Blackrock just dropped a 50-page proxy statement stuffed with corporate jargon that could not explain why its CEO, Larry Fink, gained $ 37 million in 2024. That was the number staring at each shaarers on the face, and they didn't get answers.
According to To Bloomberg, investors are still angry after last year's historical push against the company's executive pay plan, one of the most aggressive protest votes that Blackrock faced.
That protest came after the same institutional shareholder services Inc. (ISS) and Glass Lewis & Co, the leading proxy advisory firms, told investors to vote against the company's say-on-pay movements. Shareholders listened. They hit back, and they hit hard.
Thereafter, the Committee Committee responsible for pay tried to control the damage. They make phone calls. They set up meetings. They asked the shareholders what was most pissed of them. Two things came: a lack of clarity on how payment decisions were made, and the use of one -time bonuses without real conditions.
Blackrock changes a little after the investor's rebellion last year
Despite the noise, nothing has changed. Blackrock still claims that half of the executive bonuses depend on financial performance. The other half is divided between vague goals labeled “business strength” and “organization strength.”
The company has updated the list of financial metrics, adding a new scale to the past seven. Eight now falls under three loose targets: “creating a shareholder value,” “speed up the growth of organic income,” and “enhance operating leverage.”
But these are not ranked. No weights are assigned. Shareholders still do not know which metrics are most important. Business goals have not improved. Phrases such as “leading a changing world” and new activities related to integration of acquisitions sound similar to motivational posters rather than measurable goals.
The Board said Larry had “exceeded” expectations, but those expectations were no longer located. The only real number is 23% growth in the adjusted operating income, but Blackrock does not explain what the target defeated or what the baseline comparison was.
And this is a company that will benefit from the scale automatically, so the numbers don't say much without context. Non-financial achievements are not better. That part of the proxy reads like a person who has tried to cram up as many buzzwords as possible in a performance review.
There is not almost any comparison with other companies. The only data points provided are the total blackrock shareholder returned to one, three, and five years, its growth, and a price-to-income ratio that is still twice as high as its traditional peers. That's it.
In the one -time awards, the firm said nothing was given in 2024. But they also did not say formal policy or just one option, so shareholders still have no idea what to expect next year.
Glass Lewis and Iss still see problems with the pay process
Glass Lewis said the company's updates were “enough.” That's the actual word they use. They supported the Pay Plan this year – not because they were amazed, but because most of the salary was tied to future stocks and performance.
The ISS is no longer forgiving, calling for the “additional” changes. The main problem remains: Blackrock gives itself to the extra room to make decisions without showing how those decisions are reached.
Discretion is not always bad. It can stop bad outcomes when metrics are met due to macroeconomic factors rather than performance.
But decision should not mean prediction. There is a central land where companies use formulas as a basis and then take out outcomes using human judgment. That only works when shareholders can really follow the reasoning – and now, they can't.
The committee said “it seriously seizes the shareholder's feedback.” But if that's true, they have another shot to prove it. New incentives have been added for performance tied to private market investments. That is a second chance to show investors that the process will not be fuzzy it forever.
Even today, either glass lewis or ISS attacks $ 37 million payout directly. They don't talk about whether Larry deserves it. But they are asking for a better process and more transparency. And that's the main issue here.
Blackrock is not only a giant Wall Street, is also a giant crypto, and Bitcoin's whole thing has always been transparency. So what do you tell about the largest asset manager in the world?
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