pamela Daley |
65 |
Former Senior Vice President of General Electric Company Corporate Business Development and Senior Advisor to Chairman
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2014 | Chair | ●
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William S. Demchak
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Chairman, CEO and President of The PNC Financial Services Group, Inc.
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Jessica P. Einhorn |
70 |
Former Dean of Paul H. Nitze School of Advanced International Studies at The Johns Hopkins University and former Managing Director, World Bank
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Laurence D. Fink
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65 |
Chairman and CEO of BlackRock
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1999
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William E. Ford
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56 |
CEO of General Atlantic |
2018 | |||||||||||||||
Fabrizio Freda
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60 |
President and CEO of The Estée Lauder Companies Inc.
|
2012 | ●
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Murry S. Gerber Lead Independent Director
|
65 |
Former Executive Chairman, Chairman, President and CEO of EQT Corporation |
2000 | ●
| ●
| ●
| ||||||||||||
Margaret L. Johnson |
56 |
Executive Vice President of Business Development of Microsoft Corporation
|
2018 | |||||||||||||||
Robert S. Kapito |
61 |
President of BlackRock
|
2006 | |||||||||||||||
Sir Deryck Maughan |
70 |
Former Senior Advisor, Partner and Managing Director of Kohlberg Kravis Roberts & Co. L.P.
|
2006 | ●
| Chair | ●
| ||||||||||||
Cheryl D. Mills |
53 |
Founder and CEO of BlackIvy Group and former
|
2013 | ●
| ●
| |||||||||||||
Gordon M. Nixon |
61 |
Former President, CEO and Director of
|
2015 | ●
| Chair | ●
| ●
| |||||||||||
Charles H. Robbins |
52 |
Chairman and CEO of Cisco Systems, Inc. |
2017
| ●
| ||||||||||||||
Ivan G. Seidenberg |
71 |
Former Chairman and CEO of Verizon
|
2011 | ●
| Chair | ●
| ●
| |||||||||||
Marco Antonio Slim Domit |
49 |
Chairman of Grupo Financiero Inbursa, S.A.B. de C.V.
|
2011 | ●
| ●
| |||||||||||||
Susan L. Wagner |
56 |
Former Vice Chairman of BlackRock
|
2012 | ●
| ||||||||||||||
Mark Wilson
|
51 |
CEO of Aviva plc
|
2018 |
BLACKROCK, INC. 2018 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:
Additionally, shareholders are being asked to approve amendments to our Charter at this Annual Meeting, which would further enhance our corporate governance practices by providing shareholders with the right to call a special meeting.
Stock Ownership Guidelines
Our stock ownership guidelines require the Company’s Global Executive Committee (“GEC”)GEC members to own and maintain shares with a target value of:
$10 million for the CEO; $5 million for the President; and $2 million for all other GEC members. As of December 31, 2020, all NEOs exceeded our stock ownership guidelines.
| ||
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 you.them. We report back to our Board on this engagement and onas well as specific issues to be addressed.
Executive management, Investor Relations
6 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Proxy Summary | Compensation Discussion and the Corporate Secretary engage on a regular basis with shareholders to understand their perspectives on a variety of corporate governance matters, including executive compensation, corporate governance policiesAnalysis Highlights
Compensation Discussion and corporate sustainability practices. We also communicate with shareholders through a number of routine forums, including 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. We relay shareholder feedback and trends on corporate governance and sustainability developments to our Board and its Committees and work with them to both enhance our practices and improve our disclosures.
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:
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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;
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Award and Incentive Plan (the “Stock Plan”);
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securities by Section 16 officers and directors;
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What We Don’t Do
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Incentive Program – Pay-for-Performance Highlights
Our total annual compensation structure embodies our commitment to align pay with performance, as highlighted in the following Compensation Discussion and Analysis sections:
4BLACKROCK, INC. 2018 PROXY STATEMENT
what we do what we don’t do
What to Look for | Where to Find it | |||
![]() | Compensation program objectives | “Our Compensation Program” beginning on page 61 | ||
![]() | Performance assessments for NEOs based on weighted, pre-set objectives | “How We Determine Total Incentive Amounts for NEOs” on page 9 | ||
![]() | Assessments include financials as the highest weighted input, including relative and year-over-year performance | “2020 Financial Performance” on page 57 “2020 NEO Compensation and Performance Summaries” beginning on page 68 | ||
![]() | Total incentive outcomes tied to formulaic percentage ranges | “Pay and Performance Alignment for NEOs – Total Incentive Award Determination” on page 58 “NEO Total Annual Compensation Summary” on page 59 | ||
![]() | Actual performance of historical incentive awards | “2017 BPIP Award: Actual Performance and Payout” on page 64 |
BLACKROCK, INC. 2021 PROXY STATEMENT | ![]() |
2017Proxy Summary | Compensation Discussion and Analysis Highlights
2020 Financial Performance Highlights1(1)
The strength of BlackRock’s 20172020 results reflect our differentiated ability to deliver global insights, strategic advice and comprehensive solutions to our clients in a challenging market environment. We generated $391 billion of total net inflows for the long-term strategic advantages we have created by consistently investingfull year, representing 5% organic asset growth and 7% organic base fee growth. We delivered revenue, operating income and earnings growth, expanded our margin and returned $3.8 billion to shareholders. Despite a volatile market environment and uncertain economic backdrop, BlackRock continued to invest in our business. Full-year results reflected industry-leading organicbusiness to serve all our stakeholders, drive long-term growth with record full-year net inflowsand lead the evolution of $367 billion, continued Operating Margin expansion and consistent capital management. Investmentthe asset management industry. Long-term investment performance results across our alpha-seeking and index strategies as of December 31, 20172020 remain strong and are detailed in Part I, Item 1 – Businessof our 20172020 Form10-K.
Differentiated Organic Growth
Organic Assetgrowth of 7% in 2017
contributed to strong Organic Revenue
growth2
Consistent Capital Return
$2.8 billion was returned to shareholders
in 2017 through a combination of dividends
and $1.1 billion of share repurchases
Operating Leverage
Operating Margin, as adjusted, of 44.1%
was up40 bps from 2016
Earnings Growth
Diluted earnings per share, as adjusted,
of $22.60increased 17% versus 2016
Differentiated Organic Growth | Operating Leverage | |||
BlackRock generated 5% organic asset | BlackRock improved its Operating Margin, as adjusted, by 120 bps to 44.9% in 2020 | |||
![]() | ![]() | |||
Consistent Capital Return | Earnings Per Share Growth | |||
BlackRock returned $3.8 billionto | BlackRock grew diluted earnings per share, | |||
![]() | ![]() |
(1) | Amounts in this section, where noted, are shown on an “as adjusted” basis. For a reconciliation with |
(2) | Traditional Peers refers to public company asset managers: Alliance Bernstein, Affiliated Managers Group, Franklin Resources, Invesco and T. Rowe Price. |
BLACKROCK, INC. 2018 PROXY STATEMENT 5
Assets Under Management ($B) Revenue ($M) Operating Income ($M) (as adjusted)2 Operating Margin (as adjusted)2 Cash Dividend Per Share ($)Share Buyback ($M) Net Income ($M) Earnings Per Share (as adjusted)2 ($M)
8 |
| 2021 PROXY STATEMENT |
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. Under the NEO total incentive award determination framework, the Compensation Committee assesses each NEO’s performance individually, based on three categories, with 50% of the award opportunity dependent on BlackRock’s achievement of financial performance goals, 30% dependent on BlackRock’s progress towards meeting our strategic objectives as measured by our business strength and 20% dependent on BlackRock’s progress towards meeting its organizational priorities. Our commitment to sustainability is incorporated within our Business Strength and Organizational Strength objectives. The Compensation Committee’s performance assessment is directly related to each NEO’s total incentive outcome, which includes all variable pay.
For each NEO’s performance assessment, please refer to the section “2020 NEO Compensation and Performance Summaries” on page 68.
How We Determine AnnualTotal Incentive Amounts
for Our CEO and PresidentNEOs
BlackRock Performance % of Award Opportunity
| Measures
| BlackRock Performance
| ||||||||||||||||
2016
|
2017
|
Change
| ||||||||||||||||
Financial Performance
|
Net New Business ($bn)
|
$202
|
$367
|
+82%
| ||||||||||||||
Net New Base Fee Growth
|
4%
|
7%
|
+300bps
| |||||||||||||||
Operating Income, as adjusted1 ($m)
|
$4,674
|
$5,287
|
+13%
| |||||||||||||||
Operating Margin, as adjusted1
|
43.7%
|
44.1%
|
+40 bps
| |||||||||||||||
Diluted Earnings Per Share, as adjusted1
|
$19.29
|
$22.60
|
+17%
| |||||||||||||||
Share Price Data |
BLK |
LC Traditional Peers2 | ||||||||||||||||
NTM P/E Multiple3
|
20.2x
|
14.3x
| ||||||||||||||||
Annual appreciation
|
35%
|
28%
| ||||||||||||||||
Business Strength
|
Deliver superior client experience through competitive investment performance across global product groups
|
BlackRock’s alpha-seeking investments platform delivered very strong performance in 2017 and improved performance against peers
| ||||||||||||||||
Drive organization discipline through execution of our strategic initiatives |
Demonstrated successful execution across multiple complex strategic initiatives that have positioned the Company well for growth
| |||||||||||||||||
Lead in a changing world |
Elevated the use of technology across the organization and made progress in advancing BlackRock’s technology agenda
| |||||||||||||||||
Organizational Strength
|
Drive high performance |
Advanced the high performance goal through execution of key senior talent moves in 2017
| ||||||||||||||||
Build a more diverse and inclusive culture |
Strong progress in 2017 diverse hiring to meet or exceed company-wide 2020 diversity targets
| |||||||||||||||||
Develop great managers and leaders |
Continued to focus on manager excellence, succession planning, the depth of our leadership bench, and proactive development of key talent
|
BlackRock Performance % of Award Opportunity
| Measures
| Indicative BlackRock Performance Metrics
| ||||
2019 | 2020 | |||||
Financial Performance
| Net New Business ($ billion) | $429 | $391 | |||
Net New Base Fee Growth | 5% | 7% | ||||
Operating Income, as adjusted(1) ($ million) | $5,551 | $6,284 | ||||
Year-over-year change | +0% | +13% | ||||
Operating Margin, as adjusted(1) | 43.7% | 44.9% | ||||
Year-over-year change | - 60bps | + 120bps | ||||
Diluted Earnings Per Share, as adjusted(1) | $28.48 | $33.82 | ||||
Year-over-year change | + 6% | + 19% | ||||
Share Price Data | BLK | Traditional Peers(2) | ||||
NTM P/E Multiple(3) | 20.6x | 10.1x | ||||
Annual appreciation/depreciation | + 44% | + 10% | ||||
Business Strength
|
Deliver for clients | |||||
• Drove exceptional long-term investment performance across BlackRock’s active platform, delivering over $30 billion of alpha for clients in 2020, as over 85% of fundamental active equity, systematic active equity and taxable fixed income assets performed above their respective benchmarks or peer medians for the trailing five-year period. | ||||||
• Expanded ETF investment options to clients, resulting in $185 billion of inflows across iShares® and $89 billion of the net inflows in Fixed Income iShares; launched over 100 new sustainable products. | ||||||
• Aladdin provided operational resilience and risk management for clients amidst record market volatility and increased client demand drove a record $1.1 billion of annual technology services revenue. | ||||||
Evolve how we serve clients | ||||||
• Executed against sustainability commitments, strengthening BlackRock’s ability to serve clients with sustainability research, investment solutions and technology. | ||||||
• Grew the illiquid alternatives platform to $86 billion AUM. Raised a record $25 billion of client capital in 2020, led by infrastructure, private equity solutions and private credit. | ||||||
Lead in a changing world | ||||||
• Quickly responded in supporting clients during the pandemic and volatile markets, leveraging our scale and connectivity to deliver strong investment performance and more stable outcomes for clients. | ||||||
• Focused on advancing racial equity through public policy and legislative outcomes where we operate.
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Organizational Strength
|
Attract and inspire talent | |||||
• Increased senior leader accountability of talent and succession, with more rigorous Talent Bench Reviews and the roll-out of sponsorship programs for underrepresented talent. | ||||||
Inclusion and diversity | ||||||
• Progressed toward our senior women leadership target of 30%, increasing 80 basis points from the prior year to 29.7% representation in senior roles at the end of 2020. | ||||||
• Built a strong pipeline of future talent through the most diverse Graduate Analyst Program class yet, with 58% female representation globally and 29% Black and Latinx representation in the U.S. | ||||||
Purpose and culture | ||||||
• Despite the challenging environment, fostered a purpose driven culture globally, which was evidenced by the Employee Opinion Survey results, with 91% of employees indicating that they are proud to work at BlackRock and over 80% feeling that BlackRock is invested in their well-being. | ||||||
• Prioritized the health and safety of employees during the pandemic, providing COVID-19 testing globally, free telemedicine options and additional support for families.
|
Amounts are shown on an “as adjusted” basis. For a reconciliation with GAAP, |
Traditional Peers refers to public company asset managers: Alliance Bernstein, Affiliated Managers Group, |
NTM P/E multiple refers to the Company’s share price as of December 31, |
In addition to annual incentive awards, the Compensation Committee expects to continue to make annual grants of long-term equity awards to both Messrs. Fink and Kapito, with at least half of such awards being contingent on future financial or other business performance requirements in addition to share price performance.
6BLACKROCK, INC. 2018 PROXY STATEMENT
BLACKROCK, INC. 2021 PROXY STATEMENT | ![]() |
Proxy Summary | Compensation Discussion and Analysis Highlights
NEO Total Annual Compensation Summary
Following a review of full-year business and individual Named Executive Officer (“NEO”)NEO performance, the Compensation Committee determined 20172020 total annual compensation outcomes for each NEO, as outlined in the table below.
2017 Annual Incentive Award |
| 2020 Total Incentive Award
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Name
| Base
| Cash
| Deferred
| Long-Term
| Total Annual
| % change in
| Performance-
| Base Salary | Cash | Deferred Equity | Long-Term Incentive Award (BPIP) | Total Annual Compensation (“TAC”) | % change in TAC vs. 2019 | |||||||||||||||||||||||||||||||||||||||
Laurence D. Fink
| $
| 900,000
|
| $
| 10,000,000
|
| $
| 4,600,000
|
| $
| 12,450,000
|
| $
| 27,950,000
|
|
| 10%
|
|
| –
|
|
| $1,500,000 |
|
| $9,500,000 |
|
| $3,950,000 |
|
| $14,900,000 |
|
| $29,850,000 |
|
| 18% |
| |||||||||||||
Robert S. Kapito
| $
| 750,000
|
| $
| 8,125,000
|
| $
| 3,514,000
|
| $
| 9,626,000
|
| $
| 22,015,000
|
|
| 10%
|
|
| –
|
|
| $1,250,000 |
|
| $8,250,000 |
|
| $3,937,500 |
|
| $11,187,500 |
|
| $24,625,000 |
|
| 23% |
| |||||||||||||
Robert L. Goldstein
| $
| 500,000
|
| $
| 3,275,000
|
| $
| 2,325,000
|
| $
| 2,100,000
|
| $
| 8,200,000
|
|
| 12%
|
| $
| 10,000,000
|
|
| $500,000 |
|
| $3,175,000 |
|
| $2,325,000 |
|
| $5,750,000 |
|
| $11,750,000 |
|
| 19% |
| |||||||||||||
Mark S. McCombe
| $
| 500,000
|
| $
| 2,725,000
|
| $
| 1,775,000
|
| $
| 1,950,000
|
| $
| 6,950,000
|
|
| 11%
|
| $
| 10,000,000
|
| |||||||||||||||||||||||||||||||
Mark Wiedman |
| $500,000 |
|
| $2,675,000 |
|
| $1,725,000 |
|
| $5,600,000 |
|
| $10,500,000 |
|
| 24% |
| ||||||||||||||||||||||||||||||||||
Gary S. Shedlin
| $
| 500,000
|
| $
| 2,700,000
|
| $
| 1,750,000
|
| $
| 1,850,000
|
| $
| 6,800,000
|
|
| 11%
|
| $
| 7,500,000
|
|
| $500,000 |
|
| $2,800,000 |
|
| $1,850,000 |
|
| $3,350,000 |
|
| $8,500,000 |
|
| 18% |
|
The amounts listed above as “2017 Annual“2020 Total Incentive Award: Deferred Equity”Equity” and “Long-Term“2020 Total Incentive Award: Long-Term Incentive Award (“BPIP”)(BPIP)” were granted in January 20182021 in the form of equity and are separate fromin addition to the cash award amounts listed above as “2017 Annual“2020 Total Incentive Award: Cash.Cash.” In conformance with SEC requirements, the 2017“2020 Summary Compensation Table” on page 6882 reports equity in the year granted but cash in the year earned.
In the fourth quarter of 2017, BlackRock implemented a key strategic part of our long-term management succession plans 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. Consequently, we do not consider these awards to be part of our regular annual compensation determinations for 2017. For more information regarding these performance-based stock options, see “Performance-Based Stock Options” on page 55.
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 20172020 year-end compensation decisions for individual NEOs by the 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’s deferral policy, as detailed on page |
2017 CEO Total Annual Compensation-$27.95M Base Salary (Cash) $900k 97% of total compensation is variable and based on performance Annual Incentive (Cash) $10.00M 125% of target Annual Incentive (Deferred Equity1,2) $4.6M Long-Term Incentive (BPIP) (Performance Based Equity1,2) $12.45M 75% of equity is awarded in BPIP 2017 President Total Annual Compensation- $22.02M Base Salary (Cash) $750k Annual Incentive (Cash) $8.13M 125% of target Annual Incentive (Deferred Equity1,2) $3.51M Long-Term Incentive (BPIP) (Performance Based Equity1,2) $9.63M 75% of equity is awarded in BPIP 60-61% of total annual compensation is awarded in equity 2017 Total Annual Compensation for NEOs (excluding CEO and President) Base Salary (Cash) 7-8% of pay 92-94% of total compensation is variable and based on performance Annual Incentive (Cash3) 39-40% of pay Annual Incentive (Deferred Equity1,2,3) 26-28% of pay Long-Term Incentive (BPIP) (Performance Based Equity1,2) 26-28% of pay 53-54% of total annual compensation is awarded in equity
BLACKROCK, INC. 2018 PROXY STATEMENT 7
10 | BLACKROCK, INC. 2021 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 both challenges and advises our leadership team and guides BlackRock into the future.” Laurence D. Fink Chairman and Chief Executive Officer | Our Board has nominated 16 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 16 director nominees are elected, our Board will consist of 16 directors, 14 of whom, representing approximately 88% of the Board, will be “independent” as defined in the NYSE listing standards. Majority Vote Standard for Election of Directors Directors are elected by receiving a majority of the votes cast in uncontested elections, which means the number of shares voted “for” a director nominee must exceed the number of shares voted “against” that director nominee. In a contested election, directors 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. 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 Under 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 will 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. |
BLACKROCK, INC. 2021 PROXY STATEMENT | 11 |
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 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 18 nominees are elected, our 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:
The PNC Financial Services Group, Inc. (“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 Stockholder Agreement, see“Certain Relationships and Related Transactions – PNC Stockholder Agreement” on page 40.
8BLACKROCK, INC. 2018 PROXY STATEMENT
It has always been important that BlackRock’s Board of Directors functions as a key strategic and governing body that challenges our leadership team to be better and more innovative. Laurence D. Fink Chairman and Chief Executive Officer
ITEM 1: |
Majority Vote Standard for Election of Directors
Directors are elected by a majority of the votes cast in uncontested elections (the number of shares voted “for” a director nominee must exceed the number of shares voted “against” that director nominee). In a contested election (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 meeting and entitled to vote on the election of directors. 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 and Mandatory Retirement AgeNominees
Under 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 would 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 has established a mandatory retirement age of 75 years for directors, as reflected in BlackRock’s Corporate Governance Guidelines.
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 include 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, pleaseseeplease see “Deadlines for Submission of Proxy Proposals, Nomination of Directors and Other Business of Shareholders”on page 92.107.
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.
In March of this year, the Governance Committee identified Hans E. Vestberg as a candidate with significant leadership and experience in international business, Continental Europe, sustainability and the technology sector, and recommended him to the Board for consideration. Mr. Vestberg was recommended for consideration to the Governance Committee by our CEO. On March 24, 2021, the Board voted unanimously to nominate Mr. Vestberg for election at the Annual Meeting.
Each year, the Board determines 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;
BLACKROCK, INC. 2018 PROXY STATEMENT 9
ITEM 1: Election of Directors | Criteria for Board Membership
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;
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 50.
In March 2021, the Governance Committee made a recommendation to the Board regarding the independence of our director nominees 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 director nominees as well as between BlackRock and entities affiliated with a director nominee, including the relationships described under “Certain Relationships and Related Transactions” on page 50. The Governance Committee also considered that Messrs. Robbins and Vestberg are, and Ms. Johnson was, 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 2% 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, Ford, Freda, Gerber, Nixon, Robbins, Slim, Vestberg and Wilson are “independent” as defined in the NYSE listing standards and that none of the relationships between these director nominees and BlackRock are material under the NYSE listing standards. In addition, the Board had previously determined that Ivan G. Seidenberg, who retired from the Board effective May 21, 2020, and Mathis Cabiallavetta, who was a director for all of 2020 and is not standing for re-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 16 directors, 14 of whom, representing approximately 88% 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 director candidatenominee 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, ability to make independent analytical inquiries, understanding of BlackRock’s business environment and a willingness to devote adequate time and effort to the responsibilities of the Board.
BlackRock 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, race/ethnicity, age, career experience and geographic locationnationality – as well as diversity of mind – a priority when considering director candidates. The diverse backgrounds of our individual directors help the Board better evaluateoversee BlackRock’s management and operations and assess risk and opportunities for the Company’s business model.model from a variety of perspectives. BlackRock’s commitment to Board diversity enhances Boardthe Board’s involvement in our Company’s multi-facetedmultifaceted long-term strategy and inspires deeper engagement with management, employees and clients around the world.
Our Board has nominated 18 directors16 candidates for election, 1514 of whom are independent. The Boardslate of director nominees includes 5five women 1 of whom is African American, and 6 directors who aresix non-U.S. or dual citizens. Several of our nominees live and work overseas in countries and regions that are key areas of growth and investment for BlackRock, including Canada, Mexico, Canada, the United KingdomMiddle East and Continental Europe.
Additionally, beginning this year, we asked each director nominee to self-identify as to his or her racial/ethnic diversity. Based on the responses, three of our 14 independent director nominees self-identified as racially/ethnically diverse, with one as Black/African American, one as Hispanic/Latin American and one as Middle-Eastern/North African.
BLACKROCK, INC. 2021 PROXY STATEMENT | 13 |
ITEM 1: Election of Directors | Criteria for Board Membership
As BlackRock’s business has evolved, so has itsour Board. Our Boardslate of director nominees consists of senior leaders, (includingincluding 12 current or former company CEOs)CEOs, with substantial experience in financial services, consumer products, manufacturing, technology, banking and energy, andas well as several directorsdirector nominees who have held senior policy and government positions. To learn more about our Board, we encourage you to visit our website athttp://ir.blackrock.com/board-of-directors. Core qualifications and areas of expertise represented on our Board include:
10BLACKROCK, INC. 2018 PROXY STATEMENT
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 7eight years whileand the average tenure forof independent director nominees is approximately 5six years.
SixFollowing the Annual Meeting, assuming all of the nominated directors are elected, there will be six directors, comprising 33%38% of the Board, who have joined the Board within the past five years and bring fresh perspective to Board deliberations. Seven directors, comprising 44% of the Board, have served between five and 10 years. Three directors, comprising 19% of the Board, have served more than 10 years and bring a wealth of experience and knowledge concerning BlackRock. Five(1) The Board believes it is important to balance refreshment with the need to retain directors comprising 28%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.
Retirement Age. The Board has established a retirement age policy of 75 years for directors, 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.
Board have served between 5 and 10 years.
Following the 2018 Annual Meeting of Shareholders, assuming all of the nominated directors are elected, there will be seven directors, comprising 39% of the Board, who have joined the Board within the past 5 years and bring fresh perspective to Board deliberations.
Size.The Board has not adopted a policy that limits or sets a target for Board size and believes the current size and diverse composition of the Board is best suited to evaluate management’s performance and oversee BlackRock’s global strategy, complex operations and risk management. The range of insights and experience of our Board supports BlackRock’s business and strategic growth areas, which include our diverse platform of alpha-seeking active, index and cash management investment strategies across asset classes, as well as technology services and advisory services and solutions.
(1) | Percentages do not sum to 100% due to rounding |
14 | BLACKROCK, INC. 2021 PROXY STATEMENT |
ITEM 1: Election of Directors | Criteria for Board Membership
As described in“Board Evaluation Process” on page 23,28, the Governance Committee and the Board evaluate Board and Committee performance and effectiveness on at least an annual basis and, as part of that process, ask each director to consider whether the size of the Board and its standing Committees are appropriate. In response to the 2020 Board and Committee evaluations, directors praised the open, collaborative and highly engaged Board culture. Our directors also commented that the size and structure of the Board promotes diversity of thought and engagement, and it was noted that thoughtful consideration has been given to the refreshment of 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 its 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 CEO does notnor President currently serveserves 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 6 of BlackRock’s current directors will retire within the next 6 years, inclusive of Messrs. Al-Hamad and Grosfeld. In order to maintain a Board with an appropriate mix of experience and qualifications, the Governance Committee, with the help of management and an outside consultant, engages in a year-round process to identify and evaluate new director candidates in conjunction with its recurring review of Board and Committee composition. Consistent with our long-term strategic goals and the qualifications and attributes described above, search criteria include significant experience in financial services, the technology sector and consumer branding, as well as international experience. In March of this year, the Governance Committee selected William E. Ford, Margaret L. Johnson and Mark Wilson as directorParticular emphasis is also placed on diverse candidates with significantcurrently serving in leadership and experience in asset management, technology and international financial services, respectively, and recommended each to the Board for consideration as director candidates for the Board. Ms. Johnson was recommended for consideration to the Governance Committee by a third-party search firm and Messrs. Ford and Wilson were referrals from our CEO. On March 15, 2018, following a review of the candidates’ qualifications and independence, the Board voted unanimously to elect each director candidate to our Board.positions.
Board Recommendation
For this year’s election, the Board has nominated 1816 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 29, 2018.2021.
15 |
BLACKROCK, INC. 2018 PROXY STATEMENT 11
ITEM 1: Election of Directors | Director Nominee Biographies
|
Mr.
Qualifications
Mr. AIsaad’s extensive experience in the strategically important Middle East region and over 35 years of
Other Public Company Directorships (within the past 5 years)
• | ||||||||||||
Age 63 | Tenure 1 Year | |||||||||||
Committees • Governance • Risk
Qualifications • • Financial Services • Global Business • Public Policy & Government/ Regulatory Affairs • Risk Management & Compliance | ||||||||||||
| 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) | |||||||||||
Age 68 | Tenure 7 Years | |||||||||||
Committees • Audit (Chair) • Executive • Risk
Qualifications • |
12BLACKROCK, INC. 2018 PROXY STATEMENT
Age 73 Tenure 10 Years Committees Audit Nominating & Governance Risk Qualifications Senior Executive & Corporate Governance Global Business Risk Management & Compliance Financial Services Public Company & Financial Reporting Age 65 Tenure 4 Years Committees Audit (Chair) Executive Risk Qualifications Senior Executive & Corporate Governance Global Business
• Financial Services
• Global Business
• Public Company & Financial Reporting
• Public Policy & Government/ Regulatory Affairs
• Risk Management & Compliance
16 | BLACKROCK, INC. 2021 PROXY STATEMENT |
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 – | ||||||||||
Age 73 | Tenure 8 Years | |||||||||
Committees • Compensation • Risk Qualifications • Senior Executive & Corporate Governance • Financial Services • Global Business • Public Policy & Government/ Regulatory Affairs • Risk Management & Compliance |
Age 55 Tenure 15 Years Committees Executive Risk Qualifications Senior Executive & Corporate Governance Risk Management & Compliance Financial Services Public Company & Financial Reporting Branding & Marketing Age 70 Tenure 5 Years Committees Management Development & Compensation Risk Qualifications Senior Executive & Corporate Governance Global Business Risk Management & Compliance Financial Services Public Policy & Government/Regulatory Affairs
BLACKROCK, INC. 2018 PROXY STATEMENT 13
|
Laurence D. Fink
Mr. Fink is founder, Chairman and Chief Executive Officer of BlackRock. He also leads the firm’s Global Executive Committee. He is responsible for senior leadership development and succession planning, defining and reinforcing BlackRock’s vision and culture, and engaging relationships with key strategic clients, industry leaders, regulators and policy makers. Mr. Finkco-founded BlackRock in 1988, and under his leadership, the firm has grown into a global leader in investment management, risk management and advisory services for institutional and retail clients.
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 68 | Tenure 21 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 |
BLACKROCK, INC. 2021 PROXY STATEMENT | 17 |
ITEM 1: Election of Directors | Director Nominee Biographies
| William E. Ford
Mr. Ford
Qualifications 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 investment firms.
Other Public Company Directorships (within the past 5 years)
• IHS Markit Ltd. • Royalty Pharma plc (2020 – present) • Axel Springer (2016 – April 2018) | |||||||||||
Age 59 | Tenure 3 Years | |||||||||||
Committees • Audit • Compensation (Chair) • Executive Qualifications • Senior Executive & Corporate Governance • Financial Services • Global Business • Public Company & Financial Reporting |
14BLACKROCK, INC. 2018 PROXY STATEMENT
Age 65 Tenure 18 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 Age 56 Tenure 0 Years Committees None Qualifications Senior Executive & Corporate Governance Public Company & Financial Reporting Global Business Financial Services
|
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 the Company’s marketing, strategy and innovation initiatives.
Other Public Company Directorships (within the past 5 years)
• The Estée Lauder Companies Inc. (2009 – present) | ||||||||||
Age 63 | Tenure 8 Years | |||||||||
Committees • Governance Qualifications • Senior Executive & Corporate Governance • Branding & Marketing • Global Business • Risk Management & Compliance • Technology |
18 | BLACKROCK, INC. 2021 PROXY STATEMENT |
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
| Tenure 21 Years | |||||||||||
Lead Independent Director Committees • Audit • Executive • Governance Qualifications • Senior Executive & Corporate Governance • Global Business • Public Company & Financial Reporting • Risk Management & Compliance • Technology |
Age 55 Tenure 15 Years Committees Executive Risk Qualifications Senior Executive & Corporate Governance Risk Management & Compliance Financial Services Public Company & Financial Reporting Branding & Marketing Age 70 Tenure 5 Years Committees Management Development & Compensation Risk Qualifications Senior Executive & Corporate Governance Global Business Risk Management & Compliance Financial Services Public Policy & Government/Regulatory Affairs
BLACKROCK, INC. 2018 PROXY STATEMENT 15
|
Margaret “Peggy” L. Johnson
Ms. Johnson has been the Chief Executive Officer of Magic Leap, Inc., an American augmented reality company, since August 2020. Previously, she was Executive Vice President of Business Development at Microsoft Corporation
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)
• Live Nation Entertainment (2013 – | ||||||||||
Age 59 | Tenure 3 Years | |||||||||
Committees • Audit • Compensation Qualifications • Senior Executive & Corporate Governance • Branding & Marketing • Global Business • Public Policy & Government/ Regulatory Affairs • Technology |
BLACKROCK, INC. 2021 PROXY STATEMENT | 19 |
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 of iShares, 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 | |||||||||||
Age 64 | Tenure 14 Years | |||||||||||
Committees • None Qualifications • Senior Executive & Corporate Governance • Branding & Marketing • Financial Services • Global Business • Risk Management & Compliance |
16BLACKROCK, INC. 2018 PROXY STATEMENT
Age 56 Tenure 0 Years Committees None Qualifications Senior Executive & Corporate Governance Global Business Public Policy & Government/ Regulatory Affairs Technology Branding & Marketing Age 70 Tenure 11 Years Committees None Qualifications Senior Executive & Corporate Governance Global Business Risk Management & Compliance Financial Services Branding & Marketing
|
| ||||||||||
![]() | 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)
• | |||||||||
Age 56 | Tenure 7 Years | |||||||||
Committees • Compensation • Governance Qualifications • Senior Executive & Corporate Governance • Branding & Marketing • Global Business • Public Policy & Government/ Regulatory Affairs • Risk Management & Compliance |
Age 53 Tenure 4 Years Committees Management Development & Compensation Nominating & Governance Qualifications Senior Executive & Corporate Governance Global Business Risk Management & Compliance Public Policy & Government/ Regulatory Affairs Branding & Marketing
BLACKROCK, INC. 2018 PROXY STATEMENT 17
20 | BLACKROCK, INC. 2021 PROXY STATEMENT |
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) (Chairman from 2016 – present) • George Weston Limited (2014 – present) | ||||||||||
Age 64 | Tenure 5 Years | |||||||||
![]() Committees • Compensation • Executive • Governance (Chair) Qualifications • Senior Executive & Corporate Governance • Financial Services • Global Business • Public Company & Financial Reporting • 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 brings to the Board extensive experience in the fields of technology, global sales and operations acquired over his
Other Public Company Directorships (within the past 5 years)
• Cisco Systems, Inc. (2015 – present) (Chairman from 2017 – present) | |||||||||||
Age 55 | Tenure 3 Years | |||||||||||
Committees • Risk Qualifications • Senior Executive & Corporate Governance • Branding & Marketing • Global Business • Public Policy & Government/ Regulatory Affairs • Technology |
18BLACKROCK, INC. 2018 PROXY STATEMENT
Age 61 Tenure 2 Years Committees Executive Nominating & Governance (Chair) Management Development & Compensation Risk Qualifications Senior Executive & Corporate Governance Global Business Risk Management & Compliance Financial Services Public Policy & Government/ Regulatory Affairs Age 52 Tenure 1 Year Committees Risk Qualifications Senior Executive & Corporate Governance Public Policy & Government/ Regulatory Affairs Branding & Marketing Technology
BLACKROCK, INC. 2021 PROXY STATEMENT | 21 |
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. | ||||||||||
Age 52 | Tenure 9 Years | |||||||||
Committees • Audit • Compensation
Qualifications • • Financial Services • Global Business • Public Company & Financial Reporting • Risk Management & Compliance |
Age 71 Tenure 7 Years Committees Audit Executive Nominating & Governance Management Development & Compensation (Chair) Qualification Senior Executive & Corporate Governance Public Company & Financial Reporting Public Policy & Government/ Regulatory Affairs Branding & Marketing Technology global business Age 49 Tenure 6 Years Committees Audit Management Development & Compensation Qualifications Senior Executive & Corporate Governance Global Business Risk Management & Compliance Financial Services Public Company & Financial Reporting
BLACKROCK, INC. 2018 PROXY STATEMENT 19
| Hans E. Vestberg Mr. Vestberg has served as the Chief Executive Officer of Verizon Communications Inc. (Verizon) since 2018 and as Chairman since March 2019. Prior to these roles, Mr. Vestberg served as Verizon’s Chief Technology Officer and President of Global Networks from 2017 to 2018. Before joining Verizon in 2017, Mr. Vestberg served for six years as President and CEO of Ericsson, a multinational networking and telecommunications equipment and services company headquartered in Sweden. Mr. Vestberg is a board member of the UN Foundation and the Whitaker Peace & Development Initiative. He also serves as Chairman of the World Economic Forum EDISON Alliance. Mr. Vestberg has lived and worked in China, Chile, Brazil and Mexico, in addition to the U.S. and Sweden. Qualifications As the CEO of Verizon and former leader of Ericsson, Mr. Vestberg brings executive experience from these large multinational companies as well as substantial expertise in the field of technology acquired through his experience as Verizon’s Chief Technology Officer and over his 25-year career at Ericsson. Other Public Company Directorships (within the past 5 years) • Verizon Communications Inc. (2018 – present) (Chairman from 2019 – present) • Hexagon AB (2017 – 2018) • Telefonaktiebolaget LM Ericsson (2010 – 2016) | |||||||||||
Age 55 | Tenure 0 Years | |||||||||||
Committees • None Qualifications • Senior Executive & Corporate Governance • Global Business • Public Company & Financial Reporting • Public Policy & Government/ Regulatory Affairs • Technology |
22 | BLACKROCK, INC. 2021 PROXY STATEMENT |
ITEM 1: Election of Directors | Director Nominee Biographies
|
Susan L. Wagner
Ms. Wagner retired as Vice Chairman of BlackRock after serving in that role from 2006 to 2012. Ms. Wagner also served as a member of BlackRock’s Global Executive Committee and Global Operating Committee. Ms. Wagner previously served as BlackRock’s Chief Operating Officer and as Head of Corporate Strategy. She serves as a member of the board of trustees of Wellesley College. Ms. Wagner also currently serves as a director of Color
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 59 | Tenure 8 Years | |||||||||||
Committees • Audit • Executive • Risk (Chair) Qualifications • Senior Executive & Corporate Governance • Financial Services • Global Business • Public Company & Financial Reporting • Risk Management & Compliance • Technology |
| Mark Wilson
Mr. Wilson
Qualifications As the former Chief Executive Officer of Aviva and CEO of Abacai, Mr. Wilson brings to the Board extensive experience in
Other Public Company Directorships (within the past 5 years)
• Aviva plc (2013 – |
20BLACKROCK, INC. 2018 PROXY STATEMENT
Age 53 Tenure 4 Years Committees Management Development & Compensation Nominating & Governance Qualifications Senior Executive & Corporate Governance Global Business Risk Management & Compliance Public Policy & Government/ Regulatory Affairs Branding & Marketing Age 61 Tenure 2 Years Committees Executive Nominating & Governance (Chair) Management Development & Compensation Risk Qualifications Senior Executive & Corporate Governance Global Business Risk Management & Compliance Financial Services Public Policy & Government/ Regulatory Affairs
Age 54 | Tenure 3 Years | |||||||||
Committees • Risk Qualifications • Senior Executive & Corporate Governance • Financial Services • Global Business • Public Company & Financial Reporting • Public Policy & Government/ Regulatory Affairs |
BLACKROCK, INC. 2021 PROXY STATEMENT | 23 |
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 self-evaluation process of the Board and its standing Committees.
Because corporate governance practices evolve over time, our Board reviews and approves our Corporate Governance Guidelines, Committee 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 addresses director responsibilities, director access to management, director orientation and continuing education, director retirement and the annual performance evaluationsGuidelines.
The full versions of our Corporate Governance Guidelines, Committee Charters, Code of Business Conduct and Ethics and other corporate governance policies are available on our website at www.blackrock.com under the headings “Our Company and Sites / About BlackRock / Investor Relations / Governance / Governance Overview.” |
Our Board and Committees.Culture
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 and unifies the firm. Our approach to instilling, reinforcing and enhancing our culture is deliberate and intentional.
BlackRock’s culture is underpinned by five core principles that we refer to as the BlackRock Principles:
We are a fiduciary to our clients;
We are One BlackRock;
We are passionate about performance;
We take emotional ownership; and
We are committed to a better future.
We rely on the BlackRock Principles to guide how we interact with each other, our clients, the communities in which we operate and all of our other stakeholders. The Corporate Governance Guidelines also directs that the Governance Committee consider the periodic rotation of Committee membersBlackRock Principles represent our core values, our aspirations and Committee Chairs as a means of introducing fresh perspectives and broadening and diversifying the views and experience represented on Committees.our cultural language. To learn more, please visit our website www.blackrock.com.
24 |
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Corporate Governance | Our Board and Culture
Our Board is deeply engaged in understanding the culture at BlackRock
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 also believe that our Board should be deeply engaged, provide informed and honest guidance and feedback and maintain an open dialogue with management based on a clear understanding of our strategic plans.
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. | |
Role in Talent Development | Building a generation of future leaders is vital to BlackRock’s long-term success. Accordingly, our Board plays a critical part in our talent development and dedicates 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 on our Board’s role in talent development, please refer to “BlackRock’s Impact on its People” on page 38. | |
Employee Engagement & Additional Resources | Our directors have full and free access to | |
Embracing Best Practices |
Our Board also takes an active role in ensuring we embrace “best practices” in corporate governance.
|
Board Oversight of COVID-19 Response
The Board has been highly engaged with management on BlackRock’s response to the COVID-19 pandemic. Discussions with the Board and Committees have included, among other topics:
the impact of the pandemic on markets and how we are helping clients navigate uncertainty;
BLACKROCK, INC. 2018 PROXY STATEMENT 21our strategy and the pandemic’s implications for our firm-wide priorities;
business continuity and the protocols and policies put in place to protect ongoing operations;
information security and technology controls to manage work from home threats;
the firm’s controls to maintain the integrity of financial reporting;
measures taken to support employees globally and to protect their health and safety; and
the Company’s return-to-work procedures.
Additionally, during the early stages of the pandemic, our CEO provided the Board with weekly strategic, financial and operational updates.
BLACKROCK, INC. 2021 PROXY STATEMENT | 25 |
Corporate Governance | Our Board and Culture
| ||||||||
Director Engagement Our Investment Stewardship team hosts an annual Director Dialogue Day, where employees, members of management and independent directors of other companies engage on topics such as the team’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. All of our directors who were serving on the Board and nominated for re-election in 2020 attended the 2020 Annual Meeting of Shareholders. Additionally, our Lead Independent Director answered questions from shareholders and addressed questions about the Board’s composition, size and engagement with management. | ||||||||
Director Orientation 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 new directors with BlackRock’s: | ||||||||
• Financial position and strategic plans; • Significant financial, accounting and risk management policies; | • Compliance programs, Code of Business Conduct and Ethics and other key policies; 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 and are reimbursed for any reasonable expenses in connection with such programs. For example, members of our Audit Committee have participated in conferences and symposiums hosted by our independent registered public accounting firm, Deloitte. Additionally, directors are provided, on a quarterly basis, with a curated list of optional educational opportunities and events covering issues and trends that are relevant to their service on BlackRock’s Board. 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. | ||||||||
26 | BLACKROCK, INC. 2021 PROXY STATEMENT |
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 reviewreviews and evaluateevaluates the Board’s leadership structure.structure on at least an annual basis. Mr. Fink serves as both BlackRock’s CEO 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 30 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 the management of the Company.
To further facilitate coordination with the independent directors and to ensure the exercise of independent judgment byenables the Board to better understand the independent directors annually select one of the independent membersCompany and work with management to serve as the Lead Independent Director.enhance shareholder value.
Under our Lead Independent Director Guidelines, when the positions of Chief Executive Officer and Chairman of the Board are combined or the Chairman is not independent, the independent directors will appoint a Lead Independent Director. The Lead Independent Director will then be electedappointed annually by BlackRock’s independent directors and serve until a successor is elected.duly appointed and qualified, his or her removal or resignation, or he or she is no longer an independent member of the Board. Although electedappointed 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.
Our Lead Independent Director: Murry S. Gerber
| The Role of the Lead Independent Director
| |||||||
Our Lead Independent Director has significant authority and responsibilities to provide for an
| ||||||||
• meetings, in consultation with the Chairman and
•
• Serves as liaison between independent | • Focuses on Board effectiveness, performance and composition with input from the Governance Committee.
• Oversees and reports on annual Board and
• Serves as the primary Board contact for |
Mr. Gerber has substantial experience with corporate governance and public company management, as well as deep knowledge of the Company and its governance practices. The Board believes Mr. Gerber’s long tenure as a director enables him to provide a valuable perspective on BlackRock’s growing business and risk management and enhances his ability to challenge members of senior management.
The Board, as reflected in responses to the 2020 Board and Committee evaluations, particularly commended Mr. Gerber’s effectiveness as Lead Independent Director, highlighting his leadership of executive sessions and encouragement of candid feedback on the performance and effectiveness of the Board.
Executive Sessions
Executive sessions ofnon-management directors are held at mostevery regularly scheduled Board meetings,meeting, and six executive sessions were held in 2017.2020. Each session is chaired by the Lead Independent Director, who facilitates discussion of various topics throughout the year, including 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 of 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 Corporate Governance Guidelines, Committee Charters, Code of Business Conduct and Ethics and other corporate governance policies are available on our website atwww.blackrock.comhttp://ir.blackrock.com under the headings “Our Company and Sites“Governance / Our Firm / Investor Relations / Corporate Governance”Governance Overview.”
22BLACKROCK, INC. 2018 PROXY STATEMENT
BLACKROCK, INC. 2021 PROXY STATEMENT | 27 |
Corporate Governance | Board Evaluation 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 ensuremaintain their effectiveness, the Board and each standing Committee annually conduct comprehensive annual self-evaluationsevaluations to identify and assess areas for improvements.
The evaluation process includes the following steps:
BLACKROCK, INC. 2018 PROXY STATEMENT 23
28 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Corporate Governance | Board Refreshment
BLACKROCK, INC. 2021 PROXY STATEMENT | 29 |
The Governance Committee is responsible for identifying and evaluating potential director candidates, reviewing Board and Committee composition and making recommendations to the full Board. This ongoing process includes:
Director Engagement – BlackRock Corporate Culture and Purpose
Twice a year, our Board and Committee meetings are held outside of New York, including at least one round of meetings outside of the United States. Theseoff-site meetings provide our directors with an opportunity to do a focused review of regional strategies, to meet with employees and management based outside of our New York corporate headquarters and to 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 2017, the Board travelled to Toronto, Canada and Copenhagen, Denmark.
In addition to Board and Committeeoff-site meetings, members of our Board are encouraged to makeon-site visits to other BlackRock offices at their convenience. In 2017, the Chair of the Audit Committee visited Budapest, Hungary, London, England and Edinburgh, Scotland to speak with local management and employees, tour our new facilities and personally expand her knowledge of BlackRock’s global operations.
This year, our directors also attended the BlackRock NY TechFest, a showcase of the latest in BlackRock’s technology capabilities and initiatives by and for employees. As a key part of our commitment to technology and innovation, our directors experienced first-hand where our technology is today and where it is leading us tomorrow.
Director Onboarding and Continuing Education
All new directors participate in an orientation program, to be conducted within three months of their election. Orientation includes presentations by senior management to familiarize our new directors with BlackRock’s strategic plans, significant financial, accounting and risk management issues, compliance programs, conflict policies, code of ethics and other controls, our principal officers and internal and independent auditors. All Directors are also 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.
Management 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 Compensation Committee, 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 Compensation Committee to consider potential successors to the CEO
24BLACKROCK, INC. 2018 PROXY STATEMENT
Corporate Governance | Board Committees
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.
In the fourth quarter of 2017, we implemented a key strategic part of our long-term management succession plans by granting long-term incentive awards in the form of performance-based stock options to a select group of senior leaders who we believe will play critical roles in BlackRock’s future. We do not consider these awards to be part of our regular annual compensation. For more information about these awards, see“Performance-Based Stock Options” on page 55.
Each Committee is governed by a Board-approved Charter.
Board Committee Meetings and Members
The Board has five committees:Committees: the Audit Committee, the Compensation Committee, the Governance Committee, the Risk Committee and the Executive Committee. Below is a summary of our current Committee structure and membership information.
Member
| Audit
|
Management Development & Compensation
| Nominating & Governance
| Risk
| Executive
| |||||
INDEPENDENT DIRECTORS
| ||||||||||
Abdlatif Y.Al-Hamad
| ●
| ●
| ||||||||
Mathis Cabiallavetta
| ●
| ●
| ●
| |||||||
Pamela Daley
| ●
| ●
| ●
| |||||||
Jessica P. Einhorn
| ●
| ●
| ||||||||
William E. Ford
| ||||||||||
Fabrizio Freda
| ●
| |||||||||
Murry S. Gerber (Lead Independent Director)
|
●
|
●
|
●
| |||||||
James Grosfeld
| ●
| ●
| ||||||||
Margaret L. Johnson
| ||||||||||
Sir Deryck Maughan
| ●
| ●
| ●
| |||||||
Cheryl D. Mills
| ●
| ●
| ||||||||
Gordon M. Nixon
| ●
| ●
| ●
| ●
| ||||||
Charles H. Robbins
| ●
| |||||||||
Ivan G. Seidenberg
| ●
| ●
| ●
| ●
| ||||||
Marco Antonio Slim Domit
| ●
| ●
| ||||||||
Susan L. Wagner
| ●
| |||||||||
Mark Wilson
| ||||||||||
NON-INDEPENDENT DIRECTORS
| ||||||||||
Laurence D. Fink
| ●
| |||||||||
Robert S. Kapito
| ||||||||||
William S. Demchak
| ●
| ●
| ||||||||
Number of Meetings Held in 2017
| 14
| 10
| 6
| 6
| 0
|
● Chairperson
BLACKROCK, INC. 2018 PROXY STATEMENT 25
Member | Audit | Compensation | Governance | Risk | Executive | ||||||||||||||||||||
INDEPENDENT DIRECTORS | |||||||||||||||||||||||||
Bader M. Alsaad | ● | ● | |||||||||||||||||||||||
Mathis Cabiallavetta(1) | ● | ● | |||||||||||||||||||||||
Pamela Daley | ● | ● | ● | ||||||||||||||||||||||
Jessica P. Einhorn | ● | ● | |||||||||||||||||||||||
William E. Ford | ● | ● | ● | ||||||||||||||||||||||
Fabrizio Freda | ● | ||||||||||||||||||||||||
Murry S. Gerber (Lead Independent Director) | ● | ● | ● | ||||||||||||||||||||||
Margaret “Peggy” L. Johnson | ● | ● | |||||||||||||||||||||||
Cheryl D. Mills | ● | ● | |||||||||||||||||||||||
Gordon M. Nixon | ● | ● | ● | ||||||||||||||||||||||
Charles H. Robbins | ● | ||||||||||||||||||||||||
Marco Antonio Slim Domit | ● | ● | |||||||||||||||||||||||
Susan L. Wagner | ● | ● | ● | ||||||||||||||||||||||
Mark Wilson | ● | ||||||||||||||||||||||||
NON-INDEPENDENT DIRECTORS | |||||||||||||||||||||||||
Laurence D. Fink | ● | ||||||||||||||||||||||||
Robert S. Kapito | |||||||||||||||||||||||||
Number of Meetings Held in 2020 | 14 | 9 | 6 | 7 | 0 |
(1) Mr. Cabiallavetta will not be standing for re-election at the Annual Meeting. | ● | Chairperson |
The Board met seven10 times during 2017.2020. In 2017,2020, 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 period served by such director. Directors are encouraged to and do attend the annual meetings of BlackRock shareholders. Fifteen of the 17All 16 directors who were serving on the Board last yearand nominated for re-election in 2020 attended the 20172020 Annual Meeting of Shareholders. Messrs. Al-Hamad and Grosfeld are retiring from the
30 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Corporate Governance | Board and will not be standing for re-election at the 2018 Annual Meeting of Shareholders.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 the Committees.
On January 11, 2018,November 20, 2019, the Board appointed Mr. RobbinsAlsaad to serve as a member of the Risk Committee. HeCommittee and a member of the Governance Committee, each appointment effective January 28, 2020. Mr. Alsaad brings expertise in international business strategy and global business, technology, public policycapital markets as well as experience in investments and governmentthe financial sector.
On March 18, 2020, the Board appointed Mr. Ford to serve as Chair of the Compensation Committee and regulatory affairs. In addition,as a member of the Executive Committee, each appointment effective May 21, 2020. Mr. Ford brings extensive management expertise and a valuable perspective on international finance from his experience as Chief Executive Officer of General Atlantic, one of the world’s leading growth equity investment firms.
On March 24, 2021, the Board appointed Messrs. FordVestberg and Wilson to serve as members of the Audit Committee, effective May 26, 2021 (following the Annual Meeting and Ms. Johnson,subject to their election by shareholders). Mr. Vestberg brings financial expertise from having served as recent additions toa former chief financial officer, as well as a valuable perspective on international business. Mr. Wilson brings expertise in international finance and strategy and significant executive management expertise from his experience as a former chief executive officer. Also, on March 24, 2021, the Board appointed Mr. Ford to serve as a member of the Governance Committee, effective May 26, 2021 (following the Annual Meeting and subject to his election by shareholders).
Outlined below are rotating throughthe Board’s Committees with brief descriptions of each CommitteeCommittee’s membership, roles and if elected, will be appointed to one or more Committees in 2018 following a reviewresponsibilities as of existing Committee composition.the date of this Proxy Statement.
Audit Committee |
| ||||||||||||
|
Pamela Daley | Members | Mathis Cabiallavetta
|
|
Marco Antonio Slim Domit | Susan L. Wagner |
Role and Responsibilities
The Audit Committee’s primary responsibilities include oversight of the integrity of BlackRock’s financial statements and public filings, the independent
|
The Audit Committee receives reports on:
| ||||||
• The progress and results of the internal audit program,
• External audit findings, Deloitte;
• Financial controls regarding compliance with the Sarbanes-Oxley Act of 2002, | • The Company’s Risk Management program, as provided by BlackRock’s Chief Risk Officer; |
• Financial updates,
• Cybersecurity updates, as provided by the Chief Information Security Officer;
• Compliance updates, as provided by the Global Chief Compliance Officer;
• Litigation, regulatory and material ethics matters,
• Risk matters | ||||
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, All members of the Audit Committee, with the exception of Ms. Johnson, qualify as “audit committee financial experts” under applicable SEC rules.
|
26BLACKROCK, INC. 2018 PROXY STATEMENT
BLACKROCK, INC. 2021 PROXY STATEMENT |
Corporate Governance | Board Committees
Management Development |
| ||||||||||
|
William E. Ford | Members | Jessica P. Einhorn
|
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, | • Considering and discussing the results of the advisory “say-on-pay” vote; | • Providing oversight of BlackRock’s
• Reviewing, assessing and making reports and recommendations to the Board on BlackRock’s
• 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 and qualifies as a“non-employee director” under applicable SEC
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
|
Nominating, |
Chair | ||||||||
Gordon M. Nixon |
| Bader M. Alsaad Mathis Cabiallavetta
|
Fabrizio Freda
|
Cheryl D. Mills
|
|
Role and Responsibilities
|
• Recommending to the Board criteria for the selection of new directors to serve on the Board;
• Identifying
• Recommending to the Board the director nominees for the next annual meeting of
• Recommending to the Board | • Leading the Board in its annual review of the Board’s performance;
• Evaluating
• Overseeing BlackRock’s Related Persons Transaction | • Reviewing the Company’s engagement with shareholders on governance matters and considering shareholder proposals and proposed responses; • Periodically reviewing corporate governance trends, best practices and regulations applicable to the corporate governance of the Company; • Periodically reviewing the Company’s significant publications relating to environmental, social and other sustainability matters, such as BlackRock’s Task Force for Climate Related Disclosures (“TCFD”) and Sustainability Accounting Standards Board (“SASB”) disclosures; and • Periodically reviewing the Company’s philanthropic programs and related strategy, as well as the Company’s public policy and advocacy activities, including public policy priorities, political contributions and memberships in trade associations. | ||||||
During 2020, 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. In March 2021, to reflect the Governance Committee’s oversight and to provide clarity to our stakeholders, the Board changed the name of the Committee to the “Nominating, Governance & Sustainability Committee” to highlight the Board’s ongoing oversight of sustainability matters. The Board has determined that each member of the Governance Committee is “independent” as defined in the NYSE listing standards and applicable SEC
|
(1) | Ivan G. Seidenberg served as Chair of the Compensation Committee and a member of the Governance Committee until May 21, 2020. |
BLACKROCK, INC. 2018 PROXY STATEMENT 27
32 |
| 2021 PROXY STATEMENT |
Corporate Governance | Board Committees
Risk Committee |
Chair | ||||||||
|
|
Bader M. Alsaad Pamela Daley
|
Jessica P. Einhorn
|
|
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
• Market risks from volatility in financial markets;
•
• Operational risks from failed or inadequate processes relating to • Risks related to regulatory trends and public policy developments; • Technology and cybersecurity risks relating to information security, business continuity/resiliency and system capacity; and
• The impact of firm-wide risk assessments, including the quantification and analysis of requirements (liquidity, insurance, capital or other risk mitigation) associated with
| 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
|
Executive Committee |
| ||||||||||
|
Laurence D. Fink | Members(1) | Pamela Daley William
|
Murry S. Gerber
|
|
Role and Responsibilities
The Executive Committee has all the powers of the Board, except as prohibited by applicable law
|
(1) | William S. Demchak served as a member of the Risk Committee and Executive Committee until May 15, 2020. |
28BLACKROCK, INC. 2018 PROXY STATEMENT
BLACKROCK, INC. 2021 PROXY STATEMENT | 33 |
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 CEO previews the Board’s proposed 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
KEY STRATEGY & RISK OVERSIGHT AREAS
Investment Performance & Markets
Technology and Cybersecurity
Operations and Business Continuity
Regulation, Compliance and Legal Developments
Sustainable Investing and Corporate Sustainability
Human Capital
34 | BLACKROCK, INC. 2021 PROXY STATEMENT |
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. Several of our director nominees bring experience with managing and mitigating cybersecurity and technology risks at regulated entities, which provide the Board with insight into such risks and aid in overseeing the firm’s Information Security, operations and systems, as well as our continuing investment in and development of the program. • Our Risk Committee receives reports on the Company’s cybersecurity program and developments in information security from our Chief Information Security Officer at each of our regular meetings, which occur six times a year. These reports include analyses of recent cybersecurity threats and incidents across the industry, as well as reviews of BlackRock’s own security controls, assessments and program. • 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. | Cybersecurity Governance Highlights: • BlackRock employs an in-depth, multilayered strategy of control programs, using internal teams and independent third parties, including monitoring external and internal threats and events, managing access, facilitating use of appropriate authentication options, validating controls and programs and testing of various compromise scenarios that are overseen by a global information security team. • BlackRock invests in threat intelligence and participates in financial services industry and government forums to improve both internal and sector cybersecurity defense. • BlackRock routinely performs penetration tests. • BlackRock’s cyber risk program incorporates external expertise. | |||
Our global information security team, in collaboration with our technology risk team and independent third parties, assesses risks and changes in the cyber environment and adjusts our cybersecurity program as needed.
Board and Committee Oversight of Environmental, Social and Sustainability Matters
BlackRock’s governance of climate and sustainability-related matters reflects our commitment to strong leadership and oversight at the senior management and Board levels. Our Board engages with senior leaders on near- and long-term business strategy and reviews management’s performance in delivering on our framework for long-term value creation, including as it relates to sustainability. Several of our director nominees have experience in environmental, corporate responsibility and sustainability matters, including managing these issues in senior leadership roles as business imperatives and in relation to long-term strategy, through knowledge and experience in the energy sector, or through key involvement with global initiatives and alliances.
During 2020, the Board received presentations on and discussed our sustainability strategy, including as it relates to the integration of ESG factors into our investment processes and our sustainable investment strategies. The Board also received a briefing from BlackRock’s new Global Head of Investment Stewardship and an update on The BlackRock Foundation, our charitable foundation.
Additionally, the Governance Committee is directly responsible for overseeing:
![]() | Investment Stewardship | ![]() | Social Impact | ![]() |
| ![]() | Public
| |||||||
The Governance Committee periodically reviews corporate and investment stewardship–related policies, programs and significant publications relating to environmental (including climate change), social and other sustainability matters. During 2020, the Governance Committee received presentations on and discussed the Investment Stewardship team’s engagement priorities, which include climate risk and sustainability reporting, and the team’s progress toward enhancing transparency. | The Governance Committee reviews BlackRock’s philanthropic program (“Social Impact”) and its strategy, which is focused on efforts to support a more inclusive and sustainable economy. During 2020, BlackRock’s Social Impact team reviewed our philanthropic priorities with the Board and discussed the launch of The BlackRock Foundation, our $50 million commitment to COVID-19 relief and recovery, and developments associated with BlackRock’s Emergency Savings Initiative. | The Governance Committee periodically reviews BlackRock’s corporate sustainability program, including through reports from BlackRock’s Corporate Sustainability team, which is responsible for overseeing efforts to incorporate sustainability into BlackRock’s business practices, operations and strategy and setting environmental sustainability objectives and strategy for our operations. During 2020, the Governance Committee reviewed BlackRock’s corporate sustainability program and disclosures, including our TCFD and SASB disclosures. | The Governance Committee has oversight of the Company’s corporate political activities and periodically reviews BlackRock’s public policy and advocacy activities, including public policy priorities, political contributions and memberships in trade associations. During 2020, the Governance Committee reviewed BlackRock’s public policy priorities, including global financial regulatory developments, as well as memberships in trade associations. |
Governance Committee oversight 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 the full Board.
BLACKROCK, INC. 2021 PROXY STATEMENT | 35 |
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 and providing transparency to stakeholders on how we integrate these business practices into our own strategy and operations.
Our Goals | Our Business Practices | |
Operating a Sustainable Company | • Our long-term success is dependent on our people. We make a deliberate effort to unify our culture, advance diversity, equity and inclusion, cultivate and retain the best talent, and foster an environment that provides a safe and healthy workplace for all our employees. • We hold ourselves accountable to all our stakeholders through our commitment to transparency. We prioritize disclosing our strategy, governance and risk management processes to manage ESG risks and opportunities. • BlackRock is also focused on saving, protecting and restoring our natural environment by better managing our resources in our business operations. We set corporate targets for operational sustainability, which are designed to reduce our carbon footprint, and we are transparent about our progress towards these targets through disclosures aligned to the TCFD recommendations and SASB framework. • In January 2021, as communicated in a letter to our clients, we committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, and we have taken steps to help investors prepare their portfolios for a net zero world. | |
Sustainable Investing is Our Standard | • As of November 2020, 100% of our active portfolios and advisory strategies are ESG Integrated, meaning that portfolio managers are accountable for managing exposure to material ESG risks and documenting where in the investment process these risks are considered. • As of December 31, 2020, BlackRock managed $200 billion in sustainable investment strategies on behalf of our clients across over 200 different products. • We are putting Aladdin at the center of sustainable investing by enhancing analytical tools and data for BlackRock’s investors and the Aladdin community. In 2020, we created AladdinClimate to help financial institutions and investors quantify climate risk in their portfolios. | |
Responsible Stewards of Our Clients’ Assets | • BlackRock Investment Stewardship (“BIS”) plays a key role in enabling BlackRock to achieve its purpose of helping more and more people experience financial well-being. Investment stewardship is how BlackRock uses its voice as an investor to promote sound corporate governance and business practices to help maximize long-term shareholder value for our clients. • In 2020, BIS took several actions to enhance transparency in stewardship, including publishing global quarterly stewardship reports and engagement activity, quarterly vote disclosures, vote bulletins and portfolio-specific company engagement reports. • During 2020, BIS intensified its focus and engagement with companies on sustainability-related risks and asked that companies publish reports aligned with the recommendations of the TCFD and the SASB. | |
Making a Positive Social Impact | • BlackRock’s 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. Throughout the COVID-19 pandemic, the team has been focused on helping non-profit organizations who deliver direct services to the frontlines, including food banks and hospitals. • In 2020, BlackRock launched The BlackRock Foundation and made a philanthropic commitment of $589 million to promote an inclusive and sustainable economy. We also continued to support the Emergency Savings Initiative to help companies and organizations identify, shape and test solutions for creating short-term financial stability for vulnerable workers, customers and communities. • Also in 2020, BlackRock made a $10 million commitment to help support the upward mobility of Black and Latinx communities. Our action plan includes deploying $5 million to organizations supporting racial equity, launching a $5 million fund to help elevate Black and Latinx entrepreneurs and doubling support for employee giving. |
| BLACKROCK, INC. 2021 PROXY STATEMENT |
Corporate Governance | Sustainability at BlackRock
BlackRock’s strategy for delivering long-term growth and into how we operate our business | Sustainability in Our Strategy:
Sustainability in Our Operations: Advancing sustainable business practices to support the long-term sustainability of our own firm and deliver value for
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Corporate Governance Practices and Policies
Director Independence
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 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:Integrating sustainability into our long-term growth strategy
BLACKROCK, INC. 2018 PROXY STATEMENT 29
| • $200 billion of AUM as of December 31, 2020
•100 new sustainable products launched in 2020 | Data & Technology | We’ve released over 1,000 ESG metrics on the Aladdin platform, and | |||||
Advisory Capabilities | We support clients across a range of bespoke ESG-focused activities, including strategic framework setting, implementation, risk management, analytics and climate stress testing | ESG Integration | 100% of our active and advisory BlackRock strategies are ESG integrated—covering $2.9 trillion in AUM as of December 31, 2020 | |||||
Investment Stewardship | 3,000+ stewardship engagements on issues that impact long term financial performance1 | Research & Thought Leadership | Dedicated sustainable research team and thought leadership through the BlackRock Investment Institute |
1 | For the period July 1, 2019 through June 30, 2020. |
BLACKROCK, INC. 2021 PROXY STATEMENT | 37 |
Corporate Governance | BlackRock’s Impact on its People
Environmental Enhancing environmental disclosures through the publication of BlackRock’s inaugural TCFD report The TCFD report discusses our approach to managing climate-related risks and opportunities and provides an enterprise-level climate-related scenario analysis that assesses the potential implications of climate-related transition risks to BlackRock | Social Connecting BlackRock’s purpose to value creation for all stakeholders We released a report explaining how we provide value to our stakeholders and how we activate our purpose Advancing DEI Our goal is to double representation of Black senior leaders and increase overall representation by 30% by 2024 Promoting a more inclusive economy We launched The BlackRock Foundation, our charitable foundation | Governance Enhancing disclosure on Board level oversight of sustainability Enhancing shareholder rights: Shareholder right to call special meetings In September 2020, our Board approved changes to our Charter to provide shareholders with the right to call special meetings. This amendment is subject to shareholder approval at the Annual Meeting. Please see “Item 4A: Approval of an Amendment to Our Charter to Provide Shareholders the Right to Call Special Meetings” on pages 95 to 96 for additional information on this amendment |
BlackRock’s Commitment to Transparency
BlackRock is committed to providing transparency on meaningful sustainability-related information to stakeholders. We made significant progress in 2020 and we are working to further enhance our corporate sustainability strategy and disclosure in the years ahead. Recent publications include our:
SASB Report, which includes information regarding our workforce diversity, risk management and incorporation of ESG factors in our investment management processes
TCFD Report, which discusses how BlackRock manages climate-related risks and opportunities
U.S. EEO-1 Report, which provides information on our U.S. employee base across gender and race/ethnicity categories
Additionally, BIS publishes global governance and engagement guidelines, as well as quarterly and annual activity reports, which are available on our website.
BlackRock’s Impact on its People
With approximately 16,500 employees in more than 30 countries, BlackRock provides a broad range of investment and technology services to institutional and retail clients in more than 100 countries across the globe. As an asset manager, our long-term success depends on our people and how we manage our workforce.
Culture and Principles
BlackRock believes that maintaining a strong corporate culture is an important component of its human capital management practices and is critical to the firm’s long-term success. Our culture is underpinned by the BlackRock Principles, which unify our workforce and guide how we interact with each other, our clients, the communities in which we operate and all of our other stakeholders:
Read more about the BlackRock Principles on our website at www.blackrock.com.
38 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Corporate Governance | BlackRock’s Impact on its People
Diversity, Equity and Inclusion (“DEI”)
We believe a diverse workforce and an equitable and inclusive working environment are key factors in achieving better outcomes across all levels of our business. We have made or pledgeda long-term commitment to charitable organizationscultivating diversity in our workforce and leadership team, through our hiring, retention, promotion and development practices. As part of our long-term commitment, we have instituted a multi-year DEI strategy that we believe is actionable, measurable and designed to apply across the many countries in which the firm operates. Our DEI strategy is aligned with the firm’s business priorities and long-term objectives, and we expect that it will evolve as the firm learns and adapts to a director or an immediate family memberchanging macro environment. Our DEI strategy centers on three key pillars:
1. | Talent and Culture – which includes building, developing and retaining a diverse pipeline of talent and fostering a connected culture among our 16,500 global employees; |
2. | Fiduciary to Our Clients – which includes delivering differentiated investment products and strengthening our client relationships by engaging them on DEI; and |
3. | Policy and Social Impact in Underserved Communities – which includes continuing to enhance transparency on our diversity disclosures and supporting the long-term success of underserved communities. |
Key goals of the directorTalent and Culture pillar of our DEI strategy include:
Expanding partnerships with external organizations and developing strategies to increase the diversity of our applicant pool;
Strengthening talent acquisition and management processes in an effort to eliminate bias; and
Implementing leadership development, sponsorship and coaching initiatives to engage and develop diverse talent.
Another focus of our DEI strategy is to cultivate an executive officer, director or trustee if (i) withininclusive work environment in which employees feel connected to BlackRock’s culture and supported in pursuit of their goals. To this end, we have committed to raising awareness of racial equity issues and resetting behavioral expectations for employees, as well as to holding firm leaders and managers accountable for continued progress against 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,firm’s goals.
Employee Engagement
We value continuous dialogue with our employees about their experiences. We have several employee feedback mechanisms including:
In 2021, we shifted from annual to quarterly employee opinion surveys to create a director’s relative unlessmore continuous feedback channel with our employees. The opinion surveys and other engagement mechanisms provide us with actionable feedback for each team and for the relativefirm as a whole.
2021 Q1 Employee Opinion Survey highlights: 94% of respondents have a clear understanding of the BlackRock Principles and their importance in how one delivers his or her work 87% of respondents agree that the firm’s efforts to prepare clients for a net zero world make them proud to work at BlackRock |
Employee Networks
Employee, professional and social impact networks also provide forums and opportunities for employees with diverse backgrounds to connect with one another and shape the firm’s culture. The networks, which continue to grow in number, are sponsored by Global Executive Committee members and designed by employees, for employees.
More recently, these networks played an active role in our response to COVID-19, including by instituting programs to combat isolation and more deeply understand the employee experience during the pandemic. The networks also have served a critical role in the firm’s dialogue around issues of racial injustices and inequities.
BLACKROCK, INC. 2021 PROXY STATEMENT | 39 |
Corporate Governance | BlackRock’s Impact on its People
BlackRock believes that it is imperative to support employees as a local force for good in the communities in which we live and operate, and to help build a more equitable and resilient future for our neighbors. In 2021, we launched the Gives Network, whose mission is to empower employees to channel their passions to positively impact their communities and work collectively to shape BlackRock’s local footprint. During 2021, we also launched the Asian & Middle Eastern Professionals & Allies Network to foster community, camaraderie and a sense of belonging for Asian and Middle Eastern professionals and allies at the firm.
Learning and Development
We believe that developing the capabilities of our employees is integral to delivering long-term value. Our human capital management practices are designed to provide opportunities for employees to learn, innovate and enhance their skillsets at every stage of their career. The opportunities include:
BlackRock Academies, BlackRock’s comprehensive suite of online interactive resources and courses whichenable employees to build skills and thought leadership in specific facets of our business;
Leadership programs,which help accelerate growth and include executive coaching, in-person and virtual learning and senior management sponsorship; and
People Manager Enablement Sessions, which are designed to equip managers with tools and resources to lead inclusively and keep teams motivated, informed and inspired.
Compensation, Wellness and Benefits
We believe that investing in the physical, emotional, mental and financial well-being of our employees is a critical component of our human capital management strategy. Our compensation and benefits practices are designed to: attract and retain employees; align employee incentives and risk-taking with that of the firm’s and the interests of its clients; and support employees across many aspects of their lives. We have a strong pay-for-performance culture and an annual compensation process that takes into consideration firmwide results, individual business results and employee performance, as well as market benchmarks. We also offer a wide range of benefits that are regularly reviewed in accordance with industry best practices and the local requirements of our offices, including retirement savings plans, a Flexible Time Off (“FTO”) policy and flexible working arrangements, and parental leave and family support benefits, including fertility benefits, adoption and surrogacy assistance, and backup elder and childcare benefits. Comprehensive healthcare and mental-health benefits are also offered to eligible employees, including medical, dental and vision coverage, health savings and spending accounts, counseling services, an employee assistance program and access to telemedicine services. | The COVID-19 pandemic has further highlighted the importance of keeping employees safe and healthy. BlackRock implemented several initiatives to support employees following the onset of the pandemic, including: • Offering free COVID-19 testing benefits, including at-home testing, for employees and their dependents; • Prioritizing communication about the telemedicine and digital health resources available to employees, including mental, emotional and physical health offerings; and • Extending cross-border healthcare coverage and support to employees and their dependents temporarily working, or on FTO, outside of their home country as a result of the pandemic. | |||||||
40 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Corporate Governance | BlackRock’s Impact on its People
We prioritize protecting the rights of our workforce and the equitable treatment of employees. We have implemented policies related to harassment prevention and compliance with equal employment opportunity and overtime regulations, and are committed to providing a safe and healthy working environment. To do this, we design global programs, including environmental and occupational health and safety programs, to meet or exceed local requirements. Moreover, we encourage all employees to raise issues of concern and assure employees that they may do so without fear of retaliation.
Transparency and Accountability
We view transparency and accountability as a critical part of our DEI strategy and as a means to inform, measure and improve our human capital management practices.
In 2020, we published our first SASB-aligned disclosure, which we plan to update annually. We also, for the first time, published our annual EEO-1 report, which includes information regarding workforce diversity. During 2020, we also set and published goals for increasing the overall workplace representation of Black and Latinx employees and growing the number of female and U.S. Black and Latinx leaders at the Director level and above.
Board Oversight of Human Capital Management
Our Board plays an immediate family memberimportant role in the oversight of human capital management at BlackRock and devotes one full Board meeting annually to an in-depth review of BlackRock’s culture, talent development, retention and recruiting initiatives, DEI strategy, leadership and succession planning and employee feedback.
Moreover, year-end business assessments, which include a review of the director.
Additionally, succession planning for BlackRock’s CEO and other senior executives is a key part of the Board’s annual review of human capital management issues. As part of its determination, the Board also considered the relationships described under “Certain Relationships and Related Transactions.” Following itsthis review, the Board focuses on whether BlackRock has determined that Mses. Daley, Einhorn, Johnson, Millsthe right people in place to execute the Company’s long-term strategic plans, and Wagneron BlackRock’s ability to identify, attract, develop and Messrs. Cabiallavetta, Ford, Freda, Gerber, Maughan, Nixon, Robbins, Seidenberg, Slim and Wilson are “independent” as defined in the NYSE listing standards and that noneretain future senior executives. An important element of the relationships between these directorssuccession planning across the organization is a commitment to building leadership from within and BlackRock are material underincreasing diversity in leadership roles.
BLACKROCK, INC. 2021 PROXY STATEMENT | 41 |
Corporate Governance | Corporate Governance Practices and Policies
Corporate Governance Practices and Policies
Management Succession Planning
Our Board recognizes the NYSE listing standards.importance of succession planning for the CEO and other key executives at BlackRock. The Board, had also previously determined that Messrs.Al-Hamad, Grosfeld, Komansky, O’Brienin consultation with the Compensation Committee, dedicates one full meeting per year to talent development review to ensure BlackRock has the right people in place to execute our long-term strategic plans and Varley, who were directorsappropriate succession for all or part of 2017 and are not standing forre-election, were “independent.” Following the 2018 Annual Meeting of Shareholders, assuming all of 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.key roles.
DURING THESE REVIEWS, THE BOARD DISCUSSES:
• | Our succession process and pipeline, including DEI 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. |
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 the creation of regulatory regimes that increase financial market transparency, protect investors and facilitate 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 “Insights – Public 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 Global Public Policy Group. Members of the Global Public Policy Group 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.
The headBlackRock’s Chief Legal Officer and members of the Global Public Policy Group is a member of the Company’s Global Executive and Operating Committees and regularly briefs these committees on our public policy priorities and related advocacy efforts. BlackRock’s Chief Legal Officer and the head of the Global Public Policy Group brief both the Board’s Risk Committee and Governance Committees to keep directors apprised of, and engaged in, the Company’sBlackRock’s legislative and regulatory priorities and advocacy initiatives. The Global Public Policy Group 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 organizations and industry groups. The principal trade associations that we belongadvocate for and shape public policy positions that are important to are the Investment Company Institute, 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 does not control these entities and may not always be aware of the entities’ activities. We recognize that these organizations and groups represent numerous other companies and there may be instances where their positions on certain issues diverge from those of BlackRock.
As an asset manager, BlackRock focuses on issues that impact the asset management industry and the clientsglobal business community. Trade associations also provide educational, training and professional networking opportunities for whomtheir members. BlackRock participates in these associations for such opportunities and to help build consensus on issues that we actbelieve will serve investors, increase shareholder value and facilitate responsible economic growth. We do not control these organizations, and our membership and participation in them are not endorsements of all their activities or positions. Accordingly, there may be instances where specific positions diverge from those of BlackRock.
BlackRock discloses the principal trade associations to which we belong as agentwell as those trade associations to which we paid in managing assets. In general,excess of $25,000 in 2020 for membership fees and/or dues on our Public Policy Engagement and Political Participation Policies webpage. BlackRock periodically reviews our memberships in these trade associations, and the positions they support, to evaluate whether there is alignment between our views and those of these organizations on public policy matters we consider material to our efforts to serve our investors and clients. Where we identify a significant inconsistency on a material strategic policy issue, we will discuss and review our options with respect to such organization, including the benefits and challenges associated with our continued membership. Actions that we may take to address material misalignment include engagement with the trade association, clarifying BlackRock’s efforts are focused atposition through public statements or termination of our membership in the national or regional level, rather than at a state-specific level.trade association.
30BLACKROCK, INC. 2018 PROXY STATEMENT
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Corporate Governance | Corporate Governance Practices and Policies
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 StatesU.S. 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 StatesU.S. 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 voluntarily elected not to spend corporate funds directly on independent expenditures, including electioneering communications, and does not currently engage in “grassroots lobbying” or support or oppose ballot initiatives. AllInformation about BlackRock’s lobbying activities, including contributions required to be disclosed under the Lobbying Disclosure Act, areis publicly available athttp://lobbyingdisclosure.house.govwww.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.Company who are U.S. citizens or green card holders. 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 atwww.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.
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.
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. 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. 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 4655 for a discussion of our compensation related shareholder engagement initiatives and our historical2020 say-on-pay vote resultsresult.
BLACKROCK, INC. 2021 PROXY STATEMENT | 43 |
Corporate Governance | Communications with the Board
Shareholders and other interested parties may contact any member (or all members) of the Board, any Committee or any Chair of any such Committee by mail or electronically.
Correspondence may be sent by:
| Mail:
BlackRock, Inc. Attn: Board of Directors c/o Corporate Secretary 40 East 52nd Street New York, New York 10022 |
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Online:
Go to the BlackRock website atwww.blackrock.com. Under the headings“Our |
BLACKROCK, INC. 2018 PROXY STATEMENT 31
BlackRock’s Corporate Communications, Investor Relations and Legal and Compliance Departments will review all communications received to determine whether the contents represent a message to or matter for our 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 for reporting certain matters to the Audit Committee.
Shareholders are encouraged to visit the “Our Firm / Investor Relations / Corporate “Governance / Governance Overview”Overview” 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 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., 40 East 52nd Street, New York, New York 10022.
20172020 Director Compensation
DirectorsIndependent 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 further 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 retainers within five years of being elected to the Board.as described below.
The Compensation Committee is responsible for reviewing director compensation periodically and making recommendations to the Board. The Compensation Committee reviews the Board’s compensation levels semi-annually. The Compensation Committee also reviews the Boarddirector compensation practices of peer corporations. For more information on these peer groups, please refer to“Role of the Compensation Consultant” on page 57.66. The Compensation Committee determined that no changes to our director compensation program were necessary for 2020.
HOW OUR DIRECTOR COMPENSATION PROGRAM ALIGNS WITH LONG-TERM SHAREHOLDER INTERESTSHow Our Director Compensation Program Aligns with Long-Term Shareholder Interests
32BLACKROCK, INC. 2018 PROXY STATEMENT
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| 2021 PROXY STATEMENT |
Corporate Governance | 2020 Director Compensation
20172020 Elements of Director Compensation
The following table shows the elements of director compensationFor services provided by BlackRock in 2017. For 2017,2020, each independent director received an Annual Retainer of $75,000 plus Meeting Fees of $1,500,annual retainer paid quarterly in January, April, July,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 October, based on service during the prior quarter. At least $25,000 for members of, the Annual Retainer, or a pro rata portion thereofAudit 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 the event that a director’s service is less than a full year, is paid in the formarrears at an annualized rate of BlackRock common stock. Each$100,000. In addition, each independent director who received compensation 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 Boardretainer and Committee retainers in excess of $25,000.annual retainers.
In addition, each independent director received an annual equity grant, awarded in deferred stock units valued at $175,000$240,000. For 2020, these equity awards were granted to each director following their election to the Board of Directors at the Annual Meeting of Shareholders on the last business day of the first quarter of 2017. TheseMay 21, 2020. The deferred stock units are fully vested on the date of grant and are generally settled in shares of BlackRock common stock on the earlier of the third anniversary of the date of grant and the date the director ceases to be a member of the Board. Deferred stock units have no voting rights. Dividend equivalents accrue and are paid
The following table shows the elements of director compensation provided by BlackRock for services in the form of cash. Additional cash compensation was paid for certain Committees and other services, as described below.2020.
Director Compensation Element
| Payment or Value of Equity
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Payment or Value of Equity | ||||||||||||||
Board Service(1)
| ![]() |
| ||||||||||||||
Annual Retainer(1)
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$ 75,000 (at least td5,000 in common stock)
| |||||||||||||||
Annual Equity Grant(2)
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$ 175,000 deferred stock units
| |||||||||||||||
Board Meeting Fees(1)
|
$ 1,500
| |||||||||||||||
Annual Retainer(2) | $85,000 | |||||||||||||||
Annual Equity Grant(3) | td40,000 deferred stock units | |||||||||||||||
Lead Independent Director
|
$ 40,000
|
|
td00,000 |
| ||||||||||||
Committee Service
| ||||||||||||||||
Committee Annual Retainers(1)
|
Chair
|
Member
| ||||||||||||||
Committee Annual Retainers(2) | Chair | Member | ||||||||||||||
Audit Committee
|
$ 30,000
|
$ 15,000
| ![]() | $40,000 | td5,000 |
| ||||||||||
Compensation Committee
|
$ 20,000
|
$ 10,000
| $30,000 | td5,000 | ||||||||||||
Governance Committee
|
$ 15,000
|
$ 5,000
| $30,000 | td5,000 | ||||||||||||
Risk Committee
|
$ 15,000
|
$ 5,000
| $30,000 | td5,000 | ||||||||||||
Committee Meeting Fees(1)
|
$ 1,000
|
$ 1,000
| ||||||||||||||
(1) | Board |
(2) | Timing of Payments. Board Service and Committee Service Retainers |
Annual Equity Grant. Directors were granted an annual equity award |
Director Compensation – Changes for 2018
The Compensation Committee engaged its independent compensation consulting firm, Semler Brossy, to conduct a competitive market study of its director compensation program for 2018. Based on the study’s findings, and in light of increasing demands and engagement from our Board, the Compensation Committee determined it was appropriate to simplify and modify its director compensation program effective as of the 2018 Annual Meeting of Shareholders. As a result, in early 2018 the Compensation Committee agreed to:
Additionally, during 2017 the Compensation Committee agreed to provide directors an election to defer future compensation into deferred stock units that are fully vested on the date of grant and are settled in shares of BlackRock common stock on the date the director ceases to be a member of the Board.
The modifications 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.
BLACKROCK, INC. 2018 PROXY STATEMENT 33
BLACKROCK, INC. 2021 PROXY STATEMENT | 45 |
Corporate Governance | 2020 Director Compensation
20172020 Total Director Compensation
Directors in 20172020 who were also employees of BlackRock or designees of PNC are not listed in the table below table because they did not receive compensation for serving as directors or Committee members. In 2017,2020, directors who were not employees of BlackRock or PNC each received the amounts set forth in the below table and were also reimbursed for reasonable travel and related expenses. Each director who received compensation received at least $25,000 of his or her annual retainer, or a pro rata portion thereof in the event that a director’s service is less than a full year, in the form of BlackRock common stock valued at an equivalent fair market value. In addition, each director who received compensation 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 in excess of $25,000.
20172020 Total Director Compensation Table
Name
| Fees Earned
| Stock Awards ($)(2)(3)
| Total ($)
|
Fees Earned | Stock Awards ($)(2) | Total ($) | ||||||||||||||||||
Abdlatif Y.Al-Hamad
|
| 82,500
|
|
| 200,000
|
|
| 282,500
|
| |||||||||||||||
Bader M. Alsaad |
| 114,120 |
|
| 239,508 |
|
| 353,628 |
| |||||||||||||||
Mathis Cabiallavetta
|
| 111,500
|
|
| 200,000
|
|
| 311,500
|
|
| 124,040 |
|
| 239,508 |
|
| 363,548 |
| ||||||
Pamela Daley
|
| 115,500
|
|
| 200,000
|
|
| 315,500
|
|
| 139,153 |
|
| 239,508 |
|
| 378,661 |
| ||||||
Jessica P. Einhorn
|
| 85,000
|
|
| 200,000
|
|
| 285,000
|
|
| 115,000 |
|
| 239,508 |
|
| 354,508 |
| ||||||
William E. Ford |
| 135,634 |
|
| 239,508 |
|
| 375,142 |
| |||||||||||||||
Fabrizio Freda
|
| 71,500
|
|
| 200,000
|
|
| 271,500
|
|
| 98,451 |
|
| 239,508 |
|
| 337,959 |
| ||||||
Murry S. Gerber
|
| 144,500
|
|
| 200,000
|
|
| 344,500
|
|
| 225,000 |
|
| 239,508 |
|
| 464,508 |
| ||||||
James Grosfeld
|
| 89,500
|
|
| 200,000
|
|
| 289,500
|
| |||||||||||||||
David Komansky(4)
|
| 22,500
|
|
| 200,000
|
|
| 222,500
|
| |||||||||||||||
Sir Deryck Maughan
|
| 125,500
|
|
| 200,000
|
|
| 325,500
|
| |||||||||||||||
Margaret “Peggy” L. Johnson |
| 124,040 |
|
| 239,508 |
|
| 363,548 |
| |||||||||||||||
Cheryl D. Mills
|
| 88,250
|
|
| 200,000
|
|
| 288,250
|
|
| 115,096 |
|
| 239,508 |
|
| 354,604 |
| ||||||
Gordon M. Nixon
|
| 106,750
|
|
| 200,000
|
|
| 306,750
|
|
| 128,811 |
|
| 239,508 |
|
| 368,319 |
| ||||||
Thomas H. O’Brien(4)
|
| 56,000
|
|
| 200,000
|
|
| 256,000
|
| |||||||||||||||
Charles H. Robbins |
| 98,451 |
|
| 239,508 |
|
| 337,959 |
| |||||||||||||||
Charles H. Robbins(5)
|
| 41,250
|
|
| 25,000
|
|
| 66,250
|
| |||||||||||||||
Ivan G. Seidenberg
|
| 126,500
|
|
| 200,000
|
|
| 326,500
|
| |||||||||||||||
Ivan G. Seidenberg(3) |
| 64,219 |
|
| – |
|
| 64,219 |
| |||||||||||||||
Marco Antonio Slim Domit
|
| 102,000
|
|
| 200,000
|
|
| 302,000
|
|
| 123,507 |
|
| 239,508 |
|
| 363,015 |
| ||||||
John S. Varley(6)
|
| 32,000
|
|
| 200,000
|
|
| 232,000
|
| |||||||||||||||
Susan L. Wagner |
| 139,019 |
|
| 239,508 |
|
| 378,527 |
| |||||||||||||||
Susan L. Wagner
|
| 71,500
|
|
| 200,000
|
|
| 271,500
|
| |||||||||||||||
Mark Wilson |
| 98,577 |
|
| 239,508 |
|
| 338,085 |
|
(1) | Includes |
(2) | Includes the annual grants to each non-employeedirector of |
(3) |
Mr. |
34BLACKROCK, INC. 2018 PROXY STATEMENT
46 |
| 2021 PROXY STATEMENT |
Corporate Governance | Other Executive Officers
In addition to Messrs. Fink and Kapito, whose biographical information is included on pages 1417 and 16,20, 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 and CEO.
Stephen Cohen age 45 | Senior Managing Director, has been Head of EMEA since April 2021. Prior to this, Mr. Cohen served as Head of EMEA iShares and Wealth and oversaw Index Investments in EMEA from 2017 to 2021 and served as Global Head of Fixed Income Indexing from 2011 to 2017. Mr. Cohen joined BlackRock in 2011 from Nomura, where he was the Global Head of Equity Linked Strategy. | |
Robert L. Goldstein age | Senior Managing Director, has been Chief Operating Officer | |
J. Richard Kushel age | Senior Managing Director, has been Head of the Portfolio Management Group, which encompasses BlackRock’s Fixed Income, Fundamental Equities, Systematic Investments, Multi-Asset Strategies and Solutions and the Global Lending, Liquidity and Private Investors businesses since 2020. Prior to that, he served as the Head of Multi-Asset Strategies and Global Fixed Income | |
Rachel Lord age | Senior Managing Director, has been named Chair and Head of Asia Pacific, a position she will assume beginning May 2021. Prior to this, Ms. Lord served as Head of EMEA since 2017. Ms. Lord also | |
Mark S. McCombe age | Senior Managing Director, has been | |
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, he was a partner with the law firm of Wilmer Cutler Pickering Hale and Dorr. Earlier in his career, Mr. Meade served as a law clerk to Justice John Paul Stevens on the U.S. Supreme Court and Judge Harry T. Edwards of the U.S. Court of Appeals for the D.C. Circuit. | |
Manish Mehta age 50 | Senior Managing Director, has been Global Head of Human Resources since 2019. Prior to this, Mr. Mehta was Global Head of Markets & Investments for ETF and Index Investments from 2016 to 2019, Head of Product & Markets for iShares from 2015 to 2016 and Chief Operating Officer for iShares from 2011 to 2015. Mr. Mehta joined BlackRock in 2009 as part of the acquisition of Barclays Global Investors, where he was Head of Strategy and Corporate Development and Chief of Staff to the CEO. | |
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 served as theCo-Head of the Financial Institutions 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 Head of | |
|
| |
BLACKROCK, INC. 2018 PROXY STATEMENT 35
BLACKROCK, INC. 2021 PROXY STATEMENT | 47 |
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, 20182021, by: (i) each
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, 2018,2021, through the exercise of any option, warrant or right. All fractional shares have been rounded to the nearest whole number.
36BLACKROCK, INC. 2018 PROXY STATEMENT
48 |
| 2021 PROXY STATEMENT |
Ownership of BlackRock Common Stock
As of March 31, 2018,2021, there were 160,308,362[●] shares of BlackRock’s common stock outstanding.
Amount of beneficial
|
Percent of
|
Deferred/ Units(2)
| Total
| |||||||||||||||||||||||||||||
The PNC Financial Services Group, Inc. and affiliates(3) |
|
34,438,549 |
|
|
21.48 |
% |
|
– |
|
|
34,438,549 |
| ||||||||||||||||||||
One PNC Plaza | ||||||||||||||||||||||||||||||||
249 Fifth Avenue | ||||||||||||||||||||||||||||||||
Pittsburgh, PA 15222 | ||||||||||||||||||||||||||||||||
The Vanguard Group, Inc.(4) |
|
8,576,055 |
|
|
5.34 |
% |
|
– |
|
|
8,576,055 |
| ||||||||||||||||||||
Amount of beneficial ownership | Percent of common stock | Deferred/ Restricted Stock Units(2) | Total | |||||||||||||||||||||||||||||
The Vanguard Group, Inc. | 12,137,641(3) | 7.96% | – | 12,137,641(3) | ||||||||||||||||||||||||||||
100 Vanguard Blvd. | ||||||||||||||||||||||||||||||||
Malvern, PA 19355 | ||||||||||||||||||||||||||||||||
Abdlatif Y.Al-Hamad |
|
5,177 |
|
|
* |
|
|
1,260 |
|
|
6,437 |
| ||||||||||||||||||||
Mathis Cabiallavetta(5) |
|
5,922 |
|
|
* |
|
|
1,219 |
|
|
7,141 |
| ||||||||||||||||||||
Bader M. Alsaad | [●] | * | [●] | [●] | ||||||||||||||||||||||||||||
Mathis Cabiallavetta(4) | [●] | * | [●] | [●] | ||||||||||||||||||||||||||||
Pamela Daley |
|
2,242 |
|
|
* |
|
|
1,287 |
|
|
3,529 |
| [●] | * | [●] | [●] | ||||||||||||||||
William S. Demchak |
|
1,200 |
|
|
* |
|
|
0 |
|
|
1,200 |
| ||||||||||||||||||||
Jessica P. Einhorn |
|
1,914 |
|
|
* |
|
|
1,219 |
|
|
3,133 |
| [●] | * | [●] | [●] | ||||||||||||||||
Laurence D. Fink |
|
1,086,024 |
|
|
* |
|
|
20,105 |
|
|
1,106,129 |
| [●] | * | [●] | [●] | ||||||||||||||||
William E. Ford |
|
2,000 |
|
|
* |
|
|
360 |
|
|
2,360 |
| [●] | * | [●] | [●] | ||||||||||||||||
Fabrizio Freda |
|
3,053 |
|
|
* |
|
|
1,219 |
|
|
4,272 |
| [●] | * | [●] | [●] | ||||||||||||||||
Murry S. Gerber |
|
39,136 |
|
|
* |
|
|
1,231 |
|
|
40,367 |
| [●] | * | [●] | [●] | ||||||||||||||||
Robert L. Goldstein |
|
33,773 |
|
|
* |
|
|
9,620 |
|
|
43,393 |
| [●] | * | [●] | [●] | ||||||||||||||||
James Grosfeld |
|
506,371 |
|
|
* |
|
|
1,275 |
|
|
507,646 |
| ||||||||||||||||||||
Margaret L. Johnson |
|
11 |
|
|
* |
|
|
323 |
|
|
334 |
| ||||||||||||||||||||
Robert S. Kapito(5) |
|
392,891 |
|
|
* |
|
|
15,325 |
|
|
408,216 |
| ||||||||||||||||||||
Sir Deryck Maughan |
|
14,504 |
|
|
* |
|
|
1,219 |
|
|
15,723 |
| ||||||||||||||||||||
Mark S. McCombe |
|
18,997 |
|
|
* |
|
|
7,270 |
|
|
26,267 |
| ||||||||||||||||||||
Margaret “Peggy” L. Johnson | [●] | * | [●] | [●] | ||||||||||||||||||||||||||||
Robert S. Kapito(4) | [●] | * | [●] | [●] | ||||||||||||||||||||||||||||
Cheryl D. Mills |
|
1,729 |
|
|
* |
|
|
1,219 |
|
|
2,948 |
| [●] | * | [●] | [●] | ||||||||||||||||
Gordon M. Nixon |
|
362 |
|
|
* |
|
|
1,262 |
|
|
1,624 |
| [●] | * | [●] | [●] | ||||||||||||||||
Charles H. Robbins |
|
193 |
|
|
* |
|
|
323 |
|
|
516 |
| [●] | * | [●] | [●] | ||||||||||||||||
Ivan G. Seidenberg |
|
11,991 |
|
|
* |
|
|
1,295 |
|
|
13,286 |
| ||||||||||||||||||||
Gary S. Shedlin |
|
18,318 |
|
|
* |
|
|
7,153 |
|
|
25,471 |
| [●] | * | [●] | [●] | ||||||||||||||||
Marco Antonio Slim Domit |
|
2,979 |
|
|
* |
|
|
1,266 |
|
|
4,245 |
| [●] | * | [●] | [●] | ||||||||||||||||
Hans E. Vestberg | [●] | * | [●] | [●] | ||||||||||||||||||||||||||||
Susan L. Wagner |
|
477,341 |
|
|
* |
|
|
1,219 |
|
|
478,560 |
| [●] | * | [●] | [●] | ||||||||||||||||
Mark Wiedman | [●] | * | [●] | [●] | ||||||||||||||||||||||||||||
Mark Wilson |
|
7 |
|
|
* |
|
|
323 |
|
|
330 |
| [●] | * | [●] | [●] | ||||||||||||||||
All directors and executive officers as a group (29 persons)(5) |
|
2,811,542 |
|
|
1.75 |
% |
|
105,004 |
|
|
2,916,546 |
| ||||||||||||||||||||
All directors, nominees and executive officers as a group (26 persons)(4) | [●] | [●]% | [●] | [●] |
* | 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 |
(3) |
Based on the Schedule 13G of The Vanguard Group, Inc. filed on February |
Includes shares of BlackRock common stock held jointly, indirectly and/or in trust (other than shares the beneficial ownership of which has been disclaimed). |
Preferred Stock
As of March 31, 2018, 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 143,458 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, 2018, PNC owned all issued and outstanding shares of our Series B Preferred Stock and Series C Preferred Stock.
BLACKROCK, INC. 2018 PROXY STATEMENT 37
BLACKROCK, INC. 2021 PROXY STATEMENT | 49 |
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 on copies of such reports and representations from these reporting persons, we believe that in 2017, our directors, Section 16 officers and 10% holders met all applicable SEC filing requirements.
38BLACKROCK, INC. 2018 PROXY STATEMENT
Related Transactions
AsOn May 15, 2020, a subsidiary of March 31, 2018, PNC beneficially owned approximately 21.2%completed a secondary offering of 31,628,573 shares of the Company’s common stock, which included 823,188 shares of common stock issued upon the conversion of BlackRock’s Series B Convertible Participating Preferred Stock (“Series B Preferred Stock”) and 2,875,325 shares of common stock outstanding and 21.7%under the fully exercised underwriters’ option to purchase additional shares.
Also on May 15, 2020, BlackRock completed its repurchase from PNC of BlackRock’s capital stock, which includes outstanding2,650,857 shares of common stock pursuant to a stock repurchase agreement, between PNC andnon-voting preferred stock.
BlackRock. Additionally, William S. Demchak Chairman, Presidentresigned from the BlackRock Board on May 15, 2020.
The secondary offering and Chief Executive Officerthe Company’s share repurchase resulted in PNC’s exit of PNC, serves asits entire ownership position in the Company. 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 Affairs ofresult, PNC is the PNC observer.no longer a related party.
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 20172020 totaled $3.2$2.0 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 $6.9$8.7 million for 2017.2020. BlackRock also recorded revenue of $2.7$2.8 million related tonon-discretionary trading services.
BlackRock incurred expenses of $1.2$3.1 million to PNC affiliates in 20172020 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 2017.2020. 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.
BLACKROCK, INC. 2018 PROXY STATEMENT 39
PNC Stockholder Agreement
During 2020, BlackRock iswas a party to the PNC Stockholder Agreement, which governsgoverned PNC’s ownership interests in and relationship with BlackRock. The PNC Stockholder Agreement terminated upon consummation of the secondary offering because PNC’s ownership of BlackRock and PNC are also parties to a registration rights agreement. The following table describes certaincapital stock fell below five percent. A description of the key provisions of the PNC Stockholder Agreement, as amended and restated.well as the approval process for transactions (other than transactions in the ordinary course of business) with PNC, is set forth in Annex B.
|
| |
|
| |
|
|
40BLACKROCK, INC. 2018 PROXY STATEMENT
50 |
| 2021 PROXY STATEMENT |
| ||
|
| |
|
| |
|
|
BLACKROCK, INC. 2018 PROXY STATEMENT 41
| ||
|
| |
|
|
Certain Relationships and Related Transactions | Transactions with BlackRock Directors, Executive Officers and Other Related Parties
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 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.
42BLACKROCK, INC. 2018 PROXY STATEMENT
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.
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”, were reviewed with the Board at the time of entering into such transactions.
BLACKROCK, INC. 2021 PROXY STATEMENT | 51 |
and& Compensation Committee
Interlocks and Insider
Participation
The members of the Compensation Committee during 20172020 were Mses. Einhorn, Johnson and Mills and Messrs. Gerber, Grosfeld, Komansky, Maughan,Ford (Chairperson), Nixon, Seidenberg (Chairperson)(until May 21, 2020) and Slim. No member of the Compensation Committee was, during the fiscal year, an officer or employee, or formerly an officer or employee, of BlackRock or 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 Compensation Committee of BlackRock, (ii) as a directorBlackRock;
Director of another entity, one of whose executive officers served on the Compensation 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.
BLACKROCK, INC. 2018 PROXY STATEMENT 43
52 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Approval, in a Non-Binding
Advisory Vote, of the
Compensation for Named
Executive Officers
We are asking our shareholders to approve the compensation of our named executive officersNEOs as disclosed in this Proxy Statement.
While this vote is advisory, and not binding on the Company, it will provide information to our Board and the Compensation Committeeus regarding investor sentiment about our executive compensation philosophy, policies and practices. Our Board and the Compensation CommitteeWe 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 Compensation 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 Compensation Committeesummary of our executive compensation practices on page 65,79, as well as our “Compensation Discussion and Analysis” beginning on page 46.55.
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.
risk-taking.
Board Recommendation
|
|
44BLACKROCK, INC. 2018 PROXY STATEMENT
BLACKROCK, INC. 2021 PROXY STATEMENT | 53 |
and& Compensation Committee
Report
Management Development and& Compensation Committee Report on Executive Compensation for Fiscal Year 20172020
The Compensation 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
Ivan G. Seidenberg,William E. Ford, Chair
Jessica P. Einhorn
Murry S. Gerber
James GrosfeldMargaret “Peggy” L. Johnson
Cheryl D. Mills
Gordon M. Nixon
Marco Antonio Slim Domit
BLACKROCK, INC. 2018 PROXY STATEMENT 45
54 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Compensation Discussion and Analysis
BlackRock’s executive compensation program is designed to align management incentives with the long-term interests of our stakeholders. Our total annual compensation structure embodies our commitment to align pay with performance. This Compensation Discussion and Analysis provides shareholders with information about BlackRock’s business and 2020 financial performance, our disciplined compensation approach and 2020 compensation decisions for our NEOs, listed below.
Compensation Discussion and Analysis
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 2017 financial performance, our disciplined compensation approach and 2017 compensation decisions for our NEOs, listed below.
Laurence D. Fink
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Robert S. Kapito
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Robert L. Goldstein Chief Operating Officer
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Mark
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Gary S. Shedlin
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Officer | ||||||
President | ||||||
International and | ||||||
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46BLACKROCK, INC. 2018 PROXY STATEMENT
Chief Financial Officer | ||||||||||||||||||||||
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Table of Contents
Introduction
BLACKROCK, INC. 2021 PROXY STATEMENT | 55 |
Compensation Discussion and Analysis | 1. Introduction
Introduction
Shareholder Engagement on Executive Compensation
Our Board recognizes the importance of executive compensation decisions to our shareholders.stakeholders. 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 20172020 Annual Meeting of Shareholders, thesay-on-pay advisory vote received majoritysignificant support, with 90%approximately 94% 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 Compensation Committee considered shareholder input when it designed the CEO and President compensation framework as well as the BPIP Awards and the December 2017 grants of performance-based stock options.
As in prior years, we engaged shareholders inIn advance of this year’s annual meetingAnnual Meeting, we targeted stewardship officers at BlackRock’s 50 largest shareholders, representing 69% of our total outstanding shares, to incorporate their views as we continuediscuss corporate governance, executive compensation and sustainability topics outside of the proxy season. Shareholders who provided feedback generally reported that executive compensation at BlackRock was reasonable and well-aligned to enhanceperformance. No consistent or prevalent concerns were raised from our compensation programs.engagements.
BlackRock Shareholder Value Framework
BlackRock is committed to delivering long-term shareholder value. While our financial results can 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, risk managementportfolio construction and technology solutions to help meet their objectives, we are able to buildgrow our business by adding new
assets under management (“AUM”) AUM and growing risk management andincreasing technology offerings,services revenue, resulting inOrganic Revenue growth..1(1)
BlackRock’s scale is one of the firm’s key strategic advantages and is an important driver ofoperating leverage that benefits clients, shareholders, employees and shareholdersthe communitiesin which we operate. We take advantage of scale in numerous areas of our business including through our index-based and cash investment strategies, brand spend, technology platform, including ourAladdin business, and our external vendor relationships.
InvestingIn 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, enableshas enabled us to generate stable cash flow through market cycles, positioning and positions BlackRock to consistently invest for future growth and consistently return capital to our shareholders. For more details, refer to“Business Outlook” on page 34 of our 2017 2020 Form10-K.
During 2017,we returned $2.8 billion to our shareholders through a combination of share repurchases and 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 |
BLACKROCK, INC. 2018 PROXY STATEMENT 47
56 |
| 2021 PROXY STATEMENT |
Compensation Discussion and Analysis | 2020 Financial Performance
BlackRock 20172020 Financial Performance1(1)
The strength of BlackRock’s 20172020 results reflect our differentiated ability to deliver global insights, strategic advice and comprehensive solutions to our clients in a challenging market environment. We generated $391 billion of total net inflows for the long-term strategic advantages we have created by consistently investingfull year, representing 5% organic asset growth and 7% organic base fee growth. We delivered revenue, operating income and earnings growth, expanded our margin and returned $3.8 billion to shareholders. Despite a volatile market environment and uncertain economic backdrop, BlackRock continued to invest in our business. Full-year results reflected industry-leading organicbusiness to serve all our stakeholders, drive long-term growth with record full-year net inflowsand lead the evolution of $367 billion, continued Operating Margin expansion and consistent capital management. Investmentthe asset management industry. Long-term investment performance results across our alpha-seeking and index strategies as of December 31, 20172020 remain strong and are includeddetailed in Part I, Item 1 – Businessof our 20172020 Form10-K.
Differentiated Organic Growth
OrganicBlackRock generated 5% organic asset growth of 7% in 2017 contributed to strong Organic Revenue growth2
• |
Operating Leverage
We continued to invest in our business while simultaneously expanding ourBlackRock improved its Operating Margin, as adjusted, by 40120 bps to 44.9% in 2020
Consistent Capital Return
$2.8BlackRock returned $3.8 billion was returned to shareholders in 20172020
Earnings Per Share Growth
DilutedBlackRock grew diluted earnings per share, as adjusted,, of $22.60 increased 17% versus 2016 by 19% to $33.82 in 2020
Amounts in this section, where noted, are shown on an “as adjusted” basis. For a reconciliation with GAAP, |
(2) | Traditional Peers refers to public company asset managers: Alliance Bernstein, Affiliated Managers Group, Franklin Resources, Invesco and T. Rowe Price. |
48BLACKROCK, INC. 2018 PROXY STATEMENT
Assets Under Management ($B) Revenue ($M) Operating Income ($M) (as adjusted)2 Operating Margin (as adjusted)2 Cash Dividend Per Share ($)Share Buyback ($M) Net Income ($M) Earnings Per Share (as adjusted)2 ($M)
BLACKROCK, INC. 2021 PROXY STATEMENT | ![]() |
Compensation Discussion and Analysis | Our Compensation Framework
Our annual total compensation program for NEOs continues to includeincludes base salary, annual incentive awards (cash and deferred equity) and long-term performance-based incentive awards.
In the fourth quarter of 2017, we implemented a key strategic part of our long-term management succession plans by granting long-term incentive awards in the form of performance-based stock options to a select group of senior leaders who we believe will play critical roles in BlackRock’s future. We do not consider these awards to be part of our annual compensation framework. For more information regarding performance-based stock options, see“Performance-Based Stock Options” on page 55.
Annual Incentive Awards – Pay and Performance Alignment for CEO and PresidentNEOs – Total Incentive Award Determination
Under this program, target annual cashthe NEO total 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,award determination framework, the Compensation Committee used the framework below to assess individual performance. The Compensation Committee createdassesses each NEO’s performance individually, based on three categories andoutlined below. Each category is assigned a weighting factor, to each, with 50% of the award opportunity dependent on BlackRock’s achievement of financial performance. To assess the performance ofgoals, 30% dependent on BlackRock’s progress towards meeting our strategic objectives as measured by our business strength and 20% dependent on BlackRock’s progress towards meeting its organizational strengths,priorities. Our commitment to sustainability is incorporated within our Business Strength and Organizational Strength objectives. In the “2020 NEO Compensation and Performance Summaries” section, performance objectives and outcomes related to ESG are noted for each NEO with an ..
At the beginning of the year, the Compensation Committee usesand management engage 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 BlackRock performance measures and also considers peer group comparisons.
The Compensation Committee’s performance assessment directly impacts each NEO’s total incentive award, which includes all variable pay including an annual cash award, deferred equity award and long-term equity award. 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 also contingent on future financial performance rather than solely 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 “2020 NEO Compensation and Performance Summaries” on page 68.
(1) | For reconciliation with GAAP, please see Annex A. |
(2) | Total annual incentive includes the NEO’s annual cash award, deferred equity award and long-term equity award. |
(3) | 2020 total incentive compensation is calculated using 2019 total incentive outcome multiplied by applicable performance incentive percentage. |
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In addition to the annual cash incentive awards, the Compensation Committee expects to continue to make annual grants of long-term equity awards to both Messrs. Fink and Kapito, with at least half of such equity awards being long-term and contingent on future financial or other business performance requirements in addition to share price performance.
The Compensation Committee maintains accountability 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.
BLACKROCK, INC. 2018 PROXY STATEMENT 49
2021 PROXY STATEMENT |
How We Determine OtherCompensation Discussion and Analysis | NEO Total Annual Compensation Summary
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 Compensation Committee’s total annual compensation decision.
NEO Total Annual Compensation Summary
Following a review of full-year business and individual NEO performance, the Compensation Committee determined 20172020 total annual compensation outcomes for each NEO, as outlined in the table below.
In the fourth quarter of 2017, BlackRock implemented a key strategic part of our long-term management succession plans 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. Consequently, we do not consider these awards to be part of our regular annual compensation determinations for 2017. For more information regarding these performance-based stock options, see“Performance-Based Stock Options” on page 55.
2017 Annual Incentive Award
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2020 Total Incentive Award
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Name
| Base
| Cash
| Deferred
| Long-Term
| Total Annual
| % change in
| Performance-
| Base Salary
| Cash
| Deferred Equity
|
Long-Term Incentive Award (BPIP)
|
Total Annual Compensation (TAC)
| % change in TAC vs. 2019
| Performance Assessment
| ||||||||||||||||||||||||||||||
Laurence D. Fink
| $
| 900,000
|
| $
| 10,000,000
|
| $
| 4,600,000
|
| $
| 12,450,000
|
| $
| 27,950,000
|
|
| 10%
|
|
| –
|
| $1,500,000 | $9,500,000 | $3,950,000 | $14,900,000 | $29,850,000 | 18% | Far Exceeds | ||||||||||||||||
Robert S. Kapito
| $
| 750,000
|
| $
| 8,125,000
|
| $
| 3,514,000
|
| $
| 9,626,000
|
| $
| 22,015,000
|
|
| 10%
|
|
| –
|
| $1,250,000 | $8,250,000 | $3,937,500 | $11,187,500 | $24,625,000 | 23% | Far Exceeds | ||||||||||||||||
Robert L. Goldstein
| $
| 500,000
|
| $
| 3,275,000
|
| $
| 2,325,000
|
| $
| 2,100,000
|
| $
| 8,200,000
|
|
| 12%
|
| $
| 10,000,000
|
| $500,000 | $3,175,000 | $2,325,000 | $5,750,000 | $11,750,000 | 19% | Far Exceeds | ||||||||||||||||
Mark S. McCombe
| $
| 500,000
|
| $
| 2,725,000
|
| $
| 1,775,000
|
| $
| 1,950,000
|
| $
| 6,950,000
|
|
| 11%
|
| $
| 10,000,000
|
| |||||||||||||||||||||||
Mark Wiedman | $500,000 | $2,675,000 | $1,725,000 | $5,600,000 | $10,500,000 | 24% | Far Exceeds | |||||||||||||||||||||||||||||||||||||
Gary S. Shedlin
| $
| 500,000
|
| $
| 2,700,000
|
| $
| 1,750,000
|
| $
| 1,850,000
|
| $
| 6,800,000
|
|
| 11%
|
| $
| 7,500,000
|
| $500,000 | $2,800,000 | $1,850,000 | $3,350,000 | $8,500,000 | 18% | Far Exceeds |
The amounts listed above as “2017 Annual“2020 Total Incentive Award: Deferred Equity”Equity” and “Long-Term“2020 Total Incentive Award: Long-Term Incentive Award (BPIP)” were granted in January 20182021 in the form of equity and are separate from thein addition to cash award amounts listed above as “2017 Annual“2020 Total Incentive Award: Cash.” In conformance with SEC requirements, the 20172020 Summary Compensation Table on page 6882 reports equity in the year granted, but cash in the year earned.
50BLACKROCK, INC. 2018 PROXY STATEMENT
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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 20172020 year-end compensation decisions for individual NEOs by the 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 |
BLACKROCK, INC. 2018 PROXY STATEMENT 51
2017 CEO Total Annual Compensation-$27.95M Base Salary (Cash) $900k 97% of total compensation is variable and based on performance Annual Incentive (Cash) $10.00M 125% of target Annual Incentive (Deferred Equity1,2) $4.6M Long-Term Incentive (BPIP) (Performance Based Equity1,2) $12.45M 75% of equity is awarded in BPIP 2017 President Total Annual Compensation- $22.02M Base Salary (Cash) $750k Annual Incentive (Cash) $8.13M 125% of target Annual Incentive (Deferred Equity1,2) $3.51M Long-Term Incentive (BPIP) (Performance Based Equity1,2) $9.63M 75% of equity is awarded in BPIP 60-61% of total annual compensation is awarded in equity 2017 Total Annual Compensation for NEOs (excluding CEO and President) Base Salary (Cash) 7-8% of pay 92-94% of total compensation is variable and based on performance Annual Incentive (Cash3) 39-40% of pay Annual Incentive (Deferred Equity1,2,3) 26-28% of pay Long-Term Incentive (BPIP) (Performance Based Equity1,2) 26-28% of pay 53-54% of total annual compensation is awarded in equity
BLACKROCK, INC. 2021 PROXY STATEMENT | 59 |
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 decisions during the period from 2011 to 2020. 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 pay determination process has resulted in disciplined 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 growth for the CEO and the President was +3%, since 2011. The average year-over-year total compensation growth for the other NEOs (excluding the CEO and the President) was +4% since 2011. The year-to-year decisions have been made to align compensation with annual performance and our talent strategy.
60 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Compensation Discussion and Analysis | 2. Our Compensation Program
Our Compensation 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 vesting period. | To reward achievement of goals and objectives.
Aligns with Company-wide performance and business unit / function performance.
Deferred equity component aligns compensation with multi-year shareholder outcomes. |
Annual incentive award determinations
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(1) | For |
52BLACKROCK, INC. 2018 PROXY STATEMENT
BLACKROCK, INC. 2021 PROXY STATEMENT | ![]() |
Compensation Discussion and Analysis | Compensation Elements
Element/How it is Paid | Purpose | Description | ||
BlackRock Performance Incentive Plan (BPIP)
(Performance-Based RSUs)
Terms:
The target BPIP Award value is converted into a base number of RSUs using a conversion price.(1)
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
Expense, based on the expected number of awards to be delivered, is recognized over the vesting period.
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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 value. |
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 2020 BPIP Awards are provided below. |
(1) | For |
BlackRock Performance Incentive Plan (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. BPIP was designed to further align compensation with BlackRock’s framework for long-term shareholder value creation. A portion of each NEO’s incentive compensation for 2020 was provided in the form of a BPIP Award granted in January 2021. In addition to recognizing an NEO’s performance in the prior year, the BPIP Awards are intended to promote a focus on driving increased performance over a multi-year period. BlackRock is focused on balancing investment to optimize Organic Revenue growth in the most efficient way possible.
In January 2015, with the advice of the Compensation Committee’s independent compensation consultant, Semler Brossy,Each year, the Compensation Committee approved a new form of performance-based equity awards, referred to asapproves the BPIP 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, 2016 and 2017 as part of his or her incentive compensation for their 2014, 2015 and 2016 performance, respectively. Similarly, a portion of each NEO’s incentive compensation for 2017 was in the form of a BPIP Award granted in January 2018. 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 2018 BPIP grants (for 2017 performance) are described in further detail below.
BlackRock is focused on achieving the right balance of investing to drive future growth in Organic Revenue, and the impact those investments have on our expense base and Operating Margin, as adjusted.
BPIP Awards 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.
BLACKROCK, INC.The 2020 BPIP Award Determination Matrix (performance period beginning January 1, 2021, and ending on December 31, 2023) is outlined below. Additionally, we have included the actual performance and payout for the 2017 BPIP Award, which vested on January 31, 2021 (performance period began January 1, 2018, PROXY STATEMENT 53and ended on December 31, 2020).
62 | BLACKROCK, INC. 2021 PROXY STATEMENT |
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 new technology services
• 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.
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Similar to previous BPIP Awards, the January 2018 BPIP Awards have a three-year performance period that commenced on January 1, 2018 and end on December 31, 2020. Each BPIP Award consists of a “base” number of RSUs granted to the recipient. Distributions will be in the form of common stock.
2020 BPIP Award Determination Matrix
Performance Period (2021-2023)
For the January 20182020 BPIP Awards granted in January 2021, 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 20182020 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 three-year performance period; performance between two adjacent points on the matrix will be extrapolated.interpolated.
A summary version of the matrix for the January 20182020 BPIP Awards granted in January 2021 is set forthshown below.
2018 BPIP AWARD DETERMINATION MATRIX
3-yr Average Annual Organic Revenue growth ($ million) | ||||||||||||||||||||||||
3-yr Average Annual Operating Margin, as Adjusted
| <=0
| 475
| 675
| 875
| >=1,075
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| ||||||||||||||||||
>=50.5% |
| 100% |
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| 123% |
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| 133% |
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| 149% |
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| 165% |
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|
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48.5% |
| 83% |
|
| 112% |
|
| 122% |
|
| 138% |
|
| 154% |
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46.5% |
| 67% |
|
| 101% |
|
| 111% |
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| 127% |
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| 143% |
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44.5% |
| 50% |
|
| 85% |
|
| 100% |
|
| 116% |
|
| 133% |
|
| Target Level |
| ||||||
42.5% |
| 33% |
|
| 69% |
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| 83% |
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| 105% |
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| 122% |
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40.5% |
| 17% |
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| 52% |
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| 67% |
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| 92% |
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| 111% |
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<=38.5% |
| 0% |
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| 35% |
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| 50% |
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| 75% |
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| 100% |
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3-yr Average Organic Revenue ($M)
| ||||||||||||||||||||||
3-yr Average Op Margin, as Adjusted | <=0 | 300 | 500 | 700 | >=900 | |||||||||||||||||
>=50.5% |
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100% |
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120% |
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133% |
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149% |
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165% |
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48.5% |
|
83% |
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|
109% |
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|
122% |
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|
138% |
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|
154% |
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46.5% |
|
67% |
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|
97% |
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|
111% |
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127% |
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143% |
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44.5% |
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50% |
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|
80% |
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|
100% |
|
|
116% |
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133% |
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Target Level | ||||||
42.5% |
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33% |
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63% |
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83% |
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105% |
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122% |
| |||||||
40.5% |
|
17% |
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|
47% |
|
|
67% |
|
|
92% |
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111% |
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<=38.5% |
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0% |
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30% |
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50% |
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75% |
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100% |
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If target levelTarget Level performance is achieved (i.e., during the three-year performance period BlackRock hasfollowing grant, average annual Organic Revenue equal to $500growth equals $675 million and average annual Operating Margin, as adjusted, equal toequals 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 following grant, BlackRock has zero or negative average annual Organic Revenue growth and average annual Operating Margin, as adjusted, of 38.5% or less, than,then the participant will not be entitled to a distribution of any shares under their 2018his 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 three-year performance period following grant, BlackRock delivered average annual Organic Revenue growth equal to or greater than $1,075 million 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 equals 165% of the base number of units.
54BLACKROCK, INC. 2018 PROXY STATEMENT
BLACKROCK, INC. 2021 PROXY STATEMENT | ![]() |
If
Compensation Discussion and Analysis | BlackRock Performance Incentive Plan (BPIP)
2017 BPIP Award: Actual Performance and Payout
Performance Period (2018-2020)
For the 2017 BPIP Awards granted in January 2018 as part of 2017 NEO incentive compensation, the number of shares that a recipient received upon settlement was equal to the base number of RSUs granted, multiplied by 102.4%, which was determined in accordance with the 2017 BPIP Award Determination Matrix. The percentage was determined by BlackRock’s average annual Organic Revenue growth and Operating Margin, as adjusted, during the January 1, 2018 to December 31, 2020 performance period.
BlackRock achieved above Target Level results in the 2018-2020 performance cycle, with three-year performance period, BlackRock were to deliver average annual Organic Revenue growth of $700$547 million and average Operating Margin, as adjusted, of 44.5%, then a recipient receiving a BPIP Award valued44.3%. This resulted in the recipients’ award units settling at $2.0 million in January 2018 would receive a distribution of 4,096 shares, or 116%102.4% of the base number of RSUsunits granted. Outlined below is an example of how this above-target level achievement would be calculated.
JANUARY 2018 BPIP GRANT: EXAMPLEActual Payout – Example
BPIP Award Value | $1 million | |||
For Performance Year 2017 and in anticipation of continued performance and long-term focus over a multi-year period | ||||
Conversion Price | $566.44 | |||
The average of the high and low prices per share of common stock of BlackRock on January 16, 2018 (the grant date) | ||||
Base number of units granted | 1,765 | |||
Determined by dividing the dollar value of the recipient’s award by the conversion price |
| ($ | ||
| $ | |||
Jan 1, 2018 to Dec 31, 2020 | ( | |||
Jan 1, 2018 to Dec 31, 2020 | 44.3% | |||
(below Target Level of 44.5%
| ||||
Resulting Award Payout (%) | 102.4% | |||
Based on Award Determination Matrix | ||||
Resulting Award Payout (Number of units) | ||||
Base number of units granted x Award Payout (%) | ( |
(1) | For further details on the 2017 BPIP Awards granted in January 2018, including the full Award Determination Matrix, please refer to page 54 of BlackRock’s 2018 Proxy Statement. |
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 $900 million and average 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.
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 strategic part of our long-term management succession plans 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. Consequently, we do not consider these awards to be part of our regular annual compensation determinations for 2017.
The Compensation Committee approved these grants in December 2017 in consultation with Semler Brossy, and following a comprehensive review of leadership and development plans, potential value outcomes, shareholder input and market trends.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.
The Compensation Committee believes that the stock options drive increased equity ownership for a select group of future leaders and create economic incentives that more closely align the recipients of the stock options with the original entrepreneurial spirit of BlackRock’s founders. The structure of these awards seeks to retain key participants with BlackRock for an extended period, recognizing their important contributions to growing the Company and their potential in leading it into the future. In concert with their regular annual compensation, these awards seek to maximally align participants with our shareholders over a sustained number of years.
BLACKROCK, INC. 2018 PROXY STATEMENT 55
64 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Compensation Discussion and Analysis | 3. Compensation Determination Process
Compensation
Determination Process
Compensation Timeline and Process
The Compensation Committee structures the timing and process for determining individual NEO compensation so 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.
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56BLACKROCK, INC. 2018 PROXY STATEMENT
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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 evaluate BlackRock’sits competitive position overall, as well asincluding by functional business and by title, and 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.
BLACKROCK, INC. 2021 PROXY STATEMENT | 65 |
Compensation Discussion and Analysis | Competitive Pay Positioning – Market Data
The Compensation 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
In 2017,2020, the Compensation Committee continued to engage Semler Brossy for objective advice on compensation practices and the competitive landscape for the compensation of BlackRock’s executive officers.
Semler Brossy reports directly to the Compensation Committee and interacts with BlackRock management when necessary and appropriate. Semler Brossy provides services only to the Compensation 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 Compensation Committee concluded that no conflict of interest exists that would prevent Semler Brossy from independently advising the Compensation Committee.
A representative from Semler Brossy met with the Compensation Committee in formal Committee meetings and at key points throughout the year to provide objective advice to the Compensation 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 also meets with the Compensation Committee in executive sessions throughout the year to discuss compensation practices and industry pay trends.
Peer Group Composition – Changes in 2017
The Compensation Committee, with assistance from Semler Brossy, regularly reviews the composition of our peer group to ensure the group continues to serve as an appropriate market reference for executive compensation purposes. In considering the compositionfall of 2020, the Compensation Committee determined that the peer group should be updated to more closely reflect the current scale and breadth of our business.
In reaching its decision to revise the peer group, the Compensation Committee considersreviewed the results of a screening process for identifying companies that are in 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 capcapitalization perspective. During 2017,The Compensation Committee approved the updates to the peer group shown below, which reflect the addition of relevant companies identified through the screening process and the removal of certain companies that were determined to no longer be appropriate peers relative to BlackRock’s scale, global reach and product breadth.
Industry Fit: Given BlackRock’s diversified lines of business, the Compensation Committee determined broadened its industry review (beyond traditional asset management) to consider diversified financial and technology companies
– | Diversified Financials – the Compensation Committee considered Capital Markets and Consumer Finance companiesthat provide whole-portfolio solutions through a global and diverse investment platform |
– | Technology Services – the Compensation Committee considered Software & Services industry companies offering global IT service platforms, given BlackRock’s global technology services platform supporting risk and investment solutions |
Size and Global Reach: Given BlackRock’s growth, the peer group should be updatedCompensation Committee considered companies reflecting comparative size metrics to BlackRock, including revenue (0.5x to 3x revenue) and market capitalization (above $10 billion)
BLACKROCK, INC. 2018 PROXY STATEMENT 57
66 |
| 2021 PROXY STATEMENT |
to more closely reflect our current scale, business and strategic priorities. Given that determination, in the fall of 2017 the Compensation Committee removed four companies whose market caps were below $10 billion (BlackRock’s market cap as of December 31, 2017 was $84 billion) and added the three new companies shown on the right of the chart below:
Compensation Discussion and Analysis | Role of the Compensation Consultant
As previously noted, the McLagan analyses, which include both publicly traded companies as well as private companies in 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.
Risk Assessment of Compensation Plans
Our employee compensation program isprograms are structured to discourage excessive and unnecessary risk taking.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.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 Compensation 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 takingrisk-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-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.
58BLACKROCK, INC. 2018 PROXY STATEMENT
Peer group adjustments made in 2017 REMOVED Alliance Bernstein Eaton Vance Legg Mason Federated Investors - REMAINING FOR 2017 + Affiliated Managers Group Ameriprise Financial Bank of New York Mellon Franklin Resources Invesco Northern Trust State Street T. Rowe Price Group ADDED Charles Schwab Goldman Sachs Morgan Stanley New Peer Group effective 2017
BLACKROCK, INC. 2021 PROXY STATEMENT | ![]() |
2017Compensation Discussion and Analysis | 4. 2020 NEO Compensation
and Performance Summaries
2020 NEO Compensation
and Performance Summaries
Here we provide 2017 compensationthe 2020 NEO performance assessments and total incentive award decisions
As outlined in “Our Compensation Framework” on page 58, the Compensation Committee assesses each NEO’s performance against financial performance objectives (50%), business strength objectives (30%) and organizational strength objectives (20%).
Our commitment to sustainability is incorporated within our Business Strength and Organizational Strength objectives. In this section, performance objectives and outcomes related to ESG are noted for each NEO andwith an ..
The performance assessments have a summary of his individual performance accomplishments relativedirect link to achieving BlackRock’sthe total incentive outcome (annual discretionary cash award, annual discretionary deferred equity award, and long-term performance goals.equity awards) for each NEO.
68 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Compensation Discussion and Analysis | 4. 2020 NEO Compensation and Performance Summaries
Laurence D.
Chairman and CEO |
| Responsibilities:
Mr. Fink
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 | |||||||||||
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| $9,500 |
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Annual Incentive Award |
| $3,950 |
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| $14,900 |
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| $29,850 |
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Overall Assessment: Far Exceeds Expectations Mr. Fink successfully led BlackRock through a challenging environment in 2020, focusing the firm on strategic priorities, providing thought leadership, investment insights and risk management tools to our clients, and prioritizing the well-being of BlackRock employees and the firm’s culture. Mr. Fink drove the firm and surrounding ecosystem around sustainability and climate risk as investment risk and helped communities through philanthropic efforts. The culmination of these efforts delivered value for shareholders. Overall, the Compensation Committee’s assessment of Mr. Fink’s performance resulted in a Far Exceeds determination. Based on the performance assessment, the Compensation Committee set Mr. Fink’s 2020 total compensation at $29.85 million, up 18% from 2019. |
Compensation Scorecard | ||||||||||||
Performance Category | Performance Highlights | Assessment | ||||||||||
Financial Performance
|
• Drove strong performance globally across investment solutions (all asset classes, investment styles and regions) and technology services, resulting in full-year revenue growth of 11% and operating income growth of 13%, compared to 2019.
• Generated annual net inflows of $391 billion, representing 5% organic asset growth and 7% organic base fee growth that exceeded the growth rates of our competitors.
• Led the firm’s ability to invest through volatile markets, while expanding full-year operating margin and returning $3.8 billion of capital to shareholders.
• Continued to generate differentiated organic growth and financial results, leading to significant stock price outperformance and P/E multiple premium versus Traditional Peers.
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Far Exceeds Expectations | ||||||||||
Measures |
BlackRock Performance
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2019
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2020
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Net New Base Fee Growth | 5% | 7% | ||||||||||
Operating Income, as adjusted(1) ($ million) | $5,551 | $6,284 | ||||||||||
Operating Margin, as adjusted(1) | 43.7% | 44.9% | ||||||||||
Diluted Earnings Per Share, as adjusted(1) | $28.48 | $33.82 | ||||||||||
Share Price Data |
BlackRock | Traditional Peers(2) Average | ||||||||||
NTM P/E Multiple(3) | 20.6x | 10.1x | ||||||||||
% Change in Share Price vs. Prior Year | +44% | +10% | ||||||||||
(1) | Amounts are shown on an “as adjusted” basis. For a reconciliation with GAAP, please see Annex A. |
(2) | Traditional Peers refers to Alliance Bernstein, Affiliated Managers Group, Franklin Resources, Invesco and T. Rowe Price. |
(3) | NTM P/E multiple refers to the Company’s share price as of December 31, 2020, divided by the consensus estimate of the Company’s expected earnings over the next 12 months. Sourced from FactSet. |
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Compensation Discussion and Analysis | 4. 2020 NEO Compensation and Performance Summaries
|
| Assessment | |||||||||
Business Strength |
Deliver for clients • In partnership with Mr. • Continued to offer clients expanded ETF investment options, resulting in $185 billion of inflows across iShares and $89 billion of the net inflows in Fixed Income iShares. • Raised a record $25 billion of client capital in 2020, across infrastructure, private equity solutions, private credit and the final close of BlackRock’s innovative direct private equity Long Term Private Capital strategy. • Personally served as a thought leader for BlackRock’s clients and shareholders during increased levels of uncertainty in the • Led firmwide sustainability commitments which strengthened BlackRock’s ability to serve clients with sustainability research, investment solutions and technology, and in turn generated
• Emphasized the importance of providing clients with enhanced sustainability data across their portfolios, achieving 100% ESG integration of over 5,600 active and advisory strategies, with all publicly available active strategies featuring integration statements on the BlackRock website. | Far Exceeds Expectations | ||||||||
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Evolve how we serve clients • Continued to invest for long-term growth, highlighted by the acquisition of Aperio, a pioneer in customizing tax-optimized index equity separately managed accounts, to enhance our wealth platform and provide whole-portfolio solutions to ultra-high net worth advisors. • Continued to expand BlackRock’s presence in new markets, with a focus on deepening our presence in China. • Oversaw launch of AladdinClimate to help investors better assess both the physical risk of climate change and the transition risk to a low-carbon economy on their portfolios. | ||||||||||
Lead in a changing world
• Led the firm’s response to the pandemic and volatile markets, engaging with the Board on their impact to the firm’s strategy and bolstering the connectivity across the Global Executive Committee through more frequent meetings and collaborative efforts to meet client needs.
• Focused on how to advance racial equity through public policy and legislative outcomes where we operate. • Established The BlackRock Foundation to augment our efforts to promote a more inclusive and sustainable economy. • Underlined the importance of enhancing sustainability in stewardship, partnering with leaders to map the firm’s engagement priorities to specific UN Sustainable Development Goals and publishing the firm’s SASB and TCFD disclosures. |
BLACKROCK, INC. 2018 PROXY STATEMENT 59
70 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Compensation Discussion and Analysis | 4. 2020 NEO Compensation and Performance Summaries
| Performance Highlights | Assessment | ||||||
Organizational Strength | Attract and inspire talent • Drove increased senior leader accountability of talent and succession, with more rigorous Talent Bench Reviews and the roll-out of sponsorship programs for underrepresented talent. • Elevated Sandra Boss, Global Head of Investment Stewardship, Sudhir Nair, Global Head of the Aladdin business, and Martin Small, Head of BlackRock’s U.S. Wealth Advisory business, to the Global Executive Committee. • Continued to progress CEO and President succession discussions with the Board. | Far Exceeds Expectations | ||||||
Inclusion and diversity • Oversaw progress toward our senior women leadership target of 30%, increasing 80 basis points from 2019 to 29.7% representation in senior roles at the end of 2020. • Hired female leaders into strategic areas for the firm, including Sandra Boss as Global Head of Investment Stewardship and Michelle Gadsden-Williams as Global Head of Diversity, Equity and Inclusion. • Built a strong pipeline of future talent through the most diverse Graduate Analyst Program class yet, with 58% female representation globally and 29% Black and Latinx representation in the U.S. |
Purpose and culture
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60BLACKROCK, INC. 2018 PROXY STATEMENT
BLACKROCK, INC. 2021 PROXY STATEMENT | ![]() |
Compensation Discussion and Analysis | 4. 2020 NEO Compensation and Performance Summaries
Robert S. Kapito
President |
| 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 | |||||||||||
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| $8,250 |
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Annual Incentive Award |
| $3,938 |
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| $11,188 |
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| $24,625 |
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Overall Assessment: Far Exceeds Expectations In 2020, Mr. Kapito led the firm’s exceptional long-term investment performance for clients, while partnering with senior leaders to ensure operational resilience during the pandemic. Mr. Kapito also led a renewed focus on organizational strength at the firm, personally engaging with employees globally to lead a purpose driven culture. Overall, the Compensation Committee’s assessment of Mr. Kapito’s performance resulted in a Far Exceeds determination. Based on the performance assessment, the Compensation Committee set Mr. Kapito’s 2020 total compensation at $24.63 million, up 23% from 2019. |
Compensation Scorecard | ||||||||||||
Performance Category | Performance Highlights | Assessment | ||||||||||
Financial Performance
|
• Responsible for BlackRock’s distribution channels and client-facing businesses, including maintaining relationships with key intermediary partners, and contributed to 5% organic asset growth and 7% organic base fee growth.
• Guided leadership in the management of record AUM of $8.68 trillion, including over $2 trillion in active, nearly $6 trillion in iShares ETFs & Index and nearly $700 billion in cash management strategies.
• Delivered on day-to-day oversight of the firm’s business operations, partnering with Mr. Goldstein and Mr. Shedlin to manage an operating margin, as adjusted, of 44.9%, up 120 basis points from 2019.
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Far Exceeds Expectations | ||||||||||
Measures
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BlackRock Performance
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2019
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2020
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Net New Base Fee Growth | 5% | 7% | ||||||||||
Operating Income, as adjusted(1) ($ million) | $5,551 | $6,284 | ||||||||||
Operating Margin, as adjusted(1) | 43.7% | 44.9% | ||||||||||
(1) | Amounts are shown on an “as adjusted” basis. For a reconciliation with GAAP, please see Annex A. |
72 |
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BLACKROCK, INC. 2018 PROXY STATEMENT 61
Compensation Discussion and Analysis | 4. 2020 NEO Compensation and Performance Summaries
Performance Category | Performance Highlights |
| Assessment | |||||||||||
Business Strength
|
Deliver for clients
• Led exceptional long-term investment performance across active products, delivering over $30 billion of alpha for clients in 2020, which drove $88 billion of total active net inflows for the year and a record $30 billion in active equity net inflows.
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Far Exceeds Expectations | ||||||||||||
Actively managed AUM above benchmark or peer median | 1-Yr | 3-Yr | 5-Yr |
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Taxable Fixed Income | 86% | 87% | 88% | |||||||||||
Tax-Exempt Fixed Income | 36% | 56% | 78% | |||||||||||
Fundamental Equity | 78% | 85% | 85% | |||||||||||
Systematic Equity | 61% | 46% | 88% | |||||||||||
• Oversaw the seamless execution of our trading platform through unprecedented volatility and volume, with over 20% growth in trading volumes for 2020.
• In response to the pandemic, at the peak levels of uncertainty, engaged in over 100 outreach calls to ensure client needs were being met.
• Led the effort in BlackRock’s discretionary active portfolios to completely exit investments in public companies with more than 25% of revenues from thermal coal production and exit any company with ties to controversial | ||||||||||||||
Evolve how we serve clients
• Oversaw the growth of the illiquid alternatives platform to $86 billion AUM. Raised a record $25 billion of client capital in 2020, led by infrastructure, private equity solutions, private credit and the final close of our direct private equity Long Term Private Capital strategy.
• Integrated the private and public Capital Markets functions to unlock synergies and increase collaboration and deal flow across the Portfolio Management Group and the Alternatives Group. | ||||||||||||||
Lead in a changing world
• During the pandemic, partnered with Mr. Goldstein in overseeing key day-to-day management challenges, including managerial priorities and resource allocation.
• Oversaw the Financial Markets Advisory team’s engagement and execution of three programs implemented by the Federal Reserve Bank of New York to help stabilize financial markets and support the economy through the pandemic.
• Focused on how to advance racial equity through public policy and legislative outcomes where we operate.
• Established The BlackRock Foundation to augment our efforts to promote a more inclusive and sustainable | ||||||||||||||
Organizational Strength
| Attract and inspire talent
• Established the Portfolio Management Group, aligning our seven portfolio management businesses, to empower a broad set of leaders, while ensuring the businesses remain nimble and innovative.
• Continued to oversee talent programs and committees to engage critical talent across the firm and provide development opportunities. | Far Exceeds Expectations | ||||||||||||
Inclusion and diversity
• In partnership with Mr. Fink, re-committed the firm’s focus on improved recruiting and talent management of diverse talent across the firm, resulting in an increase in racial/ethnic representation in the U.S. | ||||||||||||||
Purpose and culture
• Led progress in building a purpose driven culture through personal engagement with leaders and employees, evidenced by 2020 Employee Opinion Survey engagement and enablement scores, which were up four percentage points, and 86% of employees indicating they were willing to go above and beyond in their role.
• Prioritized the health and safety of employees during the pandemic, hosting over 30 town halls to increase levels of connectivity across the firm and support leadership teams.
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BLACKROCK, INC. 2021 PROXY STATEMENT | 73 |
Compensation Discussion and Analysis | 4. 2020 NEO Compensation and Performance Summaries
Robert L. Goldstein
COO |
| Responsibilities:
As COO, Mr. Goldstein is responsible for ensuring that the Company’s investment, client, risk analytics, technology and
Mr. Goldstein also leads theBlackRock Solutions (“BRS”) business, delivering investment and risk analytics technology to clients.
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(Thousands) | ||||||||||||||
Base Salary | $500 | |||||||||||||
Annual Incentive Award - Cash | $3,175 | |||||||||||||
Annual Incentive Award - Equity | $2,325 | |||||||||||||
Long-Term Incentive Award | $5,750 | |||||||||||||
Total Annual Compensation | $11,750 | |||||||||||||
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Annual Incentive Award – Cash
$
3,275
Annual Incentive Award – Equity
$
2,325
Long-Term Incentive Award
$
2,100
Total Annual Compensation1
$
8,200
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In 2020, Mr. Goldstein’s leadership significantly contributed to BlackRock’s ability to react and operate during the unprecedented and challenging environment presented by the pandemic, while also prioritizing the well-being of employees globally. Mr. Goldstein continued to | |||||||||
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talent initiatives.
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$11.75 million, up 19% from 2019.
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62BLACKROCK, INC. 2018 PROXY STATEMENT
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| Under Mr. Goldstein’s leadership, BlackRock generated a record $1.1 billion of 2020 technology services revenue, representing 17% year-over-year growth.
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• During the pandemic, partnered with Mr. Kapito in overseeing key day-to-day management, including managerial priorities and resource allocation. • Ensured the firm appropriately managed operating risk and operating platform stability during the firm’s swift migration to 95% of employees working in a remote environment. • Partnered with Manish Mehta, Global Head of Human Resources, and Derek Stein, Global Head of Technology and Operations, in establishing health and safety focused return to office protocols (including testing and case management). • Oversaw the resilience and stability of the Aladdin platform with record trading volumes and increased market volatility throughout the year. • Launched AladdinClimate, setting a new standard for assessing environmental risks across asset classes in investment portfolios. • Partnered with leaders across the firm to integrate ESG onto Aladdin, adding 1,200 sustainability metrics and establishing data partnerships with Sustainalytics, Refinitiv and Rhodium to help clients better understand portfolio risks. | Far Exceeds Expectations |
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Compensation Discussion and Analysis | 4. 2020 NEO Compensation and Performance Summaries strategic growth plan and drove commercial impact with record Alternatives capital raising and improved investment performance.
Mr. McCombe played a leadership role in advancing BlackRock’s culture and diversity agenda through executive sponsorship of a number of firm-wide programs, including serving as the executive sponsor of the Leadership Excellence and Development (LEAD) program, a firm initiative focused on developing diverse high performing Vice Presidents, and an executive sponsor of the BlackRock OUT & Allies network; and also served as Chairman of the Toigo Foundation, an organization supporting diverse MBA candidates in securing elevated roles in financial services.
1 In the fourth quarter of 2017, BlackRock implemented a key strategic part of our long-term management succession plans 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. Consequently, we do not consider these awards to be part of our regular annual compensation determinations for 2017. For more information regarding these performance-based stock options, see “Performance-Based Stock Options” on page 55.
BLACKROCK, INC. 2018 PROXY STATEMENT 63
| Performance Highlights | Assessment | ||||||||||||
Organizational Strength | • Partnered with Mr. Wiedman and Mr. Mehta to lead Talent Bench Review discussions with senior leaders focused on strengthening our talent pipeline, driving accountability with our senior leaders and identifying key actions the firm needs to take to close succession gaps. • Focused on evolving the experience and career path of technologists, launching the Technology Fellows program to recognize our talent and position them to drive the firm’s technology strategy. • Made progress in increasing gender diversity across technology groups. Continued to drive engagement discussions and improve racial/ethnic representation. • Led work to refresh and evolve the BlackRock Principles, which reflect the core values, aspirations and cultural language embraced by our employees. • During the pandemic, led efforts to establish, update and communicate to employees on work-from-home policies, prioritizing the health and safety of our global population. | Far Exceeds Expectations |
BLACKROCK, INC. 2021 PROXY STATEMENT | 75 |
Compensation Discussion and Analysis | 4. 2020 NEO Compensation and Performance Summaries
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| Responsibilities: As Head of International and of Corporate Strategy, Mr. Wiedman is responsible for shaping the firm’s strategy and aligning resources, talent and operating plans to serve clients and drive growth. Mr. Wiedman also oversees BlackRock’s operations in EMEA, Latin America and Asia Pacific, and global marketing. | ||||||||||
(Thousands) | ||||||||||||
Base Salary | $500 | |||||||||||
Annual Incentive Award - Cash | $2,675 | |||||||||||
Annual Incentive Award - Equity | $1,725 | |||||||||||
Long-Term Incentive Award | $5,600 | |||||||||||
Total Annual Compensation | $10,500 | |||||||||||
Overall Assessment: Far Exceeds Expectations In 2020, Mr. Wiedman significantly contributed to outlining and executing against BlackRock’s strategy in a challenging environment, while also contributing to the oversight of day-to-day management and resource allocation. He partnered with senior leaders and country managers to serve clients locally, made progress against sustainability priorities and engaged in efforts focused on BlackRock’s purpose. Overall, the Compensation Committee’s assessment of Mr. Wiedman’s performance resulted in a Far Exceeds determination. Based on the performance assessment, the Compensation Committee set Mr. Wiedman’s 2020 total compensation at $10.50 million, up 24% from 2019. |
Performance Category | Performance Highlights | Assessment | ||||||||||||
Financial Performance | • As Head of International, drove global growth across investment solutions, generating net inflows of $97 billion and $65 billion across active and passive strategies in the EMEA and APAC regions, respectively. • Achieved more than $1 billion of net inflows in each of 19 countries and 104 different investment products. | Far Exceeds Expectations | ||||||||||||
Business Strength | • During the pandemic, reviewed and executed against the firm’s strategy and strategic opportunities, including iShares, Aladdin, private markets, alpha generation, whole portfolio solutions and sustainable investing. • Enhanced the firm’s competitive intelligence efforts, tracking business progress against key initiatives and overseeing business reviews throughout the year. • Established a framework for country managers to drive a local approach to client solutions, personally supporting regional leaders in serving client needs. • Led BlackRock’s execution to integrate sustainability as a key component in the way the firm manages risk, constructs portfolios, designs products and engages with companies, resulting in $68 billion of net inflows in sustainable strategies. • Sponsored the efforts to accelerate employee and client engagement, highlighted by the publishing of BlackRock’s “Where We Stand” report, which outlines how BlackRock is helping more and more people experience financial well-being. | Far Exceeds Expectations | ||||||||||||
Organizational Strength | • Partnered with Mr. Goldstein and Mr. Mehta to enhance Talent Bench Review discussions with senior leaders on the talent pipeline and to drive accountability. • Oversaw improvement in employee connectivity across the firm globally, evidenced by the 2020 Employee Opinion Survey results, with engagement and enablement scores up 4 percentage points year-over-year. • Partnered closely with the Global Executive Talent Subcommittee to develop and advance senior diverse | Far Exceeds Expectations |
76 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Compensation Discussion and Analysis | 4. 2020 NEO Compensation and Performance Summaries
Gary S. Shedlin CFO | 2020 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
Mr. Shedlin alsoco-chairs, along with Mr. Goldstein, the | ||||||||||
(Thousands) | ||||||||||||
Base Salary | $500 | |||||||||||
Annual Incentive Award - Cash | $2,800 | |||||||||||
Annual Incentive Award - Equity | $1,850 | |||||||||||
Long-Term Incentive Award | $3,350 | |||||||||||
Total Annual Compensation | $8,500 | |||||||||||
|
|
|
|
|
|
| Overall Assessment: Far Exceeds Expectations
| |||||||||
|
|
| ||||||||||
|
|
| ||||||||||
|
|
| ||||||||||
|
The Compensation Committee’s assessment of Mr.
| |||||||||||
up 18% from 2019.
|
64BLACKROCK, INC. 2018 PROXY STATEMENT
Performance Category | Performance Highlights | Assessment | ||||||||||||
Financial Performance | • Partnered with Mr. Kapito and Mr. Goldstein to achieve an operating margin, as adjusted, of 44.9%, up 120 basis points from 2019, through expense discipline and optimal allocation of resources to our highest growth priorities. • Managed BlackRock’s balance sheet to ensure continued liquidity during volatile market conditions associated with the pandemic, including the successful extension of BlackRock’s five-year credit facility and execution of two 10-year debt deals which raised $2.25 billion of proceeds at record low coupons. • Successfully led the execution of BlackRock’s capital management strategy that resulted in the return of $3.8 billion to shareholders in 2020, including the May 2020 repurchase of $1.1 billion of BlackRock shares from PNC at $415 per share. • Increased investor relations engagement by over 66% through more frequent virtual shareholder connectivity and increased access to BlackRock senior management, contributing to our 44% share price appreciation from 2019. | Far Exceeds Expectations | ||||||||||||
Business Strength | • Led the successful acquisition of Aperio, a pioneer in customizing tax-optimized equity separately managed accounts, to enhance our wealth platform and position it to deliver whole-portfolio solutions to ultra-high net worth advisors. • Drove the tax-efficient contribution and monetization of BlackRock’s remaining PennyMac stake to create over $500 million of proceeds in support of our future Social Impact initiatives. • Progressed our China buildout by successfully creating a wealth joint venture with China Construction Bank and Temasek and finalizing our application to license our fund management company. • Drove enhanced reporting metrics to better monitor profitability, compensation and liquidity metrics amidst the pandemic, and oversaw the efficient remote execution of month-end/quarter-end closes, stand-alone entity audits, regulatory filings and tax reporting. • Significantly progressed BlackRock’s corporate sustainability agenda, including the buildout of a disclosure framework and successful publications of our inaugural SASB and TCFD disclosures and “Where We Stand” report. | Far Exceeds Expectations |
BLACKROCK, INC. 2021 PROXY STATEMENT | 77 |
Compensation Discussion and Analysis | 4. 2020 NEO Compensation and Performance Summaries
Performance Category | Performance Highlights | Assessment | ||||||||||||
Organizational Strength | • Bolstered succession planning and the leadership bench across Finance, including controllers, tax and corporate sustainability. • Continued progress in gender and racial/ethnic representation across Finance, and strengthened the pipeline of female leaders. • Sponsor of the Veterans Network, which is committed to helping those who have served in the armed forces transition to the civilian workforce, both at BlackRock and through mentorship programs. | Meets/Exceeds Expectations |
78 | BLACKROCK, INC. 2021 PROXY STATEMENT | ![]() |
Compensation Policies
and Practices
Compensation Discussion and Analysis | 5. Compensation Policies and Practices
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:
BLACKROCK, INC. 2018 PROXY STATEMENT 65
What We Do | What We Don’t Do | |||||||
• 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;
|
| |||||||
BLACKROCK, INC. 2021 PROXY STATEMENT | 79 |
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 vested BlackRock equity awards. The Compensation 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.GEC.
$10 million for the CEO;
$5 million for the President; and
$2 million for all other GEC members.
As of December 31, 2017,2020, 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. Under 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.
BlackRock maintains a clawback policy that allows for the CEO;
Clawback Policy
All performance-based compensation (including annual and long-term incentive awards and all equity compensation) in the event that a significant restatement of financial results is subjectrequired due to the actions of an employee. In addition, BlackRock’s Clawback Policyequity award agreements require the forfeiture of equity awards upon certain restrictive covenant breaches and is subject to recoupment ifother conduct constituting “cause.”
Fraud or Willful Misconduct Causing a | Breach of Restrictive Covenants | Conduct Constituting Cause | ||||
Who | All employees | Recipients of equity awards | Recipients of equity awards | |||
Application | 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. | If the recipient: • breaches certain confidentiality, non-solicitation, non-disparagement and intellectual property policies or covenants; or • competes with BlackRock following certain terminations of employment. | If, following a termination of employment, BlackRock becomes aware of conduct by a recipient that occurred while the recipient was employed that would have been grounds for a termination for “cause,” including the occurrence of any of the following: • gross negligence or intentional misconduct by the recipient that is in connection with the recipient’s duties to BlackRock or that causes, or is expected to cause, monetary or other harm to BlackRock or its clients; • breach of a fiduciary duty owed to BlackRock or its clients; • misappropriation or embezzlement by the recipient, or any action involving theft, fraud or material personal dishonesty; • any violation by the recipient of any domestic or foreign securities laws, rules or regulations (including those of any self-regulatory organization or authority); or • material violation by the recipient of BlackRock’s policies (e.g., the Code of Business Conduct and Ethics or Insider Trading Policy). | |||
What | All performance-based compensation (including annual cash bonuses and equity awards) may be recouped. | Any shares delivered within the preceding one-year period prior to such breach (or the gross proceeds from the disposition of such shares(1)) may be recouped by BlackRock, and any then-unvested awards will be forfeited. All or a portion of any unvested awards(1) will be forfeited if the recipient competes with BlackRock following certain terminations of employment. | Any unvested equity awards held by the recipient (and any vested but unexercised options) will be forfeited. |
(1) | In the case of any shares received upon the exercise of an option, BlackRock may recoup the positive difference between the fair market value of the shares on the date of exercise and the option exercise price. If the recipient competes with BlackRock following certain terminations of employment, any vested but unexercised options will be forfeited. |
80 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Compensation Discussion and Analysis | 5. Compensation Policies and Practices
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 our 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 our 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 opportunitiesofferings 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. Our NEOssecurity and as such, are provided with an allowance for personal travel. BlackRock incurs incremental costs to provide these services, though this allowance is generally capped below a level the Compensation Committee considers reasonable. Messrs. Fink and Kapito generally 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 allowance, and are made available to our NEOs for business and personal use.Mr. Fink did so in 2020. In addition, Mr. Shedlin utilized the company-provided private airplane services during 2020. The compensation attributed to each of our NEOs for 20172020 for perquisites is described in footnote (4)(3) to the ““20172020 Summary Compensation Table”Table” on page 68.82.
66BLACKROCK, INC. 2018 PROXY STATEMENT
![]() |
Tax Reimbursements
BlackRock did not provide tax reimbursements for any perquisites or other compensation paid to our NEOs.
Tax Deductibility of Compensation
The Compensation Committee considers multiple compensation objectives when designing our incentive compensation programs, including the tax-deductibility of such compensation. The Compensation Committee maintains the flexibility to pay non-deductible incentive compensation if it determines that doing so is in the best interest of the Company and its shareholders.
Section 162(m) of the Internal Revenue Code generally limits the tax deductibility of compensation paid to any executive officers subject to Section 162(m) (the “Covered Employees”) to $1 million during any fiscal year unless such compensation qualifies as “performance-based” (although this exception is severely limited beginning in 2018, as described below).year. Historically, the Company administered its incentive compensation arrangements in a manner that would comply with certain exceptions to these tax rules. However, the Compensation Committee maintained the flexibility to paynon-deductible incentive compensation if it determines it is in the best interest of the Company and its shareholders.
Separately from determining the total bonus pool in respect of calendar year 2017, the Compensation Committee established the method for calculating the Section 162(m) compliant aggregate cap (the “Aggregate 162(m) Cap”) for annual incentive awards to each of our NEOs pursuant to the shareholder-approved Amended 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 portion of the overall Aggregate 162(m) Cap (the “Individual 162(m) Caps”), was calculated in accordance with the requirements of Section 162(m). Neither the Aggregate 162(m) Cap nor the Individual 162(m) Caps served as a basis for the Compensation Committee’s compensation decisions for our NEOs; instead, these caps served to establish a ceiling on the amount of annual incentive awards which the Compensation Committee can award to the NEOs on a tax deductible basis. In determining final awards for each NEO, the Compensation Committee ensured that such awards do not exceed the executive officer’s Individual 162(m) Cap.
The Tax Cuts and Jobs Act, enacted on December 22, 2017, substantially modifiesmodified Section 162(m) and, among other things, eliminateseliminated the performance-basedmost commonly used exception to the $1 million deduction limit, effectivethe “performance-based compensation” exception, as of January 1, 2018. As a result, beginning in 2018, compensation paid to Covered Employees in excess of $1 million willis generally be nondeductible, whether or not it is performance-based. In addition, beginning in 2018, the Covered Employees will 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, and onceyear. 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) described above will not apply to 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 extent applicable to our existing contracts and awards, the Company may avail itself of this transition relief rule. However, because of uncertainties as to the application and interpretation of the transition relief rule, no assurances can be given at this time that our existing contracts and awards, even if in place on November 2, 2017, will meet the requirements of the transition relief rule. Moreover, to maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals in the best interest of the Company and its shareholders, the Compensation Committee does not limit its actions with respect 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 Company and its shareholders.
BLACKROCK, INC. 2018 PROXY STATEMENT 67
BLACKROCK, INC. 2021 PROXY STATEMENT | 81 |
Compensation Discussion and Analysis | 6. Executive Compensation Tables
Executive Compensation Tables
The following 20172020 Summary Compensation Table contains information concerning compensation provided by BlackRock for the years indicated to the NEOs. Pursuant to SEC rules, the 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.
20172020 Summary Compensation Table
Name and Principal Position
| Year
| Salary
| Bonus
| Stock Awards (Fair Value of
| Performance-
| All Other
| Total
| |||||||||||||||||||||
Laurence D. Fink | 2017 | $ | 900,000 | $ | 10,000,000 | $ | 16,599,733 | – | $243,500 | $ | 27,743,233 | |||||||||||||||||
Chairman and |
|
2016 |
|
$ |
900,000 |
|
$ |
8,000,000 |
|
$ |
16,379,581 |
|
|
– |
|
|
$193,250 |
|
$ |
25,472,831 |
| |||||||
Chief Executive Officer
|
| 2015
|
| $
| 900,000
|
| $
| 8,720,000
|
| $
| 15,979,630
|
|
| –
|
|
| $193,000
|
| $
| 25,792,630
|
| |||||||
Robert S. Kapito
|
| 2017
|
| $
| 750,000
|
| $
| 8,125,000
|
| $
| 12,834,775
|
|
| –
|
|
| $274,675
|
| $
| 21,984,450
|
| |||||||
President
|
| 2016
|
| $
| 750,000
|
| $
| 6,500,000
|
| $
| 12,149,508
|
|
| –
|
|
| $224,425
|
| $
| 19,623,933
|
| |||||||
| 2015
|
| $
| 750,000
|
| $
| 7,085,000
|
| $
| 12,279,750
|
|
| –
|
|
| $224,175
|
| $
| 20,338,925
|
| ||||||||
Robert L. Goldstein
|
| 2017
|
| $
| 500,000
|
| $
| 3,275,000
|
| $
| 3,999,470
|
| $
| 10,460,528
|
|
| $ 54,500
|
| $
| 18,289,498
|
| |||||||
Senior Managing Director and
|
| 2016
|
| $
| 500,000
|
| $
| 2,850,000
|
| $
| 3,899,900
|
|
| –
|
|
| $ 49,425
|
| $
| 7,299,325
|
| |||||||
Chief Operating Officer
|
| 2015
|
| $
| 500,000
|
| $
| 2,850,000
|
| $
| 4,024,823
|
|
| –
|
|
| $ 23,723
|
| $
| 7,398,546
|
| |||||||
Mark S. McCombe
|
| 2017
|
| $
| 500,000
|
| $
| 2,725,000
|
| $
| 3,374,353
|
| $
| 10,460,528
|
|
| $ 49,675
|
| $
| 17,109,556
|
| |||||||
Senior Managing Director and
|
| –
|
|
| –
|
|
| –
|
|
| –
|
|
| –
|
|
| –
|
|
| –
|
| |||||||
Head of Americas(5)
|
| –
|
|
| –
|
|
| –
|
|
| –
|
|
| –
|
|
| –
|
|
| –
|
| |||||||
Gary S. Shedlin
|
| 2017
|
| $
| 500,000
|
| $
| 2,700,000
|
| $
| 3,249,781
|
| $
| 7,845,347
|
|
| $ 18,500
|
| $
| 14,313,628
|
| |||||||
Senior Managing Director and
|
| 2016
|
| $
| 500,000
|
| $
| 2,350,000
|
| $
| 3,149,532
|
|
| –
|
|
| $ 18,250
|
| $
| 6,017,782
|
| |||||||
Chief Financial Officer
|
| 2015
|
| $
| 500,000
|
| $
| 2,350,000
|
| $
| 3,224,672
|
|
| –
|
|
| $ 18,000
|
| $
| 6,092,672
|
|
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards (Fair Value of ($)(2) | All Other Compensation ($)(3) | Total ($) | ||||||||||||||||||
Laurence D. Fink Chairman and Chief Executive Officer |
| 2020 |
|
| $1,500,000 |
|
| $9,500,000 |
|
| $15,999,930 |
|
| $356,502 |
|
| $27,356,432 |
| ||||||
| 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 |
| |||||||
Robert S. Kapito President |
| 2020 |
|
| $1,250,000 |
|
| $8,250,000 |
|
| $12,449,488 |
|
| $165,715 |
|
| $22,115,203 |
| ||||||
| 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 |
| |||||||
Robert L. Goldstein Senior Managing Director and Chief Operating Officer |
| 2020 |
|
| $500,000 |
|
| $3,175,000 |
|
| $6,399,759 |
|
| $47,095 |
|
| $10,121,854 |
| ||||||
| 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 |
| |||||||
Mark Wiedman Senior Managing Director and Head of International and of Corporate Strategy |
| 2020 |
|
| $500,000 |
|
| $2,675,000 |
|
| $5,475,065 |
|
| $13,400 |
|
| $8,663,465 |
| ||||||
Gary S. Shedlin Senior Managing Director and Chief Financial Officer |
| 2020 |
|
| $500,000 |
|
| $2,800,000 |
|
| $4,224,887 |
|
| $58,669 |
|
| $7,583,556 |
| ||||||
| 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 |
|
(1) | Bonus. These amounts represent the cash portion of |
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) | All Other Compensation. For Messrs. Fink, Kapito, Goldstein, Wiedman and |
For Messrs. Fink and Kapito, the value reported for 2020 includes $295,000 and $97,238, respectively, which reflects the incremental cost associated with personal use of company-provided aircraft |
82 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Compensation Discussion and Analysis | 6. Executive Compensation Tables
BlackRock associated with additional pandemic-related empty positioning (deadhead) flights for the protection of the health and safety of the flight crew (as described below) of $48,102 and $21,382, respectively, which were not counted against their personal use allowances. For Mr. Shedlin, the value reported for 2020 includes $45,269, which reflects the incremental cost attributable to |
68BLACKROCK, INC. 2018 PROXY STATEMENT
![]() |
plus any trip-specific incremental costs (such as crew expenses, catering expenses and fees associated with landing, parking and flight planning) or (ii) actual charter cost, in each case, less reimbursement received from the NEO. During the COVID-19 pandemic, to protect the health and safety of the flight crew, BlackRock required corporate aircraft to return to base rather than stay at the passenger’s destination, which resulted in an increased number of deadhead flights associated with aircraft usage during the pandemic. Messrs. Fink and Kapito are required by the Board to utilize |
For more information regarding perquisites, see “ |
20172020 Grants of Plan-Based Awards
The following table sets forth information concerning equity incentive plan-based compensation provided by BlackRock in 20172020 to our NEOs.
Estimated Future Payouts Under Equity
| Estimated Future Payouts Under Equity Incentive Plan Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name
| Grant Date(1)
| Date of
| Threshold
| Target
| Maximum
| All Other
| Exercise or ($/share)
| Grant Date
| Grant Date(1) | Date of Committee Action | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares or Units (#) | Grant Date Fair Value of ($)(4) | |||||||||||||||||||||||||||||||||||||||||||||
Laurence D. Fink | 1/17/2017 | 1/11/2017 | (2) | 11,060 | $ | 4,149,933 |
| 1/16/2020 |
|
| 1/14/2020(2) |
|
| 7,965 |
|
| $4,249,965 |
| ||||||||||||||||||||||||||||||||||||||||||
| 1/17/2017
|
|
| 1/11/2017
| (3)
|
| –
|
|
| 33,180
|
|
| 54,747
|
| $
| 12,449,800
|
| |||||||||||||||||||||||||||||||||||||||||||
| 1/16/2020 |
|
| 1/14/2020(3) |
|
| — |
|
| 22,021 |
|
| 36,335 |
|
| $11,749,965 |
| |||||||||||||||||||||||||||||||||||||||||||
Robert S. Kapito | 1/17/2017 | 1/11/2017 | (2) | 8,552 | $ | 3,208,881 |
| 1/16/2020 |
|
| 1/14/2020(2) |
|
| 6,559 |
|
| $3,499,751 |
| ||||||||||||||||||||||||||||||||||||||||||
| 1/17/2017
|
|
| 1/11/2017
| (3)
|
| –
|
|
| 25,654
|
|
| 42,329
|
| $
| 9,625,894
|
|
| 1/16/2020 |
|
| 1/14/2020(3) |
|
| — |
|
| 16,773 |
|
| 27,675 |
|
| $8,949,737 |
| |||||||||||||||||||||||||
Robert L. Goldstein | 1/17/2017 | 1/11/2017 | (2) | 5,063 | $ | 1,899,739 |
| 1/16/2020 |
|
| 1/14/2020(2) |
|
| 3,748 |
|
| $1,999,858 |
| ||||||||||||||||||||||||||||||||||||||||||
1/17/2017 | 1/11/2017 | (3) | – | 5,596 | 9,233 | $ | 2,099,731 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 12/4/2017
|
|
| 12/4/2017
| (4)
|
| –
|
|
| 108,190
|
|
| 108,190
|
|
| 513.50
|
| $
| 10,460,528
|
|
| 1/16/2020 |
|
| 1/14/2020(3) |
|
| — |
|
| 8,246 |
|
| 13,606 |
|
| $4,399,901 |
| ||||||||||||||||||||||
Mark S. McCombe | 1/17/2017 | 1/11/2017 | (2) | 3,797 | $ | 1,424,710 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mark Wiedman |
| 1/16/2020 |
|
| 1/14/2020(2) |
|
| 2,858 |
|
| $1,524,972 |
| ||||||||||||||||||||||||||||||||||||||||||||||||
1/17/2017 | 1/11/2017 | (3) | – | 5,196 | 8,573 | $ | 1,949,643 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 12/4/2017
|
|
| 12/4/2017
| (4)
|
| –
|
|
| 108,190
|
|
| 108,190
|
|
| 513.50
|
| $
| 10,460,528
|
|
| 1/16/2020 |
|
| 1/14/2020(3) |
|
| — |
|
| 7,403 |
|
| 12,215 |
|
| $3,950,093 |
| ||||||||||||||||||||||
Gary S. Shedlin | 1/17/2017 | 1/11/2017 | (2) | 3,731 | $ | 1,399,946 |
| 1/16/2020 |
|
| 1/14/2020(2) |
|
| 2,858 |
|
| $1,524,972 |
| ||||||||||||||||||||||||||||||||||||||||||
1/17/2017 | 1/11/2017 | (3) | – | 4,930 | 8,134 | $ | 1,849,835 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 12/4/2017
|
|
| 12/4/2017
| (4)
|
| –
|
|
| 81,142
|
|
| 81,142
|
|
| 513.50
|
| $
| 7,845,347
|
|
| 1/16/2020 |
|
| 1/14/2020(3) |
|
| — |
|
| 5,060 |
|
| 8,349 |
|
| $2,699,915 |
|
(1) | Grant Date.Grant date is the date on which approved award values |
(2) | These January |
(3) | These January |
(4) | Grant Date Fair Value of |
Stock 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 |
BLACKROCK, INC. 2018 PROXY STATEMENT 69
BLACKROCK, INC. 2021 PROXY STATEMENT | 83 |
Compensation Discussion and Analysis | 6. Executive Compensation Tables
20172020 Outstanding Equity Awards at FiscalYear-End
Option Awards
|
Stock Awards
| |||||||||||||||||||||||||||||||||||||||||||||||
Performance-Based Option Awards
|
Stock Awards
| |||||||||||||||||||||||||||||||||||||||||||||||
Name
| Grant
|
Equity Incentive Plan
| Option
| Option
| Number of
| Market Value
| Grant Date
|
Number of Unexercisable
| Option
| Option Expiration Date
| Number of
| Market Value of Shares or
| ||||||||||||||||||||||||||||||||||||
Laurence D. Fink |
|
1/17/2014 |
|
|
– |
|
|
– |
|
|
– |
|
|
24,322 |
(2) |
$ |
12,494,455 |
| 1/16/2018 | — | — | — |
| 2,707(2) |
| $1,953,209 | ||||||||||||||||||||||
1/16/2015 | – | – | – | 3,873 | (3) | $ | 1,989,599 | 1/16/2018 | — | — | — |
| 22,506(3) |
| $16,238,979 | |||||||||||||||||||||||||||||||||
1/16/2015 | – | – | – | 38,165 | (4) | $ | 19,605,742 | 1/17/2019 | — | — | — |
| 6,906(2) |
| $4,982,955 | |||||||||||||||||||||||||||||||||
1/19/2016 | – | – | – | 9,219 | (3) | $ | 4,735,892 | 1/17/2019 | — | — | — |
| 32,550(3) |
| $23,486,127 | |||||||||||||||||||||||||||||||||
1/19/2016 | – | – | – | 45,219 | (4) | $ | 23,229,452 | 1/16/2020 | — | — | — |
| 7,965(2) |
| $5,747,066 | |||||||||||||||||||||||||||||||||
1/17/2017 | – | – | – | 11,060 | (3) | $ | 5,681,633 | 1/16/2020 | — | — | — |
| 26,664(3) |
| $17,796,063 | |||||||||||||||||||||||||||||||||
| 1/17/2017
|
|
| –
|
|
| –
|
|
| –
|
|
| 39,484
| (4)
| $
| 20,283,326
|
| |||||||||||||||||||||||||||||||
Robert S. Kapito |
|
1/17/2014 |
|
|
– |
|
|
– |
|
|
– |
|
|
19,201 |
(2) |
$ |
9,863,746 |
| 1/16/2018 | — | — | — |
| 2,068(2) |
| $1,492,145 | ||||||||||||||||||||||
1/16/2018 | — | — | — |
| 17,401(3) |
| $12,555,518 | |||||||||||||||||||||||||||||||||||||||||
1/16/2015 | – | – | – | 2,976 | (3) | $ | 1,528,801 | 1/17/2019 | — | — | — |
| 5,687(2) |
| $4,103,398 | |||||||||||||||||||||||||||||||||
1/16/2015 | – | – | – | 29,328 | (4) | $ | 15,066,087 | 1/17/2019 | — | — | — |
| 24,800(3) |
| $17,894,192 | |||||||||||||||||||||||||||||||||
1/19/2016 | – | – | – | 6,838 | (3) | $ | 3,512,749 | 1/16/2020 | — | — | — |
| 6,559(2) |
| $4,732,581 | |||||||||||||||||||||||||||||||||
1/19/2016 | – | – | – | 33,541 | (4) | $ | 17,230,347 | 1/16/2020 | — | — | — |
| 18,786(3) |
| $13,554,850 | |||||||||||||||||||||||||||||||||
1/17/2017 | – | – | – | 8,552 | (3) | $ | 4,393,248 | |||||||||||||||||||||||||||||||||||||||||
| 1/17/2017
|
|
| –
|
|
| –
|
|
| –
|
|
| 30,528
| (4)
| $
| 15,682,539
|
| |||||||||||||||||||||||||||||||
Robert L. Goldstein |
|
1/17/2014 |
|
|
– |
|
|
– |
|
|
– |
|
|
8,960 |
(2) |
$ |
4,602,842 |
| 12/4/2017 | 108,190 | 513.5 | 12/4/2026(4) |
| — |
| — | ||||||||||||||||||||||
1/16/2015 | – | – | – | 1,963 | (3) | $ | 1,008,413 | 1/16/2018 | — | — | — |
| 1,369(2) |
| $987,788 | |||||||||||||||||||||||||||||||||
1/16/2015 | – | – | – | 6,368 | (4) | $ | 3,271,305 | 1/16/2018 | — | — | — |
| 3,796(3) |
| $2,738,966 | |||||||||||||||||||||||||||||||||
1/19/2016 | – | – | – | 4,278 | (3) | $ | 2,197,651 | 1/17/2019 | — | — | — |
| 3,250(2) |
| $2,345,005 | |||||||||||||||||||||||||||||||||
1/19/2016 | – | – | – | 7,361 | (4) | $ | 3,781,419 | 1/17/2019 | — | — |
| — |
| 7,440(3) | $5,368,258 | |||||||||||||||||||||||||||||||||
1/17/2017 | – | – | – | 5,063 | (3) | $ | 2,600,914 | 1/16/2020 | — | — | — |
| 3,748(2) |
| $2,704,332 | |||||||||||||||||||||||||||||||||
1/17/2017 | – | – | – | 6,659 | (4) | $ | 3,420,795 | 1/16/2020 | — | — | — |
| 9,236(3) |
| $6,664,143 | |||||||||||||||||||||||||||||||||
| 12/4/2017
|
|
| 108,190
|
|
| 513.5
|
|
| 12/4/2026
| (5)
|
| –
|
|
| –
|
| |||||||||||||||||||||||||||||||
Mark S. McCombe |
|
1/17/2014 |
|
|
– |
|
|
– |
|
|
– |
|
|
6,144 |
(2) |
$ |
3,156,234 |
| ||||||||||||||||||||||||||||||
Mark Wiedman | 12/4/2017 | 108,190 | 513.5 | 12/4/2026(4) |
| — |
| — | ||||||||||||||||||||||||||||||||||||||||
1/16/2018 | — | — | — |
| 1,104(2) |
| $796,580 | |||||||||||||||||||||||||||||||||||||||||
1/16/2015 | – | – | – | 1,212 | (3) | $ | 622,617 | 1/16/2018 | — | — | — |
| 2,712(3) |
| $1,956,816 | |||||||||||||||||||||||||||||||||
1/16/2015 | – | – | – | 4,457 | (4) | $ | 2,289,605 | 1/17/2019 | — | — | — |
| 2,478(2) |
| $1,787,976 | |||||||||||||||||||||||||||||||||
1/19/2016 | – | – | – | 3,208 | (3) | $ | 1,647,982 | 1/17/2019 | — | — | — |
| 6,045(3) |
| $4,361,709 | |||||||||||||||||||||||||||||||||
1/19/2016 | – | – | – | 6,073 | (4) | $ | 3,119,761 | 1/16/2020 | — | — | — |
| 2,858(2) |
| $2,062,161 | |||||||||||||||||||||||||||||||||
1/17/2017 | – | – | – | 3,797 | (3) | $ | 1,950,557 | 1/16/2020 | — | — | — |
| 8,291(3) |
| $5,982,288 | |||||||||||||||||||||||||||||||||
1/17/2017 | – | – | – | 6,183 | (4) | $ | 3,176,269 | |||||||||||||||||||||||||||||||||||||||||
| 12/4/2017
|
|
| 108,190
|
|
| 513.5
|
|
| 12/4/2026
| (5)
|
| –
|
|
| –
|
| |||||||||||||||||||||||||||||||
Gary S. Shedlin |
|
1/17/2014 |
|
|
– |
|
|
– |
|
|
– |
|
|
7,680 |
(2) |
$ |
3,945,293 |
| 12/4/2017 | 81,142 | 513.5 | 12/4/2026(4) |
| — |
| — | ||||||||||||||||||||||
1/16/2015 | – | – | – | 1,382 | (3) | $ | 709,947 | 1/16/2018 | — | — | — |
| 1,030(2) |
| $743,186 | |||||||||||||||||||||||||||||||||
1/16/2015 | – | – | – | 5,731 | (4) | $ | 2,944,072 | 1/16/2018 | — | — | — |
| 3,344(3) |
| $2,412,830 | |||||||||||||||||||||||||||||||||
1/19/2016 | – | – | – | 3,152 | (3) | $ | 1,619,214 | 1/17/2019 | — | — | — |
| 2,478(2) |
| $1,787,976 | |||||||||||||||||||||||||||||||||
1/19/2016 | – | – | – | 6,440 | (4) | $ | 3,308,292 | 1/17/2019 | — | — | — |
| 6,045(3) |
| $4,361,709 | |||||||||||||||||||||||||||||||||
1/17/2017 | – | – | – | 3,731 | (3) | $ | 1,916,652 | 1/16/2020 | — | — | — |
| 2,858(2) |
| $2,062,161 | |||||||||||||||||||||||||||||||||
1/17/2017 | – | – | – | 5,866 | (4) | $ | 3,013,423 | 1/16/2020 | — | — | — |
| 5,667(3) |
| $4,088,967 | |||||||||||||||||||||||||||||||||
| 12/4/2017
|
|
| 81,142
|
|
| 513.5
|
|
| 12/4/2026
| (5)
|
| –
|
|
| –
|
|
(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 |
70BLACKROCK, INC. 2018 PROXY STATEMENT
(3) | ||||||||
![]() |
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, |
In the fourth quarter of 2017, BlackRock implemented a key strategic part of our long-term management succession plans 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. |
84 | BLACKROCK, INC. 2021 PROXY STATEMENT |
2017Compensation Discussion and Analysis | 6. Executive Compensation Tables
2020 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, 20172020 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
| Value
| Number of
| Value
| Number of
| Value
| Number of
| Value Realized on
| ||||||||||||||||||||||||
Laurence D. Fink
|
| –
|
|
| –
|
|
| 55,252
|
| $
| 20,729,445
|
|
|
— |
|
|
— |
|
|
46,642 |
|
|
$25,172,221 |
| ||||||||
Robert S. Kapito
|
| –
|
|
| –
|
|
| 43,069
|
| $
| 16,158,627
|
|
|
— |
|
|
— |
|
|
36,212 |
|
|
$19,543,254 |
| ||||||||
Robert L. Goldstein
|
| –
|
|
| –
|
|
| 22,626
|
| $
| 8,488,823
|
|
|
— |
|
|
— |
|
|
10,885 |
|
|
$5,874,526 |
| ||||||||
Mark S. McCombe
|
| –
|
|
| –
|
|
| 13,800
|
| $
| 5,177,484
|
| ||||||||||||||||||||
Mark Wiedman
|
|
— |
|
|
— |
|
|
9,259 |
|
|
$4,996,990 |
| ||||||||||||||||||||
Gary S. Shedlin
|
| –
|
|
| –
|
|
| 4,210
|
| $
| 1,579,508
|
|
|
— |
|
|
— |
|
|
8,980 |
|
|
$4,846,416 |
| ||||||||
(1) | Value realized reflects (i) the closing price per share of BlackRock common stock on the day prior to the vesting date, multiplied by (ii) the number of |
20172020 Nonqualified Deferred Compensation
Name
| Executive
|
Registrant
|
Aggregate
| Aggregate
|
Aggregate
| Executive ($)
| Registrant
| Aggregate ($)(1)
| Aggregate
| Aggregate at Last End ($)
| ||||||||||||||||||||||||||||||
Laurence D. Fink
|
| –
|
|
| –
|
| $
| 404,229
|
|
| –
|
| $
| 2,446,235
|
|
|
— |
|
|
— |
|
|
$372,176 |
|
|
— |
|
|
$3,367,626 |
| ||||||||||
Robert S. Kapito
|
| –
|
|
| –
|
| $
| 7,217
|
|
| –
|
| $
| 221,399
|
|
| — |
|
| — |
|
| $11,810 |
|
| — |
|
| $250,019 |
| ||||||||||
Robert L. Goldstein
|
| –
|
|
| –
|
| $
| 1,239,389
|
| $
| 258,776
|
| $
| 11,747,082
|
|
| — |
|
| — |
|
| $690,905 |
|
| $1,974,347 |
|
| $5,899,289 |
| ||||||||||
Mark S. McCombe
|
| –
|
|
| –
|
|
| –
|
|
| –
|
|
| –
|
| |||||||||||||||||||||||||
Mark Wiedman |
| — |
|
| — |
|
| $22,500 |
|
| — |
|
| $231,522 |
| |||||||||||||||||||||||||
Gary S. Shedlin
|
| –
|
|
| –
|
|
| –
|
|
| –
|
|
| –
|
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| ||||||||||
(1) | Represents earnings on balances in the VDCP (as |
Voluntary Deferred Compensation Plan
BlackRock maintains the 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.
BLACKROCK, INC. 2018 PROXY STATEMENT 71
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 7386 and 74,88, in each case assuming a termination of employment of the NEO on December 31, 2017.2020.
BLACKROCK, INC. 2021 PROXY STATEMENT | 85 |
Compensation Discussion and Analysis | 6. Executive Compensation Tables
Treatment of Outstanding Equity Awards Upon Termination of Employment or a Change in Control
Type of Award | Voluntary | Termination | Involuntary Termination Without Cause(1) | Qualified Retirement / Disability | Death | |||||||||||||
RSUs Granted as Part of Annual Incentive Awards (“Year-End Awards”) | Unvested | Unvested | If termination occurs within the one-year period following a change in control of BlackRock, the awards will vest at the time of termination. | Awards will continue to | Immediate vesting and settlement. | |||||||||||||
RSUs Granted as BPIP Awards | Unvested | Unvested | Awards will continue to be eligible to fully vest following the end of the performance period, subject to attainment of the applicable performance targets and non-engagement in any Competitive Activity prior to the vesting date. If termination occurs within the 12-month period following a change in control, awards granted will fully vest at target level. | Awards will continue to | Awards will continue | |||||||||||||
Performance-Based Option Awards | Unvested | Unvested | Awards will vest on a pro rata basis with respect to each tranche (based on length of service during the vesting period), plus a one-year service credit, and will remain exercisable through the full term, subject to achievement of the applicable performance conditions. The stock price hurdle was achieved on December 2, 2020. If termination occurs within the 12-month period following a change in control, awards will fully vest and remain exercisable through the full term. | QualifiedRetirement: Disability: Awards will | Awards will continue to be eligible to fully | |||||||||||||
(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 acquirer. If outstanding awards are not assumed or substituted, such awards would become vested at the time of the change in control (at target level for performance-based awards). |
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, 2017.2020. Accordingly, no amounts have been included in the table on page 7488 with respect to VDCP balances. For additional information, please refer to the “20172020 Nonqualified Deferred CompensationCompensation”” table above.on page 85.
Leadership Retention Carry Plan: No percentage points were granted under the Leadership Retention Carry Plan to any of our NEOs in 2020. 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
72BLACKROCK, INC. 2018 PROXY STATEMENT
86 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Compensation Discussion and Analysis | 6. Executive Compensation Tables
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.
BLACKROCK, INC. 2021 PROXY STATEMENT | ![]() |
Treatment of Outstanding Equity Awards Upon Termination of Employment or a Change in Control
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BLACKROCK, INC. 2018 PROXY STATEMENT 73
Compensation Discussion and Analysis | 6. 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 31, 20172020, and are based on the closing price of BlackRock common stock on December 29, 2017,31, 2020, which was $513.71.$721.54. 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
| Involuntary Termination a Change in Control
| Death /Disability
| Qualified Retirement
|
Voluntary
| |||||||||||||||
Laurence D. Fink | ||||||||||||||||||||
Year-End Awards(1) | $ | 12,407,124 | $12,407,124 | $ | 12,407,124 | $ 12,407,124 | – | |||||||||||||
Challenge Awards(2) | $ | 12,494,455 | $12,494,455 | $ | 12,494,455 | $ 12,494,455 | – | |||||||||||||
BPIP Awards(3), (4), (5) | $ | 41,852,981 | $57,962,413 | $ | 63,118,520 | $ 63,118,520 | – | |||||||||||||
Severance(10)
| $
| 934,615
|
|
| $ 934,615
|
|
| –
|
|
| –
|
|
| –
|
| |||||
Total(11) | $ | 67,689,175 | $83,798,607 | $ | 88,020,099 | $ 88,020,099 | – | |||||||||||||
Robert S. Kapito | ||||||||||||||||||||
Year-End Awards(1) | $ | 9,434,798 | $ 9,434,798 | $ | 9,434,798 | $ 9,434,798 | – | |||||||||||||
Challenge Awards(2) | $ | 9,863,746 | $ 9,863,746 | $ | 9,863,746 | $ 9,863,746 | – | |||||||||||||
BPIP Awards(3), (4), (5) | $ | 31,780,155 | $44,052,687 | $ | 47,978,973 | $ 47,978,973 | – | |||||||||||||
Severance(10)
| $
| 778,846
|
|
| $ 778,846
|
|
| –
|
|
| –
|
|
| –
|
| |||||
Total(11) | $ | 51,857,545 | $64,130,077 | $ | 67,277,516 | $ 67,277,516 | – | |||||||||||||
Robert L. Goldstein | ||||||||||||||||||||
Year-End Awards(1) | $ | 5,806,978 | $ 5,806,978 | $ | 5,806,978 | $ 5,806,978 | – | |||||||||||||
Challenge Awards(2) | $ | 4,602,842 | $ 4,602,842 | $ | 4,602,842 | $ 4,602,842 | – | |||||||||||||
BPIP Awards(3), (4), (5) | $ | 6,932,003 | $ 9,615,624 | $ | 10,473,519 | $ 10,473,519 | – | |||||||||||||
Option Awards(6), (7), (8), (9) | $ | 3,859 | $ 22,720 | $ | 22,720 | – | – | |||||||||||||
Severance(10)
| $
| 461,538
|
|
| $ 461,538
|
|
| –
|
|
| –
|
|
| –
|
| |||||
Total(11) | $ | 17,807,219 | $20,509,701 | $ | 20,906,059 | $ 20,883,339 | – | |||||||||||||
Mark S. McCombe | ||||||||||||||||||||
Year-End Awards(1) | $ | 4,221,155 | $ 4,221,155 | $ | 4,221,155 | $ 4,221,155 | – | |||||||||||||
Challenge Awards(2) | $ | 3,156,234 | $ 3,156,234 | $ | 3,156,234 | $ 3,156,234 | – | |||||||||||||
BPIP Awards(3), (4), (5) | $ | 5,427,860 | $ 7,821,235 | $ | 8,585,635 | $ 8,585,635 | – | |||||||||||||
Option Awards(6), (7), (8), (9) | $ | 3,859 | $ 22,720 | $ | 22,720 | – | – | |||||||||||||
Severance(10)
| $
| 134,615
|
|
| $ 134,615
|
|
| –
|
|
| –
|
|
| –
|
| |||||
Total(11) | $ | 12,943,723 | $15,355,959 | $ | 15,985,744 | $ 15,963,025 | – | |||||||||||||
Gary S. Shedlin | ||||||||||||||||||||
Year-End Awards(1) | $ | 4,245,813 | $ 4,245,813 | $ | 4,245,813 | $ 4,245,813 | – | |||||||||||||
Challenge Awards(2) | $ | 3,945,293 | $ 3,945,293 | $ | 3,945,293 | $ 3,945,293 | – | |||||||||||||
BPIP Awards(3), (4), (5) | $ | 6,153,732 | $ 8,512,175 | $ | 9,265,787 | $ 9,265,787 | – | |||||||||||||
Option Awards(6), (7), (8), (9) | $ | 2,894 | $ 17,040 | $ | 17,040 | – | – | |||||||||||||
Severance(10)
| $
| 115,385
|
|
| $ 115,385
|
|
| –
|
|
| –
|
|
| –
|
| |||||
Total(11)
| $
| 14,463,117
|
|
| $16,835,705
|
| $
| 17,473,933
|
|
| $17,456,893
|
|
| –
|
|
Name | Involuntary Termination Without Cause | Involuntary Termination Without Cause Following a | Qualified Retirement / Disability / Death | Voluntary Resignation / Termination for Cause | ||||||||||||
Laurence D. Fink | ||||||||||||||||
Year-End Awards(1) |
| $12,683,230 |
|
| $12,683,230 |
|
| $12,683,230 |
|
| — |
| ||||
BPIP Awards(2), (3), (4) |
| $57,521,169 |
|
| $50,592,220 |
|
| $57,521,169 |
|
| — |
| ||||
Severance(9) |
| $1,557,692 |
|
| $1,557,692 |
|
| — |
|
| — |
| ||||
Total(11) |
| $71,762,091 |
|
| $64,833,142 |
|
| $70,204,399 |
|
| — |
| ||||
Robert S. Kapito | ||||||||||||||||
Year-End Awards(1) |
| $10,328,124 |
|
| $10,328,124 |
|
| $10,328,124 |
|
| — |
| ||||
BPIP Awards(2), (3), (4) |
| $44,004,560 |
|
| $38,725,773 |
|
| $44,004,560 |
|
| — |
| ||||
Severance(9) |
| $1,298,077 |
|
| $1,298,077 |
|
| — |
|
| — |
| ||||
Total(10), (11) |
| $55,630,761 |
|
| $50,351,974 |
|
| $54,332,684 |
|
| — |
| ||||
Robert L. Goldstein | ||||||||||||||||
Year-End Awards(1) |
| $6,037,125 |
|
| $6,037,125 |
|
| $6,037,125 |
|
| — |
| ||||
BPIP Awards(2), (3), (4) |
| $14,771,367 |
|
| $12,909,072 |
|
| $14,771,367 |
|
| — |
| ||||
Option Awards(5), (6), (7), (8) |
| $15,290,774 |
|
| $22,507,848 |
|
| — |
|
| — |
| ||||
Severance(9) |
| $500,000 |
|
| $500,000 |
|
| — |
|
| — |
| ||||
Total(11) |
| $36,599,266 |
|
| $41,954,045 |
|
| $20,808,492 |
|
| — |
| ||||
Mark Wiedman | ||||||||||||||||
Year-End Awards(1) |
| $4,646,718 |
|
| $4,646,718 |
|
| $4,646,718 |
|
| — |
| ||||
BPIP Awards(2), (3), (4) |
| $12,300,814 |
|
| $10,727,135 |
|
| $12,300,814 |
|
| — |
| ||||
Option Awards(5), (6), (7), (8) |
| $15,290,774 |
|
| $22,507,848 |
|
| — |
|
| — |
| ||||
Severance(9) |
| $326,923 |
|
| $326,923 |
|
| — |
|
| — |
| ||||
Total(11) |
| $32,565,228 |
|
| $38,208,623 |
|
| $16,947,532 |
|
| — |
| ||||
Gary S. Shedlin | ||||||||||||||||
Year-End Awards(1) |
| $4,593,324 |
|
| $4,593,324 |
|
| $ 4,593,324 |
|
| — |
| ||||
BPIP Awards(2), (3), (4) |
| $10,863,506 |
|
| $9,492,580 |
|
| $10,863,506 |
|
| — |
| ||||
Option Awards(5), (6), (7), (8) |
| $11,468,009 |
|
| $16,880,782 |
|
| — |
|
| — |
| ||||
Severance(9) |
| $153,846 |
|
| $153,846 |
|
| — |
|
| — |
| ||||
Total(11) |
| $27,078,685 |
|
| $31,120,532 |
|
| $15,456,830 |
|
| — |
| ||||
(1) | This reflects an amount equal to (i) the number of unvested |
(2) |
74BLACKROCK, INC. 2018 PROXY STATEMENT
![]() |
BPIP Awards upon an involuntary termination without cause (other than following a change in control): |
88 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Compensation Discussion and Analysis | 6. Executive Compensation Tables
(3) | BPIP Awards upon an involuntary termination without cause within 12 months following a change in control: |
BPIP Awards upon a termination due to death, disability or qualified retirement: For the January |
In the fourth quarter of 2017, we implemented a key strategic part of our long-term management succession plans 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. |
Option Awards upon an involuntary termination without cause: |
Option Awards upon a termination without cause within 12 months following a change in control or due to death or disability: |
(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 31, |
(10) | 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, 2020, and initial distribution date of June 30, 2021. |
(11) | Total values forYear-End |
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 2017,2020, our last completed fiscal year:
The median of the annual total compensation of all employees of our Company (other than our CEO) was $141,987;$147,417; and
The annual total compensation of our CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $27,743,233.$27,356,432.
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 195:186:1. This result is broadly consistent with our historical pay practices.
20172020 CEO Pay Ratio=195: 186:1
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, |
BLACKROCK, INC. 2018 PROXY STATEMENT 75
2. | Identification of Median Employee.To identify the “median employee” from our employee population, we reviewed |
We identified our median employee using this compensation measure, which was consistently applied to all our employees included in the |
BLACKROCK, INC. 2021 PROXY STATEMENT | 89 |
Compensation Discussion and Analysis | CEO Pay Ratio for 2020
3. | Calculation of Annual Total Compensation.Once we identified our median employee, we combined all |
For our CEO’s annual total compensation, we used the amount reported in the “Total” column (column (j)) of our |
Equity Compensation Plan Information
The following table summarizes information, as of December 31, 2017,2020, 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
| Weighted-average
| Number of securities
| 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 | 5,913,094 | (1) | $513.50 | (2) | 2,438,646 |
| 4,755,939(1) |
|
| $513.50(2) |
| 6,068,624 | ||||||||||||
Amended and Restated BlackRock, Inc. Employee Stock Purchase Plan
|
| –
|
|
| N/A
|
|
| 542,359
| (3)
|
| — |
|
| N/A |
| 437,686(3) | ||||||||
Total Approved by Shareholders
|
| 5,913,094
|
|
| 2,981,005
|
|
| 4,755,939 |
|
|
| 6,506,310 |
| |||||||||||
Not Approved |
|
|
| |||||||||||||||||||||
None
|
| –
|
|
| N/A
|
|
| –
|
|
| — |
|
| N/A |
|
| — |
| ||||||
Total Not Approved by Shareholders
|
| –
|
|
| N/A
|
|
| –
|
|
| — |
|
| N/A |
|
| — |
| ||||||
Total
|
| 5,913,094
|
|
| 2,981,005
|
|
| 4,755,939 |
|
|
| 6,506,310 |
|
(1) | Includes |
(2) | Represents the weighted-average exercise price of stock options only. |
(3) | Includes |
76BLACKROCK, INC. 2018 PROXY STATEMENT
Approval of an Amendment to the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan
BlackRock is asking shareholders to approve an amendment to the Stock Plan (the “Stock Plan Amendment”) to increase the number of shares of common stock, par value $0.01 per share, authorized for issuance under the Stock Plan from 34,500,000 to 41,500,000 shares. The Board believes that the existing number of shares available under the Stock Plan will not be sufficient to meet BlackRock’s anticipated needs to support our equity compensation plan beyond 2018.
The increase in the number of shares available under the Stock Plan will allow the Board to continue to provide equity incentive awards as part of ourpay-for-performance compensation program. The Board also believes that the combination of short-term and long-term incentives is essential to maintain a competitive compensation program aligned with shareholder interests and attract, reward and retain top talent.
The Stock Plan enables the Compensation Committee to make discretionary stock option, stock appreciation, restricted stock, restricted stock unit, dividend equivalent and other long-term stock-based or cash-based awards to selected employees andnon-employee directors of, and other individuals performing advisory or consulting services to, BlackRock and its present or future affiliates.
This proposal is being submitted to BlackRock’s shareholders in compliance with the NYSE Corporate Governance Standards concerning shareholder approval of equity compensation plans and/or material revisions to these plans.
While equity incentive awards are an important part of our pay-for-performance compensation program, the Board and the Compensation Committee are mindful of their responsibility to our shareholders to exercise judgment in granting equity-based awards. We review a number of metrics to assess the cumulative impact of our equity compensation programs, including burn rate and overhang.
The annual share usage under the Stock Plan for the last three fiscal years was as follows:
2015
| 2016
| 2017(3)
| ||||||||||
Burn rate(1)
|
| 0.99
| %
|
| 1.13
| %
|
| 2.19
| %
| |||
Overhang(2)
|
| 7.09
| %
|
| 6.00
| %
|
| 4.98
| %
|
BLACKROCK, INC. 2018 PROXY STATEMENT 77
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Summary of the Material Features of the Stock Plan and Stock Plan Amendment
The following summary of the material features of the Stock Plan, as amended by the Stock Plan Amendment, does not purport to be complete and is qualified by the specific provisions of the Stock Plan and the Stock Plan Amendment, copies of which are available to any shareholder of BlackRock upon written request to the Corporate Secretary of BlackRock at BlackRock’s principal executive offices. Requests for copies should be addressed to:
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A copy of the Stock Plan is also included as Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and filed with the SEC on February 26, 2016. Please also see Annex B for a copy of the Stock Plan Amendment.
Shares Available
An aggregate of 34,500,000 shares of common stock is currently authorized for issuance under the Stock Plan. As of March 31, 2018, awards representing 5,288,393 shares of common stock were outstanding under the Stock Plan (which, for BPIP Awards, includes the base number of RSUs granted) and 1,469,022 shares of common stock remained available for grant. If BlackRock shareholders approve this proposal, an aggregate of 41,500,000 shares of BlackRock common stock will be authorized for grant under the Stock Plan and 8,469,022 shares of common stock will remain available for grant.
Annual Limits: No more than 4,000,000 shares of common stock may be covered by stock-based awards granted to any single individual in any plan year under the Stock Plan. In addition, the aggregate maximum value of all awards granted to non-employee director in any plan year under the Stock Plan (including any awards made at the election of a non-employee director in lieu of cash retainer fees) may not exceed $2,000,000.
The number of shares of common stock authorized for issuance under the Stock Plan, as well as the number of shares subject to outstanding awards and the annual limitation on grants to any single individual, are subject to equitable adjustment upon the occurrence of any stock dividend or other distribution, recapitalization, stock split, reverse split, reorganization, merger, consolidation,spin-off, combination, repurchase or share exchange or other similar corporate transaction or event.
The closing price of a share of the common stock on the NYSE on March 29, 2018 was $541.72.
Stock Plan Administration
The Compensation Committee administers the Stock Plan. The Compensation Committee consists exclusively of directors who are“non-employee directors” for purposes of Rule16b-3 of the Exchange Act and “outside directors” for purposes of Section 162(m) of the Internal Revenue Code. The Compensation Committee has authority under the Stock Plan to:
Eligibility
Grants of awards may be made under the Stock Plan to (i) employees of BlackRock or any of its affiliates, (ii) non-employee members of the Board and (iii) other individuals performing advisory or consulting services for BlackRock or any of its affiliates, in each case as determined and designated by the Compensation Committee. In exercising its discretion to select eligible individuals to participate in the Stock Plan, the Compensation Committee takes into account, among other factors, the need to incentivize eligible individuals to continue as employees, members of the Board, or other service providers, increase their efforts on behalf of BlackRock, and promote the success of BlackRock’s business.
As of March 31, 2018, (i) approximately 14,000 employees of BlackRock and its affiliates were eligible for awards under the Stock Plan, of which 3,428 had been selected by the Compensation Committee for participation in and had received awards under the Stock Plan, (ii) 17
78BLACKROCK, INC. 2018 PROXY STATEMENT
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non-employee members of the Board were eligible for awards under the Stock Plan, of which 17 had been selected by the Compensation Committee for participation in and had received awards under the Stock Plan and (iii) 6 independent contractors were eligible for awards under the Stock Plan, of which 6 had been selected by the Compensation Committee for participation in and had received awards under the Stock Plan.
Stock Options and Appreciation Rights
Stock option awards may be either “incentive stock options,” as defined in Section 422 of the Internal Revenue Code, or nonqualified stock options. Incentive stock options may be granted only to employees. The exercise price of an option may not be less than the fair market value per share of common stock on the date of grant (except for options assumed in a corporate transaction). The Compensation Committee may provide for payment of the exercise price of a stock option in cash or cash equivalents, by an exchange of stock previously owned by the grantee or through a broker-dealer facilitated cashless exercise procedure.
Stock appreciation rights may be granted alone or together with stock options. A stock appreciation right is a right to be paid an amount equal to the excess of the fair market value of a share of common stock on the date the stock appreciation right is exercised over either the fair market value of a share of common stock on the date of grant (in case of a free-standing stock appreciation right) or the exercise price of the related stock option (in case of a tandem stock appreciation right). Payment can be made in cash, common stock or both, as specified in the award agreement or as determined by the Compensation Committee.
Stock options and stock appreciation rights are exercisable at such times and upon such conditions as the Compensation Committee may determine, as reflected in the applicable award agreement. The Compensation Committee determines the exercise period except that, in the case of an option, the exercise period may not exceed ten years from the date of grant of the option.
Except to the extent that the Compensation Committee or applicable award agreement provides otherwise, in the event of the termination of employment of an employee or other service relationship, the right to exercise stock options and stock appreciation rights held by such employee or other service provider will cease.
Dividend equivalent rights may not be granted with respect to options or stock appreciation rights.
Restricted Stock and Restricted Stock Units
An Restricted Stock award is an award of common stock and an Restricted Stock Unit award is an award of the right to receive cash or common stock at a future date. In each case, the award is subject to restrictions on transferability and such other restrictions, if any, as the Compensation Committee may impose at the date of grant. The restrictions may lapse separately or in combination at such times, under such circumstances, including, without limitation, a specified period of employment or the satisfaction ofpre-established performance goals, in such installments, or otherwise, as the Compensation Committee may determine. Except to the extent provided in the applicable award agreement, a participant granted Restricted Stock will have all of the rights of a shareholder, including, without limitation, the right to vote and the right to accrue dividends equal to the dividends paid on shares of common stock. If provided in the applicable award agreement, a holder of Restricted Stock Units will be entitled to dividend equivalents with respect to such RSUs. Dividends or dividend equivalents accrued with respect to Restricted Stock or Restricted Stock Units, respectively, will be paid out only if, and to the extent that, the underlying Restricted Stock or Restricted Stock Unit vests.
Upon termination of employment or other service relationship during the applicable restriction period, shares of Restricted Stock, Restricted Stock Units and accrued but unpaid dividends or dividend equivalents, as applicable, that are subject to restrictions will be forfeited unless the award agreement provides otherwise. Subject to the terms of the Stock Plan, the Compensation Committee can determine that restrictions or forfeiture conditions relating to Restricted Stock or Restricted Stock Units will be waived in whole or in part in the event of terminations resulting from specified causes and the Compensation Committee may in other cases waive in whole or in part the forfeiture of Restricted Stock or Restricted Stock Units.
Other Stock-Based or Cash-Based Awards
The Compensation Committee is also authorized to grant “other stock-based awards” and “cash-based awards”. The Compensation Committee will determine the form of other stock-based awards and cash-based awards that may be awarded under the Stock Plan, as well as all of the terms and conditions applicable to these awards, including whether the vesting or payment of an award will be based on the attainment of one or more performance goals. Other stock-based awards will be valued in whole or in part by reference to, or will be otherwise based on, shares of common stock. Other stock-based awards may be granted alone or in addition to other awards under the Stock Plan. The maximum payment that any executive officer may receive pursuant to a “cash-based award” that is subject to performance goals in any plan year shall be $10,000,000.
BLACKROCK, INC. 2018 PROXY STATEMENT 79
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Minimum Vesting
An award granted under the Stock Plan after it becomes effective will not vest prior to the first anniversary of the date of grant of the Award. However, the Compensation Committee may grant awards that vest within one year following the date of grant under the following circumstances:
Under the Stock Plan, up to 5% of the shares of stock authorized for issuance under the Plan may provide for vesting within one year following the date of grant.
Change in Control
Unless otherwise provided in an award agreement or other agreement between the Company and the grantee, in the event of a “change in control” (as defined in the Stock Plan):
An award will be considered assumed or substituted in connection with a change in control if, following the change in control, the award is of substantially comparable value and remains subject to substantially the same terms and conditions that were applicable to the award prior to the change in control; provided, that, if applicable, following the change in control, an award will be deemed assumed if it relates to shares of stock of the acquiring or ultimate parent entity.
Performance Goals
To the extent the Compensation Committee grants an award under the Stock Plan with payment or vesting based on the attainment of one or more performance goals, such payment or vesting is permitted if, and only to the extent that, the performance goals established by the Compensation Committee are met. The performance goals may relate to the performance of BlackRock, a subsidiary, affiliate, division or strategic business unit or any combination thereof.
The performance goals will be based on one or more of the following criteria:
|
| |||
|
Where applicable, the performance goals may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to the performance of BlackRock relative
80BLACKROCK, INC. 2018 PROXY STATEMENT
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to a market index, a group of other companies or a combination thereof, all as determined by the Compensation Committee. The performance goals may include a threshold level of performance below which no payment will be made, levels of performance at which specified payments will be made and a maximum level of performance above which no additional payment will be made. To the extent possible, each of the foregoing performance goals will be determined in accordance with GAAP. The performance measure or measures and the performance goals established by the Compensation Committee may be different for different fiscal years and different goals may be applicable to BlackRock and its subsidiaries and affiliates.
Clawback
In addition to any forfeiture provisions otherwise applicable to an award, a grantee’s right to payment or benefits with respect to an award is subject to reduction, cancellation, forfeiture, clawback or recoupment under BlackRock’s clawback policies or as required by applicable law.
Transferability
Except as otherwise determined by the Compensation Committee, awards granted under the Stock Plan may be transferred only by will or by the laws of descent and distribution.
Amendment and Termination
The Stock Plan may be altered, amended, suspended or terminated by the Board, in whole or in part, except that no amendment that requires shareholder approval in order for the Stock Plan to continue to comply with state law, stock exchange requirements or other applicable law will be effective unless the amendment has received the required shareholder approval. In addition, no amendment may be made that adversely affects any of the rights of any award holder previously granted an award without the holder’s consent. The Stock Plan will terminate on May 28, 2025.
Registration
We intend to file with the SEC a registration statement on Form S-8 covering the increase in the number of shares of common stock authorized for issuance under the Stock Plan.
United States Federal Income Tax Information
The following summary is intended as a general guide to the United States federal income tax consequences relating to the issuance and exercise of stock options granted under the Stock Plan. This summary does not attempt to describe all possible federal or other tax consequences of such grants or tax consequences based on particular circumstances.
Incentive Stock Options
An optionee generally recognizes no taxable income for income tax purposes as the result of the grant or exercise of an incentive stock option qualifying under Section 422 of the Internal Revenue Code. Optionees who neither dispose of their shares (“ISO shares”) within two years after the stock option grant date nor within one year after the exercise date normally will recognize a long-term capital gain or loss equal to the difference, if any, between the sale price and the amount paid for the ISO shares. If an optionee disposes of the ISO shares within two years after the stock option grant date or within one year after the exercise date (each a “disqualifying disposition”), the optionee will realize ordinary income at the time of the disposition in an amount equal to the excess, if any, of the fair market value of the ISO shares at the time of exercise (or, if less, the amount realized on such disqualifying disposition) over the exercise price of the ISO shares being purchased. Any additional gain will be capital gain, taxed at a rate that depends upon the amount of time the ISO shares were held by the optionee. BlackRock will be entitled to a deduction in connection with the disposition of the ISO shares only to the extent that the optionee recognizes ordinary income on a disqualifying disposition of the ISO shares.
Nonstatutory Stock Options
An optionee generally recognizes no taxable income as the result of the grant of a nonstatutory stock option. Upon the exercise of a nonstatutory stock option, the optionee normally recognizes ordinary income equal to the difference between the stock option exercise price and the fair market value of the shares on the exercise date. If the optionee is a BlackRock employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of stock acquired by the exercise of a nonstatutory stock option, any subsequent gain or loss, generally based on the difference between the sale price and the fair market
|
value on the exercise date, will be taxed as capital gain or loss. BlackRock generally is entitled to a deduction equal to the amount of ordinary income recognized by the optionee as a result of the exercise of a nonstatutory stock option.
Additional Information
Future grants under the Stock Plan will be made at the discretion of the Compensation Committee and, accordingly, are not yet determinable. In addition, benefits under the Stock Plan will depend on a number of factors, including the fair market value of common stock on future dates and the exercise decisions made by optionees. Consequently, it is not possible to determine the benefits that might be received by participants under the Stock Plan.
For information relating to the grants under the Stock Plan for the last fiscal year to BlackRock’s NEOs, see the “2017 Grants of Plan-Based Awards Table” on page 69.
Board Recommendation
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82BLACKROCK, INC. 2018 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 14, 2018,23, 2021, the Audit Committee appointed Deloitte to serve as BlackRock’s independent registered public accounting firm for the 20182021 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. 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 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.
Although ratification is not required by our Bylaws or otherwise, the Board is submitting the appointment of Deloitte 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 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. 2018 PROXY STATEMENT 83
BLACKROCK, INC. 2021 PROXY STATEMENT |
| 91 |
Item 3: Ratification of the Appointment of the Independent Registered Public Accounting Firm | Fees Incurred by BlackRock for Deloitte
Fees Incurred by BlackRock for Deloitte
Aggregate fees incurred by BlackRock for the fiscal years ended December 31, 20172020 and 2016,2019, for BlackRock’s independent registered public accounting firm, Deloitte, the member firms of Deloitte Touche Tohmatsu Limited, and their respective affiliates, are set forth below.
2017
| 2016
| |||||||||||||||
2020 | 2019 | |||||||||||||||
Audit Fees(1)
| $
| 13,922,000
|
| $
| 15,626,000
|
|
| $19,601,000 |
|
| $18,362,000 |
| ||||
Audit-Related Fees(2)
| $
| 4,315,000
|
| $
| 4,246,000
|
|
| $4,663,000 |
|
| $3,892,000 |
| ||||
Tax Fees(3)
| $
| 1,277,000
|
| $
| 1,243,000
|
|
| $964,000 |
|
| $1,432,000 |
| ||||
All Other Fees(4)
| $
| 1,041,000
|
| $
| 462,000
|
|
| $643,000 |
|
| $765,000 |
| ||||
Total
| $
| 20,555,000
|
| $
| 21,577,000
|
|
| $25,871,000 |
|
| $24,451,000 |
|
(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 on Forms 10-K and 10-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 SEC. Audit fees also included fees for the audit opinion rendered regarding the effectiveness of internal control over financial reporting and audits of certain sponsored funds. |
(2) | Audit-Related Fees consisted principally of assurance and related services pursuant to Statement on Standards for Attestation Engagements (SSAE) No. 18 and International Standard on Assurance Engagements (ISAE) 3402, fees for employee benefit plan audits, attestation services for Global Investment Performance Standards (GIPS®) verification and other assurance engagements. |
(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. |
Excluded from the amounts reported above, 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 $22,477,539$25,200,000 and $19,325,652$25,000,000 for the fiscal years ended December 31, 20172020 and 2016,2019, respectively. Such fees do not include fees paid to Deloitte by registered investment companies.
Audit CommitteePre-Approval Policy
In accordance with BlackRock’s Audit CommitteePre-Approval Policy (the“Pre-Approval Policy”), all services 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 was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The responsibility for pre-approval of audit and permitted non-audit services includes pre-approval of the fees for such services. Periodically, theThe 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 any pre-approval decisions under the Pre-Approval Policy to the Audit Committee at its next scheduled meeting.
Board Recommendation
|
84BLACKROCK, INC. 2018 PROXY STATEMENT
92 | BLACKROCK, INC. 2021 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 Committees – The Audit Committee” under “Item 1 – Election of 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 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 GAAP 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, BlackRock’s independent registered public accounting firm for 2017.2020.
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, 20172020 for filing with the SEC.
MEMBERS OF THE AUDIT COMMITTEE
Pamela Daley, Chair
Mathis Cabiallavetta
William E. Ford
Murry S. Gerber
Sir Deryck Maughan
Ivan G. SeidenbergMargaret “Peggy” L. Johnson
Marco Antonio Slim Domit
Susan L. Wagner
BLACKROCK, INC. 2018 PROXY STATEMENT 85
BLACKROCK, INC. 2021 PROXY STATEMENT | 93 |
Approval of Amendments
to Our Charter
Our Governance Committee has reviewed our Charter to determine whether any changes were necessary, appropriate or desirable in light of PNC exiting its investment in BlackRock in May 2020. In connection with and as a result of that review and the Governance Committee’s recommendations, on September 30, 2020, the Board adopted, and recommends that our shareholders approve, amendments to the Charter to:
provide shareholders of record owning 15% or more of the voting power of all outstanding shares of stock of the Company the ability to call a special meeting of shareholders (Item 4A);
eliminate supermajority voting requirements relating to the amendment of certain articles of the Charter (Item 4B); and
eliminate provisions relating to the “Significant Stockholder” (as defined in the Charter), which are no longer applicable, and make certain other technical revisions (Item 4C).
The amendments, which require shareholder approval, are described in greater detail on the following pages.
94 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Items 4A-4C: Approval of Amendments to Our Charter | The Special Meeting Amendment
Item 4A:
Approval of an Amendment to Our Charter to Provide Shareholders the Right to Call Special Meetings
The Board has unanimously adopted and declared advisable, and recommends that our shareholders approve, an amendment (the “Special Meeting Amendment”) to our Charter to provide shareholders with the right to call special meetings of shareholders.
The Special Meeting Amendment
Shareholders do not currently have the right to call a special meeting. Under the existing Charter, Article Fifth, Section A(2) provides that special meetings may be called only by the Chairman of the Board, the President of the Company, a majority of the Board, or any committee of the Board that has the power and authority to call special meetings of shareholders.
If the Special Meeting Amendment is approved by shareholders and becomes effective (as described below), Article Fifth, Section A(2) of the Charter will be amended to provide that one or more record holders of the Company’s stock representing ownership of not less than 15% of the voting power of all outstanding shares of common stock in the Company who comply with all of the applicable requirements and procedures set forth in our Bylaws would have the ability to require the Company to call a special meeting of shareholders. The Special Meeting Amendment will not impact our Board’s existing authority to call special meetings of shareholders.
The text of the Special Meeting Amendment, with proposed deletions reflected by “strike-through” text and proposed additions reflected by “underline” text, is set forth in Annex C. This summary of the Special Meeting Amendment is qualified in its entirety by reference to Annex C.
Purpose and Effect of the Special Meeting Amendment
The Special Meeting Amendment is a result of the Board’s and the Governance Committee’s ongoing review of our corporate governance practices and policies. In considering the Special Meeting Amendment, the Board and the Governance Committee carefully considered the implications of amending our Charter to provide shareholders the right to call special meetings.
Our Board believes the proposed Special Meeting Amendment strikes an appropriate balance between enhancing shareholder rights and adequately protecting shareholder interests. The Board recognizes that providing shareholders the ability to call special meetings is an important corporate governance practice. However, special meetings of shareholders can be potentially disruptive to business operations and to long-term shareholder interests and can cause the Company to incur substantial expenses. Accordingly, the Board believes the 15% threshold for calling special meetings of shareholders balances these considerations and ensures that special meetings are not used to the detriment of shareholders.
In light of these considerations, and upon recommendation of the Governance Committee, the Board adopted resolutions declaring it advisable to approve the Special Meeting Amendment, and resolved to submit the Special Meeting Amendment to our shareholders for consideration.
Overview of Related Changes to the Bylaws
If the Special Meeting Amendment is approved by the shareholders and becomes effective, the Bylaws will be amended to specify the requirements and procedures for shareholder-requested special meetings. Below is a summary of the expected Bylaw amendment (the “Special Meeting Bylaw Amendment”). The Special Meeting Bylaw Amendment sets forth certain procedural requirements that the Board believes are appropriate to avoid duplicative or unnecessary special meetings.
A shareholder-requested special meeting would have to be held not more than 120 days after the Company receives a valid special meeting request. Among other things, a special meeting request would need to be accompanied by the following:
A statement setting forth the purpose of the meeting;
The information required by the advance notice bylaw provisions;
BLACKROCK, INC. 2021 PROXY STATEMENT | 95 |
Items 4A-4C: Approval of Amendments to Our Charter | Overview of Related Changes to the Bylaws
A representation that one or more of the requesting shareholders (or a representative) intends to attend the special meeting to present the proposal(s);
An agreement to notify the Company in the event that any of the requesting shareholders disposes of shares of Company stock before the record date and an acknowledgement that any such disposition will be deemed to be a revocation of the special meeting request with respect to such disposed shares; and
The number of shares of stock owned by each requesting shareholder and documentary evidence demonstrating that the requesting shareholders in the aggregate own the requisite percentage of shares.
In addition, a special meeting request would not be valid if:
The special meeting request does not comply with the Bylaws;
The special meeting request relates to an item of business that is not a proper subject for shareholder action under applicable law (as determined in good faith by the Board);
The special meeting request is delivered within 120 days of the anniversary date of the previous annual meeting;
An identical or substantially similar item (as determined in good faith by the Board, a “Similar Item”), other than the election of directors, was presented at an annual or special meeting held not more than 12 months before the special meeting request is delivered;
A Similar Item (including the election of directors) was presented at an annual or special meeting held not more than 120 days before the special meeting request is delivered;
A Similar Item is included in the Company’s notice of meeting as an item of business to be brought before an annual or special meeting that has been called but not yet held, or that is called for a date within 120 days of the receipt of a special meeting request; or
The special meeting request was made in a manner that involved a violation of law.
The Special Meeting Bylaw Amendment would specify that the business to be transacted at a shareholder-requested special meeting would be limited to the business stated in a valid special meeting request and any additional business that the Board determines to include in the notice for such special meeting.
Required Vote and Impact of Vote
The affirmative vote of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting is required for the approval of Item 4A. Abstentions and broker “non-votes” will both have the same effect as a vote “against” this matter.
If shareholders approve the Special Meeting Amendment by the requisite vote, the Special Meeting Amendment will become effective upon the filing of a Certificate of Amendment with the Secretary of State of the State of Delaware, which we will file promptly following the Annual Meeting.
If shareholders do not approve the Special Meeting Amendment by the requisite vote, the Certificate of Amendment setting forth the Special Meeting Amendment will not be filed with the Secretary of State of the State of Delaware and shareholders will not have the ability to require the Company to call a special meeting of shareholders.
Board Recommendation
96 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Items 4A-4C: Approval of Amendments to Our Charter | The Supermajority Elimination Amendment
Item 4B:
Approval of an Amendment to Our Charter to Eliminate Supermajority Voting Requirements
The Board has unanimously adopted and declared advisable, and recommends that our shareholders approve, an amendment (the “Supermajority Elimination Amendment”) to our Charter to eliminate supermajority voting requirements.
Currently, our Charter provides that certain amendments to the Charter require the affirmative vote of at least 75% of the outstanding shares of our common stock (the “75% Supermajority Voting Requirement”) or the affirmative vote of at least 80% of the outstanding shares of our common stock (the “80% Supermajority Voting Requirement,” and, together with the 75% Supermajority Voting Requirement, the “Supermajority Voting Requirements”).
Specifically, Article Thirteenth, Section A(2) of the Charter provides that the 80% Supermajority Voting Requirement is required to amend:
Certain provisions that are no longer applicable relating to any “Significant Stockholder” and “Affiliated Companies,” both as defined in the Charter (Article Ninth); and
The provisions relating to bylaw amendments, including that amendments may be approved by shareholders holding a majority of our outstanding shares (Article Twelfth).
In addition, Article Thirteenth, Section (B) of the Charter provides that any alteration, amendment or repeal of the Charter provision relating to Charter amendments (Article Thirteenth), or the adoption of any provision inconsistent with Article Thirteenth, must be approved pursuant to the 75% Supermajority Voting Requirement.
The Supermajority Elimination Amendment
Although the Board previously viewed the Supermajority Voting Requirements as protective of shareholders and appropriate given the significant ownership stake of PNC, the Board and Governance Committee reviewed these provisions in light of PNC’s exit of its investment in the Company. Accordingly, the Board approved and declared advisable, and recommends that shareholders approve, the amendment and restatement of Article Thirteenth to remove the Supermajority Voting Requirements contained therein.
The text of the Supermajority Elimination Amendment, with proposed deletions reflected by “strike-through” text and proposed additions reflected by “underline” text, is set forth in Annex D. This summary of the Supermajority Elimination Amendment is qualified in its entirety by reference to Annex D.
If the amendment is approved and becomes effective (as described below), future amendments to the Charter provisions referenced above will not be subject to the Supermajority Voting Requirements and will instead require the affirmative vote of a majority of the outstanding shares of our common stock.
Required Vote and Impact of Vote
The affirmative vote of at least 75% of the outstanding shares of our common stock entitled to vote at the Annual Meeting is required for the approval of Item 4B. Abstentions and broker “non-votes” will have the same effect as a vote “against” this matter.
If shareholders approve the Supermajority Elimination Amendment by the requisite vote, the Supermajority Elimination Amendment will become effective upon the filing of a Certificate of Amendment with the Secretary of State of the State of Delaware, which we will file promptly following the Annual Meeting.
If shareholders do not approve the Supermajority Elimination Amendment by the requisite vote, the Certificate of Amendment setting forth the Supermajority Elimination Amendment will not be filed with the Secretary of State of the State of Delaware and the Supermajority Voting Requirements will remain in the Charter.
Board Recommendation
BLACKROCK, INC. 2021 PROXY STATEMENT | 97 |
Items 4A-4C: Approval of Amendments to Our Charter | The Charter Updating Amendments
Item 4C:
Approval of Amendments to Our Charter to Eliminate Provisions that are No Longer Applicable and Make Other Technical Revisions
The Board has unanimously adopted and declared advisable, and recommends that our shareholders approve, amendments to several provisions (the “Charter Updating Amendments”) of our Charter to eliminate provisions that are no longer applicable and make other technical revisions.
The Charter Updating Amendments
Currently, our Charter contains several provisions related to PNC’s former investment in the Company and related to the PNC Stockholder Agreement that are no longer applicable. The Charter Updating Amendments would delete references to the Stockholder Agreement and the “Significant Stockholder” throughout the Charter as well as eliminate Article Ninth in its entirety, which relates to “Significant Stockholders,” corporate opportunity and the relationship between the Company and PNC.
In addition, the Charter Updating Amendments would make certain other technical revisions, including:
Deleting defined terms that are no longer applicable;
Deleting a reference to the Company’s previously classified Board (Article Sixth, Sections C and D); and
Renumbering Articles and sections in light of various deletions.
The text of the Charter Updating Amendments, with proposed deletions reflected by “strike-through” text and proposed additions reflected by “underline” text, is set forth in Annex E. This summary of the Charter Updating Amendments is qualified in its entirety by reference to Annex E.
Required Vote and Impact of Vote
The affirmative vote of at least 80% of the outstanding shares of our common stock entitled to vote at the Annual Meeting is required for the approval of Item 4C. This is because the Charter Updating Amendments include amendments to Articles Ninth and Twelfth, which currently are subject to the 80% Supermajority Vote Requirement described under Item 4B. Abstentions and broker “non-votes,” if any, will have the same effect as a vote “against” this matter.
If shareholders approve the Charter Updating Amendments by the requisite vote, the Charter Updating Amendments will become effective upon the filing of a Certificate of Amendment with the Secretary of State of the State of Delaware, which we will file promptly following the Annual Meeting.
If shareholders do not approve the Charter Updating Amendments by the requisite vote, the Certificate of Amendment setting forth the Charter Updating Amendments will not be filed with the Secretary of State of the State of Delaware and the certain inapplicable provisions will remain in the Charter and the other technical revisions will not be made to the Charter.
Board Recommendation
98 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Shareholder Proposal –
Production of an Annuala Report on Certain Trade Association and Lobbying Expendituresthe
The Unitarian Universalist Association (“UUA”), 24 Farnsworth Street, Boston, MA 02210-1409,“Statement on the Purpose of a
Corporation”
Fortunat & Shoshana Mueller, the holder of 15017 shares of common stock and represented by As You Sow, 2150 Kittredge Street, Suite 450, Berkeley, California 94704, has advised us that it intends to introduce the following resolution:resolution, which is co-sponsored by NJ Blessing Decd Tr Mar Rev GST EX (S):
Whereas, we believe: Our Company’s Chairman and Chief Executive Officer (CEO) Larry Fink, in full disclosure of BlackRock’s direct and indirect lobbying activities and expenditures to assess whether our company’s lobbying is consistent with its expressed goals and inAugust 2019, signed a Business Roundtable (BRT) “Statement on the best interests of stockholders.
Resolved, the stockholders of BlackRock request the preparationPurpose of a report, updated annually, disclosing:Corporation,” (Statement) committing our Company to serve all stakeholders including employees, customers, supply chain, communities where we operate, and shareholders.
The CEO has made other public statements underscoring the importance of a company’s public purpose. In his 2020 annual letter to CEOs Larry Fink wrote:
The importance of serving stakeholders and embracing purpose is becoming increasingly central to the way that companies understand their role in society . . . a company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders . . . . Ultimately, purpose is the engine of long-term profitability.1
BlackRock’s existing governance documents evolved in an environment of shareholder primacy. While the Statement may be beneficial to associate with our brand, the Statement as company policy may conflict with Delaware law and/or be interpreted as greenwashing or puffery unless integrated into Company governance documents, including bylaws, Articles of Incorporation, and/or Committee Charters.
The Company’s actions and policies should also integrate with the Statement. The Company currently engages in various actions that appear to contradict the 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.2 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 $17.6 billion USD.3 |
BlackRock’s 2020 publicly reported proxy voting record reveals consistent votes against virtually all climate-related resolutions (having voted for |
Although the Statement of Purpose implies accountability to stakeholders, without clear mechanisms in place to implement the Purpose, this broadened standard could reduceaccountability to shareholders while providing accountability to none.
Be it resolved: Shareholders request our Board prepare a report based on a review of the BRT Statement of the New 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, if at all, to fully implement the New 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;” linking related goals or metrics to executive or board compensation; providing for representation of stakeholders in governance of our Company.
1 | https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter |
2 | https://2degrees-investing.org/wp-content/uploads/2019/11/MASTER_Fossil_Fuel_Ownership_Nov_2018.pdf, p.2 |
3 | https://coalexit.org/sites/default/files/download_public/COP25_PR3.pdf, p.8 |
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 or other relevant oversight committees and posted on BlackRock’s website.
Supporting Statement
As stockholders, we encourage transparency and accountability in BlackRock’s use of corporate funds to influence legislation and regulation. Since 2010, BlackRock has spent over $18 million on federal lobbying. This figure does not include lobbying expenditures to influence legislation in states, where BlackRock also lobbies but disclosure is uneven or absent. For example, BlackRock spent $811,317 on lobbying in California from 2011 – 2016. And BlackRock CEO Laurence Fink has stated that “lobbying is really good because it is maximizing shareholder value” (“Unusual Debate at Davos: Lobbying, Maximizing Shareholder Value and the Duty of CEO’s,”ProMarket,April 1, 2016).
BlackRock lists memberships in the Investment Company Institute and the Securities Industry and Financial Markets Association, which together spent over $25 million on lobbying in 2015 and 2016. BlackRock is reportedly a member of the Chamber of Commerce (“Is the Most Powerful Lobbyist in Washington Losing Its Grip?”Washington Post, July 14, 2017), which spent more than $1.3 billion in lobbying since 1998, and is listed as a member of the Business Roundtable, which is lobbying against the right of shareholders to file resolutions. BlackRock does not comprehensively disclose its memberships in, or payments to, trade associations, nor the amounts used for lobbying.
We are concerned that BlackRock’s lack of trade association lobbying disclosure presents significant reputational risk. For example, BlackRock believes climate change risk is an investment issue, yet the Chamber undermined the Paris climate accord (“Paris Pullout Pits Chamber against Some of Its Biggest Members,”Bloomberg, June 9, 2017).
86BLACKROCK, INC. 2018 PROXY STATEMENT
BLACKROCK, INC. 2021 PROXY STATEMENT |
|
Item 5: Shareholder Proposal – Production of a Report on the “Statement on the Purpose of a Corporation” | The Board of Directors’ Statement in Opposition
The
|
We received a nearly identical proposal last year from Our leadership has long believed that embracing purpose is central to achieving a company’s full potential, and this concept has been highlighted and reemphasized in our 1. Delivering value to our clients. Our commitment to our clients’ interests is embodied in the five BlackRock Principles, which represent our core values and guide how we interact with each other and our stakeholders. These are: (1) We are a fiduciary to our clients; (2) We are One BlackRock; (3) We are passionate about performance; (4) We take emotional ownership; and (5) We are committed to a better future. As reflected in the BlackRock Principles, we are relentless about finding better ways to serve our clients and improve our firm. Our principles also reflect that we seek to manage our business sustainably and responsibly. 2. Investing in our employees. Our long-term sustainability depends on our 3. Dealing fairly and ethically with our suppliers. As noted on our Corporate Sustainability webpage, our Supplier Code of Conduct & Ethics (“Supplier Code”) 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. 4. Supporting the communities in which we work. Our Social Impact webpage details our philanthropic efforts, which date back many years and have consistently focused on furthering BlackRock’s 5. Generating long-term value for shareholders. In the last year, we
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BLACKROCK, INC. 2018 PROXY STATEMENT 87
100 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Item 5: Shareholder Proposal – Production of a Report on the “Statement on the Purpose of a Corporation” | The Board of Directors’ Statement in Opposition
We have also continued to demonstrate and communicate how BlackRock aims to serve the long-term interests of all stakeholders by publishing numerous reports and disclosures that establish how the principles of the BRT Statement are incorporated into our day-to-day business. These include: • Our “Where We Stand” report, which provides examples of how we pursue our purpose by, among other things, helping people build savings and making investing easier and more affordable. • Our Investment Stewardship team’s 2021 Global Principles and “Our Approach to Sustainability,” which provide information on how the team engages with companies on sustainability-related risks and on sustainable and responsible business practices that drive long-term value for our clients. Furthermore, our Corporate Sustainability webpage includes valuable information about our purpose, our latest TCFD, SASB and EEO-1 disclosures, our 2020 Carbon Footprint Factsheet, and is where our stakeholders can find detailed information on our actions with respect to ESG issues that overlap with the topics addressed in the BRT Statement. The Board’s Governance Committee reviewed and considered the proposal and found that there is no meaningful difference between how BlackRock operates and the BRT Statement. In reaching this determination, the Governance Committee considered the Company’s public statements, actions and commitments outlined above. In addition, our commitment to managing BlackRock with consideration to all stakeholders is incorporated into our governance systems. For example, in 2016, our Board amended the Company’s Corporate Governance Guidelines to specifically acknowledge that long-term value creation requires consideration of the concerns of our stakeholders and interested parties, including shareholders, clients, employees and the communities where we operate. Accordingly, the Board does not believe that a report based on a review of the BRT Statement is necessary because the Company already operates in accordance with the principles included in the BRT Statement with oversight and guidance by the Board, and provides significant disclosures to shareholders and the public about how it implements its purpose. |
Board Recommendation
BLACKROCK, INC. 2021 PROXY STATEMENT | 101 |
Shareholder Proposal – Amend Certificate of Incorporation to Convert to a Public Benefit Corporation
James McRitchie, 9295 Yorkship Court, Elk Grove, CA 95758, the holder of 25 shares of common stock, has advised us that he intends to introduce the following resolution:
ITEM 6 – Public Benefit Corporation Request
RESOLVED: Shareholders request our Board of Directors take steps necessary to amend our certificate of incorporation and, if necessary, bylaws (including presenting such amendments to the shareholders for approval) to become a public benefit corporation (a “PBC”).
Supporting Statement
The Company signed the Business Roundtable Statement on the Purpose of a Corporation (the “Statement”),1 which proclaims, “we share a fundamental commitment to all of our stakeholders. . . .We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
However, the Company is a conventional Delaware corporation, so that directors’ duties emphasize shareholders, not stakeholders (except to the extent they create value for shareholders). As one law firm reported to another signatory, directors of a conventional corporation may consider stakeholder interests only if “any decisions made with respect to such stakeholders are in the best interests of the corporation and its stockholders.”2 In contrast, directors of a PBC must “balance” the interests of shareholders, stakeholders, and a specified benefit,3 giving legal status to the Statement’s otherwise empty promise.
This distinction is critical. A recent study determined that listed companies create annual social and environmental costs of $2.2 trillion.4 These costs have many sources, including pollution, climate change and employee stress.5 A company required to balance stakeholder interests could prioritize lowering these costs, even if doing so sacrificed higher return.
These costs matter to our shareholders, the vast majority of whom are diversified. Indeed, as of September 2020, the Company itself, along with Vanguard and State Street, each of whom provides broadly diversified investment products, own almost 20% of the Company’s shares. Diversified shareholders suffer when companies follow Delaware’s “shareholder primacy” model and harm the economy, because the relationship between GDP and the value of a diversified portfolio is positively correlated over time.6 While the Company may profit by ignoring costs that it can externalize, its diversified shareholders ultimately internalize them and may prefer different governance.
1 | https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that- serves-all-americans |
2 | https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2020/harringtonwellsfargo021220-14a8.pdf (emphasis added.) |
3 | 8 Del C, §365. |
4 | https://www.schroders.com/en/sysglobalassets/digital/insights/2019/pdfs/sustainability/sustainex/sustainex-short.pdf |
5 | Id. |
6 | See Universal Ownership: Why Environmental Externalities Matter to Institutional Investors, Appendix IV (demonstrating linear relationship between GDP and a diversified portfolio) available at https://www.unepfi.org/fileadmin/documents/universal_ownership_full.pdf; cf. https://www.advisorperspectives.com/dshort/updates/2020/11/05/market-cap-to-gdp-an-updated-look-at-the-buffett-valuation- indicator (total market capitalization to GDP “is probably the best single measure of where valuations stand at any given moment”) (quoting Warren Buffet). |
102 |
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Item 6: Shareholder Proposal – Public Benefit Corporation | The Board of Directors’ Statement in Opposition
This issue is especially cogent for the Company, an investment manager with more than $7 trillion under management, heavily weighted towards indexed strategies. Its first focus as a steward of these assets should be protection of the systems that support all of the companies it its diversified portfolios.
Shareholders are entitled to vote on a governance change that would serve their interests and ensure the commitment made to stakeholders in the Statement is authentic and lasting – and that the Company’s corporate governance is aligned with the interests of its clients.
Please vote for: Public Benefit Corporation Request – Proposal 6
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We believe that BlackRock already operates in a manner that considers the interests of its shareholders and
BlackRock’s purpose is to help more and more people experience financial well-being. This purpose drives our strategy and is essential to our culture. In December 2020, we published our “Where We Stand” report, which provides examples of how BlackRock pursues its purpose in detail, including by helping millions of people invest to build savings, making investing easier and more affordable, contributing to a more resilient economy and advancing sustainable investing. When our CEO signed the BRT Statement, which indicated BlackRock’s commitment to serving all stakeholders, BlackRock already operated in accordance with this principle. This focus on our shareholders, clients, employees and the communities in which we operate is evidenced by our public statements, actions and commitments. Accordingly, we believe BlackRock’s conversion to a PBC would not result in meaningful change or serve the interests of our shareholders or other stakeholders. The PBC model is new and largely untested, and the resulting uncertainties make this approach inappropriate for a company of our size and complexity. To our knowledge, only a handful of U.S. publicly traded corporations have gone public as, Conversion to a PBC may alienate our clients and investors who believe their interests are not being served, as As a global financial services firm, BlackRock and its subsidiaries are heavily regulated around the world, including by the Securities and Exchange Commission, the Office of the
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Board Recommendation
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88BLACKROCK, INC. 2018 PROXY STATEMENT
BLACKROCK, INC. 2021 PROXY STATEMENT | 103 |
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 29, 20182021 are entitled to receive notice and to vote their shares of BlackRock common stock at the 2018 Annual Meeting of Shareholders.Meeting. As of March 29, 2018, 160,308,3622021, [●] 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. It can also 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., 40 East 52nd Street, New York, New York 10022. The list will also be accessible during the Annual Meeting by visiting www.virtualshareholdermeeting.com/BLK2021 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 light of ongoing considerations relating to the COVID-19 pandemic, the Annual Meeting will be held virtually; you will not be able to attend the Annual Meeting in person.
You are entitled to virtually participate in the Annual Meeting if you were a shareholder as of the close of business on the record date, March 29, 2021, 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, visit www.virtualshareholdermeeting.com/BLK2021. 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.
Technology Support for the Annual Meeting: We encourage you to access the Annual Meeting before it begins. You may login approximately fifteen minutes before the meeting start time. If you have difficulty accessing the Annual Meeting, please contact the technical support number that will be posted at www.virtualshareholdermeeting.com/BLK2021. 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?”
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 determined to enhance shareholder access, participation and communication by providing shareholders the ability to submit questions in advance of and during the meeting.
Submitting questions in advance of the Annual Meeting. You may submit a question in advance of the meeting at www.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.
Submitting questions during the Annual Meeting. Questions may be submitted during the Annual Meeting by accessing the virtual meeting platform at www.virtualshareholdermeeting.com/BLK2021 with your control number and following the instructions to submit a question.
During the Q&A session of the Annual Meeting, we will address as many questions that comply with our rules of conduct and are submitted online by shareholders as time permits. Our rules of conduct will be made available on the virtual meeting platform and on our Investor Relations website. Questions that are substantially similar may be grouped and answered once to avoid repetition. To allow us to respond to as many questions as possible in the allotted time, we may limit each shareholder to one question.
104 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Annual Meeting Information | Questions and Answers about the Annual Meeting and Voting
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.
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 29, 2018. 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 22, 2018. Please note that seating is limited
BLACKROCK, INC. 2018 PROXY STATEMENT 89
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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 29, 2018, 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 at www.virtualshareholdermeeting.com/BLK2021.
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. As 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:
For shares held beneficially in street name, you may change your vote by submitting new voting instructions to your bank, broker or nominee by 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 virtually 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. 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 amendmentamendments to our Charter to provide
BLACKROCK, INC. 2021 PROXY STATEMENT | 105 |
Annual Meeting Information | Questions and Answers about the Stock PlanAnnual Meeting and Voting
shareholders with the right to call a special meeting and to eliminate certain supermajority vote requirements, as well as the shareholder proposalproposals 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 isand the amendments to our Charter to eliminate certain provisions that are no longer applicable and make certain other technical revisions are deemed a “routine” mattermatters 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 1816 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
90BLACKROCK, INC. 2018 PROXY STATEMENT
and have no effect on the outcome of the Item 1 vote to elect directors. A
The affirmative vote of 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 3, the approval of an amendment to the Stock Plan, Item 4, the ratification of Deloitte as BlackRock’s independent registered public accounting firm for the 20182021 fiscal year, and ItemItems 5 and 6, the approval of the shareholder proposal.proposals. Abstentions will be treated as a vote “against” and “brokernon-votes”non-votes,” if any, will have no effect on such matters.
The proposals to amend our Charter are subject to the following different approval requirements:
Item 4A, to provide shareholders with the right to call a special meeting, requires the affirmative vote of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting;
Item 4B, to eliminate certain supermajority vote requirements, requires the affirmative vote of at least 75% of the outstanding shares of our common stock entitled to vote at the Annual Meeting; and
Item 4C, to eliminate certain provisions that are no longer applicable and make certain other technical revisions, requires the affirmative vote of at least 80% of the outstanding shares of our common stock entitled to vote at the Annual Meeting.
For each of these, abstentions and “broker non-votes,” if any, will have the same effect as a vote “against” the matter.
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 aForm 8-K filed within four business days of the Annual Meeting.
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 try 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 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 20182021 Annual Meeting of Shareholders.
You may also notify us if 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.
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.
106 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Annual Meeting Information | Important Additional Information
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.
BLACKROCK, INC. 2018 PROXY STATEMENT 91
Written requests for copies can be made by:
![]() ![]() | Mail: Corporate Secretary of BlackRock, 40 East 52nd Street, New York, New York 10022 | |
![]() | Telephone:(212) 810-5300 | |
![]() | Email:invrel@blackrock.com |
Copies may also be accessed electronically by means of the SEC homepage on the Internet atwww.sec.gov. The Annual Report on Form10-K for the year ended December 31, 20172020 is not part of the proxy solicitation materials.
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 20192022 Annual Meeting of Shareholders must submit their proposals to BlackRock’s Corporate Secretary on or before December 14, 2018.[●], 2021.
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 20192022 Annual Meeting of Shareholders must be received no later than December 14, 2018[●], 2021 and no earlier than November 14, 2018.[●], 2021.
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 must be followed for a shareholder 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 20192022 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 25 days before or after the anniversary date of the immediately preceding annual meeting.
Assuming that our 20192022 Annual Meeting of Shareholders is held within 25 days of the anniversary of the 2018 Annual Meeting, we must receive notice of your intention to introduce a nomination or other item of business at the 20192022 Annual Meeting of Shareholders by December 14, 2018[●], 2021 and no earlier than November 14, 2018.[●], 2021.
BLACKROCK, INC. 2021 PROXY STATEMENT | 107 |
Annual Meeting Information | Deadlines for Submission of Proxy Proposals, Nomination of Directors and Other Business of Shareholders
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”.
92BLACKROCK, INC. 2018 PROXY STATEMENT
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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, 40 East 52nd Street, New York, New YorkNY 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
BLACKROCK, INC. 2018 PROXY STATEMENT 93
108 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Non-GAAP Reconciliation
Non-GAAP Financial Measures
BlackRock reports its financial results in accordance with GAAPaccounting principles generally accepted in the United States;States (“GAAP”); however, management believes evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP financial measures. Management reviewsnon-GAAP financial measures to assess ongoing operations and considers them to be helpful, for both management and investors, in 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,operating margin, as adjusted:
(in millions) | 2020 | 2019 | 2018 | |||||||||
Operating income, GAAP basis | $ 5,695 | $5,551 | $5,457 | |||||||||
Non-GAAP expense adjustments: | ||||||||||||
Charitable Contribution(1) | 589 | — | — | |||||||||
Restructuring charge | — | — | 60 | |||||||||
PNC LTIP funding obligation | — | — | 14 | |||||||||
Operating income, as adjusted | 6,284 | 5,551 | 5,531 | |||||||||
Product launch costs and commissions | 172 | 61 | 13 | |||||||||
Operating income used for operating margin measurement | $ 6,456 | $5,612 | $5,544 | |||||||||
Revenue, GAAP basis | $16,205 | $14,539 | $14,198 | |||||||||
Non-GAAP adjustments: | ||||||||||||
Distribution fees | (1,131) | (1,069) | (1,155) | |||||||||
Investment advisory fees | (704) | (616) | (520) | |||||||||
Revenue used for operating margin measurement | 14,370 | $12,854 | $12,523 | |||||||||
Operating margin, GAAP basis | 35.1% | 38.2% | 38.4% | |||||||||
Operating margin, as adjusted | 44.9% | 43.7% | 44.3% |
(1) | On February 13, 2020, BlackRock announced the establishment of The BlackRock Foundation (the “Foundation”) and the contribution of its remaining 20% stake in PennyMac Financial Services, Inc. to the Foundation and the BlackRock Charitable Fund, which BlackRock established in 2013 (together, the “Charitable Contribution”). The Charitable Contribution resulted in an operating expense of $589 million, which was offset by a $122 million noncash, nonoperating pre-tax gain on the contributed shares and a tax benefit of $241 million in the consolidated statement of income for the year ended December 31, 2020. The Charitable Contribution provides long-term funding for BlackRock’s philanthropic investments and partnerships. The general and administration expense, nonoperating gain and associated tax benefit related to the Charitable Contribution have been excluded from as adjusted results. |
Management believes operating income, as adjusted, and Operating Margin,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)
|
2017
|
2016
|
2015
| |||||||||
Operating income, GAAP basis | $ | 5,272 | $ | 4,570 | $ | 4,664 | ||||||
Non-GAAP expense adjustments: | ||||||||||||
Restructuring charge | – | 76 | – | |||||||||
PNC LTIP funding obligation | 15 | 28 | 30 | |||||||||
Compensation expense related to appreciation (depreciation) on deferred compensation plans | – | – | 1 | |||||||||
Operating income, as adjusted | 5,287 | 4,674 | 4,695 | |||||||||
Product launch costs and commissions
|
| –
|
|
| –
|
|
| 5
|
| |||
Operating income used for Operating Margin measurement
| $
| 5,287
|
| $
| 4,674
|
| $
| 4,700
|
| |||
Revenue, GAAP basis | $ | 12,491 | $ | 11,155 | $ | 11,401 | ||||||
Non-GAAP adjustments: | ||||||||||||
Distribution and servicing costs | (492 | ) | (429 | ) | (409 | ) | ||||||
Amortization of deferred sales commissions
|
| (17
| )
|
| (34
| )
|
| (48
| )
| |||
Revenue used for Operating Margin measurement
| $
| 11,982
|
| $
| 10,692
|
| $
| 10,944
|
| |||
Operating Margin, GAAP basis
|
| 42.2
| %
|
| 41.0
| %
|
| 40.9
| %
| |||
Operating Margin, as adjusted
|
| 44.1
| %
|
| 43.7
| %
|
| 42.9
| %
|
A-1 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Annex A: Non-GAAP Reconciliation | Non-GAAP Financial Measures
Operating income, as adjusted,includesnon-GAAP expense adjustments. TheIn 2020, the Charitable Contribution expense of $589 million has been excluded from operating income, as adjusted, due to its nonrecurring nature. In 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, 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. In 2016, a restructuring charge primarily comprised of severance and accelerated amortization expense of previously granted deferred compensation awards has been excluded to provide an analysis of BlackRock’s ongoing operations and to ensure comparability among periods presented. In 2015, 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).
BLACKROCK, INC. 2018 PROXY STATEMENT A-1
Revenue used for Operating Margin,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)
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2017
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2016
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2015
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Employee compensation and benefits, GAAP basis | $ | 4,255 | $ | 3,880 | $ | 4,005 | ||||||
LessNon-GAAP expense adjustments: | ||||||||||||
PNC LTIP funding obligation | 15 | 28 | 30 | |||||||||
Compensation expense related to appreciation (depreciation) on deferred compensation plans | – | – | 1 | |||||||||
Employee compensation and benefits, as adjusted | $ | 4,240 | $ | 3,852 | $ | 3,974 | ||||||
Revenue, GAAP basis | $ | 12,491 | $ | 11,155 | $ | 11,401 | ||||||
Compensation and benefitsexpense-to-revenue ratio, GAAP basis | 34.1 | % | 34.8 | % | 35.1 | % | ||||||
Compensation and benefitsexpense-to-revenue ratio, as adjusted | 33.9 | % | 34.5 | % | 34.9 | % |
(3) Net income attributable to BlackRock, Inc., as adjusted:
(in millions, except per share data)
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2017
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2016
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2015
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Net income attributable to BlackRock, GAAP basis | $ | 4,970 | $ | 3,172 | $ | 3,345 | ||||||
Non-GAAP adjustments: | ||||||||||||
Restructuring charge (including $23 tax benefit) | – | 53 | – | |||||||||
PNC LTIP funding obligation, net of tax | 11 | 19 | 22 | |||||||||
The Tax Cuts and Jobs Act: | ||||||||||||
Deferred tax revaluation (noncash) | (1,758 | ) | – | – | ||||||||
Deemed repatriation tax | 477 | – | – | |||||||||
Other Income tax matters | 16 | (30 | ) | (54 | ) | |||||||
Net income attributable to BlackRock, as adjusted | $ | 3,716 | $ | 3,214 | $ | 3,313 | ||||||
Diluted weighted-average common shares outstanding(1) | 164.4 | 166.6 | 169.0 | |||||||||
Diluted earnings per common share, GAAP basis(1) | $ | 30.23 | $ | 19.04 | $ | 19.79 | ||||||
Diluted earnings per common share, as adjusted(1) | $ | 22.60 | $ | 19.29 | $ | 19.60 |
(in millions, except per share data) | 2020 | 2019 | 2018 | |||||||||
Net income attributable to BlackRock, Inc., GAAP basis | $4,932 | $4,476 | $4,305 | |||||||||
Non-GAAP adjustments: | ||||||||||||
Charitable Contribution, net of tax | 226 | — | — | |||||||||
Restructuring charge, net of tax | — | — | 47 | |||||||||
PNC LTIP funding obligation, net of tax | — | — | 12 | |||||||||
Income tax matters | 79 | 8 | (3) | |||||||||
Net income attributable to BlackRock, Inc., as adjusted | $5,237 | $4,484 | $4,361 | |||||||||
Diluted weighted-average common shares outstanding(1) | 154.8 | 157.5 | 161.9 | |||||||||
Diluted earnings per common share, GAAP basis(1) | $31.85 | $28.43 | $26.58 | |||||||||
Diluted earnings per common share, as adjusted(1) | $33.82 | $28.48 | $26.93 |
(1) | Nonvoting participating preferred stock is considered to be a common stock equivalent for purposes of determining basic and diluted earnings per share calculations. As of December 31, 2020, there were no shares of preferred stock outstanding. |
A-2BLACKROCK, INC. 2018 PROXY STATEMENT
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 above regarding Operating Income,operating income, as adjusted, and Operating Margin,operating margin, as adjusted, for information on the Charitable Contribution, PNC LTIP funding obligation and the restructuring charge.
For each period presented,In 2020, a discrete tax benefit of $241 million was recognized in connection with thenon-GAAP adjustment related Charitable Contribution. The discrete tax benefit has been excluded from as adjusted results due to the restructuring charge and PNC LTIP funding obligation was tax effected atnon-recurring nature of the respective blended rates applicable to the adjustments. The noncash deferred tax revaluation benefit of $1,758 million and the otherCharitable Contribution. Amounts for income tax matters wererepresent net noncash (benefits) expense primarily associated with the revaluation of certain deferred tax liabilities related to intangible assets and goodwill.goodwill as a result of tax rate changes. The amount for 2020 included a $79 million net noncash expense related to the impact of legislation enacted in the United Kingdom increasing its corporate tax rate and state and local income tax changes. These 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 repatriationIn 2018, the non-GAAP adjustment related to the restructuring charge and PNC LTIP funding obligation was tax expense of $477 million has been excluded fromeffected at the 2017 as adjusted results duerespective blended rates applicable to theone-time nature and to ensure comparability among periods presented. adjustments.
Per share amounts reflect net income attributable to BlackRock, Inc., as adjusted divided by diluted weighted averageweighted-average common shares outstanding.
BLACKROCK, INC. 2018 PROXY STATEMENT A-3
BLACKROCK, INC. 2021 PROXY STATEMENT | A-2 |
Annex BDescription of PNC Stockholder Agreement
AmendmentPNC Stockholder Agreement
Until May 15, 2020, BlackRock was a party to the BlackRock, Inc. Second AmendedPNC Stockholder Agreement, which governed PNC’s ownership interests in and Restated 1999 Stock Award and Incentive Plan
THIS AMENDMENT (thisrelationship with BlackRock. As noted below under “Amendment”) is made as of May , 2018 to the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan, as amended from time to time (the “Plan”). Any capitalized terms used and not defined herein shall have the meanings set forth in the Plan.
WHEREAS, pursuant to Section 8(f)Termination of the Plan,PNC Stockholder Agreement,” the Board may at any time and from time to time alter, amend, suspend or terminate the Plan in whole or in part, provided that (i) no amendment shall adversely affect anyPNC Stockholder Agreement terminated upon consummation of the rightssecondary offering because PNC’s ownership of any Grantee, without such Grantee’s consent, under any Award theretofore granted underBlackRock capital stock fell below 5%.
The following table describes certain key provisions of the Plan and (ii) any amendment shall be approved by the stockholders (unless otherwise determined by the Board) if necessaryPNC Stockholder Agreement prior to comply with state law, stock listing requirements or other applicable law; and
WHEREAS, the Board has determined to amend the Plan in the manner set forth below, subject to approval by the stockholders.
NOW, THEREFORE, the Plan is hereby amended as follows, subject to approval by the stockholders:its termination.
Share Ownership | The PNC Stockholder Agreement provided for a limit on the percentage of BlackRock capital stock that may be owned by PNC at any time (the “PNC ownership cap”). Due to the PNC ownership cap, PNC was generally not permitted to acquire any additional capital stock of BlackRock if, after such acquisition, it would hold greater than 49.9% of the total voting power of the capital stock of BlackRock issued and outstanding at such time or 38% of the sum of the total voting securities and participating preferred stock of BlackRock issued and outstanding at such time and issuable upon the exercise of any options or other rights outstanding at that time. In addition, PNC could not acquire any shares of BlackRock from any person other than BlackRock or a person that owned 20% or more of the total voting power of the capital stock of BlackRock (other than itself) if, after such acquisition, it would have held capital stock of BlackRock representing more than 90% of the PNC voting ownership cap. | |
Prohibited Actions | PNC was 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: • An acquisition which would result in PNC holding more than the PNC ownership cap, or holding any equity securities of any controlled affiliate of BlackRock; • Any business combination or extraordinary transaction involving BlackRock or any controlled affiliate of BlackRock, including a merger, tender or exchange offer or sale of any substantial portion of the assets of BlackRock or any controlled affiliate of BlackRock; • Any restructuring, recapitalization or similar transaction with respect to BlackRock or any controlled affiliate of BlackRock; • Any purchase of the assets of BlackRock or any controlled affiliate of BlackRock, other than in the ordinary course of its business; • Being a member of a “group,” as defined in Section 13(d)(3) of the Exchange Act, for the purpose of acquiring, holding or disposing of any shares of capital stock of BlackRock or any controlled affiliate of BlackRock; • Selling any BlackRock capital stock in an unsolicited tender offer that was opposed by the BlackRock Board; • Any proposal to seek representation on the Board of BlackRock except as contemplated by the PNC Stockholder Agreement; • Any proposal to seek to control or influence the management, Board or policies of BlackRock or any controlled affiliate of BlackRock except as contemplated by the PNC Stockholder Agreement; or • Any action to encourage or act in concert with any third party to do any of the foregoing. | |
Additional Purchase of Voting Securities | The |
BLACKROCK, INC. 2018 PROXY STATEMENT B-1
B-1 | BLACKROCK, INC. 2021 PROXY STATEMENT |
Annex B: Description of PNC Stockholder Agreement
Share Repurchase | If BlackRock engaged in a share repurchase, BlackRock could have required PNC to sell an amount of securities to BlackRock that would have caused its beneficial ownership of BlackRock capital stock not to exceed its total ownership cap or voting ownership cap. | |
Transfer Restrictions | PNC could 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, which would result in the beneficial ownership, by any person, of more than 10% of the total voting power of issued and outstanding BlackRock capital stock with respect to transfers to persons who would be eligible to report their holdings of BlackRock capital stock on Schedule 13G or of more than 5% of the total voting power of issued and outstanding capital stock with respect to any other persons. | |
Right of Last Refusal | PNC had to notify BlackRock if it proposed to sell shares of BlackRock capital stock in a privately negotiated transaction. Upon receipt of such notice, BlackRock would have had 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 did not apply in the case of tax-free transfers to charitable organizations or foundations and tax-deferred transfers. | |
Corporate Governance | Board Designation: The PNC Stockholder Agreement provided that BlackRock would use its best efforts to cause the election at each annual meeting of shareholders such that the Board would consist of no more than 19 directors: • Not less than two nor more than four directors who would be members of BlackRock management; • Two directors who would be designated by PNC, provided, however, that if for any period greater than 90 consecutive days PNC and its affiliates beneficially owned less than 10% of the BlackRock capital stock issued and outstanding, PNC would have promptly caused one of such PNC designees to resign and the number of PNC designees would be reduced to one; and provided further, that, if for any period greater than 90 consecutive days PNC and its affiliates beneficially owned less than 5% of the BlackRock capital stock issued and outstanding, PNC would have promptly caused the second PNC designee to resign and the number of PNC designees would be reduced to zero; and • The remaining directors who would be independent for purposes of the rules of the NYSE and would not be designated by or on behalf of PNC or any of its affiliates. As noted above, William S. Demchak was designated by PNC and resigned from the Board on May 15, 2020, in connection with the secondary offering. Voting Agreement: PNC 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 could not be done without prior approval of all of the independent directors, or at least two-thirds of the directors, then in office: • Appointment of a new Chief Executive Officer of BlackRock; • Any merger, issuance of shares or similar transaction in which beneficial ownership of a majority of the total voting power of BlackRock capital stock would be held by persons different from those currently holding such majority of the total voting power, or any sale of all or substantially all assets of BlackRock; • Any acquisition of any person or business that has a consolidated net income after taxes for its preceding fiscal year that equals or exceeds 20% of BlackRock’s consolidated net income after taxes for its preceding fiscal year if such acquisition involved the current or potential issuance of BlackRock capital stock constituting more than 10% of the total voting power of BlackRock capital stock issued and outstanding immediately after completion of such acquisition; • Any acquisition of any person or business constituting a line of business that was materially different from the lines of business BlackRock and its controlled affiliates were engaged in at that time if such acquisition involved consideration in excess of 10% of the total assets of BlackRock on a consolidated basis; • Except for repurchases otherwise permitted under their respective stockholder agreements, any repurchase by BlackRock or any subsidiary of shares of BlackRock capital stock such that, after giving effect to such repurchase, BlackRock and its subsidiaries would have repurchased more than 10% of the total voting power of BlackRock capital stock within the 12-month period ending on the date of such repurchase; • Any amendment to BlackRock’s certificate of incorporation or Bylaws; • Any matter requiring shareholder approval pursuant to the rules of the NYSE; or |
BLACKROCK, INC. 2021 PROXY STATEMENT | B-2 |
Annex B: Description of PNC Stockholder Agreement
• Any amendment, modification or waiver of any restriction or prohibition on any significant shareholder (other than PNC or its affiliates) provided for under its stockholder agreement. Committees: Consistent with applicable laws, rules and regulations, the Audit Committee, the Compensation Committee and the Governance Committee are to be composed solely of independent directors. The Risk Committee and Executive Committee are not subject to any similar laws, rules or regulations, and as such, Mr. Demchak was a member of the Risk Committee and Executive Committee until he resigned from the Board on May 15, 2020. The PNC Stockholder Agreement provided that the Executive Committee would consist of not less than five members, of which one must have been designated by PNC. | ||
Significant Stockholder | The PNC Stockholder Agreement prohibited 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, was in the ordinary course of business of BlackRock or had 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 would terminate on the first day on which PNC and its affiliates owned less than 5% of the capital stock of BlackRock, unless PNC had sent a notice indicating its intent to increase its beneficial ownership above such threshold within 10 business days after it had fallen below such threshold, and PNC bought sufficient capital stock of BlackRock within 20 business days after PNC had sent notice that it had fallen below 5% of BlackRock capital stock such that it had continued to own greater than 5% of BlackRock capital stock. |
How We Review, Approve or Ratify Transactions with Related Persons – PNC Approval Process
BlackRock’s Mission StatementTransactions (other than transactions in the ordinary course of business) with PNC were governed by the special approval procedures detailed in the PNC Stockholder Agreement. Those approval procedures prohibited 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 had been approved by a majority of the directors of BlackRock, excluding those designated for appointment by the party wishing to enter into the transaction. Mr. Demchak, who served on Sustainabilityour Board until May 15, 2020 and resigned in connection with the secondary offering, was designated by PNC.
We are an asset manager whose objective isPrior to create better financial futures for our clientsthe adoption of this policy, related person transactions, including certain of the transactions described under “Certain Relationships and Related Transactions – PNC and its Subsidiaries” and “PNC Stockholder Agreement” above, were reviewed with the Board at the time of entering into such transactions. As a result of the secondary offering and the people they serve. We aspire to be an industry leaderCompany’s share repurchase, PNC exited its entire ownership position in how we incorporate sustainability into:the Company and is no longer a related party.
B-3 |
2021 PROXY STATEMENT |
Amendment to Our Charter to
Provide Shareholders the Right
to Call Special Meetings – Item 4A
The proposed amendments to our Charter to provide shareholders with the right to call a special meeting are as follows:
Amended and Restated Certificate of Incorporation
Article FIFTH, Section A would be amended and restated to read in its entirety as follows:
FIFTH: A. Stockholder Meetings.
(1) Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. An annual meeting of the stockholders of the Corporation for the election of directors and for the transaction of such other business as may come before the meeting shall be held at such time and place as shall be determined in accordance with the Bylaws. Elections of directors need not be by written ballot unless otherwise provided in the Bylaws.
(2) Except as otherwise required by law and subject to the rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or distributions upon liquidation, special meetings of stockholders of the Corporation of any class or series for any purpose or purposes may be called only by:
(a) the Chairman of the Board of Directors;
(b) the President of the Corporation;
(c) a majority of the Board of Directors; or
(d) any committee of the Board of Directors the powers and authority of which include the power and authority to call such meetings.; or
(e) the Chairman of the Board of Directors, the President or the Corporate Secretary of the Corporation upon a written request of one or more record holders of shares of stock of the Corporation representing ownership of not less than 15 percent of the voting power of all outstanding shares of stock in the Corporation, which request complies with the procedures for calling a special meeting of stockholders as set forth in the Bylaws, as may be amended from time to time.
Our stewardship
of our clients’
assets
Our sustainable
investment
solutions for
our clients
The operations
of our own
business
BLACKROCK, INC. 2021 PROXY STATEMENT | C-1 |
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Amendment to Our Charter to
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E40399-P05894 KEEP THIS PORTION FOR YOUR RECORDSThe proposed amendments to our Charter to eliminate the supermajority voting requirement to amend the Charter are as follows:
Amended and Restated Certificate of Incorporation
Article THIRTEENTH would be amended and restated to read in its entirety as follows:
THIRTEENTHTWELFTH:
A. General Right to Amend Certificate of Incorporation.
(1)Subject to the provisions of any Stockholder Agreement, theThe Corporation hereby reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, and to add thereto any other provision authorized by the laws of the state of Delaware at the time in force, and except as may otherwise be explicitly provided by any provision of this Certificate of Incorporation, all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or officers of the Corporation or any other person whomsoever by and pursuant to this Certificate of Incorporation in its present form, or as hereafter amended, are granted subject to the right reserved in this paragraph (A)(1).
(2) Subject to theprovisions of paragraph (B) below, the provisions of any Stockholder Agreement and therights of the holders of Preferred Stock, the provisions of this Certificate of Incorporation may only be altered, amended or repealed, and any inconsistent provision adopted, with such action (if any) of the Board of Directors as is provided by law, and in addition to any other vote of stockholders (if any) required by law, and notwithstanding that a lower vote (or a no vote) of stockholders otherwise would be required, by the approval of at least a majority of the voting power of all Voting Stock; provided, however, that the provisions of Articles Ninth and Twelfth may be amended only with the approval of at least eight percent (80%) of the voting power of all Voting Stock.
B.Amendment of this Article.Subject to the provisions of any Stockholder Agreement, the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of all Voting Stock shall be required to alter, amend or repeal, or to adopt any provision inconsistent with, this Article Thirteenth.
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED, DATED AND RETURNED.
BLACKROCK, INC. 2021 PROXY STATEMENT | D-1 |
Amendments to Our Charter to
Eliminate Provisions that are No Longer Applicable and Make Other Technical Revisions – Item 4C
The proposed amendments to our Charter to eliminate certain provisions that are no longer applicable and make certain other technical revisions are as follows:
Amended and Restated Certificate of Incorporation
Article FOURTH, section C would be amended and restated to read in its entirety as follows:
C. Common Stock.
(1)For so long as any Stockholder Agreement shall remain in effect, the Corporation shall recognize the restrictions on transfer contained therein with respect to the parties thereto;provided that in connection with any transfer of any stock of the Corporation pursuant to or as permitted by the Stockholder Agreement, or in connection with the making of any determination referred to therein:
(a)the Corporation shall be under no obligation to make any investigation of facts unless an officer, employee or agent of the Corporation responsible for making such transfer or determination has substantial reason to believe, or unless the Board of Directors (or a committee of the Board of Directors designated for the purpose) determines that there is substantial reason to believe, that any affidavit or other document is incomplete or incorrect in a material respect or that an investigation would disclose facts upon which any determination should be made, in either of which events the Corporation shall make or cause to be made such investigation as it may deem necessary or desirable in the circumstances and have a reasonable time to complete such investigation; and
(b)neither the Corporation nor any director, officer, employee or agent of the Corporation shall be liable in any manner for any action taken or omitted in good faith.
(2) No stockholder shall be entitled to exercise any right of cumulative voting.
Article SIXTH would be amended and restated to read in its entirety as follows:
SIXTH:A. Powers of the Board of Directors. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, which shall be constituted as provided in this Article and as provided by law.
B. Number of Directors.The Board of Directors shall initially consist of 17 directors, whichSubject to the rights of holders of Preferred Stock, the number of directorsmay be increased or decreasedshall be fixed from time to timepursuant to aby resolution adopted by the affirmative vote of a majority of the entire Board of Directors, subject to the provisions of the Bylaws and any Stockholder Agreementthen in office.
C. Election and Term.A director shall be elected to hold office until the expiration of the term for which such person is elected, and until such person’s successor shall be duly elected and qualified. Commencing at the annual meeting of stockholders that is held in calendar year 2013 (the“2013 Annual Meeting”), theThe directors of the Corporation shall be elected annuallyfor terms of one year, except that any director in office at the 2013 Annual Meeting whose term expires at the annual meeting of stockholders in calendar year 2014 or calendar year 2015 (a“Continuing Classified Director”) shall continue to hold office until the end of the term for whichsuchdirector was elected and until such director’s successor shall have been elected and qualified. Accordingly, at each annual
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BLACKROCK, INC. 2021 PROXY STATEMENT |
Annex E: Amendments to Our Charter to Eliminate Provisions that are No Longer Applicable and Make Other Technical Revisions – Item 4C
meeting of stockholders after the terms of all Continuing Classified Directors have expired, all directors shall be electedfor terms expiring at the next annual meeting of stockholders and until such directors’ successors shall have been elected and qualified. Any vacancies created in the Board of Directors through and increase in the number of directors or otherwise may be filled in accordance with the Bylaws of the Corporation and the applicable laws of the State of Delaware.
D. Removal of Directors. Except as may be provided in a resolution or resolutions providing for any class or series of Preferred Stock with respect to any directors elected by the holders of such class or series, any director, or the entire Board of Directors, may be removed, with or without cause, by the holders of a majority of the votes of capital stock then entitled to vote in the election of directors at a meeting of stockholders called for that purpose, except that Continuing Classified Directors and any director appointed to fill a vacancy of any Continuing Classified Director may be removed only for cause.
E. Meetings of the Board of Directors. Meetings of the Board of Directors may be held within or without the State of Delaware, as the Bylaws may provide.
F. Quorum; Required Vote.
G.Except as otherwise provided by law or any Stockholder Agreement, but only until the termination of such Stockholder Agreement in accordance with its terms:
(1) at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business, and
(2) the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.
Article NINTH would be deleted in its entirety and currently reads as follows:1
NINTH:A. Certain Acknowledgments. The provisions of this Article Ninth shall regulate and define the conduct of certain of the business and affairs of the Corporation in relation to any Significant Stockholder and Affiliated Companies (as defined below in this Article Ninth) thereof, in recognition and anticipation that:
(1)one or moreSignificant Stockholder will be a significant stockholderof the Corporation;
(2)the directors, officers and/or employees of Significant Stockholders or of Affiliated Companies thereof may serve as directors of the Corporation;
(3)Significant Stockholders and the Affiliated Companies thereof engage, are expected to continue to engage, and may in the future engage in the same, similar or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities than overlap with or compete with those in which the Corporation, directly or indirectly, may engage;
(4)the Corporation and Affiliated Companies thereof will or may engage in material business transactions with a Significant Stockholder and Affiliated Companies thereof; and
(5)as a consequence of the foregoing, it is in the best interests of the Corporation that the respective rights and duties of the Corporation, any Significant Stockholder and the Affiliated Companies of each, and the duties of any directors or officers of the Corporation who are also directors, officers or employees of the Significant Stockholder or Affiliated Companies thereof, be determined and delineated in respect of any agreements, arrangements or transactions between, or opportunities that may be suitable for both, the Corporation and Affiliated Companies thereof, on the one hand, and the Significant Stockholder and Affiliated Companies thereof, on the other hand.
Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article Ninth.
The provisions of this Article Ninth are in addition to, and not in limitation of, the provisions of the DGCL and the other provisions of this Certificate of Incorporation. Any agreement, arrangement, transaction or business relationship which does not comply with the procedures set forth in this Article Ninth shall not by reason thereof be deemed void or voidable or result in any breach of any fiduciary duty or duty of loyalty or failure to act in good faith or in the best interests of the Corporation or derivation of any improper personal benefit, but shall be governed by the provisions of this Certificate of Incorporation, the Bylaws, the DGCL and other applicable law.
B. Certain Agreements, Arrangements and Transactions Permitted; Certain Fiduciary Duties of Certain Stockholders, Directors and Officers. The Corporation may from time to time enter into and perform, and cause or permit any Affiliated Company of the Corporation to enter into and perform, one or more agreements (or modifications or supplements to pre-existing agreements), arrangements or transactions with a Significant Stockholder or Affiliated Companies thereof pursuant to which the Corporation or an Affiliated Company thereof, on the one hand, and the Significant Stockholder or an Affiliated Company thereof, on the other hand, agree to or do engage in transactions of any kind or nature with each other or with Affiliated Companies thereof and/or agree to or do
1 | In the event that Article NINTH is deleted, all subsequent Articles would be renumbered. |
E-2 |
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Annex E: Amendments to Our Charter to Eliminate Provisions that are No Longer Applicable and Make Other Technical Revisions – Item 4C
compete, or refrain from competing or limit or restrict their competition, with each other, including allocating and causing their respective directors, officers and employees (including any who are directors, officers or employees of both) to allocate opportunities between or to refer opportunities to each other. No such agreement, arrangement or transaction shall be considered void or voidable solely (i) due to the nature of the parties thereto or due to the existence of circumstances as described in paragraph (A) of this Article Ninth or (ii) because any one or more of the officers or directors of the Corporation who are also directors or officers of the Significant Stockholder or any Affiliated Companies thereof are present at or participate in the meeting of the Board of Directors or committee thereof which authorizes the agreement, arrangement or transaction, or solely because his or their votes are counted for such purpose. No such agreement, arrangement or transaction or the performance thereof by the Corporation or the Significant Stockholder or any Affiliated Company thereof shall be considered (i) contrary to any fiduciary duty or duty of loyalty that the Significant Stockholder or any Affiliated Company thereof may owe to the Corporation or any Affiliated Company thereof or to any stockholder or other owner of an equity interest in the Corporation by reason of the Significant Stockholder or any Affiliated Company thereof being a Significant Stockholder of the Corporation or participating in control of the Corporation or any Affiliated Company thereof or (ii) contrary to any fiduciary duty or duty of loyalty of any director or officer of the Corporation who is also a director, officer or employee of the Significant Stockholder or any Affiliated Company thereof to the Corporation or such Affiliated Company or any stockholder or other owner of an equity interest therein. In addition, with respect to any such agreement, arrangement or transaction, the directors and officers of the Corporation who are also directors and officers of the Significant Stockholder or any Affiliated Company thereof (i) shall have fully satisfied their fiduciary duties to the Corporation and the stockholders, (ii) shall be deemed to have acted in good faith and in a manner such persons reasonably believe to be in and not opposed to the best interests of the Corporation and (iii) shall be deemed not to have breached their duties of loyalty to the Corporation and its stockholders and not to have derived an improper personal benefit therefrom, if such agreement, arrangement or transaction shall have been approved in accordance with the terms of any Stockholder Agreement to which such Significant Stockholder is a party.
Neither a Significant Stockholder, as a stockholder of the Corporation, nor any Affiliated Company thereof, shall have or be under any fiduciary duty or duty of loyalty to refrain from entering into any agreement or participating in any agreement, arrangement or transaction that meets the requirements of this paragraph (B) and no director of the Corporation who is also a director, officer or employee of the Significant Stockholder or any Affiliated Company thereof shall have or be under any fiduciary duty or duty of loyalty to the Corporation to refrain from acting on behalf of the Corporation or any Affiliated Company thereof in respect of any such agreement, arrangement or transaction or performing any such agreement, arrangement or transaction in accordance with its terms. The failure of any agreement, arrangement or transaction between the Corporation or an Affiliated Company thereof, on the one hand, and the Significant Stockholder or an Affiliated Company thereof, on the other hand, to satisfy the requirements of this Article Ninth shall not, by itself, cause such agreement, arrangement or transaction to constitute any breach of any fiduciary duty or duty of loyalty to the Corporation or to any Affiliated Company thereof, or to any stockholder or other owner of an equity interest therein, by the Significant Stockholder or such Affiliated Company thereof or by any director or officer of the Corporation, the Significant Stockholder or any of their respective Affiliated Companies.
For purposes of this Article Ninth, any agreement, arrangement or transaction with any corporation, partnership, joint venture, association or other entity in which the Corporation owns (directly or indirectly) fifty percent or more of the outstanding voting stock, voting power, partnership interests or similar ownership interests, or with any officer or director thereof, shall be deemed to be an agreement, arrangement or transaction with the Corporation.
C. Corporate Opportunities.
(1) A Significant Stockholder and its Affiliated Companies shall have no fiduciary duty, duty of loyalty or other duty not to (i) engage in the same or similar activities or lines of business as the Corporation, (ii) do business with any client or customer of the Corporation or (iii) employ or otherwise engage any officer or employee of the Corporation, and none of the Significant Stockholder nor its Affiliated Companies nor any officer or director thereof shall be liable to the Corporation or its stockholders or other owner of an equity interest therein for breach of any fiduciary duty or duty of loyalty by reason of any such activities of the Significant Stockholder or any Affiliated Company thereof or of such person’s participation therein. In the event that a Significant Stockholder or any Affiliated Company thereof acquires knowledge of a potential transaction or matter which may be a corporate opportunity for both the Significant Stockholder or any Affiliated Company thereof and the Corporation, neither the Significant Stockholder nor its Affiliated Companies nor any officer or director thereof (even if such officer or director is also an officer or director of the Corporation) shall have any duty to communicate or present such corporate opportunity to the Corporation and shall not be liable to the Corporation or its stockholders or other owner of an equity interest therein for breach of any fiduciary or duty of loyalty by reason of the fact that the Significant Stockholder or any Affiliated Company thereof pursues or acquires such corporate opportunity for itself or the Significant Stockholder or any of its Affiliated Companies or any officer or director thereof (even if such officer or director is also an officer or director of the Corporation) directs such corporate opportunity to another person or does not present such corporate opportunity to the Corporation.
(2) For the purposes of this Article Ninth, “corporate opportunities” shall include, but not be limited to, business opportunities which the Corporation is financially able to undertake, which are, from their nature, in the line of the Corporation’s business, are of practical advantage to it and are ones in which the Corporation has an interest or a reasonable expectancy, and in which, by embracing the
BLACKROCK, INC. 2021 PROXY STATEMENT | E-3 |
Annex E: Amendments to Our Charter to Eliminate Provisions that are No Longer Applicable and Make Other Technical Revisions – Item 4C
opportunities, the self-interest of a Significant Stockholder or any Affiliated Company or its officers or directors, will be brought into conflict with that of the Corporation.
(3) If any agreement, arrangement or transaction between the Corporation and a Significant Stockholder and any Affiliated Company involves a corporate opportunity and is approved in accordance with the procedures set forth in paragraph (B) of this Article Ninth, the officers and directors of the Corporation, the Significant Stockholder and any Affiliated Company and their officers and directors shall (even if such officers and directors are also directors of the Corporation) also for the purposes of this Article Ninth and the other provisions of this Certificate of Incorporation and the provisions of the Bylaws (a) have fully satisfied and fulfilled their fiduciary duties to the Corporation and its stockholders or other owner of an equity interest therein, (b) be deemed to have acted in good faith and in a manner such persons reasonably believe to be in and not opposed to the best interests of the Corporation and (c) be deemed not to have breathed their duties of loyalty to the Corporation and its stockholders or other owner of an equity interest therein and not to have derived an improper personal benefit therefrom. Any such agreement, arrangement or transaction involving a corporate opportunity not so approved shall not by reason thereof result in any such breach of any fiduciary duty or duty of loyalty or failure to act in good faith or in the best interests of the Corporation or derivation of any improper personal benefit, but shall be governed by the other provisions of this Article Ninth, this Certificate of Incorporation, the Bylaws, the DGCL and other applicable law.
D. Modification.No alteration, amendment or repeal of any provision of this Article Ninth shall terminate the effect of such provisions or eliminate or reduce the effect of this Article Ninth in respect of any matter occurring, or any cause of action, suit or claim that, but for this Article Ninth, would accrue or arise, prior to such alteration, amendment or repeal.
E. For purposes of this Article Ninth, “Affiliated Company” shall mean in respect of any Significant Stockholder any company which controls, is controlled by or is under common control with such Significant Stockholder (other than the Corporation and any company that is controlled by the Corporation) and in respect of the Corporation shall mean any company controlled by the Corporation.
Article TWELFTH would be amended and restated to read in its entirety as follows:
TWELFTHELEVENTH:Bylaw Amendments. The Bylaws of the Corporation may be adopted, consistent with law and the provisions of this Certificate of Incorporation (including any Preferred Stock Designation), and once adopted, any Bylaw may be altered or repealed by: (1) the affirmative vote of at least a majority of the members of the Board of Directors then in office, or (2) the affirmative vote of at least a majority of the voting power of the Voting Stock;provided that any adoption, alteration or repeal of a Bylaw by the Board of Directors, if such adoption, alteration or repeal would be inconsistent with the provisions of any Stockholder Agreement, shall require such approval, if any, as shall be required by the terms of such Stockholder Agreement..
Article FIFTEENTH would be amended and restated to read in its entirety as follows:
FIFTEENTHFOURTEENTH: For purposes of this Certificate of Incorporation, the following definitions shall apply:
(1) “Affiliate” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person; provided, however, that neither the Corporation nor any of its Controlled Affiliates shall be deemed to be a Subsidiary or Affiliate of any Person who is or becomes a party to a Stockholder Agreement solely by virtue of the Beneficial Ownership by such Person of Capital Stock, the election of Directors nominated by such Person to the Board, the election of any other Directors nominated by the Board or any other action taken by such Person which is expressly permitted under a Stockholder Agreement, in each case in accordance with the terms and conditions of, and subject to the limitations and restrictions set forth on such Person in, such Stockholder Agreement (and irrespective of the characteristics of the aforesaid relationships and actions under applicable law or accounting principles).
(2) “Beneficial Ownership” by a Person of any securities includes ownership by any Person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares (i) voting power which includes the power to vote, or to direct the voting of, such security; and/or (ii) investment power which includes the power to dispose, or to direct the disposition, of such security; and shall otherwise be interpreted in accordance with the term “beneficial ownership” as defined in Rule 13d-3 adopted by the Commission under the Securities Exchange Act of 1934, as amended; provided that for purposes of determining Beneficial Ownership, a Person shall be deemed to be the Beneficial Owner of any securities which may be acquired by such Person pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise (irrespective of whether the right to acquire such securities is exercisable immediately or only after the passage of time, including the passage of time in excess of 60 days, the satisfaction of any conditions, the occurrence of any event or any combination of the foregoing), except that in no event will any Person who is or becomes a party to a Stockholder Agreement be deemed to Beneficially Own any securities which it has the right to acquire pursuant to any Stockholder Agreement unless, and then only to the extent that, it shall have actually exercised such right. For purposes of this Agreement, a Person shall be deemed to Beneficially Own any securities Beneficially Owned by its Affiliates (including as Affiliates for this purpose its officers and directors only to the extent they would be Affiliates solely by reason of their equity interest) or any Group of which such Person or any such Affiliate is or becomes a member; provided, however, that securities Beneficially Owned by any Person shall not include any Voting Securities or other securities held by such Person and its Controlled Affiliates in trust, managed, brokerage, custodial, nominee or other customer accounts; in trading, inventory, lending or similar accounts of such Person and Controlled Affiliates of such Personwhich are broker-dealers or otherwise engaged in the securities business; or in pooled investment vehicles sponsored, managed and/
E-4 | BLACKROCK, INC. 2021 PROXY STATEMENT |
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Annex E: Amendments to Our Charter to Eliminate Provisions that are No Longer Applicable and Make Other Technical Revisions – Item 4C
or advised or subadvised by such Person and its Controlled Affiliates except, if they Beneficially Own more than 25% of the ownership interests in a pooled investment vehicle, to the extent of their ownership interests therein;provided that in each case, such securities were acquired in the ordinary course of business of their securities business and not with the intent or purpose of influencing control of the Corporation or avoiding the provisions hereof or of any Stockholder Agreement. The term“Beneficially Own” shall have a correlative meaning.
(31) “Capital Stock” means any and all shares (however designated, whether voting or non-voting) of capital stock issued by the Corporation.
(4) “control”(including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or any other means, or otherwise to control such Person within the meaning of such term as used in Rule 405 under the Securities Act of 1933, as amended. For purposes of this definition, a general partner or managing member of a Person shall always be considered to control such Person provided, however, that a Person shall not be treated as having any control over any collective investment vehicle to which it provides services unless it or an Affiliate has a proprietary economic interest exceeding 25% of the equity interest in such collective investment vehicle.
(5) “Controlled Affiliate” of any Person means a Person that is directly or indirectly controlled by such other Person.
(62) each reference to a “person” shall be deemed to include not only a natural person, but also a corporation, partnership, joint venture, association or legal entity of any kind; each reference to a “natural person” (or to a “record holder” of shares, if a natural person) shall be deemed to include, in his, her or its representative capacity, a guardian, committee, executor, administrator or other legal representative of such natural person or record holder;.
(7)“Significant Stockholder” shall mean a person who is a party to a Stockholder Agreement and who Beneficially Owns more than twenty percent (20%) of the Voting Stock.
(8)“Stockholder Agreement” shall mean any agreement to which the Corporation and a holder of Capital Stock is a party that is in effect on the date of issuance of the initial shares of Series A Participating Preferred Stock of the Corporation and that relates to the voting of shares of capital stock by such holder;
(9)“Subsidiary” shall mean, as to any person or entity, a corporation, part ownership, joint venture, association or other entity in which such person or entity beneficially owns (directly or indirectly) fifty percent (50%) or more of the Voting Stock or outstanding voting power, partnership interests or similar voting interests; and
(103) “Voting Stock” shall mean the then outstanding shares of Capital Stock of the Corporation entitled to vote generally on the election of directors and shall exclude any class or series of capital stock of the Corporation only entitled to vote in the event of dividend arrearages or any default under any provision of such series thereon, whether or not at the time of determination there are any such dividend arrearages or defaults.
BLACKROCK, INC. 2021 PROXY STATEMENT |
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Mission Statement
on Sustainability
BlackRock’s purpose is to help more and more people experience financial well-being. We are committed to embedding sustainability across our business because we believe that integrating sustainability can help investors build more resilient portfolios and achieve better long-term, risk-adjusted returns. That is why we are making sustainability integral to the way we manage risk, generate alpha, build portfolios, pursue investment stewardship and operate our business.
Investment Integration We have integrated | Sustainable Solutions We are making it easier and more affordable for people to access sustainable investing. | Research and Insights We are developing research and generating insights into how ESG factors affect the long-term financial performance of companies. | Data and Analytics We are providing investors with the analytical tools and data, powered by Aladdin, needed to address ESG risks and opportunities. | Investment Stewardship We are making sustainability central to our investment stewardship activities with companies we invest in on behalf of clients. | Corporate Sustainability We are embedding sustainability across our strategy and operations and are committed to leading by example to promote a more sustainable world. |
in |
#1 in the Capital Markets industry on Forbes and JUST Capital’s list of America’s Most JUST Companies for 20202 | #5 among the top 50 companies in the world that drive a “measurable social impact” through their business activities according to Fortune Magazine3 | |||||||||||
#1 on Refinitiv’s 2020 top 100 most diverse and inclusive organizations globally4 |
![]() | (1) | The PRI Reporting Framework is a key step in the journey towards building a common language and industry standard for reporting responsible investment (RI) activities. Its primary objective is to enable signatory transparency on RI activities and facilitate dialogue between investors and their clients, beneficiaries and other stakeholders. As a signatory, BlackRock commits to uphold all six principles and has submitted a 2020 PRI Transparency Report and has received PRI’s Assessment of that report in 25 investment categories. | ||||||||||
(2) | The 2020 list of America’s Most JUST Companies celebrates U.S. corporations that outperform their peers in the Russell 1000 on the priorities of the American people – including issues like fair pay, ethical leadership, good benefits and work-life balance, equal opportunity, customer treatment and privacy, community support, environmental impact, and delivering shareholder return. By balancing the needs of all stakeholders, JUST 100 companies demonstrate that profits and purpose can go hand in hand. Read more about methodology at https://justcapital.com/our-methodology/ | |||||||||||
(3) | BlackRock was ranked #5 on Fortune Magazine’s Change the World list. Fortune Magazine, in partnership with the Shared Value Initiative built the Change the World list on the premise that the profit motive can inspire companies to tackle society’s unmet needs. The 2020 list includes 50 companies identified as tackling the world’s most urgent problems. All companies are eligible for nomination. Nominees are assessed on four criteria: measurable social impact, business results, degree of innovation and corporate integration. Read more on methodology at https://fortune.com/franchise-list-page/methodologychange-the-world-2020/ | |||||||||||
(4) | ||||||||||||
Refinitiv’s Diversity & Inclusion ratings cover 9,000 publicly listed companies, as measured by 24 metrics across four pillars (Diversity, Inclusion, People Development and News and Controversies). Read more about methodology at https://www.refinitiv.com/content/dam/marketing/en_us/documents/methodology/diversity-inclusion-rating- methodology.pdf |
BLACKROCK® BLACKROCK, INC. 55 EAST 52ND STREET NEW YORK, NEW YORK 10055 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/BLK2021 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: D44328-P51545 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY BLACKROCK, INC. A. The Board of Directors recommends a vote FOR all nominees listed in Item 1 and FOR Items 2, 3, 4a, 4b and 4c. 1. Election of Directors Nominees: For Against Abstain 1a. Bader M. Alsaad 1b. Pamela Daley 1c. Jessica P. Einhorn 1d. Laurence D. Fink 1e. William E. Ford 1f. Fabrizio Freda 1g. Murry S. Gerber 1h. Margaret “Peggy” L. Johnson 1i. Robert S. Kapito 1j. Cheryl D. Mills 1k. Gordon M. Nixon 1l. Charles H. Robbins 1m. Marco Antonio Slim Domit 1n. Hans E. Vestberg 1o. Susan L. Wagner 1p. Mark Wilson 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. Signature [PLEASE SIGN WITHIN BOX] Date For Against Abstain 2. Approval, in a non-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 2021. 4. Approve amendments to BlackRock’s Amended and Restated Certificate of Incorporation to: 4a. Provide shareholders with the right to call a special meeting. 4b. Eliminate certain supermajority vote requirements. 4c. Eliminate certain provisions that are no longer applicable and make certain other technical revisions. B. Shareholder Proposals - The Board of Directors recommends a vote AGAINST Items 5 and 6. For Against Abstain 5. Shareholder Proposal – Production of a report on the “Statement on the Purpose of a Corporation.” 6. Shareholder Proposal – Amend Certificate of Incorporation to convert to a public benefit corporation. 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 Items 2, 3, 4a, 4b and 4c and AGAINST Items 5 and 6, and with respect to participants in the BlackRock, Inc. Retirement Savings Plan, in the manner required or permitted by the governing plan documents. Signature (Joint Owners) Date
2018
BLACKROCK, INC. 2021 ANNUAL MEETING OF SHAREHOLDERS
May 23, 2018
26, 2021 8:00 AM, EDT
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 22, 2018. 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.
www.virtualshareholdermeeting.com/BLK2021 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available atwww.proxyvote.com.
E40400-P05894
www.proxyvote.com. D44329-P51545 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 29, 2018,2021, at the 20182021 Annual Meeting of Shareholders to be held on May 23, 2018,26, 2021, beginning at 8:00 AM, EDT, at Lotte New York Palace Hotel, 455 Madison Avenue, New York, New York 10022,www.virtualshareholdermeeting.com/BLK2021, 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, FOR Item 3, FOR Item 44a, 4b and 4c and AGAINST Item 5.
Items 5 and 6. 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 you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side