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BLK Blackrock

Filed: 15 Apr 21, 8:00pm
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

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BlackRock, Inc.

 

(Name of Registrant as Specified in Its Charter)

 

 

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Table of Contents

LOGO


Table of Contents

Delivering Value to All

Stakeholders to Generate

Durable Returns For

Shareholders

BlackRock, Inc. (“BlackRock” or the “Company”) is 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 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 is supported by our technology and risk management system, Aladdin®, which helps us better identify risks and opportunities and make portfolios more resilient for our clients. The stability of BlackRock’s globally integrated asset management and technology platform drives strong, long-term performance and consistent financial results, which allows us to continuously and deliberately invest in our business and enhances BlackRock’s ability to:

 

    Generate      

    Leverage our scale

      

    Return capital to

    differentiated  

    for the benefit of all

  

    shareholders on

    organic growth  

    stakeholders

  

    a consistent and

    

    predictable basis

    

Over 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 actively oversees our broader strategy and our ability to successfully execute it.

In 2021, we will continue to strategically and efficiently invest in BlackRock to optimize future growth to benefit 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 classes; and further integrate sustainability across our platform.

 


Table of Contents

LOGO

 

 

LOGO  

 

 

 

 

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 16, 2021

To Our Shareholders:

Just 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 our 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 COVID-19, we are once again holding BlackRock’s Annual Meeting of Shareholders virtually. We welcome you to join us on May 26, 2021 at 8:00 a.m. EDT at www.virtualshareholdermeeting.com/BLK2021. You may vote your shares via the Internet and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/BLK2021. As we do each year, we will address the voting items in this year’s Proxy Statement and take your questions. Regardless of whether you plan to join the meeting, your vote is important, and we encourage you to review the enclosed materials and submit your proxy.

Over the past year, the COVID-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 path to recovery, I am a long-term optimist and am 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 confront 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 all 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 testament to the trust our clients place in us to help them navigate uncertain markets and our ability to meet their needs. Our diverse global investment platform – with active and index strategies across all asset classes, integrated technology, data and risk management, and global scale and connectivity enables us to deliver 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 in each of 19 countries and 104 different products, reflecting the strength 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 executed on our shareholder value framework by delivering revenue, operating income and earnings growth. After investing back in our business to serve all our stakeholders, we returned approximately $3.8 billion of cash to shareholders through a combination of dividends and share repurchases.

The strength and consistency of BlackRock’s results, regardless of the market environment, are directly linked to our diverse and engaged Board, and strong corporate governance and sustainability frameworks. BlackRock’s Board plays an integral role in our governance, strategy, growth and success. It has always been important that our Board functions as a key strategic governing body that 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 ensure 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 people experience financial well-being. It is critical that we continue aggressively investing in our business to serve clients, inspire our employees and 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 and I hope to see you in person next year.

Sincerely,

 

 

LOGO

Laurence D. Fink

Chairman and Chief Executive Officer

 

 

  

 



Table of Contents

Notice of 2021

Annual Meeting of

Shareholders

Annual Meeting of Shareholders

 

 

  

 

  

 

LOGO

 

 

Date & Time

     

LOGO

 

   Location                                          

LOGO

 

 

Record Date

  
Wednesday, May 26, 2021  www.virtualshareholdermeeting.com/  Monday, March 29, 2021
8:00 a.m. EDT  BLK2021   

 

Voting Matters

At or before the 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

  LOGO Vote FOR each

director nominee            

   10 
    

Item 2 Approval, in a Non-Binding Advisory Vote, of the Compensation for Named Executive Officers

  LOGO 

 

Vote FOR

   52 

Item 3 Ratification of the Appointment of the Independent Registered Public Accounting Firm

  LOGO 

 

Vote FOR

   90 
    

Items 4A-4C Approval 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

  LOGO 

 

Vote FOR

   93 

 

Item 5 Shareholder Proposal – Amend Certificate of Incorporation to Convert to a Public Benefit Corporation

  LOGO 

 

Vote AGAINST

  

 

 

 

98

 

 


Table of Contents

 

 

Your vote is important — How to vote:

LOGO

   Internet  

LOGO

   Mail

 

Visit the website listed on your proxy card. You will need the control number that appears on your proxy card when you access the web page.

 

 

 

 

Complete and sign the proxy card and return it in the enclosed postage pre-paid envelope.

    

LOGO

   Telephone 

 

 

LOGO

   During the Meeting

 

If your shares are held in the name of a broker, bank or other nominee: Follow the telephone voting instructions, if any, provided on your voting instruction card. If your shares are registered in your name: Call 1-800-690-6903 and follow the telephone voting instructions. You will need the control number that appears on your proxy card.

 

 

 

 

 

This year’s meeting will be virtual. For details on voting your shares during
the Annual Meeting, see “Questions and Answers about the Annual Meeting and Voting.”

 

 

 

 

Please note that we are furnishing proxy materials and access to our Proxy Statement to our shareholders via our website instead of mailing printed copies to each of our shareholders. By doing so, we save costs and reduce our impact on the environment.

 

Beginning on April 16, 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,

 

 

        

 

How to Sign up for Electronic Delivery

 

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.

 

LOGO

 

 

R. Andrew Dickson III

Corporate Secretary

April 16, 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/


Table of Contents

 

Contents

 


 


 

Annex D  
Amendment to Our Charter to Eliminate Supermajority Voting Requirements – Item 4B   D-1 
Annex E  
Amendments to Our Charter to Eliminate Provisions That Are No Longer Applicable and Make Other Technical Revisions – Item 4C   E-1 

 

    
     Index of Frequently Requested Information       

 

 BlackRock’s Impact on its People   37  

 

 

 Sustainability at BlackRock   35  

 

 

 Board Diversity   12  

 

 

 CEO Pay Ratio   88  

 

 

 Clawback Policy   79  

 

 

 Director Independence   11  

 

 

 Hedging and Pledging Policy   79  

 

 

 Peer Group   65  

 

 

 Public Policy Engagement   41  

 

 

 Stock Ownership Guidelines for Directors   43  

 

 

 Stock Ownership Guidelines for NEOs   79  

 

          
 

 


 

BLACKROCK, INC. 2021 PROXY STATEMENT    i

 



Table of Contents

 

 

 

Helpful Resources

 

Where You Can Find

More Information

Annual Meeting

 

Proxy Statement:

http://ir.blackrock.com/financials/annual-reports-and-proxy

Annual Report:

http://ir.blackrock.com/financials/annual-reports-and-proxy

Voting Your Proxy via the Internet Before the

Annual Meeting:

www.proxyvote.com

Board of Directors

 

http://ir.blackrock.com/board-of-directors

Communications with the Board

 

http://ir.blackrock.com/governance-overview under the heading

“Contact Our Board of Directors”

Governance Documents

 

http://ir.blackrock.com/governance-overview

 

 Categorical Standards of Director Independence

 

 Corporate Governance Guidelines

 

 Committee Charters

 

 Code of Business Conduct and Ethics

 

 Code of Ethics for Chief Executive and Senior Financial Officers

 

 Lead Independent Director Guidelines

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

 

AUM  Assets under Management
CEO  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

Governance

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

Traditional

Peers

  Traditional Peers refers to public company asset managers: Alliance Bernstein, Affiliated Managers Group, Franklin Resources, Invesco and T. Rowe Price

 

 

 

ii    BLACKROCK, INC. 2021 PROXY STATEMENT


Table of Contents

 

Proxy Summary


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

 

 

  

 

  

 

LOGO

 

 

Date & Time

     

LOGO

 

   Location                                          

LOGO

 

 

Record Date

  
Wednesday, May 26, 2021  www.virtualshareholdermeeting.com/  Monday, March 29, 2021
8:00 a.m. EDT  BLK2021   

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 has the knowledge, experience, skills and background necessary to contribute to an effective and well-functioning Board.

   LOGO  Vote FOR each
director nominee
   10 

ITEM 2. Approval, in a Non-Binding Advisory Vote, of the Compensation for Named Executive Officers

 

BlackRock seeks a non-binding advisory vote from its shareholders to approve the compensation of the NEOs as disclosed in this Proxy Statement. The Board values the opinions of our shareholders and will take into consideration the outcome of the advisory vote when considering future executive compensation decisions.

   LOGO  

 

Vote FOR

   52 

ITEM 3. Ratification of the Appointment of the Independent Registered Public Accounting Firm

 

The Audit Committee has appointed Deloitte to serve as BlackRock’s independent registered public accounting firm for the 2021 calendar year and this appointment is being submitted to our shareholders for ratification. The Audit Committee and the Board believe that the continued retention of Deloitte to serve as BlackRock’s independent auditor is in the best interests of the Company and its shareholders.

   LOGO  

 

Vote FOR

   90 

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.

   LOGO  

 

Vote FOR

   93 

ITEM 5. 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.

   LOGO  

 

Vote AGAINST

   98 

 


 

 

BLACKROCK, INC. 2021 PROXY STATEMENT    

 

1


Table of Contents

 

 

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:

 

Disclosures of Board-level oversight in connection with COVID-19 – see “Board Oversight of COVID-19 Response” on page 24

 

 


Enhanced disclosure on BlackRock’s approach to sustainability – see “Sustainability at BlackRock” on page 35

Enhanced disclosure on human capital management, including our Diversity, Equity and Inclusion strategy – see “BlackRock’s Impact on its People” on page 37

 

Enhanced disclosure on Board diversity – see “Board Profile and Diversity” and “Board Diversity” on pages 3 and 12

 

 

Governance Highlights

Board Composition

(16 director nominees)

The Board 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 regularly reviews the overall composition of the Board and its Committees to assess whether it reflects the appropriate mix of skills, experience, backgrounds and qualifications that are relevant to BlackRock’s current and future global business and 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.

 

LOGO 

 

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:

 

 

LOGO

 

(1)

Percentages do not sum to 100% due to rounding.

 

2     BLACKROCK, INC. 2021 PROXY STATEMENT 


Table of Contents

 

 

Proxy Summary  |  Governance Highlights

 

Board Independence and Leadership

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.

 

 

                      LOGO

Board Profile and Diversity

The partnership and oversight of a diverse board with proven leadership experience is essential to creating long-term shareholder value.

 

 

                      LOGO

 

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.

    

LOGO

           

 

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:

 

LOGO 

  Investment   Stewardship

  LOGO    

Social

Impact

  LOGO    

Corporate Sustainability

  LOGO    

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.

 

 

BLACKROCK, INC. 2021 PROXY STATEMENT    

 

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Table of Contents

 

 

Proxy Summary  |  Governance Highlights

 

Our Director Nominees

 

  

Age at
Record
Date

      Committee Memberships
(effective following the Annual Meeting)

 

Nominee

 Primary Occupation Director
since
  Audit  Compensation Governance Risk Executive

Bader M. Alsaad

 63 Chairman of the Board and Director General of the Arab Fund for Economic & Social Development  2019   

 

 

 

 

 

  

 

    

 

Pamela Daley

 68 Former Senior Vice President of Corporate Business Development, General Electric Company  2014      

 

  

 

  

Jessica P. Einhorn

 73 Former Dean of Paul H. Nitze School of Advanced International Studies at Johns Hopkins University  2012   

 

 

 

 

 

   

 

   

 

Laurence D. Fink

 68 Chairman and CEO of BlackRock  1999   

 

 

 

 

 

  

 

  

 

  

 

 

William E. Ford

 59 Chairman and CEO of General Atlantic  2018   

 

 

 

 

 

    

 

 

Fabrizio Freda

 63 President and CEO of Estée Lauder Companies Inc.  2012   

 

 

 

 

 

  

 

   

 

  

 

Murry S. Gerber

Lead Independent Director

 68 Former Chairman and CEO of EQT Corporation  2000      

 

   

 

 

Margaret “Peggy”

L. Johnson

 59 CEO of Magic Leap, Inc.  2018       

 

  

 

  

 

Robert S. Kapito

 64 President of BlackRock  2006   

 

 

 

 

 

  

 

  

 

  

 

  

 

Cheryl D. Mills

 56 Founder and CEO of BlackIvy Group  2013   

 

 

 

 

 

    

 

  

 

Gordon M. Nixon

 64 Former President and CEO of Royal Bank of Canada  2015   

 

 

 

 

 

    

 

 

Charles H. Robbins

 55 Chairman and CEO of Cisco Systems, Inc.  2017   

 

 

 

 

 

  

 

  

 

   

 

Marco Antonio

Slim Domit

 52 Chairman of Grupo Financiero Inbursa, S.A.B. de C.V.  2011       

 

  

 

  

 

Hans E. Vestberg

 55 Chairman and CEO of Verizon Communications, Inc.  N/A      

 

  

 

  

 

  

 

Susan L. Wagner

 59 Former Vice Chairman of BlackRock  2012      

 

  

 

  

Mark Wilson

 54 Co-Chairman and CEO of Abacai  2018     

 

 

 

  

 

Number of Committee Meetings Held in 2020:

  

 

 

 

 

 

  14  9 6 7 0

 

   Chairperson

 

4     BLACKROCK, INC. 2021 PROXY STATEMENT 


Table of Contents

 

 

Proxy Summary  |  Governance Highlights

 

Governance Practices

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:

 

 Annual election of directors

 

 Majority voting for directors in uncontested elections

 

 Lead Independent Director may call special meetings of directors without management present

 

 Executive sessions of independent directors

 

 Annual Board and Committee evaluations

 

 Risk oversight by Board and Committees

 

 Strong investor outreach program

 

 Meaningful stock ownership requirements for directors and executives
 Annual advisory vote on executive compensation

 

 Proxy access for shareholders

 

 Annual review of Committee charters and Corporate Governance Guidelines

 

 Human capital management oversight by Board and Committees

 

 Governance Committee oversight of corporate and investment stewardship-related policies and programs relating to social, environmental and other sustainability matters, BlackRock’s philanthropy program and strategy and corporate political activities
 

 

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 GEC members to own 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 them. We report back to our Board on this engagement as well as specific issues to be addressed.

 

 

LOGO

 

 

BLACKROCK, INC. 2021 PROXY STATEMENT    

 

5


Table of Contents

 

 

Proxy Summary  |  Compensation Discussion and Analysis Highlights

 

Compensation Discussion and

Analysis Highlights

Compensation Policies and Practices

Our commitment to designing an executive compensation program that is consistent with responsible financial and risk management is reflected in the following policies and practices:

 

 

What We Do

 

LOGO  Review pay and performance alignment;

 

LOGO  Balance short- and long-term incentives, cash and equity and fixed and variable pay elements;

 

LOGO  Maintain a clawback policy that allows for the recoupment of annual and long-term performance-based compensation in the event that financial results require a significant restatement due to the actions of an employee;

 

LOGO  Provide for the forfeiture of equity awards upon certain restrictive covenant breaches and other actions constituting cause for termination;

 

LOGO  Require one-year minimum vesting for awards granted under the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan (the “Stock Plan”);

 

LOGO  Maintain meaningful stock ownership and retention guidelines;

 

LOGO  Prohibit hedging, pledging or short selling of BlackRock securities by Section 16 officers and directors;

 

LOGO  Limit perquisites;

 

LOGO  Assess and mitigate compensation risk;

 

LOGO  Solicit an annual advisory vote on executive compensation; and

 

LOGO  Annually review the independence of the compensation consultant retained by the Compensation Committee.

 

  

 

What We Don’t Do

 

LOGO  No ongoing employment agreements or guaranteed compensation arrangements for NEOs;

 

LOGO  No automatic single trigger vesting of equity awards or transaction bonus payments upon a change-in-control;

 

LOGO  No dividends or dividend equivalents on unearned RSUs, stock options or stock appreciation rights;

 

LOGO  No repricing of stock options;

 

LOGO  No cash buyouts of underwater stock options;

 

LOGO  No tax reimbursements for perquisites;

 

LOGO  No tax gross-ups for excise taxes;

 

LOGO  No supplemental retirement benefits for NEOs; and

 

LOGO  No supplemental severance benefits for NEOs beyond standard severance benefits under BlackRock’s Severance Pay Plan (the “Severance Plan’’).

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:

 

What to Look for

 

Where to Find it

LOGO Compensation program objectives “Our Compensation Program” beginning on page 60
LOGO Performance assessments for NEOs based on weighted, pre-set objectives “How We Determine Total Incentive Amounts for NEOs” on page 8
LOGO 

Assessments include financials as the highest

weighted input, including relative and

year-over-year performance

 

“2020 Financial Performance” on page 56

“2020 NEO Compensation and Performance Summaries” beginning on page 67

LOGO Total incentive outcomes tied to formulaic percentage ranges 

“Pay and Performance Alignment for NEOs – Total Incentive Award Determination” on page 57

NEO Total Annual Compensation Summary” on page 58

LOGO Actual performance of historical incentive awards 2017 BPIP Award: Actual Performance and Payout” on page 63

 

6     BLACKROCK, INC. 2021 PROXY STATEMENT 


Table of Contents

 

 

Proxy Summary  |  Compensation Discussion and Analysis Highlights

 

2020 Financial Performance(1)

BlackRock’s 2020 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 full 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 to serve all our stakeholders, drive long-term growth and lead the evolution of the asset management industry. Long-term investment performance results across our alpha-seeking and index strategies as of December 31, 2020 remain strong and are detailed in Part I, Item 1 – Business of our 2020 Form 10-K.

 

Differentiated Organic Growth      

Operating Leverage

  

BlackRock generated 5% organic asset
growth
and 7% organic base fee growth in 2020

  

BlackRock improved its Operating Margin,

as adjusted, by 120 bps to 44.9% in 2020

  

 

LOGO      LOGO
Consistent Capital Return  

Earnings Per Share Growth

  

BlackRock returned $3.8 billion to
shareholders in 2020

  

BlackRock grew diluted earnings per share,
as adjusted, by 19% to $33.82 in 2020

  

 

LOGO      LOGO

 

(1)

Amounts in this section, where noted, are shown on an “as adjusted” basis. For a reconciliation with GAAP, please see Annex A.

 

(2)

Traditional Peers refers to public company asset managers: Alliance Bernstein, Affiliated Managers Group, Franklin Resources, Invesco and T. Rowe Price.

 

 

BLACKROCK, INC. 2021 PROXY STATEMENT    

 

7


Table of Contents

 

 

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 67.

How We Determine Total Incentive Amounts for NEOs

 

  

BlackRock Performance

% of Award Opportunity

 

 

Measures

 

 

Indicative BlackRock Performance Metrics

 

   
    

2019

 

2020

 

  Financial

  Performance

 

 

 

LOGO

 

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

 

 

 

LOGO

 

 

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.

 

 

  Organizational

  Strength

 

 

LOGO

 

 

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.

 

 

(1)

Amounts are shown on an “as adjusted” basis. For a reconciliation with GAAP, please see Annex A.

 

(2)

Traditional Peers refers to public company asset managers: 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.

 

8     BLACKROCK, INC. 2021 PROXY STATEMENT 


Table of Contents

 

 

Proxy Summary  |  Compensation Discussion and Analysis Highlights

 

NEO Total Annual Compensation Summary

Following a review of full-year business and individual NEO performance, the Compensation Committee determined 2020 total annual compensation outcomes for each NEO, as outlined in the table below.

 

    
 

 

   

 

   

2020 Total Incentive Award

 

    

 

    

 

 
      

Name

  

Base

Salary

   Cash   

Deferred

Equity

   

Long-Term

Incentive Award

(BPIP)

   

Total Annual

Compensation

(“TAC”)

   

% change in

TAC vs. 2019

 

Laurence D. Fink

  

 

$1,500,000

 

  

 

$9,500,000

 

  

 

$3,950,000

 

  

 

$14,900,000

 

  

 

$29,850,000

 

  

 

18%

 

Robert S. Kapito

  

 

$1,250,000

 

  

 

$8,250,000

 

  

 

$3,937,500

 

  

 

$11,187,500

 

  

 

$24,625,000

 

  

 

23%

 

Robert L. Goldstein

  

 

$500,000

 

  

 

$3,175,000

 

  

 

$2,325,000

 

  

 

$5,750,000

 

  

 

$11,750,000

 

  

 

19%

 

Mark Wiedman

  

 

$500,000

 

  

 

$2,675,000

 

  

 

$1,725,000

 

  

 

$5,600,000

 

  

 

$10,500,000

 

  

 

24%

 

Gary S. Shedlin

  

 

$500,000

 

  

 

$2,800,000

 

  

 

$1,850,000

 

  

 

$3,350,000

 

  

 

$8,500,000

 

  

 

18%

 

The amounts listed above as “2020 Total Incentive Award: Deferred Equity” and “2020 Total Incentive Award: Long-Term Incentive Award (BPIP)” were granted in January 2021 in the form of equity and are in addition to the cash award amounts listed above as “2020 Total Incentive Award: Cash.” In conformance with SEC requirements, the “2020 Summary Compensation Table” on page 81 reports equity in the year granted but cash in the year earned.

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 2020 year-end compensation decisions for individual NEOs by the Compensation Committee.

 

 

LOGO

 

(1)

All grants of BlackRock equity, including the portion of the annual incentive awards granted in RSUs and the portion granted under the BlackRock Performance Incentive Plan (“BPIP Awards”), our long-term incentive plan, are approved for each NEO by the Compensation Committee under the Stock Plan, which has been previously approved by shareholders. The Stock Plan allows for multiple types of awards to be granted.

 

(2)

The value of the 2020 BPIP Awards and the value of the annual incentive deferred equity awards were converted into RSUs by dividing the award value by $739.22, which represented the average of the high and low prices per share of common stock of BlackRock on January 15, 2021.

 

(3)

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 60.

 

 

    BLACKROCK, INC. 2021 PROXY STATEMENT    

 

9


Table of Contents

 

Item 1:


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

 

    

Director Nominees

 

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.

 


 

10     BLACKROCK, INC. 2021 PROXY STATEMENT 


Table of Contents

ITEM 1:  Election of Directors  |  Director Nominees

 

Director Nomination Process

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 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 nominate for election at each annual meeting of shareholders. The Governance Committee also may 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 from current directors when identifying and evaluating new candidates for director. The Governance Committee also may engage third-party firms that specialize in identifying director candidates to assist with its search. Shareholders can recommend a candidate for election to the Board by submitting director recommendations to the Governance Committee. For information on the requirements governing shareholder nominations for the election of directors, please see “Deadlines for Submission of Proxy Proposals, Nomination of Directors and Other Business of Shareholders” on page 103.

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.

 

 

LOGO

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.

Criteria for Board Membership

Director Independence

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. 2021 PROXY STATEMENT    

 

11


Table of Contents

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 49.

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 49. 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 when reviewing candidates for nomination to the Board. The Board believes that, at a minimum, a director nominee must demonstrate, by significant accomplishment in his or her field, an ability to make a meaningful contribution to the Board’s oversight of the business and affairs of BlackRock. Equally important, a director nominee 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.

Board Diversity

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 nationality – as well as diversity of mind – a priority when considering director candidates. 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. BlackRock’s commitment to Board diversity enhances the Board’s involvement in our Company’s multifaceted long-term strategy and inspires deeper engagement with management, employees and clients around the world.

Our Board has nominated 16 candidates for election, 14 of whom are independent. The slate of director nominees includes five women and six 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, the Middle 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.

 

12     BLACKROCK, INC. 2021 PROXY STATEMENT 


Table of Contents

ITEM 1:  Election of Directors  |  Criteria for Board Membership

 

As BlackRock’s business has evolved, so has our Board. Our slate of director nominees consists of senior leaders, including 12 current or former company CEOs, with substantial experience in financial services, consumer products, manufacturing, technology, banking and energy, as well as several director nominees who have held senior policy and government positions. Core qualifications and areas of expertise represented on our Board include:

 

 

LOGO

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 eight years and the average tenure of independent director nominees is approximately six years.

Following the Annual Meeting, assuming all of the nominated directors are elected, there will be six directors, comprising 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.(1) The Board believes it is important to balance refreshment with the need to retain directors who have developed, over time, significant insight into the Company and its operations and who continue to make valuable contributions to the Company that benefit our shareholders.

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 Size. The Board has not adopted a policy that sets a target for Board size and believes the current size and diverse composition of the Board 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

 

 

BLACKROCK, INC. 2021 PROXY STATEMENT  �� 

 

13


Table of Contents

ITEM 1:  Election of Directors  |  Criteria for Board Membership

 

As described in “Board Evaluation Process” on page 27, 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, 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 nor President currently serves 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.

Director Candidate Search

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 international experience. Particular emphasis is also placed on diverse candidates currently serving in leadership positions.

Board Recommendation

For this year’s election, the Board has nominated 16 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 following biographical information about each director nominee highlights the particular experience, qualifications, attributes and skills possessed by such 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, 2021.

 

 

LOGO

 

14     BLACKROCK, INC. 2021 PROXY STATEMENT 


Table of Contents

ITEM 1:  Election of Directors  |  Director Nominee Biographies

 

Director Nominee Biographies

 

 

LOGO  

         

 

 

Bader M. Alsaad

 

Mr. Alsaad has served as Chairman of the Board and Director General of the Arab Fund for Economic & Social Development (the “Fund”) since September 2020. As Director General, Mr. Alsaad serves as the chief executive officer of the Fund. He also serves as a member of the board of directors of the Kuwait Investment Authority (KIA), a position he has held since 2003. He served as Managing Director of the KIA from December 2003 until April 2017. Prior to his appointment at KIA, Mr. Alsaad served as the Chief Executive Officer of one of the leading investment companies in Kuwait, The Kuwait Financial Center. Mr. Alsaad is currently a member of the Global Advisory Council of Bank of America, a member of the board of directors of the Kuwait Fund for Economic Development and a member of the supervisory board of Daimler AG. He also served as the Chairman and Deputy Chairman of the International Forum of Sovereign Wealth Funds from its inception in 2009 until October 2015.

 

Qualifications

 

Mr. AIsaad’s extensive experience in the strategically important Middle East region and over 35 years of experience in investments and the financial sector provides the Board with an experienced outlook on international business strategy and global capital markets.

 

Other Public Company Directorships (within the past 5 years)

 

  Daimler AG (2017 – present)

Age

 

63

 

 

Tenure

 

1 Year

  

Committees

 

•  Governance

 

•  Risk

 

Qualifications

 

•  Senior Executive & Corporate Governance

 

•  Financial Services

 

•  Global Business

 

•  Public Policy & Government/ Regulatory Affairs

 

•  Risk Management & Compliance

 

  
    

    

 

LOGO  

         

 

 

Pamela Daley

 

Ms. Daley retired from General Electric Company (GE) in January 2014, having most recently served as a Senior Advisor to its Chairman from April 2013 to January 2014. Prior to this role, Ms. Daley served as GE’s Senior Vice President of Corporate Business Development from 2004 to 2013 and as Vice President and Senior Counsel for Transactions from 1991 to 2004. As Senior Vice President, Ms. Daley was responsible for GE’s mergers, acquisitions and divestiture activities worldwide. Previously, Ms. Daley was a Partner of Morgan, Lewis & Bockius, a large U.S. law firm, where she specialized in domestic and cross-border tax-oriented financings and commercial transactions.

 

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

 

•  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    

 

15


Table of Contents

ITEM 1:  Election of Directors  |  Director Nominee Biographies

 

 

LOGO  

         

 

 

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 the National Bureau of Economic Research and was formerly a Director of the Peterson Institute for International Economics. As of July 2012, Ms. Einhorn is resident at The Rock Creek Group in Washington, D.C., where she is a Senior Advisor and longstanding member of The Rock Creek Group Advisory Board.

 

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 an in-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 – June 2018)

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

 

  

 

 

LOGO  

         

 

 

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. Fink co-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 and in-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

 

  

 

16     BLACKROCK, INC. 2021 PROXY STATEMENT 


Table of Contents

ITEM 1:  Election of Directors  |  Director Nominee Biographies

 

 

LOGO  

         

 

 

William E. Ford

 

Mr. Ford has served as the Chief Executive Officer of General Atlantic since 2007 and is the firm’s Chairman. Mr. Ford is actively involved with a number of educational and not-for-profit organizations and also serves on the Executive Committee of the Partnership for New York City, the board of directors of the National Committee on United States-China Relations and is a member of The Council on Foreign Relations. He is also a member of the Steering Committee for the CEO Action for Diversity and Inclusion initiative. Mr. Ford has formerly served on the boards of First Republic Bank, NYSE Euronext, E*Trade, Priceline, NYMEX Holdings and Computershare.

 

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. (2016 – present)

  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

 

  

 

 

LOGO  

         

 

 

Fabrizio Freda

 

Mr. Freda has served as President, Chief Executive Officer and as a member of the board of directors of The Estée Lauder Companies Inc. (Estée Lauder) since 2009. Mr. Freda previously served as Estée Lauder’s President and Chief Operating Officer from March 2008 to July 2009. Estée Lauder is a global leader in beauty with more than 25 brands and over 40,000 employees worldwide. Prior to joining Estée Lauder, Mr. Freda held various senior positions at Procter & Gamble Company over the span of 20 years. From 1986 to 1988, Mr. Freda directed marketing and strategic planning for Gucci SpA.

 

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

 

  

 

 

BLACKROCK, INC. 2021 PROXY STATEMENT    

 

17


Table of Contents

ITEM 1:  Election of Directors  |  Director Nominee Biographies

 

 

LOGO  

         

 

 

Murry S. Gerber

 

Mr. Gerber served as Executive Chairman of EQT Corporation, an integrated energy production company, from 2010 until May 2011, as its Chairman from 2000 to 2010, as its President from 1998 to 2007 and as its Chief Executive Officer from 1998 to 2000. Prior to joining EQT Corporation, Mr. Gerber served as the CEO of Coral Energy (now Shell Trading North America) from 1995 to 1998. He is also a member of the board of trustees of the Pittsburgh Cultural Trust. Mr. Gerber currently serves as BlackRock’s Lead Independent Director.

 

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

 

68

 

 

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

 

  

 

 

LOGO  

         

 

 

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 from September 2014 to July 2020 and was responsible for driving strategic business deals and partnerships across various industries. Ms. Johnson joined Microsoft from Qualcomm Incorporated, where she served in various leadership positions across engineering, sales, marketing and business development. She most recently served as Executive Vice President of Qualcomm Technologies, Inc. and President of Global Market Development. Ms. Johnson is an Advisor to Huntington’s Disease Society of America, San Diego Chapter.

 

Qualifications

 

Ms. Johnson brings to the Board substantive experience in the field of technology as well as business and strategic development expertise acquired over her 28 years at Microsoft and Qualcomm.

 

Other Public Company Directorships (within the past 5 years)

 

  Live Nation Entertainment (2013 – June 2018)

Age

 

59

 

 

Tenure

 

3 Years

  

Committees

 

•  Audit

 

•  Compensation

 

Qualifications

 

•  Senior Executive & Corporate Governance

 

•  Branding & Marketing

 

•  Global Business

 

•  Public Policy & Government/ Regulatory Affairs

 

•  Technology

 

  

 

18     BLACKROCK, INC. 2021 PROXY STATEMENT 


Table of Contents

ITEM 1:  Election of Directors  |  Director Nominee Biographies

 

 

LOGO  

         

 

 

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. Kapito co-founded BlackRock in 1988. He is responsible for the day-to-day oversight of BlackRock’s key operating units including Investment Strategies, Client Businesses, Technology & Operations and Risk & Quantitative Analysis. Prior to 2007, Mr. Kapito served as Vice Chairman of BlackRock and Head of BlackRock’s Portfolio Management Group.

 

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 addition to in-depth knowledge about BlackRock’s businesses, investment strategies and risk management, as well as extensive experience overseeing day-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

 

  

 

 

LOGO  

         

 

 

Cheryl D. Mills

 

Ms. Mills is Founder and Chief Executive Officer of the BlackIvy Group, a private holding company that grows and builds businesses in Sub-Saharan Africa. Previously, she served as Chief of Staff to former Secretary of State Hillary Clinton and Counselor to the U.S. Department of State from 2009 to 2013. Ms. Mills was with New York University from 2002 to 2009, where she served as Senior Vice President for Administration and Operations, General Counsel and as Secretary of the Board of Trustees. She also served as Deputy Counsel to President Clinton and as the White House Associate Counsel. Ms. Mills previously served on the boards of Cendant Corporation (now Avis Budget Group, Inc.), a consumer real estate and travel conglomerate, and Orion Power, an independent electric power generating company.

 

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 and non-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)

 

  iHeartMedia, Inc. (2020 – Present)

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

 

  

 

 

BLACKROCK, INC. 2021 PROXY STATEMENT    

 

19


Table of Contents

ITEM 1:  Election of Directors  |  Director Nominee Biographies

 

 

LOGO  

         

 

 

Gordon M. Nixon, C.M., O.Ont.

 

Mr. Nixon served as President, Chief Executive Officer and a member of the board of directors of Royal Bank of Canada (RBC) from 2001 to 2014. He first joined RBC Dominion Securities Inc. in 1979, where he held a number of operating positions and from December 1999 to April 2001 was Chief Executive Officer of RBC Capital Markets (the successor company to RBC Dominion Securities Inc.). Mr. Nixon has served on the board of directors of BCE Inc. since 2014 and as Chairman of the board since 2016. He is also on the advisory board of Kingsett Capital.

 

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 an in-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

 

 

  

 

 

LOGO  

         

 

 

Charles H. Robbins

 

Mr. Robbins serves as the Chairman and Chief Executive Officer of Cisco Systems, Inc. (Cisco). Prior to assuming this role in July 2015, he was Senior Vice President of Cisco’s Worldwide Field Operations and led its Worldwide Sales and Partner Organization where he helped drive and execute many of Cisco’s investment areas and strategy shifts. He is Chairman Emeritus of the U.S.-Japan Business Council and serves as a member of the International Business Council for the World Economic Forum. Mr. Robbins is also on the board of directors of the Business Roundtable and is a Trustee of the Ford Foundation.

 

Qualifications

 

Mr. Robbins brings to the Board extensive experience in the fields of technology, global sales and operations acquired over his 20 years at Cisco, one of world’s leading information technology companies.

 

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

 

  

 

20     BLACKROCK, INC. 2021 PROXY STATEMENT 


Table of Contents

ITEM 1:  Election of Directors  |  Director Nominee Biographies

 

 

LOGO  

         

 

 

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 from 1997 until April 2012. Mr. Slim is also a member of the board of directors of Grupo Carso, S.A.B. de C.V. and Chairman of The Carlos Slim Health Institute and of Impulsora del Desarrollo y el Empleo en América Latina, S.A.B. de C.V. (IDEAL), an infrastructure company. Mr. Slim was a member of the board of directors of Teléfonos de México, S.A.B. de C.V. from 1995 until April 2014.

 

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, business strategy and integration to the Board.

 

Other Public Company Directorships (within the past 5 years)

 

  Grupo Carso, S.A.B. de C.V. (1991 – present)

  Grupo Financiero Inbursa, S.A.B. de C.V. (Chairman from 1997 – present)

  Impulsora del Desarrollo y el Empleo en América Latina, S.A.B. de C.V. (Chairman from 2012 – present)

Age

 

52

 

 

Tenure

 

9 Years

  

Committees

 

•  Audit

 

•  Compensation

 

Qualifications

 

•  Senior Executive & Corporate Governance

 

•  Financial Services

 

•  Global Business

 

•  Public Company & Financial Reporting

 

•  Risk Management & Compliance

 

  

 

 

LOGO  

         

 

 

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

 

  

 

 

BLACKROCK, INC. 2021 PROXY STATEMENT    

 

21


Table of Contents

ITEM 1:  Election of Directors  |  Director Nominee Biographies

 

 

LOGO  

         

 

 

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 Health (privately held) and Samsara (privately held).

 

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

 

  

 

 

LOGO  

         

 

 

Mark Wilson

 

Mr. Wilson has served as Co-Chairman and CEO of Abacai, an insurance technology company, since February 2021. Mr. Wilson previously served as the Chief Executive Officer of Aviva plc (Aviva), a multinational insurance company headquartered in the U.K., from January 2013 to October 2018. Prior to joining Aviva, Mr. Wilson worked in Asia for 14 years, including as Chief Executive Officer of AIA Group Limited, a leading pan-Asian company. Mr. Wilson is recognized for his leadership on sustainability issues and is a member of the UN Business and Sustainable Development Commission.

 

Qualifications

 

As the former Chief Executive Officer of Aviva and CEO of Abacai, Mr. Wilson brings to the Board extensive experience in Europe and Asia and his operational and executive expertise in the insurance and pensions industry and in international finance provides the Board with an experienced outlook on international business strategy, development and sustainability.

 

Other Public Company Directorships (within the past 5 years)

 

  Aviva plc (2013 – October 2018)

Age

 

54

 

 

Tenure

 

3 Years

  

Committees

 

•  Risk

 

 

Qualifications

 

•  Senior Executive & Corporate Governance

 

•  Financial Services

 

•  Global Business

 

•  Public Company & Financial Reporting

 

•  Public Policy & Government/ Regulatory Affairs

 

  

 

22     BLACKROCK, INC. 2021 PROXY STATEMENT 


Table of Contents

Corporate Governance

BlackRock’s corporate governance framework is a set of principles, guidelines and practices that support consistent 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 meet with our shareholders to solicit feedback on our corporate governance framework. We strive 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 our Corporate Governance Guidelines, Committee charters and other governance policies at least once a year and approves or updates them as necessary and appropriate. Additionally, both the Board and 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.

 

 

 

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 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 BlackRock Principles represent our core values, our aspirations and our cultural language. To learn more, please visit our website www.blackrock.com.

 

 

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Table of Contents

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 37.

  
Employee Engagement & Additional Resources  Our directors have full and free access to BlackRock management and employees at any time to address questions, comments or concerns. Our directors may arrange these meetings independently and without the presence of senior management. Additionally, the Board and its Committees have the power to hire independent legal, financial or other advisors without approval from, or consultation with, BlackRock management.
  
Embracing Best Practices  

Our Board also takes an active role in ensuring we embrace “best practices” in corporate governance. Members of the Governance Committee are briefed on significant trends and developments in corporate governance and regulatory issues, including briefings from BlackRock’s Investment Stewardship, Corporate Sustainability and Global Public Policy teams, as well as feedback from shareholders. In 2020, we acted on feedback from our shareholders to enhance disclosure on how the Board approaches its composition and diversity.

 

For more information, see “Board Profile and Diversity” and “Board Diversity” on pages 3 and 12, respectively.

 

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;

 

 

our 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.

 

24     BLACKROCK, INC. 2021 PROXY STATEMENT 


Table of Contents

Corporate Governance  |  Our Board and Culture

 

 

Beyond the Boardroom

 

 
    
       

 

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.

 

 
    

 

 

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Corporate Governance  |  Our Board Leadership Structure

 

Our Board Leadership Structure

Why our Board leadership structure is right for BlackRock

Our Board and Governance Committee reviews and evaluates the Board’s leadership 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. In addition, the Board believes that this structure allows for robust and frequent communication between the Board’s independent directors and management and enables the Board to better understand the Company and work with management to enhance shareholder value.

Under our Lead Independent Director Guidelines, when the positions of Chief Executive Officer and Chairman of the 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 appointed annually by BlackRock’s independent directors and serve until a successor is duly appointed and qualified, his or her removal or resignation, or he or she is no longer an independent member of the Board. Although appointed annually, we 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.

 

 

 

 

 

LOGO

 

Our Lead Independent Director:

Murry S. Gerber

 

Serving since 2017

  

The Role of the Lead Independent Director

 

  

Our Lead Independent Director has significant authority and responsibilities to provide for an
effective and independent Board. In this role, Mr. Gerber:

 

     Develops and approves the agenda for Board
    meetings, in consultation with the Chairman
    and Committee Chairs.

 

   Leads executive sessions and facilitates
    discussion of the Company’s strategy, key
    governance issues (including succession
    planning) and the performance of BlackRock
    senior executives at each executive session.

 

   Serves as liaison between independent
    directors and the Chairman.

     Focuses on Board effectiveness, performance
    and composition with input from the
    Governance Committee.

 

   Oversees and reports on annual Board and
    Committee performance evaluations, in
    consultation with the Governance Committee.

 

   Serves as the primary Board contact for
    shareholder engagement.

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 of non-management directors are held at every regularly scheduled Board meeting, and six executive sessions were held in 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.

 

 

The full versions of our Lead Independent Director Guidelines and other corporate governance policies are available on our website at http://ir.blackrock.com under the headings “Governance / Governance Overview.”

 

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Corporate Governance  |  Board Evaluation Process

 

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 maintain their effectiveness, the Board and each standing Committee annually conduct comprehensive evaluations to identify and assess areas for improvements.

 

 

LOGO

 

 

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Corporate Governance  |  Board Refreshment

 

LOGO

 

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Corporate Governance  |  Board Committees

 

Board Committees

Each Committee is governed by a Board-approved Charter.

Board Committee Meetings and Members

The Board has five 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            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

149670

(1)  Mr. Cabiallavetta will not be standing for re-election at the Annual Meeting.

  

  Chairperson

The Board met 10 times during 2020. In 2020, each of 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. All 16 directors who were serving on the Board and nominated for re-election in 2020 attended the 2020 Annual Meeting of Shareholders.

 

 

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Corporate Governance  |  Board Committees

 

Board Committee Refreshment

The Governance Committee considers the periodic rotation of Committee members and Committee Chairs to introduce fresh perspectives and to broaden and diversify the views and experience represented on the Committees.

 

 

On November 20, 2019, the Board appointed Mr. Alsaad to serve as a member of the Risk Committee and a member of the Governance Committee, each appointment effective January 28, 2020. Mr. Alsaad brings expertise in international business strategy and global capital markets as well as experience in investments and the financial sector.

 

 

On March 18, 2020, the Board appointed Mr. Ford to serve as Chair of the Compensation Committee and as a member of the Executive Committee, each appointment effective May 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. Vestberg and Wilson to serve as members of the Audit Committee, effective May 26, 2021 (following the Annual Meeting and subject to their election by shareholders). Mr. Vestberg brings financial expertise from having served as a 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 the Board’s Committees with brief descriptions of each Committee’s membership, roles and responsibilities as of the date of this Proxy Statement.

 

 

Audit Committee

 

 

Chair

 

 

Pamela Daley

  

 

Members

  

 

Mathis Cabiallavetta

William E. Ford

 

  

 

Murry S. Gerber

Margaret “Peggy” L. Johnson

 

  

 

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 registered public accounting firm’s qualifications, performance and independence, the performance of BlackRock’s internal audit function and BlackRock’s compliance with legal and regulatory requirements.

 

 

The Audit Committee receives reports on:

 

   The progress and results of the internal audit program, as provided by BlackRock’s Head of Internal Audit, and approves BlackRock’s internal audit plan;

 

   External audit findings, as provided by BlackRock’s independent registered public accounting firm, Deloitte;

 

   Financial controls regarding compliance with the Sarbanes-Oxley Act of 2002, as provided by the Head of Financial Controls and presented by management;

 

   The Company’s Risk Management program, as provided by BlackRock’s Chief Risk Officer;

  

 

   Financial updates, as provided by the Chief Financial Officer;

 

   Cybersecurity updates, as provided by the Chief Information Security Officer;

 

   Compliance updates, as provided by the Global Chief Compliance Officer;

 

   Litigation, regulatory and material ethics matters, as provided by BlackRock’s Chief Legal Officer; and

 

   Risk matters addressed at the Risk Committee, as provided by the Chair of the Risk Committee.

 

 

Additionally, as part of the Audit Committee’s responsibility for oversight of the Company’s major financial risk exposures, the Audit Committee reviews and discusses with management the Company’s approach to assessing and managing risk in coordination with the Risk Committee.

 

The Audit Committee is also responsible for the appointment, compensation, retention and oversight of the work of the independent registered public accounting firm retained to audit BlackRock’s financial statements. The Audit Committee approves all audit engagement fees and terms associated with the retention of Deloitte. In addition to ensuring the regular rotation of the lead audit partner, as required by law, the Audit Committee selects, reviews and evaluates the lead audit partner and determines whether there should be periodic rotation of the independent registered public accounting firm.

 

The Audit Committee regularly holds separate sessions with BlackRock’s management, internal auditors and Deloitte.

 

The Board has determined that each member of the Audit Committee is “independent” as defined in the NYSE listing standards and applicable SEC rules, is “financially literate,” and has accounting and related financial management expertise within the meaning of the NYSE listing standards. All members of the Audit Committee, with the exception of Ms. Johnson, qualify as “audit committee financial experts” under applicable SEC rules.

 

 

 

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Corporate Governance  |  Board Committees

 

 

Management Development & Compensation Committee

 

 

Chair(1)

 

 

William E. Ford

  

 

Members

  

 

Jessica P. Einhorn

Margaret “Peggy” L. Johnson

 

    

 

        Cheryl D. Mills

        Gordon M. Nixon

 

 

 

Marco Antonio Slim Domit

 

 

Role and Responsibilities

 

   Reviewing and approving corporate goals and objectives relevant to CEO compensation, evaluating the CEO’s performance in light of those goals and objectives and determining and approving the CEO’s overall compensation levels based on this evaluation;

 

   Reviewing BlackRock’s executive compensation program and establishing the compensation framework of BlackRock’s executive officers;

 

   Periodically reviewing and approving director compensation;

 

   Reviewing, approving, recommending to the Board, or delegating to management the oversight of, BlackRock’s benefits plans;

 

   Considering and discussing the results of the advisory “say-on-pay” vote;

 

   Providing oversight of BlackRock’s executive compensation program and determining whether our program remains effective to attract, motivate and retain senior officers capable of making significant contributions to BlackRock’s long-term success;

 

   Reviewing, assessing and making reports and recommendations to the Board on BlackRock’s strategies relating to human capital management, with an emphasis on talent development, performance against talent and diversity goals and succession planning, in each case, at the highest management levels; and

 

   Appointment, compensation and oversight of the work of any compensation consultant, legal counsel or other advisor retained by the Compensation Committee.

 

 

The Board has determined that each member of the Compensation Committee is “independent” as defined in the NYSE listing standards and applicable SEC rules and qualifies as a “non-employee director” under applicable SEC rules.

 

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 53 and “Compensation Discussion and Analysis” beginning on page 54.

 

 

 

 

Nominating, Governance & Sustainability Committee

 

 

Chair

 

 

Gordon M. Nixon

  

 

Members(1)

  

 

Bader M. Alsaad

Mathis Cabiallavetta

 

    

 

Fabrizio Freda

Murry S. Gerber

 

  

 

Cheryl D. Mills

 

 

Role and Responsibilities

 

   Recommending to the Board criteria for the selection of new directors to serve on the Board;

 

   Identifying individuals qualified to become members of the Board;

 

   Recommending to the Board the director nominees for the next annual meeting of shareholders or candidates to fill vacancies or newly created directorships that may occur between annual meetings;

 

   Recommending to the Board members for each Committee;

 

   Leading the Board in its annual review of the Board’s performance;

 

   Evaluating and recommending to the Board corporate governance policies, practices and guidelines applicable to the Company;

 

   Overseeing BlackRock’s Related Persons Transaction Policy;

 

  

   Reviewing the Company’s engagement with shareholders on governance matters and considering shareholder proposals and proposed responses;

 

   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 rules.

 

 

 

(1)

Ivan G. Seidenberg served as Chair of the Compensation Committee and a member of the Governance Committee until May 21, 2020.

 

 

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Corporate Governance  |  Board Committees

 

 

Risk Committee

 

 

Chair

 

 

Susan L. Wagner

  

 

Members(1)

  

 

Bader M. Alsaad

Pamela Daley

 

    

 

Jessica P. Einhorn

Charles H. Robbins

 

  

 

Mark Wilson

 

 

Role and Responsibilities

 

The Risk Committee assists the Board with its oversight of the Company’s levels of risk, risk assessment, risk management and related policies and processes in connection with the following types of risk and related areas:

 

 

Enterprise Risks

 

   Market risks from volatility in financial markets;

 

   Contractually indemnified risks;

 

   Operational risks from failed or inadequate processes relating to investment management processes, new products and services, third–party relationships, model risk and change;

 

   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 BlackRock’s key risks.

  

Fiduciary Risks

 

   Investment risks being taken on behalf of clients in their portfolios or accounts;

 

   Risks of default by client counterparties; and

 

   Pricing and valuation risk that BlackRock’s counterparties misprice assets in client portfolios or accounts.

 

Other

 

   Reputational risk; and

 

   Any other areas of risk delegated to the Risk Committee by the Board.

 

 

The Committee regularly reviews a detailed risk profile report prepared by the Chief Risk Officer which covers a wide range of topics and potential issues that could impact BlackRock.

 

The Risk Committee also reviewed and discussed with management the Risk Factors included in the 2020 Form 10-K and received reports from members of management responsible for identifying and monitoring these risks.

 

 

 

 

Executive Committee

 

 

Chair

 

 

Laurence D. Fink

  

 

Members(1)

  

 

Pamela Daley

William E. Ford

 

    

 

Murry S. Gerber

Gordon M. Nixon

 

  

 

Susan L. Wagner

 

 

Role and Responsibilities

 

The Executive Committee has all the powers of the Board, except as prohibited by applicable law and BlackRock’s Amended and Restated Bylaws (“Bylaws”), and except to the extent another Committee has been accorded authority over the matter. The Executive Committee may meet to exercise such powers between meetings of the Board.

 

 

 

(1)

William S. Demchak served as a member of the Risk Committee and Executive Committee until May 15, 2020.

 

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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

 

LOGO

 

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

 

 

 

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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:

 

LOGO 

  Investment   Stewardship

  LOGO    

Social

Impact

  LOGO    

Corporate Sustainability

  LOGO    

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.

 

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.

 

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Corporate Governance  |  Sustainability at BlackRock

 

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 Aladdin Climate 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.

 

 

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Corporate Governance  |  Sustainability at BlackRock

 

 

Sustainability is

integrated into

BlackRock’s strategy for

delivering long-term

growth and into how we

operate our business

  

Sustainability in Our Strategy:

 

Investing to be the global leader in sustainable investing by making sustainability integral to the way we manage risk, construct portfolios, design products and engage with companies on behalf of our clients

 

Sustainability in Our Operations:

 

Advancing sustainable business practices to support the long-term sustainability of our own firm and deliver value for all stakeholders

 

 

Integrating sustainability into our long-term growth strategy

 

 

    

Dedicated Sustainable Investment Platform

  

  $200 billion of AUM as of December 31, 2020

 

  200+ sustainable choices offered

 

  100 new sustainable products launched in 2020

 

        Data &   Technology  

We’ve released over 1,000 ESG metrics on the Aladdin platform, and we continue to develop tools to better manage climate risk in portfolios

      
    

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.

 

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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 94 to 95 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:

 

 We are a fiduciary to our clients

 

 We are passionate about performance

 

 We are committed to a better future
 We are One BlackRock

 

 We take emotional ownership
 

 

Read more about the BlackRock Principles on our website at www.blackrock.com.

 

 

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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 a long-term commitment to cultivating 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 changing 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 Talent 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 inclusive 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 firm’s goals.

 

Employee Engagement

We value continuous dialogue with our employees about their experiences. We have several employee feedback mechanisms including:

 

 quarterly employee opinion pulse surveys;

 

 interactive townhalls and communications; and

 

 the sponsorship of employee, professional and social impact networks.

In 2021, we shifted from annual to quarterly employee opinion surveys to create a more continuous feedback channel with our employees. The opinion surveys and other engagement mechanisms provide us with actionable feedback for each team and for the firm 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.

 

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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.

 

 

LOGO

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 which enable 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.

 

 

 

 

 

 

 

 

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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 important 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 progress that is being made against the firm’s DEI goals, influence individual compensation outcomes that are reviewed and approved by the Compensation Committee. For a discussion on how organizational strength objectives such as attracting and inspiring talent and developing a more diverse and inclusive culture are factored into performance assessments of BlackRock’s NEOs, see “2020 NEO Compensation and Performance Summaries” beginning on page 67.

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 this review, the Board focuses on whether BlackRock has the right people in place to execute the Company’s long-term strategic plans, and on BlackRock’s ability to identify, attract, develop and retain future senior executives. An important element of the succession planning across the organization is a commitment to building leadership from within and increasing diversity in leadership roles.

 

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Corporate Governance  |  Corporate Governance Practices and Policies

 

Corporate Governance Practices and Policies

Management Succession Planning

Our Board recognizes the importance of succession planning for the CEO and other key executives at BlackRock. The Board, in 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 appropriate succession for 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 and Political 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 BlackRock’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.

BlackRock’s Chief Legal Officer and members of the Global Public Policy Group regularly brief both the Board’s Risk and Governance Committees to keep directors apprised of, and engaged in, BlackRock’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 BlackRock’s engagement in the public policy process, BlackRock participates in a number of trade associations that advocate for and shape public policy positions that are important to the asset management industry and the global business community. Trade associations also provide educational, training and professional networking opportunities for their members. BlackRock participates in these associations for such opportunities and to help build consensus on issues that we believe 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 well as those trade associations to which we paid in 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 position through public statements or termination of our membership in the trade association.

 

 

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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 U.S. federal law, BlackRock may not contribute corporate funds or make in-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 U.S. are governed by Municipal Securities Rulemaking Board Rule G-37, Rule 206(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. Information about BlackRock’s lobbying activities, including contributions required to be disclosed under the Lobbying Disclosure Act, is publicly available at http://www.senate.gov/legislative/lobbying.

BlackRock maintains a federal PAC that is funded in accordance with applicable federal law on a voluntary basis by employees of the Company who are U.S. citizens or green card holders. The PAC makes contributions at the federal level on a bi-partisan basis consistent with the Company’s contribution policies and public policy goals and without regard to the private political preferences of management. As required by law, all political contributions by the PAC are reported to the Federal Election Commission and are publicly disclosed at www.fec.gov.

BlackRock maintains compliance processes designed to ensure that its activities are conducted in accordance with our 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 to be addressed.

 

 

LOGO

Also see “Compensation Discussion and Analysis” beginning on page 54 for a discussion of our compensation related shareholder engagement initiatives and our 2020 say-on-pay vote result.

 

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Corporate Governance  |  Communications with the Board

 

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:

 

 

LOGO

 

 

 

Mail:

 

 

BlackRock, Inc.

Attn: Board of Directors

c/o Corporate Secretary

40 East 52nd Street

New York, New York 10022

 

 

         

 

 

LOGO

 

 

Online:

 

 

Go to the BlackRock website at www.blackrock.com. Under the headings “Our Company and Sites / About BlackRock / Investor Relations / Governance / Governance Overview / Contact Our Board of Directors,” you will find a link that may be used for writing an electronic message to the Board, the Lead Independent Director, any individual director or any group or committee of directors.

  
         

BlackRock’s Corporate Communications, Investor Relations and Legal and Compliance Departments will review all communications received to determine whether the contents represent a message 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 handled in accordance with procedures established for reporting certain matters to the Audit Committee.

Shareholders are encouraged to visit the “Governance / Governance Overview” page of the BlackRock website at http://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.

2020 Director Compensation

Independent directors receive compensation, including retainers 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 a minimum target number of shares, as described below.

The Compensation Committee is responsible for reviewing director compensation periodically and making recommendations to the Board. The Compensation Committee also reviews the director compensation practices of peer corporations. For more information on these peer groups, please refer to “Role of the Compensation Consultant” on page 65. 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 Interests

 

 

 

FOCUS ON EQUITY COMPENSATION

 

  

 

 

STOCK/EQUITY OWNERSHIP REQUIREMENT

 

The largest portion of independent director compensation is the annual equity grant, payable in deferred stock units.

 

  

All independent directors are required to own shares valued at a minimum of $500,000 (over five times the annual board retainer) within five years of joining the Board. All directors have met or are on track to meet this requirement.

 

 

 

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Corporate Governance  |  2020 Director Compensation

 

2020 Elements of Director Compensation

For services provided in 2020, each independent director received an annual retainer paid quarterly in arrears at an annualized rate of $85,000, as well as Committee annual retainers paid quarterly in arrears at the following annualized rates: $40,000 for Chair, and $25,000 for members of, the Audit Committee; and $30,000 for Chairs, and $15,000 for members of, the Compensation, Governance and Risk Committees. Our Lead Independent Director received an additional annual retainer paid quarterly in arrears at an annualized rate of $100,000. In addition, each independent director had the right to elect to receive BlackRock common stock valued at an equivalent fair market value in lieu of all or a portion of his or her annual retainer and Committee annual retainers.

In addition, each independent director received an annual equity grant, awarded in deferred stock units valued at $240,000. 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 May 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.

The following table shows the elements of director compensation provided by BlackRock for services in 2020.

 

 

 

Director Compensation Element

  

 

Payment or Value of Equity

   

Board Service(1)

    

 

LOGO

Annual Retainer(2)

   $85,000  

Annual Equity Grant(3)

   $240,000 deferred stock units 
          

 

Lead Independent Director

  

 

 

 

$100,000

 

 

 
          

Committee Service

   

Committee Annual Retainers(2)

   Chair   Member 

Audit Committee

   $40,000   $25,000 

Compensation Committee

   $30,000   $15,000 

Governance Committee

   $30,000   $15,000 

Risk Committee

   $30,000   $15,000             
            

 

(1)

Board Service and Committee Service Retainers. Directors have the right to elect to receive their annual retainers in the form of BlackRock common stock. Directors also have a right to elect, no later than December of the prior calendar year, to receive their annual retainers in the form of deferred stock units that are fully vested on the date of grant, and to elect for such deferred stock units, as well as deferred stock units granted as part of the annual equity grant, to be settled in shares of BlackRock common stock in a lump sum on the date the director ceases to be a member of the Board or in five equal installments beginning on the date the director ceases to be a member of the Board and continuing on each of the next four anniversaries of such date.

 

(2)

Timing of Payments. Board Service and Committee Service Retainers are paid in January, April, July and October, based on service during the prior quarter. New Board members rotating through the standing Committees receive one general Committee retainer. From time to time, the Company also makes available, as an accommodation to all of its directors upon request, basic office space at its existing locations and administrative support, as needed.

 

(3)

Annual Equity Grant. Directors were granted an annual equity award following their election to the Board of Directors at the Annual Meeting of Shareholders on May 21, 2020. The award will be delivered on the earlier of (i) the third anniversary of the date of grant and (ii) the date a director ceases to be a member of the Board.

 

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Corporate Governance  |  2020 Director Compensation

 

2020 Total Director Compensation

Directors in 2020 who were also employees of BlackRock or PNC are not listed in the table below because they did not receive compensation for serving as directors or Committee members. In 2020, directors who were not employees of BlackRock or PNC each received the amounts set forth below and were also reimbursed for reasonable travel and related expenses.

2020 Total Director Compensation Table

 

   

Name

  

 

Fees Earned
or Paid in  Cash
($)
(1)

   Stock Awards
($)
(2)
   

Total

($)

 

Bader M. Alsaad

  

 

114,120

 

  

 

239,508

 

  

 

353,628

 

Mathis Cabiallavetta

  

 

124,040

 

  

 

239,508

 

  

 

363,548

 

Pamela Daley

  

 

139,153

 

  

 

239,508

 

  

 

378,661

 

Jessica P. Einhorn

  

 

115,000

 

  

 

239,508

 

  

 

354,508

 

William E. Ford

  

 

135,634

 

  

 

239,508

 

  

 

375,142

 

Fabrizio Freda

  

 

98,451

 

  

 

239,508

 

  

 

337,959

 

Murry S. Gerber

  

 

225,000

 

  

 

239,508

 

  

 

464,508

 

Margaret “Peggy” L. Johnson

  

 

124,040

 

  

 

239,508

 

  

 

363,548

 

Cheryl D. Mills

  

 

115,096

 

  

 

239,508

 

  

 

354,604

 

Gordon M. Nixon

  

 

128,811

 

  

 

239,508

 

  

 

368,319

 

Charles H. Robbins

  

 

98,451

 

  

 

239,508

 

  

 

337,959

 

Ivan G. Seidenberg(3)

  

 

64,219

 

  

 

–  

 

  

 

64,219

 

Marco Antonio Slim Domit

  

 

123,507

 

  

 

239,508

 

  

 

363,015

 

Susan L. Wagner

  

 

139,019

 

  

 

239,508

 

  

 

378,527

 

Mark Wilson

  

 

98,577

 

  

 

239,508

 

  

 

338,085

 

 

(1)

Includes fees paid in cash and shares of common stock granted on March 31, June 30, September 30 and December 31, 2020, respectively, based on the closing market prices on such dates of $439.97, $544.09, $563.55 and $721.54, respectively, awarded at the election of the director in lieu of all or a portion of his or her annual retainers. Each of the following directors elected to receive common stock in lieu of the following amounts: Mr. Alsaad – $37,449; Mr. Cabiallavetta – $40,702; Ms. Daley – $139,153; Ms. Einhorn – $0; Mr. Ford – $135,634; Mr. Freda – $98,451; Mr. Gerber – $0; Ms. Johnson – $40,702; Ms. Mills – $0; Mr. Nixon – $128,811; Mr. Robbins – $98,451; Mr. Seidenberg – $64,219; Mr. Slim – $81,845; Ms. Wagner – $45,681; and Mr. Wilson – $31,907.

 

(2)

Includes the annual grants to each non-employee director of 471 deferred stock units of BlackRock with a grant date fair value of $240,000 pursuant to FASB ASC Topic 718. For complete valuation assumptions for the awards, see Note 18 to the consolidated financial statements in our 2020 Form 10-K. As of December 31, 2020, each non-employee director held the following outstanding deferred stock units: 2,166 deferred stock units for Ms. Daley; 2,046 deferred stock units for Mr. Ford; 1,770 deferred stock units for Mr. Nixon; 1,607 deferred stock units for Mr. Seidenberg; 1,551 deferred stock units for Mr. Slim; 1,506 deferred stock units for Ms. Johnson; 1,472 deferred stock units for Mr. Wilson; 1,380 deferred stock units for Mr. Gerber; 1,355 deferred stock units for each of Messrs. Cabiallavetta, Freda, Robbins and Mses. Einhorn, Mills and Wagner and 471 deferred stock units for Mr. Alsaad.

 

(3)

Mr. Seidenberg retired from the Board effective May 21, 2020.

 

 

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Corporate Governance  |  Other Executive Officers

 

Other Executive Officers

In addition to Messrs. Fink and Kapito, whose biographical information is included on pages 16 and 19, 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 47

  

Senior Managing Director, has been Chief Operating Officer since 2014 and has been the Head of BlackRock Solutions, which leverages the Company’s unique risk analytics capabilities and capital markets insights to deliver unbiased advice and expertise to other institutions, since 2009. He led BlackRock’s Institutional Client Business from 2012 to 2014. Mr. Goldstein has spent his entire career at BlackRock, beginning in 1994 as an analyst in the Company’s Portfolio Analytics Group.

    

J. Richard Kushel

age 54

  

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 from 2018 to 2020. Mr. Kushel was Chief Product Officer and Head of Strategic Product Management from 2014 to 2016, Deputy Chief Operating Officer from 2012 to 2014, Head of the Portfolio Management Group from 2010 to 2012 and Chairman of BlackRock’s International platform from 2009 to 2010. Mr. Kushel has been with BlackRock since 1991.

    

Rachel Lord

age 55

  

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 is the Global Executive Sponsor of the Women’s Initiative Network. From 2013 to 2017, she was EMEA Head of iShares and Head of Global Clients, ETF and Index Investments. Ms. Lord joined BlackRock in November 2013 from Citigroup where she was the Global Head of Corporate Equity Derivatives.

    

Mark S. McCombe

age 55

  

Senior Managing Director, has been Chief Client Officer since 2019. In addition, Mr. McCombe serves as Co-Head of Global Client Portfolio Solutions. Previously, he served as Head of Americas from 2017 to 2019, Global Head and Chairman of BlackRock Alternative Investors from 2015 to 2017, Global Head of BlackRock’s Institutional Client Business from 2014 to 2016 and Head of BlackRock’s Asia Pacific region from 2012 to 2014. Before joining BlackRock, Mr. McCombe served as Chief Executive Officer in Hong Kong for HSBC from 2010 to 2012.

    

Christopher J. Meade

age 52

  

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 57

  

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 the Co-Head of the Financial Institutions Group at Lazard Ltd.

    

Mark Wiedman

age 50

  

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 iShares and Index Investments. Mr. Wiedman joined BlackRock in 2004 to help start what became the Financial Markets Advisory Group. Prior to joining BlackRock, he was Senior Advisor to the Under Secretary for Domestic Finance at the U.S. Treasury and a management consultant at McKinsey & Company.

    

 

46     BLACKROCK, INC. 2021 PROXY STATEMENT 


Table of Contents

Ownership of BlackRock

Common Stock

The following table includes certain information about the beneficial ownership of BlackRock’s voting securities as of March 31, 2021, by:

 

 Each person who is known by BlackRock to own beneficially more than 5% of any class of outstanding voting securities of BlackRock;

 

 Each of BlackRock’s directors and nominees;
 Each of the executive officers named in the 2020 Summary Compensation Table; and

 

 All of BlackRock’s executive officers and directors as a group.
 

 

Except as otherwise noted, each individual exercises sole voting power or investment power over the shares of voting securities shown. The number of shares of voting securities shown in the following Security Ownership Table as beneficially owned by each director and executive officer is determined under the rules of the SEC. The information is not necessarily indicative of beneficial ownership for any other purpose. For purposes of the Security Ownership Table, beneficial ownership includes any shares of voting securities as to which the individual has sole or shared voting power or investment power and also any shares of common stock which the individual has the right to acquire within 60 days of March 31, 2021, through the exercise of any option, warrant or right. All fractional shares have been rounded to the nearest whole number.

 

 

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47


Table of Contents

Ownership of BlackRock Common Stock 

 

As of March 31, 2021, there were 152,635,930 shares of BlackRock’s common stock outstanding.

 

    
   

            Amount of  beneficial

ownership
of common stock
(1)

   

Percent of

            common  stock
outstanding

   

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

                    

Kuwait Investment Authority, acting for and on behalf of the Government of the State of Kuwait

   7,993,064(4)    5.18%        7,993,064(4) 

Ministries Complex, Block 3

Safat, Kuwait 13001

                    

Bader M. Alsaad

   88    *    796    884 

Mathis Cabiallavetta(5)

   6,944    *    1,357    8,301 

Pamela Daley

   4,367    *    1,357    5,724 

Jessica P. Einhorn

   3,191    *    1,357    4,548 

Laurence D. Fink

   750,633    *    14,106    764,739 

William E. Ford

   10,109    *    1,357    11,466 

Fabrizio Freda

   4,865    *    1,357    6,222 

Murry S. Gerber

   40,380    *    1,357    41,737 

Robert L. Goldstein

   31,541    *    7,269    38,810 

Margaret “Peggy” L. Johnson

   603    *    1,357    1,960 

Robert S. Kapito(5)

   282,694    *    12,544    295,238 

Cheryl D. Mills

   3,210    *    1,357    4,567 

Gordon M. Nixon

   1,607    *    1,357    2,964 

Charles H. Robbins

   1,111    *    1,357    2,468 

Gary S. Shedlin

   7,515    *    5,648    13,163 

Marco Antonio Slim Domit

   4,371    *    1,357    5,728 

Hans E. Vestberg

       *         

Susan L. Wagner

   430,867    *    1,357    432,224 

Mark Wiedman

   4,187    *    5,479    9,666 

Mark Wilson

   461    *    1,357    1,818 

All directors, nominees and executive officers as a group (26 persons)(5)

   1,767,541    1.16%    88,530    1,856,071 

 

*

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 unvested/unsettled RSUs and unvested stock options.

 

(2)

Does not include BPIP Awards.

 

(3)

Based on the Schedule 13G of The Vanguard Group, Inc. filed on February 10, 2021. The Vanguard Group, Inc. reported it held 0 shares with sole voting power, 236,313 shares with shared voting power, 11,496,927 shares with sole dispositive power and 640,714 shares with shared dispositive power.

 

(4)

Based on the Schedule 13G of the Kuwait Investment Authority (the “KIA”), acting for and on behalf of the Government of the State of Kuwait, filed on July 7, 2020. The KIA reported it held 0 shares with sole voting power, 7,993,064 shares with shared voting power, 0 shares with sole dispositive power and 7,993,064 shares with shared dispositive power.

 

(5)

Includes shares of BlackRock common stock held jointly, indirectly and/or in trust (other than shares the beneficial ownership of which has been disclaimed).

 

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Table of Contents

Certain Relationships and

Related Transactions

PNC and its Subsidiaries

On May 15, 2020, a subsidiary of PNC 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 under the fully exercised underwriters’ option to purchase additional shares.

Also on May 15, 2020, BlackRock completed its repurchase from PNC of 2,650,857 shares of common stock pursuant to a stock repurchase agreement, between PNC and BlackRock. Additionally, William S. Demchak resigned from the BlackRock Board on May 15, 2020.

The secondary offering and the Company’s share repurchase resulted in PNC’s exit of its entire ownership position in the Company. As a result, PNC is 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 2020 totaled $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 $8.7 million for 2020. BlackRock also recorded revenue of $2.8 million related to non-discretionary trading services.

BlackRock incurred expenses of $3.1 million to PNC affiliates in 2020 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 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 or co-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 and co-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.

PNC Stockholder Agreement

During 2020, BlackRock was a party to the PNC Stockholder Agreement, which governed 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 capital stock fell below five percent. A description of the key provisions of the PNC Stockholder Agreement, as well as the approval process for transactions (other than transactions in the ordinary course of business) with PNC, is set forth in Annex B.

 

 

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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.

Related person transactions must be approved or ratified by a majority of the 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.

 

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Table of Contents

Management Development

& Compensation Committee

Interlocks and Insider

Participation

The members of the Compensation Committee during 2020 were Mses. Einhorn, Johnson and Mills and Messrs. Ford (Chairperson), Nixon, Seidenberg (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 as a:

 

 

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;

 

 

Director of another entity, one of whose executive officers served on the Compensation Committee of BlackRock; or

 

 

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.

 

 

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Table of Contents

 

Item 2:


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 NEOs as disclosed in this Proxy Statement.

While this vote is advisory, and not binding on the Company, it will provide information to us regarding investor sentiment about our executive compensation philosophy, policies and practices. We 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 our NEOs presented in the summary of our executive compensation practices on page 78, as well as our “Compensation Discussion and Analysis” beginning on page 54.

Our pay-for-performance compensation philosophy is structured to align management’s interests with our shareholders’ interests. A significant portion of total compensation for executives is closely linked to BlackRock’s financial and operational performance as well as BlackRock’s common stock price performance. BlackRock has adopted strong governance practices for its employment and compensation programs. Compensation programs are reviewed annually to ensure that they do not promote excessive risk-taking.

Board Recommendation

 

 

LOGO

 


 

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Table of Contents

Management Development

& Compensation Committee

Report

Management Development & Compensation Committee Report on Executive Compensation for Fiscal Year 2020

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-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 & COMPENSATION COMMITTEE

William E. Ford, Chair

Jessica P. Einhorn

Margaret “Peggy” L. Johnson

Cheryl D. Mills

Gordon M. Nixon

Marco Antonio Slim Domit

 

 

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Table of Contents

 

Executive Compensation


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.

 

            
     

 

Laurence D. Fink          

 

  

 

Robert S. Kapito

 

  

 

Robert L. Goldstein

 

Chief Operating

Officer

 

  

 

Mark Wiedman

 

  

 

Gary S. Shedlin          

 

     
 

Chairman and

Chief Executive

Officer

 

  

President

   

Head of

International and of

Corporate Strategy

 

  

Chief Financial

Officer

   
            

Table of Contents

 

 

 


 

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Table of Contents

 

 

Compensation Discussion and Analysis  |  1. Introduction

 

1.

Introduction

Shareholder Engagement on Executive Compensation

Our Board recognizes the importance of executive compensation decisions to our stakeholders. The annual say-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 2020 Annual Meeting of Shareholders, the say-on-pay advisory vote received significant support, with approximately 94% of the votes cast in favor of our executive compensation policies, practices and determinations. Our Board encourages an open and constructive dialogue with shareholders on compensation to ensure alignment on policies and practices.

In advance of this year’s Annual Meeting, we targeted stewardship officers at BlackRock’s 50 largest shareholders, representing 69% of our total outstanding shares, to discuss 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 performance. No consistent or prevalent concerns were raised from our engagements.

BlackRock Shareholder Value Framework

BlackRock is committed to delivering long-term shareholder value. While our financial results can 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:

 

 Generate differentiated organic growth;

 

 Leverage our scale for the benefit of stakeholders; and

 

 Return capital to shareholders on a consistent and predictable basis.

 

 

LOGO

BlackRock’s commitment to delivering shareholder value is aligned with the way we manage our business. By putting clients’ interests first and delivering investment, portfolio construction and technology solutions to help meet their objectives, we are able to grow our business by adding new AUM and increasing technology services revenue, resulting in Organic Revenue growth.(1)

BlackRock’s scale is one of the firm’s key strategic advantages and is an important driver of operating leverage that benefits clients, shareholders, employees and the communities in which we operate. We take advantage of scale in numerous areas of our business including our index-based and cash investment strategies, brand spend, technology platform, including our Aladdin business, and our external vendor relationships.

In 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, has enabled us to generate stable cash flow through market cycles and positions BlackRock to consistently invest for future growth and return capital to our shareholders. For more details, refer to “Business Outlook” on page 34 of our 2020 Form 10-K.

 

 

 

(1)

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 revenue, excluding the effect of market appreciation/(depreciation) and foreign exchange. Organic Revenue is not directly correlated with the actual revenue earned in a given year.

 

 

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Compensation Discussion and Analysis  |  2020 Financial Performance

 

2020 Financial Performance(1)

BlackRock’s 2020 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 full 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 to serve all our stakeholders, drive long-term growth and lead the evolution of the asset management industry. Long-term investment performance results across our alpha-seeking and index strategies as of December 31, 2020 remain strong and are detailed in Part I, Item 1 – Business of our 2020 Form 10-K.

 

Differentiated Organic Growth

BlackRock generated 5% organic asset growth and 7% organic base fee growth in 2020

 

 Total net inflows of $391 billion, positive across all client channels, asset classes and regions, represented organic asset growth of 5%, compared to Traditional Peers(2) who generated, on average, -4% organic asset decay;

 

 Technology services revenue grew 17% year-over-year, partially driven by the acquisition of eFront in May 2019, and eclipsed $1 billion in annual revenue; and

 

 Total revenue increased 11% from 2019 to $16,205 million.

 

 

LOGO

Operating Leverage

BlackRock improved its Operating Margin, as adjusted, by 120 bps to 44.9% in 2020

 

 Our 2020 operating margin, as adjusted, reflected a strategic commitment to investing for the long-term and benefited from record performance fees and securities lending revenue during the year and a lower level of “core” G&A expense than anticipated; and

 

 Operating income, as adjusted, of $6,284 million was up 13% from 2019.

 

 

 

LOGO

 

 

 

Consistent Capital Return

BlackRock returned $3.8 billion to shareholders in 2020

 

 Annual dividend of $14.52 per share reflected an increase of 10% from $13.20 in 2019; and

 

 $1.5 billion of shares were repurchased during 2020, including $1.1 billion as part of PNC’s successful sale of its entire 22% ownership position, resulting in a net reduction of 3.4 million shares.

 

 

 

LOGO

 

Earnings Per Share Growth

BlackRock grew diluted earnings per share, as adjusted, by 19% to $33.82 in 2020

 

 Robust organic growth, operating margin expansion, consistent share repurchases and higher non-operating income drove a 19% increase in earnings per share.

 

 

LOGO

 

 

(1)

Amounts in this section, where noted, are shown on an “as adjusted” basis. For a reconciliation with GAAP, please see Annex A.

(2)

Traditional Peers refers to public company asset managers: Alliance Bernstein, Affiliated Managers Group, Franklin Resources, Invesco and T. Rowe Price.

 

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Table of Contents

 

 

Compensation Discussion and Analysis  |  Our Compensation Framework

 

Our Compensation Framework

Our annual total compensation program for NEOs includes base salary, annual incentive awards (cash and deferred equity) and long-term performance-based incentive awards.

Pay and Performance Alignment for NEOs – Total Incentive Award Determination

Under the NEO total incentive award determination framework, the Compensation Committee assesses each NEO’s performance individually, based on three categories outlined below. Each category is assigned a weighting factor, 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. In the “2020 NEO Compensation and Performance Summaries” section, performance objectives and outcomes related to ESG are noted for each NEO with anLOGO ..

At the beginning of the year, the Compensation Committee and 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 performance measures and 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 67.

 

 

LOGO

 

(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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Compensation Discussion and Analysis  |  NEO Total Annual Compensation Summary

 

NEO Total Annual Compensation Summary

Following a review of full-year business and individual NEO performance, the Compensation Committee determined 2020 total annual compensation outcomes for each NEO, as outlined in the table below.

 

     
    

 

2020 Total Incentive Award

 

      
       

  Name

 

 

Base   

Salary   

 

 

Cash   

 

 

Deferred   

Equity   

 

  

 

Long-Term   

Incentive Award   

(BPIP)   

 

 

 

Total Annual   

Compensation   

(TAC)   

 

 

% change in   

TAC vs. 2019   

 

 

Performance 

Assessment 

 

Laurence D. Fink

 $1,500,000    $9,500,000     $3,950,000     $14,900,000    $29,850,000    18%    Far Exceeds 

Robert S. Kapito

 $1,250,000    $8,250,000     $3,937,500     $11,187,500    $24,625,000    23%    Far Exceeds 

Robert L. Goldstein

 $500,000    $3,175,000     $2,325,000     $5,750,000    $11,750,000    19%    Far Exceeds 

Mark Wiedman

 $500,000    $2,675,000     $1,725,000     $5,600,000    $10,500,000    24%    Far Exceeds 

Gary S. Shedlin

 $500,000    $2,800,000     $1,850,000     $3,350,000    $8,500,000    18%    Far Exceeds 

The amounts listed above as “2020 Total Incentive Award: Deferred Equity” and “2020 Total Incentive Award: Long-Term Incentive Award (BPIP)” were granted in January 2021 in the form of equity and are in addition to cash award amounts listed above as “2020 Total Incentive Award: Cash.” In conformance with SEC requirements, the 2020 Summary Compensation Table on page 81 reports equity in the year granted, but cash in the year earned.

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 2020 year-end compensation decisions for individual NEOs by the Compensation Committee.

 

 

LOGO

 

(1)

All grants of BlackRock equity, including the portion of the annual incentive awards granted in RSUs and the portion granted under the BPIP Awards, are approved for each NEO by the Compensation Committee under the Stock Plan, which has been previously approved by shareholders. The Stock Plan allows for multiple types of awards to be granted.

 

(2)

The value of the 2020 BPIP Awards and the value of the annual incentive deferred equity awards were converted into RSUs by dividing the award value by $739.22, which represented the average of the high and low prices per share of common stock of BlackRock on January 15, 2021.

 

(3)

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 60.

 

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Table of Contents

 

 

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.

 

 

LOGO

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.

 

 

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Compensation Discussion and Analysis  |  2. Our Compensation Program

 

2.

Our Compensation Program

Compensation Program Objectives

Our compensation program is designed to:

 

 

Appropriately allocate BlackRock’s profitability 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.

Compensation Elements

 

  

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.

 

Annual Incentive Award

 

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 are based on assessment of performance against three categories: financial, business strength and organizational strength, weighted 50%, 30% and 20% respectively. Each category has pre-identified objectives, which in turn are relative to budget/expectations, prior achievement or peer comparisons. A variety of factors are considered to determine the size of the CEO, President and other NEOs’ annual incentive awards. The Compensation Committee considers absolute and/or relative performance outcomes against Company, business and individual NEO goals and objectives, as well as the context in which they were achieved. These goals and objectives are set in the first quarter of each year and performance against them is assessed at year-end. See “Compensation Determination Process” beginning on page 64.

 

For Messrs. Fink and Kapito, the Compensation Committee determines the appropriate pay mix between cash and equity for their annual incentive awards. For the other NEOs, annual incentive awards are subject to deferral percentages in accordance with the Company-wide deferral policy. Deferral amounts follow a step-function approach, starting at 15% of the total award and increasing to 70% of the total award for the portion of the bonus in excess of $10 million.

 

(1)

For 2020 deferred equity, the award value was converted into a number of RSUs by dividing the award value by $739.22, which represented the average of the high and low prices per share of common stock of BlackRock on January 15, 2021.

 

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Compensation Discussion and Analysis  |  Compensation Elements

 

  

Element/How it is Paid

 Purpose Description

 

Long-Term Incentive Award

 

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 performance period and are paid in cash after the performance period with respect to the number of shares that are delivered in settlement of the award.

 

Expense, based on the expected number of awards to be delivered, is recognized over the vesting period.

 

 

 

 

 

To recognize the scope of an individual employee’s role, business expertise and leadership skills.

 

To recognize prior year performance and anticipate continued performance and long-term focus over a multi-year period.

 

Aligns the interests of senior-level employees with those of shareholders by aligning compensation with long-term drivers of shareholder value.

 

 

The Compensation Committee considers the role and influence of the NEO on setting long-term strategy and in executing long-term objectives in determining individual award amounts, although no specific formulas or weights are used to determine the size of a long-term incentive award. See “Compensation Determination Process” beginning on page 64.

 

The performance-based RSUs are settled in a number of shares of common stock that is determined based on attainment of pre-established Organic Revenue growth and Operating Margin, as adjusted, targets over a three-year performance period.

 

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 2020 BPIP Awards, the award value was converted into a base number of RSUs by dividing the award value by $739.22, which represented the average of the high and low prices per share of BlackRock common stock on January 15, 2021.

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.

Each year, the Compensation Committee approves 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 Awards are granted in the form of RSUs that vest after three years. The number of shares vesting under BPIP is based on attainment of specified levels of Organic Revenue growth and Operating Margin, as adjusted, over the three-year performance period. Awards are settled in the form of common stock.

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, and ended on December 31, 2020).

 

 

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Compensation Discussion and Analysis  |  BlackRock Performance Incentive Plan (BPIP)

 

 

BPIP Financial Metrics

 

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 revenue, excluding the effect of market appreciation/(depreciation) and foreign exchange. Organic Revenue is not directly correlated with the actual revenue earned in a given year.

 

•   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.

 

2020 BPIP Award Determination Matrix

Performance Period (2021-2023)

For the 2020 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 2020 BPIP Award Determination Matrix below. The percentage will be determined by BlackRock’s average annual Organic Revenue growth and Operating Margin, as adjusted, during the three-year performance period; performance between two adjacent points on the matrix will be interpolated.

A summary version of the matrix for the 2020 BPIP Awards granted in January 2021 is shown below.

 

  
   

3-yr Average Annual Organic Revenue growth ($ million)

    
      

3-yr Average  

Annual Operating Margin, as Adjusted  

 

  

<=0

 

   

475

 

   

675

 

   

875

 

   

>=1,075

 

   

 

 

>=50.5%  

  

 

100%

 

  

 

123%

 

  

 

133%

 

  

 

149%

 

  

 

165%

 

 

 

 

 

48.5%  

  

 

83%

 

  

 

112%

 

  

 

122%

 

  

 

138%

 

  

 

154%

 

 

 

 

 

46.5%  

  

 

67%

 

  

 

101%

 

  

 

111%

 

  

 

127%

 

  

 

143%

 

 

 

 

 

44.5%  

  

 

50%

 

  

 

85%

 

  

 

100%

 

  

 

116%

 

  

 

133%

 

 

 

Target Level

 

42.5%  

  

 

33%

 

  

 

69%

 

  

 

83%

 

  

 

105%

 

  

 

122%

 

 

 

 

 

40.5%  

  

 

17%

 

  

 

52%

 

  

 

67%

 

  

 

92%

 

  

 

111%

 

 

 

 

 

<=38.5%  

  

 

0%

 

  

 

35%

 

  

 

50%

 

  

 

75%

 

  

 

100%

 

 

 

 

 

If Target Level performance is achieved (i.e., during the three-year performance period following grant, average annual Organic Revenue growth equals $675 million and average annual Operating Margin, as adjusted, equals 44.5%), then a participant will receive a number of shares equal to 100% of the base number of units granted to the participant.

If during the three-year performance period following grant, BlackRock has zero or negative average annual Organic Revenue growth and average annual Operating Margin, as adjusted, of 38.5% or less, then the participant will not be entitled to any shares under his 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.

 

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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 average annual Organic Revenue growth of $547 million and Operating Margin, as adjusted, of 44.3%. This resulted in the recipients’ award units settling at 102.4% of the base number of units granted.

Actual 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

   ($1,000,000 / $566.44) 

Actual Performance Results(1)

   $547 million 

Jan 1, 2018 to Dec 31, 2020 (three-year) average Organic Revenue growth

   (above Target Level of $500 million) 

Jan 1, 2018 to Dec 31, 2020 (three-year) average Operating Margin, as adjusted

   44.3% 
    (below Target Level of 44.5%) 

Resulting Award Payout (%)

   102.4% 

Based on Award Determination Matrix

     

Resulting Award Payout (Number of units)

   1,807 

Base number of units granted x Award Payout (%)

   (1,765 x 102.4%) 

 

(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.

 

 

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Compensation Discussion and Analysis  |  3. Compensation Determination Process

 

3.

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.

 

 

LOGO

Competitive Pay Positioning – Market Data

BlackRock engages McLagan Partners (“McLagan”), a compensation consultant that specializes in conducting proprietary compensation surveys and interpreting compensation trends. The Company used McLagan surveys to evaluate its competitive position overall, including 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.

 

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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 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

The Compensation Committee, with assistance from Semler Brossy, reviews the composition of our peer group to ensure the group continues to serve as an appropriate market reference for executive compensation purposes. In the fall 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 reviewed 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 capitalization perspective. 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 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 companies that provide whole-portfolio solutions through a global and diverse investment platform

 

  

Technology Servicesthe 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 Compensation Committee considered companies reflecting comparative size metrics to BlackRock, including revenue (0.5x to 3x revenue) and market capitalization (above $10 billion)

2020 PEER GROUP

 

 

LOGO

 

 

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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 programs are structured to discourage excessive and unnecessary risk-taking. The Board recognizes that potential risks to BlackRock may be inherent in employee compensation programs. The Compensation Committee periodically reviews BlackRock’s employee compensation programs to ensure that they are structured so as not to unintentionally promote excessive risk-taking. As a result of these periodic reviews, we believe that our employee compensation programs are appropriately structured and do not pose risks that are reasonably likely to have a materially adverse effect on BlackRock.

The Compensation Committee considers the following when evaluating whether employee compensation programs encourage BlackRock employees to take unreasonable risks:

 

 

Performance goals that are reasonable in light of past performance and market conditions;

 

 

Longer-term expectations for earnings and growth;

 

 

The base salary component of compensation does not encourage risk-taking because it is a fixed amount;

 

 

A greater portion of annual compensation is deferred at higher annual incentive award levels;

 

 

Deferred compensation is delivered in the form of equity, vests over time, and the value is therefore dependent on the future performance of 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 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 or co-investments. While BlackRock may make seed or co-investments in its various funds alongside clients, it does not engage in proprietary trading.

 

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Compensation Discussion and Analysis  |  4. 2020 NEO Compensation and Performance Summaries

 

4.

2020 NEO Compensation

and Performance Summaries

Linking Pay and Performance

Here we provide the 2020 NEO performance assessments and total incentive award decisions

As outlined in “Our Compensation Framework” on page 57, 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 with anLOGO ..

The performance assessments have a direct link to the total incentive outcome (annual discretionary cash award, annual discretionary deferred equity award, and long-term equity awards) for each NEO.

 

 

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Compensation Discussion and Analysis  |  4. 2020 NEO Compensation and Performance Summaries

 

 

 

Laurence D.    
Fink

 

Chairman and CEO

  

 

2020 Compensation

    

 

 

Responsibilities:

 

Mr. Fink guides and oversees BlackRock’s long-term strategic direction to deliver value for clients and shareholders.

 

He is responsible for senior leadership development and succession planning, defining and reinforcing BlackRock’s mission and culture, and engaging with key strategic clients, industry leaders, regulators and policy makers.

  

(Thousands)

     
  

Base Salary

 

 

$1,500

 

 
  

Annual Incentive Award - Cash

 

 

$9,500

 

 
  

Annual Incentive Award - Equity

 

 

$3,950

 

 
  

Long-Term Incentive Award

 

 

$14,900

 

 
  

Total Annual Compensation

 

 

$29,850

 

 
  

 

 

  

 

 

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

 

LOGO

 

 

 

   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.

 

  

 

Far Exceeds

Expectations

  

Measures

 

 

BlackRock Performance

 

 
 

 

2019            

 

 

 

2020        

 

 
  

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

 

  

Performance Category   

  

 

 Performance Highlights   Assessment
 

Business

Strength

 

LOGO

 

   

 

Deliver for clients

 

   In partnership with Mr. Kapito, 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.

 

   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 market, engaging in more than 400 client meetings and external events with institutions, governments and central banks around the world.

 

   Led firmwide sustainability commitments which strengthened BlackRock’s ability to serve clients with sustainability research, investment solutions and technology, and in turn generated $68 billion of net inflows in sustainable strategies in 2020, representing over 60% organic growth.LOGO

 

   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.LOGO

 

  Far Exceeds

  Expectations

 
    

 

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 Aladdin Climate to help investors better assess both the physical risk of climate change and the transition risk to a low-carbon economy on their portfolios.LOGO

 
 
    

 

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.LOGO

 

   Established The BlackRock Foundation to augment our efforts to promote a more inclusive and sustainable economy. LOGO

 

   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.LOGO

  

 

 

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Compensation Discussion and Analysis  |  4. 2020 NEO Compensation and Performance Summaries

 

  

Performance Category 

  

 

 

Performance Highlights

 

Assessment

 
  Organizational

  Strength

 

LOGO

 

   

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.LOGO

 

   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.LOGO

 

   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.LOGO

 

   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.LOGO

 

   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.LOGO

 
 
    

Purpose and culture

 

   Despite the challenging environment, emphasized the importance of culture globally, as evidenced by the 2020 Employee Opinion Survey results, with 91% of employees proud to work at BlackRock and over 80% feeling that BlackRock is invested in their well-being.LOGO

 

   Prioritized the health and safety of employees during the pandemic, providing COVID-19 testing globally, free telemedicine options and additional support for families.LOGO

 

  

 

 

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Compensation Discussion and Analysis  |  4. 2020 NEO Compensation and Performance Summaries

 

 

 

Robert S. Kapito

 

President

  

 

 

2020 Compensation

    

 

 

 

Responsibilities:

 

Mr. Kapito is responsible for executing BlackRock’s strategic plans and overseeing the global business operations of the Company.

 

He ensures connectivity and coordination of operating processes across all groups in the organization, in part through his leadership, along with Mr. Goldstein, of the Global Operating Committee.

 

He is also responsible for spearheading initiatives to drive investment performance and the results within each of BlackRock’s businesses.

  

(Thousands)

     
  

Base Salary

 

 

$1,250

 

 
  

Annual Incentive Award - Cash

 

 

$8,250

 

 
  

Annual Incentive Award - Equity

 

 

$3,938

 

 
  

Long-Term Incentive Award

 

 

$11,188

 

 
  

Total Annual Compensation

 

 

$24,625

 

 
  

 

 

  

 

 

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

 

  LOGO

 

 

 

   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.

 

  

 

Far Exceeds

Expectations

      

Measures

 

 

 

BlackRock Performance

 

  
 

 

2019            

 

 

 

2020        

 

  
  

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.

 

 

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Compensation Discussion and Analysis  |  4. 2020 NEO Compensation and Performance Summaries

 

 

Performance Category 

 

Performance Highlights

  

 

 

Assessment

 

Business

Strength                     

 

  LOGO

 

 

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.

 

  

 

Far Exceeds

Expectations

      

 

  Actively managed AUM above benchmark or peer median

 1-Yr              3-Yr              5-Yr          

 

  

  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
weapons.LOGO

   
 
  

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.LOGO

 

   Established The BlackRock Foundation to augment our efforts to promote a more inclusive and sustainable
economy. LOGO

  
 
  Organizational

  Strength

 

LOGO

 

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.LOGO

 

   Continued to oversee talent programs and committees to engage critical talent across the firm and provide development opportunities.LOGO

   

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.LOGO

   
 
  

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.LOGO

 

   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.LOGO

 

    

 

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Compensation Discussion and Analysis  |  4. 2020 NEO Compensation and Performance Summaries

 

 

Robert L. Goldstein            

 

COO

  

 

2020 Compensation

    

 

 

Responsibilities:

 

As COO, Mr. Goldstein is responsible for ensuring that the Company’s investment, client, risk analytics, technology and operating functions have the necessary connectivity, coordination and scalable processes in place to succeed.

 

Mr. Goldstein also leads the BlackRock Solutions (“BRS”) business, delivering investment and risk analytics technology to clients.

 

Mr. Goldstein co-chairs, along with Mr. Kapito, the BlackRock Global Operating Committee. He also co-chairs, along with Mr. Shedlin, the Planning, Budgeting and Alignment (“PBA”) Committee, which makes recommendations regarding the Company’s budget and evaluates new initiatives aimed at driving growth and achieving strategic objectives.

 

  

(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

 

 
  

    

 

 

  

 

    

 

 

 

 

 

 

Overall Assessment: Far Exceeds Expectations

 

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 lead the advancement of technology services for clients and make progress against key talent initiatives.

 

Overall, the Compensation Committee’s assessment of Mr. Goldstein’s performance resulted in a Far Exceeds determination. Based on the performance assessment, the Compensation Committee set Mr. Goldstein’s 2020 total compensation at $11.75 million, up 19% from 2019.

 

 

  

Performance Category  

   Performance Highlights   Assessment

 

Financial

Performance

 

LOGO

 

   

 

   Delivered on oversight of the firm’s business operations, partnering with Mr. Kapito and Mr. Shedlin to manage an operating margin, as adjusted, of 44.9%, up 120 basis points from 2019.

 

   Under Mr. Goldstein’s leadership, BlackRock generated a record $1.1 billion of 2020 technology services revenue, representing 17% year-over-year growth.

 

 

   

 

Far Exceeds

Expectations

 

Business Strength

 

LOGO

 

   

 

   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 Aladdin Climate, setting a new standard for assessing environmental risks across asset classes in investment portfolios.LOGO

 

   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.LOGO

 

   

 

Far Exceeds

Expectations

 

 

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Compensation Discussion and Analysis  |  4. 2020 NEO Compensation and Performance Summaries

 

 

  

Performance Category  

   Performance Highlights   Assessment

 

Organizational Strength

 

LOGO

 

   

 

   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.LOGO

 

   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.LOGO

 

   Made progress in increasing gender diversity across technology groups. Continued to drive engagement discussions and improve racial/ethnic representation.LOGO

 

   Led work to refresh and evolve the BlackRock Principles, which reflect the core values, aspirations and cultural language embraced by our employees.LOGO

 

   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.LOGO

 

   

 

Far Exceeds

Expectations

 

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Compensation Discussion and Analysis  |  4. 2020 NEO Compensation and Performance Summaries

 

 

 

Mark Wiedman

 

Head of International and of Corporate Strategy

  

 

 

2020 Compensation

    

 

 

 

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

 

LOGO

 

   

 

   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

 

LOGO

 

   

 

   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.LOGO

 

   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.LOGO

 

   

 

Far Exceeds

Expectations

 

Organizational Strength

 

LOGO

 

   

 

   Partnered with Mr. Goldstein and Mr. Mehta to enhance Talent Bench Review discussions with senior leaders on the talent pipeline and to drive accountability.LOGO

 

   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.LOGO

 

   Partnered closely with the Global Executive Talent Subcommittee to develop and advance senior diverse
talent.LOGO

 

 

   

 

Far Exceeds

Expectations

 

 

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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 sustainability.

 

Mr. Shedlin also co-chairs, along with Mr. Goldstein, the PBA Committee, which makes recommendations regarding the Company’s budget and evaluates new initiatives aimed at driving growth and achieving strategic objectives.

 

  

(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

 

In 2020, Mr. Shedlin meaningfully contributed to BlackRock’s success by ensuring the seamless delivery of finance operations despite the remote working environment, through strong tactical execution of a number of critical transactions and significantly progressing our corporate sustainability agenda.

 

The Compensation Committee’s assessment of Mr. Shedlin’s performance resulted in a Far Exceeds determination, and based on the performance assessment, the Compensation Committee set Mr. Shedlin’s 2020 total compensation at $8.50 million, up 18% from 2019.

 

 

  

Performance Category  

   Performance Highlights   Assessment

 

Financial

Performance

 

LOGO

 

   

 

   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

 

LOGO

 

   

 

   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.LOGO

 

   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.LOGO

 

   

 

Far Exceeds

Expectations

 

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Compensation Discussion and Analysis  |  4. 2020 NEO Compensation and Performance Summaries

 

  

Performance Category  

   Performance Highlights   Assessment

 

Organizational Strength

 

LOGO

 

   

 

   Bolstered succession planning and the leadership bench across Finance, including controllers, tax and corporate sustainability.LOGO

 

   Continued progress in gender and racial/ethnic representation across Finance, and strengthened the pipeline of female leaders.LOGO

 

   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.LOGO

 

 

   

 

Meets/Exceeds

Expectations

 

 

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Compensation Discussion and Analysis  |  5. Compensation Policies and Practices

 

5.

Compensation Policies

and Practices

Summary of Executive Compensation Practices

Our compensation program reflects our commitment to responsible financial and risk management and is exemplified by the following policies and practices:

 

  

    

    
  

 

What We Do

   

 

What We Don’t Do

     
          

 

LOGO  Review pay and performance alignment;

 

LOGO  Balance short- and long-term incentives, cash and equity and fixed and variable pay elements;

 

LOGO  Maintain a clawback policy that allows for the recoupment of annual and long-term performance-based compensation in the event that financial results require a significant restatement due to the actions of an employee;

 

LOGO  Provide for the forfeiture of equity awards upon certain restrictive covenant breaches and other actions constituting cause for termination;

 

LOGO  Require one-year minimum vesting for awards granted under our Stock Plan, subject to limited exceptions;

 

LOGO  Maintain meaningful stock ownership and retention guidelines for GEC members;

 

LOGO  Maintain trading policies that:

 

  Prohibit all employees from short selling BlackRock securities;

 

  Prohibit Section 16 officers and directors from pledging BlackRock securities as collateral for a loan (among other items);

 

  Prohibit Section 16 officers and directors from engaging in any transactions that have the effect of hedging the economic risks and rewards of BlackRock securities;

 

LOGO  Limit perquisites;

 

LOGO  Assess and mitigate risk in compensation plans, as described in “Risk Assessment of Compensation Plans on page 66;

 

LOGO  Solicit an annual advisory vote on executive compensation in order to provide shareholders with a frequent opportunity to give feedback on compensation programs; and

 

LOGO  Annually review the independence of the Compensation Committee’s independent compensation consultant.

 

       

 

LOGO  No employment agreements or guaranteed compensation arrangements with our NEOs;

 

LOGO  No arrangements with our NEOs providing for automatic single trigger vesting of equity awards upon a change-in-control or transaction bonus payments upon a change-in-control;

 

LOGO  No dividends or dividend equivalents on unearned RSUs;

 

LOGO  No dividend equivalents on stock options or stock appreciation rights;

 

LOGO  No repricing of stock options;

 

LOGO  No cash buyouts of underwater stock options;

 

LOGO  No tax reimbursements for perquisites or tax gross-ups for excise taxes incurred due to the application of Section 280G of the Internal Revenue Code;

 

LOGO  No supplemental retirement benefit arrangements with our NEOs; and

 

LOGO  No supplemental severance benefit arrangements with our NEOs outside of the standard severance benefits under BlackRock’s Severance Plan.

 
  

    

    

 

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Compensation Discussion and Analysis  |  5. Compensation Policies and Practices

 

Stock Ownership Guidelines

Our stock ownership guidelines require the Company’s GEC members to own 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 GEC 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 GEC.

 

 

$10 million for the CEO;

 

 

$5 million for the President; and

 

 

$2 million for all other GEC members.

As of December 31, 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.

Clawback Policy

BlackRock maintains a clawback policy that allows for the recoupment of 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 required due to the actions of an employee. In addition, BlackRock’s equity award agreements require the forfeiture of equity awards upon certain restrictive covenant breaches and other conduct constituting “cause.”

 

   
 

 

 

Fraud or Willful

Misconduct Causing a
Financial Restatement  

 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.

 

 

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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

The Compensation Committee considers perquisites and other benefits available to our NEOs, such as financial planning, investment offerings and personal use of travel services to 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 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 the cost of airplane services beyond the allowance, and 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 2020 for perquisites is described in footnote (3) to the “2020 Summary Compensation Table” on page 81.

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. Historically, the Company administered its incentive compensation arrangements in a manner that would comply with certain exceptions to these tax rules. However, the Tax Cuts and Jobs Act, enacted on December 22, 2017, substantially modified Section 162(m) and, among other things, eliminated the most commonly used exception to the $1 million deduction limit, the “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 is generally nondeductible, whether or not it is performance-based. In addition, beginning in 2018, the Covered Employees include any individual who served as the CEO or CFO at any time during the taxable year and the three other most highly compensated officers (other than the CEO and CFO) for the taxable year. Once an individual becomes a Covered Employee for any taxable year beginning after December 31, 2016, that individual will remain a Covered Employee for all future years, including following any termination of employment.

 

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Compensation Discussion and Analysis  |  6. Executive Compensation Tables

 

6.

Executive Compensation Tables

Tabular Disclosure for 2020

The following 2020 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 after year-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 after year-end.

2020 Summary Compensation Table

 

      

Name and Principal Position

  Year   

Salary

($)

   

Bonus

($)(1)

   

Stock Awards

(Fair Value of
Awards)

($)(2)

   All Other
Compensation
($)
(3)
   

Total

($)

 

Laurence D. Fink

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 annual bonuses for the respective periods awarded pursuant to BlackRock’s annual incentive compensation program. The amount of incentive compensation awarded to each NEO in January 2021 (for fiscal year 2020) was based on subjective criteria, as more fully described on pages 68 to 77 of the “Compensation Discussion and Analysis.”

 

  

As described on page 58 of the “Compensation Discussion and Analysis,” on January 15, 2021, Messrs. Fink, Kapito, Goldstein, Wiedman and Shedlin were awarded RSUs as part of their discretionary annual bonuses for the 2020 fiscal year. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, these awards had grant date values of $3,950,000, $3,937,500, $2,325,000, $1,725,000 and $1,850,000, respectively, based on the average of the high and low prices per share of BlackRock common stock on January 15, 2021, which was calculated to be $739.22. Additionally, Messrs. Fink, Kapito, Goldstein, Wiedman and Shedlin received discretionary BPIP Awards consisting of performance-based RSU awards with grant date values of $14,900,000, $11,187,500, $5,750,000, $5,600,000 and $3,350,000, respectively. The base number of units granted pursuant to BPIP Awards was determined by dividing the individual’s award value by the average of the high and low prices per share of BlackRock common stock on January 15, 2021.

 

(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 18 to the consolidated financial statements in our 2020 Form 10-K. The amount included with respect to the BPIP Awards granted in January 2020 is based on the grant date fair value assuming target level of performance. If maximum level of performance had been assumed, the grant date fair value of the BPIP Awards would have been (i) $19,387,629 for Mr. Fink, (ii) $14,766,827 for Mr. Kapito, (iii) $7,259,889 for Mr. Goldstein, (iv) $6,517,680 for Mr. Wiedman, and (v) $4,454,859 for Mr. Shedlin.

 

(3)

All Other Compensation. For Messrs. Fink, Kapito, Goldstein, Wiedman and Shedlin, $13,400, $13,400, $13,400, $13,400 and $13,400, respectively, was attributable to contributions made by BlackRock under its tax-qualified defined contribution (401(k)) plan in 2020. For Messrs. Fink, Kapito, Goldstein, Wiedman and Shedlin, $0, $33,695, $33,695, $0 and $0, respectively, was attributable to financial planning services.

 

  

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 services which counted toward their respective personal use allowances approved by the Compensation Committee, plus the incremental cost to

 

 

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 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 the use of company-provided aircraft services (including the incremental cost associated with additional pandemic-related deadhead flights). These amounts relate to flights taken between December 1, 2019 and November 30, 2020, rather than flights taken during BlackRock’s fiscal year. Aircraft incremental cost is based on, as applicable, (i) variable operating cost per flight hour for the BlackRock corporate aircraft (including fuel and variable maintenance expenses) 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 company-provided airplane services for all business and personal travel in the interest of protecting their personal security.

 

  

For more information regarding perquisites, see “Perquisites” on page 80. No nonqualified deferred compensation earnings were determined to be above-market. None of the NEOs participate in any BlackRock-sponsored defined benefit pension plans.

2020 Grants of Plan-Based Awards

The following table sets forth information concerning equity incentive plan-based compensation provided by BlackRock in 2020 to our NEOs.

 

     
           Estimated Future Payouts Under Equity
Incentive Plan Awards
         
       

Name

  Grant Date(1)   Date of
Committee
Action
   Threshold
(#)
   Target
(#)
   Maximum
(#)
   All Other Stock Awards:
Number of Shares or Units
(#)
   

Grant Date Fair Value of
Stock Awards

($)(4)

 

Laurence D. Fink

  

 

1/16/2020

 

  

 

1/14/2020(2)

 

        

 

7,965

 

  

 

$4,249,965

 

   

 

1/16/2020

 

  

 

1/14/2020(3)

 

  

 

 

  

 

22,021

 

  

 

36,335

 

       

 

$11,749,965

 

Robert S. Kapito

  

 

1/16/2020

 

  

 

1/14/2020(2)

 

        

 

6,559

 

  

 

$3,499,751

 

   

 

1/16/2020

 

  

 

1/14/2020(3)

 

  

 

 

  

 

16,773

 

  

 

27,675

 

       

 

$8,949,737

 

Robert L. Goldstein

  

 

1/16/2020

 

  

 

1/14/2020(2)

 

        

 

3,748

 

  

 

$1,999,858

 

   

 

1/16/2020

 

  

 

1/14/2020(3)

 

  

 

 

  

 

8,246

 

  

 

13,606

 

       

 

$4,399,901

 

Mark Wiedman

  

 

1/16/2020

 

  

 

1/14/2020(2)

 

        

 

2,858

 

  

 

$1,524,972

 

   

 

1/16/2020

 

  

 

1/14/2020(3)

 

  

 

 

  

 

7,403

 

  

 

12,215

 

       

 

$3,950,093

 

Gary S. Shedlin

  

 

1/16/2020

 

  

 

1/14/2020(2)

 

        

 

2,858

 

  

 

$1,524,972

 

   

 

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 were converted to a number of RSUs based on the average of the high and low prices of BlackRock common stock on that date.

 

(2)

These January 16, 2020 awards represent grants of RSUs awarded to Messrs. Fink, Kapito, Goldstein, Wiedman and Shedlin as part of their 2019 bonus awards and represent the stock portion of such annual bonuses. These awards vest one-third on each of the first three anniversaries beginning on January 31, 2021. At the time of vesting, the NEOs are entitled to payment of accrued dividends with respect to the shares underlying the vested RSUs.

 

(3)

These January 16, 2020 awards represent BPIP Awards granted to Messrs. Fink, Kapito, Goldstein, Wiedman and Shedlin in respect of services performed in 2019. To determine the base number of RSUs comprising each BPIP Award, the award value was divided by the grant price ($533.58). The grant price represents an average of the high and low price of BlackRock common stock on January 16, 2020 (two trading days following the release of earnings for the fourth quarter of 2019). The BPIP Awards will be eligible to vest on January 31, 2023, subject to the Company’s attainment of the applicable financial targets during the three-year performance period commencing on January 1, 2020 and ending on December 31, 2022. The number of shares of common stock each NEO will receive upon settlement of the award will be equal to the base number of RSUs, multiplied by a percentage determined by application of the award determination matrix set forth in the NEO’s award agreement. The percentage multiplier is determined by the Company’s average annual Organic Revenue growth and Operating Margin, as adjusted, during the performance period. If performance is below the minimum thresholds set forth on the award determination matrix for both performance metrics, the award payout will be zero. If the Company attains the maximum (or greater) level of performance for both performance metrics, the award payout will be equal to 165% of the base number. Performance at target would result in the NEO receiving 100% of the base number.

 

(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 18 to the consolidated financial statements in our 2020 Form 10-K. The amount included with respect to the BPIP Awards is based on the grant date fair value assuming target level of performance.

 

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Compensation Discussion and Analysis  |  6. Executive Compensation Tables

 

2020 Outstanding Equity Awards at Fiscal Year-End

 

  
       

 

Option Awards

 

   

 

Stock Awards

 

 
      

Name

 

  

Grant Date

 

   

 

Number of
Securities Underlying
Unexercised
Options (#)

Unexercisable

 

  

Option
        Exercise
Price ($)

 

  

Option

                 Expiration

Date

 

   

Number of
Shares or
Units of Stock
That Have
Not Vested  (#)

 

   

Market Value

of Shares or
Units of Stock
That Have
Not Vested ($)
(1)

 

 

Laurence D. Fink

   1/16/2018             

 

2,707(2)

 

   $1,953,209 
   1/16/2018             

 

22,506(3)

 

   $16,238,979 
   1/17/2019             

 

6,906(2)

 

   $4,982,955 
   1/17/2019             

 

32,550(3)

 

   $23,486,127 
   1/16/2020             

 

7,965(2)

 

   $5,747,066 
   1/16/2020             

 

26,664(3)

 

   $17,796,063 
                             

Robert S. Kapito

   1/16/2018             

 

2,068(2)

 

   $1,492,145 
   1/16/2018             

 

17,401(3)

 

   $12,555,518 
   1/17/2019             

 

5,687(2)

 

   $4,103,398 
   1/17/2019             

 

24,800(3)

 

   $17,894,192 
   1/16/2020             

 

6,559(2)

 

   $4,732,581 
   1/16/2020             

 

18,786(3)

 

   $13,554,850 
                             

Robert L. Goldstein

   12/4/2017    108,190   513.5   12/4/2026(4)   

 

 

    
   1/16/2018             

 

1,369(2)

 

   $987,788 
   1/16/2018             

 

3,796(3)

 

   $2,738,966 
   1/17/2019             

 

3,250(2)

 

   $2,345,005 
   1/17/2019         

 

 

   7,440(3)    $5,368,258 
   1/16/2020             

 

3,748(2)

 

   $2,704,332 
   1/16/2020             

 

9,236(3)

 

   $6,664,143 
                             

Mark Wiedman

   12/4/2017    108,190   513.5   12/4/2026(4)   

 

 

    
   1/16/2018             

 

1,104(2)

 

   $796,580 
   1/16/2018             

 

2,712(3)

 

   $1,956,816 
   1/17/2019             

 

2,478(2)

 

   $1,787,976 
   1/17/2019             

 

6,045(3)

 

   $4,361,709 
   1/16/2020             

 

2,858(2)

 

   $2,062,161 
   1/16/2020             

 

8,291(3)

 

   $5,982,288 
                             

Gary S. Shedlin

   12/4/2017    81,142   513.5   12/4/2026(4)   

 

 

    
   1/16/2018             

 

1,030(2)

 

   $743,186 
   1/16/2018             

 

3,344(3)

 

   $2,412,830 
   1/17/2019             

 

2,478(2)

 

   $1,787,976 
   1/17/2019             

 

6,045(3)

 

   $4,361,709 
   1/16/2020             

 

2,858(2)

 

   $2,062,161 
   1/16/2020             

 

5,667(3)

 

   $4,088,967 
                             

 

(1)

Market Value of Shares or Units of Stock That Have Not Vested. Amounts reflect the year-end value of RSUs and BPIP Awards, based on the closing price of $721.54 per share of BlackRock common stock on December 31, 2020. With respect to the BPIP Awards, the value shown is based on the number of shares that the NEO would receive upon settlement of the award assuming actual performance through December 31, 2020 and 100% of target for the remainder of the performance period.

 

(2)

One-third of these RSUs vest on each of the first three anniversaries after the year in which the grant date occurs (beginning on January 31 following the year of grant).

 

(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, 2020 and target-level performance for the remainder of the performance period (which equals 102.4% of target for the BPIP Awards granted January 16, 2018, 127.2% of target for the BPIP Awards granted January 17, 2019, and 112.0% of target for the BPIP Awards granted January 16, 2020). See “Potential Payments Upon Termination of Employment or a Change in Control” on page 87 for additional details regarding these awards.

 

(4)

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. These awards represent performance-based option awards granted to Messrs. Goldstein, Wiedman and Shedlin in connection with such succession planning. One-third of these performance-based stock options will vest on each of the fifth, sixth and seventh anniversaries of the date of grant (2022, 2023 and 2024, respectively), 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 stock price hurdle was achieved on December 2, 2020. 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. See “Potential Payments Upon Termination of Employment or a Change in Control” on page 87 for additional details regarding these awards.

 

 

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2020 Option Exercises and Stock Vested

The following table sets forth the number of shares acquired and the value realized by our NEOs during the fiscal year ended December 31, 2020 on the exercise of options or the vesting and/or settlement of RSUs.

 

   

 

Option Awards

 

   

 

Stock Awards

 

 

Name

 

  

Number of
Shares
        Acquired on
Exercise (#)

 

   

Value
Realized on
         Exercise ($)
(1)

 

   

Number of
Shares
        Acquired on
Vesting  (#)

 

   

Value

Realized on
Vesting ($)
(1)

 

 

 

Laurence D. Fink

 

  

 

 

 

 

 

  

 

 

 

 

 

  

 

 

 

46,642

 

 

  

 

 

 

$25,172,221

 

 

                     

 

Robert S. Kapito

 

  

 

 

 

 

 

  

 

 

 

 

 

  

 

 

 

36,212

 

 

  

 

 

 

$19,543,254

 

 

                     

 

Robert L. Goldstein

 

  

 

 

 

 

 

  

 

 

 

 

 

  

 

 

 

10,885

 

 

  

 

 

 

$5,874,526

 

 

                     

 

Mark Wiedman

 

  

 

 

 

 

 

  

 

 

 

 

 

  

 

 

 

9,259

 

 

  

 

 

 

$4,996,990

 

 

                     

 

Gary S. Shedlin

  

 

 

 

 

 

  

 

 

 

 

 

  

 

 

 

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 RSUs that vested.

2020 Nonqualified Deferred Compensation    

 

Name

 

  

Executive
        Contributions
in Last
Fiscal  Year

($)

 

   

Registrant
        Contributions
in Last
Fiscal  Year
($)

 

   

Aggregate
        Earnings (Losses)
in  Last
Fiscal Year

($)(1)

 

   

Aggregate
         Withdrawals/
Distributions
($)

 

   

Aggregate
Balance

at Last
Fiscal Year-

End ($)

 

 

 

Laurence D. Fink

  

 

 

 

 

 

  

 

 

 

 

 

  

 

 

 

$372,176

 

 

  

 

 

 

 

 

  

 

 

 

$3,367,626

 

 

                          

Robert S. Kapito

  

 

 

  

 

 

  

 

$11,810

 

  

 

 

  

 

$250,019

 

                          

Robert L. Goldstein

  

 

 

  

 

 

  

 

$690,905

 

  

 

$1,974,347

 

  

 

$5,899,289

 

                          

Mark Wiedman

  

 

 

  

 

 

  

 

$22,500

 

  

 

 

  

 

$231,522

 

                          

Gary S. Shedlin

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

                          

 

(1)

Represents earnings on balances in the VDCP (as described below), none of which were determined to be above-market.

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.

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 85 and 87, in each case assuming a termination of employment of the NEO on December 31, 2020.

 

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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
  Resignation

 

  

  Termination
  For Cause

 

  

 Involuntary Termination

 Without Cause(1)

 

 

  Qualified

  Retirement / Disability

 

  

  Death

 

 

 

RSUs Granted as Part of Annual

Incentive Awards (“Year-End Awards”)

 

 

 

 

Unvested
awards are
forfeited.

 

 
 
 

 

 

 

 

Unvested
awards are
forfeited.

 

 
 
 

 

 

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
vest in accordance with
their schedule following
termination. Any portion
of the award that
remains unvested on
the one-year
anniversary of
termination will become
fully vested on that date.

 

 
 
 
 
 
 
 
 
 
 

 

 

 

 

Immediate vesting

and settlement.

 

 

 

                   

 

RSUs Granted as BPIP Awards

 

 

 

 

Unvested
awards are
forfeited.

 

 
 
 

 

 

 

 

Unvested
awards are
forfeited.

 

 
 
 

 

 

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
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.

 

 
 
 
 
 
 
 
 
 
 

 

 

 








 

Awards will continue
to be eligible to fully
vest following the
end of the
performance period,
subject to
attainment of the
applicable
performance
targets.

 

 
 
 
 
 
 
 
 
 
 

                   

 

Performance-Based Option Awards

 

 

 










 

Unvested
awards are
forfeited;
vested but
unexercised
awards
remain
exercisable
for a 90-
day period
following
separation.

 

 
 
 
 
 
 
 
 

 
 
 

 

 

 





 

Unvested
awards are
forfeited;
vested and
unexercised
awards are
cancelled.

 

 
 
 
 
 
 
 

 

 

Awards will vest on a pro rata basis with respect to each tranche (based on length of service during the vesting period), plus 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.

 

 

 





 













 

Qualified Retirement:
Unvested awards are
forfeited; vested but
unexercised awards
remain exercisable for a
90-day period following
separation.

 

Disability: Awards will
continue to be eligible to
fully vest on each
vesting date, subject to
achievement of the
applicable performance
conditions. The stock
price hurdle was
achieved on
December 2, 2020. Any
vested options will
remain exercisable
through the full term.

 

 
 
 
 
 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
 

 

 

 














 

Awards will continue

to be eligible to fully
vest on each vesting
date, subject to
achievement of the
applicable
performance
conditions. The
stock price hurdle
was achieved on
December 2, 2020.
Any vested options
will remain
exercisable through
the full term.

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 

                   

 

 

(1)

Treatment described in the event of a termination without cause following a change in control applies if outstanding awards are assumed or substituted by the 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, 2020. Accordingly, no amounts have been included in the table on page 87 with respect to VDCP balances. For additional information, please refer to the “2020 Nonqualified Deferred Compensation” table on page 84.

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

 

 

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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.

 

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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, 2020, and are based on the closing price of BlackRock common stock on December 31, 2020, which was $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 the one-year period following termination.

 

    

Name

  

Involuntary

Termination

        Without Cause

  

Involuntary Termination

    Without Cause Following a
Change in Control

       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 RSUs awarded as Year-End Awards outstanding as of December 31, 2020, multiplied by (ii) $721.54 (the closing price of BlackRock common stock on December 31, 2020). For additional detail on the Year-End Awards, please refer to the “2020 Outstanding Equity Awards at Fiscal Year-End” table on page 83 and the “Treatment of Outstanding Equity Awards Upon Termination of Employment or a Change in Control” table on page 85.

 

(2)

BPIP Awards upon an involuntary termination without cause (other than following a change in control): For the January 2018 BPIP Awards, January 2019 BPIP Awards and January 2020 BPIP Awards, the value shown reflects an amount equal to (i) the number of shares that the NEO would receive upon settlement of the award, assuming actual performance relative to the performance targets through December 31, 2020, and target-level performance for the remainder of the applicable performance period, multiplied by (ii) $721.54. The actual number of shares that an NEO would receive following the end of the three-year performance period will be based on the Company’s actual performance over the duration of the performance period. For additional detail on the BPIP Awards, please refer to the “2020 Grants of Plan-Based Awards” table on page 82, the “2020 Outstanding Equity Awards at Fiscal Year-End” table on page 83 and the “Treatment of Outstanding Equity Awards Upon Termination of Employment or a Change in Control” table on page 85.

 

 

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(3)

BPIP Awards upon an involuntary termination without cause within 12 months following a change in control: For January 2018 BPIP Awards, the value shown reflects an amount equal to (i) the number of shares that the NEO would receive upon settlement of the award, assuming actual performance through December 31, 2020, multiplied by (ii) $721.54. For both January 2019 BPIP Awards and January 2020 BPIP Awards, the table reflects an amount equal to (i) the number of shares that the NEO would receive assuming the achievement of target-level performance during the performance period multiplied by (ii) $721.54. Under the terms of the Stock Plan, any outstanding awards that are not assumed by the acquirer in the event of a change in control would become fully vested (at target level for performance-based awards).

 

(4)

BPIP Awards upon a termination due to death, disability or qualified retirement: For the January 2018 BPIP Awards, January 2019 BPIP Awards and January 2020 BPIP Awards, the value shown reflects an amount equal to (i) the number of shares that the NEO would receive upon settlement of the award, assuming actual performance relative to the performance targets through December 31, 2020, and target-level performance for the remainder of the applicable performance period, multiplied by (ii) $721.54. The actual number of shares that an NEO would receive following the end of the three-year performance period will be based on the Company’s actual performance over the duration of the performance period.

 

(5)

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.

 

(6)

Option Awards upon an involuntary termination without cause: The amounts shown represent the value of a pro rata portion of unvested options as of December 31, 2020, at $721.54 (the closing price on that date). The applicable stock price hurdle was achieved on December 2, 2020. The pro rata portion (with respect to each tranche) which can be earned based on, and subject to, the achievement of the performance conditions is determined by multiplying the unvested options at termination of employment by a fraction, the numerator of which is the number of full months, rounded down, the executive was employed from the date of grant through the termination date plus 12 months, and the denominator of which is the number of full months elapsed from the grant date through the applicable vesting date. For additional detail on these awards, see the “2020 Outstanding Equity Awards at Fiscal Year-End” table on page 83.

 

(7)

Option Awards upon a termination without cause within 12 months following a change in control or due to death or disability: The amounts shown represent the value of unvested options as of December 31, 2020. The stock price hurdle was achieved on December 2, 2020.

 

(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, 2020.

 

(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 for Year-End Awards, BPIP Awards, Option Awards and Severance are rounded to the nearest whole number and, as a result of such rounding, the sum of such amounts may differ slightly from the amounts set forth in the line item titled “Total.”

CEO Pay Ratio for 2020

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-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 2020, our last completed fiscal year:

 

 

The median of the annual total compensation of all employees of our Company (other than our CEO) was $147,417; and

 

 

The annual total compensation of our CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $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 186:1. This result is broadly consistent with our historical pay practices.

2020 CEO Pay Ratio = 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, 2020, our employee population consisted of approximately 16,500 employees globally (as reported in Item 1, Business, in our 2020 Form 10-K). This population included all of our full-time and part-time employees.

 

2.

Identification of Median Employee. To identify the “median employee” from our employee population, we reviewed the 2020 total compensation of our employees. Total compensation includes base salary, overtime, 2020 annual incentive award, direct incentives, commission payments and long-term equity incentive grants as reflected in the 2020 annual compensation statements provided to each employee as part of the year-end compensation process.

 

  

We identified our median employee using this compensation measure, which was consistently applied to all our employees included in the calculation. We did not make any cost-of-living adjustments in identifying the “median employee.”

 

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Compensation Discussion and Analysis  |  CEO Pay Ratio for 2020

 

3.

Calculation of Annual Total Compensation. Once we identified our median employee, we combined all the elements of such employee’s compensation for 2020 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $147,417. The difference between such employee’s total compensation and the reported amount for the ratio calculation is the contributions made by BlackRock under its tax qualified defined contribution (401(k)) plan for 2020 to such employee, which totaled $9,900.

 

  

For our CEO’s annual total compensation, we used the amount reported in the “Total” column of our “2020 Summary Compensation Table” included in this Proxy Statement on page 81.

Equity Compensation Plan Information

The following table summarizes information, as of December 31, 2020, relating to BlackRock equity compensation plans pursuant to which grants of options, RSUs or other rights to acquire shares of BlackRock common stock may be granted from time to time.

 

   

Plan Category

  

Number of

securities to be

issued upon exercise

of outstanding

options, warrants

and rights

   

Weighted-average

exercise price of

outstanding options,

warrants and rights

   

Number of securities

available for
issuance under
equity compensation
plans (excluding
securities reflected
in first column)

 

Approved

      

BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan

  

 

4,755,939(1)

 

  

 

$513.50(2)

 

   6,068,624 

Amended and Restated BlackRock, Inc. Employee Stock Purchase Plan

  

 

 

  

 

N/A

 

   437,686(3) 
    

Total Approved by Shareholders

  

 

4,755,939

 

   

 

 

 

 

 

  

 

6,506,310

 

Not Approved

  

 

 

 

  

 

 

 

  

 

 

 

None

  

 

 

  

 

N/A

 

  

 

 

    

Total Not Approved by Shareholders

  

 

 

  

 

N/A

 

  

 

 

Total

  

 

4,755,939

 

   

 

 

 

 

 

  

 

6,506,310

 

 

(1)

Includes 2,840,147 shares subject to RSUs (including RSUs which are settled in cash) and BPIP Awards (assuming payout at target levels) and 1,915,792 stock options.

 

(2)

Represents the weighted-average exercise price of stock options only.

 

(3)

Includes 437,686 shares remaining available for issuance under the Employee Stock Purchase Plan, of which 6,524 were subject to purchase during the open offering period that included December 31, 2020.

 

 

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Item 3:


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, 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 23, 2021, the Audit Committee appointed Deloitte to serve as BlackRock’s independent registered public accounting firm for the 2021 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 team’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. 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.

 


 

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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, 2020 and 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.

 

  
   

2020

   

2019

 

Audit Fees(1)

  

 

$19,601,000

 

  

 

$18,362,000

 

Audit-Related Fees(2)

  

 

$4,663,000

 

  

 

$3,892,000

 

Tax Fees(3)

  

 

$964,000

 

  

 

$1,432,000

 

All Other Fees(4)

  

 

$643,000

 

  

 

$765,000

 

Total

  

 

$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 $25,400,000 and $25,000,000 for the fiscal years ended December 31, 2020 and 2019, respectively. Such fees do not include fees paid to Deloitte by registered investment companies.

Audit Committee Pre-Approval Policy

In accordance with BlackRock’s Audit Committee Pre-Approval Policy (the “Pre-Approval Policy”), all services performed for BlackRock by Deloitte were pre-approved by the Audit Committee. The Audit Committee 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. The Audit Committee reviews and pre-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 delegates pre-approval authority under the Pre-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

 

 

LOGO

 

 

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Audit Committee Report

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 BlackRock’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 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 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”) 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 the non-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 Form 10-K for the year ended December 31, 2020 for filing with the SEC.

MEMBERS OF THE AUDIT COMMITTEE

Pamela Daley, Chair

Mathis Cabiallavetta

William E. Ford

Murry S. Gerber

Margaret “Peggy” L. Johnson

Marco Antonio Slim Domit

Susan L. Wagner

 

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Items 4A-4C:


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.

 


 

 

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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;

 

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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

 

 

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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

 

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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

 

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Item 5:


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 5 – 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).

 


 

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Item 5: Shareholder Proposal – Amend Certificate of Incorporation to Convert to a 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 5

 

 

The Board of Directors’ Statement in Opposition

 

 

We believe that BlackRock already operates in a manner that considers the interests of its shareholders and other stakeholders and can continue doing so in our existing corporate form without the unnecessary risks and burdens of converting to a public benefit corporation (“PBC”).

 

BlackRock’s existing corporate form allows it to operate in a way that considers the needs of its many stakeholders, and we are already doing so today. In fact, BlackRock has been a vocal leader on the importance of companies articulating a purpose and operating in a way that benefits all stakeholders over the long-term, as exemplified by our Chairman and CEO’s annual letter to CEOs and annual letter to shareholders. Most recently, our Chairman and CEO wrote in his 2021 letter to CEOs that “being connected to stakeholders – establishing trust with them and acting with purpose – enables a company to understand and respond to the changes happening in the world,” and warned that “[c]ompanies ignore stakeholders at their peril.”

 

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, or have converted to be, public benefit corporations, and none are large-cap publicly-traded financial institutions or comparable to BlackRock in terms of market capitalization or global footprint.

 

Conversion to a PBC may alienate our clients and investors who believe their interests are not being served, as there are no major financial services firms that have adopted the PBC structure. Moreover, the impact that a conversion would have on BlackRock’s stock price, market capitalization and overall operational and financial performance is unknown. This uncertainty also could impact our ability to attract and retain employees, and to compete for employees with other financial services firms that are not PBCs. In addition, while our clients and shareholders have expressed support for our existing sustainability initiatives, none of them, other than the proponent of this proposal, have expressed any interest in BlackRock converting to a PBC.

 

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 Comptroller of the Currency and the Financial Conduct Authority. Any significant change in our corporate structure and governance would require significant legal and regulatory review, including engagement with our regulators. Such review would result in unnecessary costs to the company and shareholders and would divert management’s attention from running our business.

 

Board Recommendation

 

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Annual Meeting Information

Questions and Answers About the Annual Meeting and