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Section 1: DEF 14A (DEF 14A)

DEF 14A
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

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.    )

Filed by the Registrant    

Filed by a Party other than the Registrant    

 

Check the appropriate box:

 

 

    Preliminary Proxy Statement

 

 

     Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

    Definitive Proxy Statement

 

 

    Definitive Additional Materials

 

 

    Soliciting Material Pursuant to  §240.14a-12        

 

 

BlackRock, Inc.

 

(Name of Registrant as Specified in Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

 

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

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Table of Contents

LOGO

 


Table of Contents

Generating

Long-Term

Shareholder

Value

BlackRock’s mission is to help our clients build better financial futures. Our framework for creating long-term shareholder value is directly aligned with that mission. BlackRock, Inc. (“BlackRock” or the “Company”) is a global asset management and technology services firm. We have strategically invested in our business over time to create a globally diverse investment platform, with index and alpha strategies ranging from ETFs to alternatives, industry-leading portfolio construction and risk management technology, and deep global capital markets expertise. The diversity of BlackRock’s platform, across asset class, investment style and region, positions us to serve client needs holistically and through market cycles. It also enables us to generate more consistent growth and financial results for shareholders. We believe the stability of our financial results and our approach to continuously and deliberately invest in our business enhances BlackRock’s ability to:

 

                                 
   

  Generate

  differentiated

  organic growth

     

Leverage our

scale for the

benefit of clients

and shareholders

 

     

Return capital

to shareholders

on a consistent and

predictable basis

   
                                 

Over the long term, BlackRock has delivered on each of these tenets. We have generated differentiated organic growth and delivered operating margin expansion. We have prioritized investment in our business to first drive growth and then return “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 measures our ability to successfully execute it.

In 2019, we will continue to strategically, and efficiently, invest in BlackRock to optimize future growth. We will focus on areas we believe have high growth potential such as ETFs and illiquid alternatives, the shift from product selection to portfolio construction, and longer-term opportunities in technology, retirement and high growth markets – so we can deliver better outcomes for clients, opportunities for employees and long-term value for shareholders.


Table of Contents

LOGO

 

LOGO

 

 

“Our focus on the long-term and commitment to adapting and innovating ahead of change helps us stay ahead of clients’ most pressing investment challenges and provide the solutions they need.”

Laurence D. Fink

Chairman and

Chief Executive Officer

 

 

BlackRock, Inc.

55 East 52nd Street

New York, New York, 10055

April 12, 2019

To Our Shareholders:

Thank you for your confidence in BlackRock. It is my pleasure to invite you to our 2019 Annual Meeting, to be held on May 23, 2019 at the Lotte New York Palace Hotel. As we do each year, we will review our business and financial results for the year, address the voting items in the Proxy Statement and take your questions. Whether you plan to attend the meeting or not, your vote is important and we encourage you to review the enclosed materials and submit your proxy.

The benefits of the investments that BlackRock has made to build the most diversified global asset management and technology services company in the world are clearer today than at any point in our history. Our focus on the long-term and commitment to adapting and innovating ahead of change helps us stay ahead of clients’ most pressing investment challenges and provide the solutions they need. Only by fulfilling our fiduciary duty to clients can BlackRock deliver long-term value to our shareholders.

In 2018, we delivered on each component of our framework for creating long-term shareholder value, while investing in our business for future growth. We generated $124 billion of net inflows in 2018, including record fourth quarter iShares flows, despite heightened uncertainty and volatility in global markets. We increased revenue, driven by growth in base fees and record annual technology services revenue, and expanded our full-year operating margin, while simultaneously investing in our highest growth opportunities, including retirement, illiquid alternatives, ETFs, factors and technology. And we returned approximately $3.6 billion of cash to shareholders through a combination of dividends and share repurchases, a more than 30% increase from 2017.

Despite our differentiation, BlackRock was not immune to sentiment on the asset management sector last year. As a significant owner of BlackRock shares myself, I share your deep disappointment in our stock’s 2018 performance.

BlackRock’s Board of Directors and I both believe that the performance of our stock price should be a factor in determining the compensation of our senior executives. And this year, driven by the Board and Compensation Committee’s commitment to aligning executive compensation with performance, the Board lowered my 2018 compensation by 14% relative to 2017 - a decision I support. We are all committed to doing better for our clients and for our shareholders.

It has always been important that BlackRock’s Board of Directors functions as a key strategic and governing body that challenges our leadership team to be better and more innovative. BlackRock’s Board continues to play an integral role in our governance, our strategy, our growth and our success. A strong corporate governance framework is critical for executing on our strategy and ensuring we act as a fiduciary for clients. We are also focused on engaging with you, our shareholders, to better understand and address issues that are important to you.

To support our mission of helping people build better financial futures, we are vocal advocates for the adoption of sound corporate governance policies. This includes strong Board leadership, thoughtful strategic deliberations and prudent management practices, including awareness of how environmental and social risks may impact long-term value creation. We believe that BlackRock has implemented such a set of principles, guidelines and practices that support sustainable financial growth and long-term value creation for shareholders and hope that you will agree as you read our Proxy Statement.

Thank you again for your commitment to BlackRock. Our Board of Directors and I look forward to seeing you on May 23, 2019 in New York City.

Sincerely,

 

LOGO

Laurence D. Fink

Chairman and Chief Executive Officer

 


Table of Contents

Notice of 2019 Annual

Meeting of Shareholders

 

Annual Meeting of Shareholders

Date and Time

Thursday, May 23, 2019

8:00 am EDT

  

Place

Lotte New York Palace Hotel

455 Madison Avenue,

New York, 10022

  

Record Date

March 25, 2019

 

 

Voting Matters

 

At or before our Annual Meeting, we ask that you vote on the following items:

 

 

Item 1 Election of Directors

 

 

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

 

 

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

 

 

Item 4 Shareholder Proposal – Production of an Annual Report on Certain Trade Association and Lobbying Expenditures

 

 

Item 5 Shareholder Proposal – Simple Majority Vote Requirement

 

 

 

Important Notice Regarding the Availability of Proxy Materials for the 2019 Annual Meeting of Shareholders to be held on Thursday, May 23, 2019: our Proxy Statement and 2018 Annual Report are available free of charge on our website at www.blackrock.com/corporate/en-us/investor-relations

   

How to vote: Your vote is important

 

            

 

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

 

 

In Person

 

    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.        You may attend the Annual Meeting and vote by ballot. Your admission ticket to the Annual Meeting is either attached to your proxy card or is in the email by which you received your Proxy Statement.
   

 

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

 

Beginning on April 12, 2019, 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, you may withdraw your proxy and vote in person, if you so choose.

 

Your vote is important and we encourage you to vote promptly whether or not you plan to attend the 2019 Annual Meeting of Shareholders of BlackRock, Inc.

 

By Order of the Board of Directors,

 

LOGO

   

R. Andrew Dickson, III

Corporate Secretary

April 12, 2019

      

BlackRock, Inc.

55 East 52nd Street,

New York, New York 10055


Table of Contents

 

Contents

 


 


Proxy Summary      1  
Governance Highlights      2  
Compensation Discussion and Analysis Highlights      5  
Item 1 Election of Directors      9  
Director Nominees      9  
Director Nomination Process      10  
Criteria for Board Membership      10  
Director Candidate Search      12  
Director Nominee Biographies      13  
Corporate Governance      22  
Our Corporate Governance Framework      22  
Our Board Leadership Structure      25  
Board Evaluation Process      26  
Board Refreshment      27  
Board Committees      28  
Corporate Governance Practices and Policies      33  
Shareholder Engagement and Outreach      36  
Communications with the Board      36  
2018 Director Compensation      37  
Other Executive Officers      41  
Ownership of BlackRock Common and Preferred Stock      42  
Section 16(a) Beneficial Ownership Reporting Compliance      44  
Certain Relationships and Related Transactions      45  
Management Development & Compensation Committee Interlocks and Insider Participation      50  

 


Item 2 Approval, in a Non-Binding Advisory Vote, of the Compensation for Named Executive Officers      51  
Management Development & Compensation Committee Report      52  
Executive Compensation      53  
Compensation Discussion and Analysis (see separate table of contents)      53  
Executive Compensation Tables      77  
Item 3 Ratification of the Appointment of the Independent Registered Public Accounting Firm      85  
Fees Incurred by BlackRock for Deloitte LLP      86  
Audit Committee Pre-Approval Policy      86  
Audit Committee Report      87  
Item 4 Shareholder Proposal – Production of an Annual Report on Certain Trade Association and Lobbying Expenditures      88  
Item 5 Shareholder Proposal – Simple Majority Vote Requirement      91  
Annual Meeting Information      93  
Questions and Answers about the Annual Meeting and Voting      93  
Important Additional Information      95  
Deadlines for Submission of Proxy Proposals, Nomination of Directors and Other Business of Shareholders      96  
Other Matters      97  
Annex A Non-GAAP Reconciliation      A-1  

 


     

    

 

Index of Frequently Requested Information

 

 

 

    

 

BlackRock’s Approach to Human Capital Management

 

  

 

 

34

 

 

 

 
 

BlackRock’s Approach to Sustainability

 

  

 

 

IBC

 

 

 

 
 

Board and Committee Membership

 

  

 

 

28

 

 

 

 
 

Board Diversity

 

  

 

 

11

 

 

 

 
 

CEO Pay Ratio

 

  

 

 

83

 

 

 

 
 

Clawback Policy

 

  

 

 

75

 

 

 

 
 

Director Independence

 

  

 

 

33

 

 

 

 
 

Hedging and Pledging Policy

 

  

 

 

75

 

 

 

 
 

Number of Board Meetings

 

  

 

 

28

 

 

 

 
 

Peer Group

 

  

 

 

64

 

 

 

 
 

Public Policy Engagement

 

  

 

 

35

 

 

 

 
 

Related Persons Transactions

 

  

 

 

48

 

 

 

 
 

Stock Ownership Guidelines

 

  

 

 

75

 

 

 

 
 

Shareholder Outreach

 

  

 

 

36

 

 

 

 
                  
 

 


 

BLACKROCK, INC. 2019 PROXY STATEMENT      


Table of Contents

 

 

 

Helpful Resources

 

Where You Can Find

More Information

Annual Meeting

 

Proxy Statement:

www.blackrock.com/corporate/en-us/investor-relations

Annual Report:

www.blackrock.com/corporate/en-us/investor-relations

Voting Your Proxy via the Internet:

www.proxyvote.com

Meeting Registration via Internet:

www.proxyvote.com

Board of Directors

 

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

Communications with the Board

 

www.blackrock.com/corporate under the headings “Investor Relations / Corporate Governance / Governance Overview / Contact Our Board of Directors”

Governance Documents

 

www.blackrock.com/corporate under the headings “Investor Relations / Corporate Governance”

 

  Lead Independent Director Guidelines

 

  Corporate Governance Guidelines

 

  Committee Charters

 

  Code of Business Conduct and Ethics

Investor Relations

 

www.ir.blackrock.com

Other

 

Public Policy “Insights”:

www.blackrock.com/corporate/insights/public-policy

Lobbying Disclosure Act:

www.senate.gov/legislative/lobbying

Federal Election Commission:

www.fec.gov

Definition of Certain Terms

or Abbreviations

 

CEO

 

 

Chief Executive Officer

 

CFO

 

 

Chief Financial Officer

 

Committees

 

 

The Audit, Management Development & Compensation, Nominating & Governance, Risk and Executive Committees

 

Compensation Committee

 

Management Development & Compensation Committee

 

COO

 

 

Chief Operating Officer

 

Deloitte

 

 

Deloitte LLP

 

GAAP

 

Accounting Principles Generally Accepted in the United States

 

GEC

 

Global Executive Committee

 

Governance

Committee

 

 

Nominating & Governance Committee

 

NEO

 

 

Named Executive Officer

 

Net Revenue

 

 

Revenue used for operating margin measurement

 

Non-core

 

 

Items such as deal-, tax- and Brexit-related professional fees, contingent consideration fair value adjustments, and product launch costs

 

NTM

 

 

Next Twelve Months

 

NYSE

 

 

New York Stock Exchange

 

PAC

 

 

Political Action Committee

 

PNC

 

The PNC Financial Services Group, Inc.

 

RS

 

 

Restricted Stock

 

RSU

 

 

Restricted Stock Unit

 

SEC

 

Securities and Exchange Commission

 

Traditional LC

Peers

 

Traditional Large Cap Peers refers to Alliance Bernstein, Affiliated Managers Group, Inc., Franklin Resources, Inc., Eaton Vance, Invesco, Legg Mason, and T. Rowe Price

 

 

 

      BLACKROCK, INC. 2019 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

 

 

Date & Time:

 

 

Thursday, May 23, 2019

8:00 AM EDT

 

 

Place:

 

 

Lotte New York Palace Hotel

455 Madison Avenue

New York, New York 10022

 

 

 

Record Date:

 

 

March 25, 2019            

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 the director nominees have the knowledge, experience, skills and
backgrounds necessary to contribute to an effective and well-functioning Board.

    
Vote FOR each
director nominee
 
 
     9  
                   

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 named executive officers as disclosed and discussed in this Proxy
Statement. The Board values the opinions of our shareholders and will take into account the
outcome of the advisory vote when considering future executive compensation decisions.

     Vote FOR        51  
                   

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

 

The Audit Committee has appointed Deloitte LLP to serve as BlackRock’s independent registered public accounting firm for the 2019 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 LLP to serve as BlackRock’s independent auditors is in the best interests of the Company and its shareholders.

     Vote FOR        85  
                   

ITEM 4. Shareholder Proposal – Production of an Annual Report on Certain Trade Association and Lobbying Expenditures

 

The Board believes that the actions requested by the proponent are unnecessary and not in the best interest of our shareholders.

     Vote AGAINST        88  
                   

ITEM 5. Shareholder Proposal – Simple Majority Vote Requirement

 

The Board believes that the actions requested by the proponent are unnecessary and not in the best interest of our shareholders.

     Vote AGAINST        91  
                   

 


 

BLACKROCK, INC. 2019 PROXY STATEMENT    1

 


 


Table of Contents

 

 

Proxy Summary    |    Governance Highlights

 

What’s New?

This year, we have expanded our discussion of BlackRock’s governance, culture, sustainability and compensation practices. 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:

 

    Board refreshment through the nomination of a new director (see “Director Candidate Search” on page 12)

 

    Board commitment to engagement with employees (see “Beyond the Boardroom” on page 24)

 

    Enhanced disclosure on Human Capital Management (see “BlackRock’s Approach to Human Capital Management” on page 34)
    Enhanced disclosure on our Board and BlackRock’s culture (see “Our Board is deeply engaged in understanding the culture at BlackRock” on page 23 and “Beyond the Boardroom” on page 24)

 

    Enhanced disclosure on our NEO compensation decisions framework (see “Our Compensation Framework” on page 56)

 

    BlackRock’s Approach to Sustainability
 

Governance Highlights

Board Composition

(18 director nominees)

The Governance Committee regularly reviews the overall composition of the Board and its Committees to assess whether they reflect the appropriate mix of skills, experience, backgrounds and qualifications that are relevant to BlackRock’s current and future global strategy and business. The Governance Committee identified a new candidate with strong senior executive, international and financial services experience for nomination to the Board this year.

Board Tenure

The Board considers length of tenure when reviewing nominees in order to maintain an overall balance of experience, continuity and fresh perspective.

 

LOGO

7 years: Average tenure of all director nominees 5 years: Average tenure of independent director nominees

Board Profile

 

LOGO

Current & Former CEOs 11 of [18] 61.1 Non-U.S. or Dual Citizens [6] of [18] 33.3 Women 5 of [18] 27.77

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

15 of BlackRock's 18 director nominees are independent

 

2    BLACKROCK, INC. 2019 PROXY STATEMENT

 


Table of Contents

 

 

Proxy Summary    |    Governance Highlights

 

Our Director Nominees

 

   

Age at

Record

Date

 

         

Committee Memberships (effective May 23, 2019)

 

Nominee

 

 

Primary Occupation

 

 

Director

since

 

 

Audit

 

 

Compensation

 

 

Governance

 

 

Risk

 

 

Executive  

 

Bader M. Alsaad

  61   Former Managing Director of the Kuwait Investment Authority   N/A          
                                 

Mathis Cabiallavetta

  74   Former Chairman of UBS, Vice Chairman of
Swiss Re Ltd. and of Marsh & MacLennan Companies, Inc.
  2007          
                                 

Pamela Daley

  66   Former Senior Vice President of General Electric Company Corporate Business Development and Senior Advisor to Chairman   2014          
                                 

William S. Demchak

  56   Chairman, CEO and President of PNC   2003          
                                 

Jessica P. Einhorn

  71   Former Dean of Paul H. Nitze School of Advanced International Studies at The Johns Hopkins University and former Managing Director,
World Bank
  2012          
                                 

Laurence D. Fink

  66   Chairman and CEO of BlackRock   1999          
                                 

William E. Ford

  57   CEO of General Atlantic   2018          
                                 

Fabrizio Freda

  61   President and CEO of The Estée Lauder Companies Inc.   2012          
                                 

Murry S. Gerber

 Lead Independent Director

  66   Former Executive Chairman, Chairman,
President and CEO of EQT Corporation
  2000          
                                 

Margaret L. Johnson

  57   Executive Vice President of Business Development of Microsoft Corporation   2018          
                                 

Robert S. Kapito

  62   President of BlackRock   2006          
                                 

Cheryl D. Mills

  54   Founder and CEO of BlackIvy Group and former Chief of Staff to Secretary of State Hillary Clinton   2013          
                                 

Gordon M. Nixon

  62   Former President, CEO and Director of Royal Bank of Canada   2015          
                                 

Charles H. Robbins

  53   Chairman and CEO of Cisco Systems, Inc.   2017          
                                 

Ivan G. Seidenberg

  72  

Former Chairman and CEO of Verizon

Communications Inc.

  2011          
                                 

Marco Antonio Slim Domit

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

Susan L. Wagner

  57   Former Vice Chairman of BlackRock   2012          
                                 

Mark Wilson

  52   Former CEO of Aviva plc and former President and CEO of AIA   2018          
                                 

Chairperson

 

BLACKROCK, INC. 2019 PROXY STATEMENT    3

 


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, strategic deliberation, and 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
  Robust stock ownership requirements for directors and executives

 

  Annual advisory vote on executive compensation

 

  Adoption of proxy access

 

  Annual review of Committee charters and Corporate Governance Guidelines

 

  Human capital management oversight by Board and Committees
 

 

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, 2018, all NEOs exceeded our stock ownership guidelines.
 

 


Shareholder Engagement and Outreach

Executive management, Investor Relations and the Corporate Secretary engage with shareholders on a regular basis to understand their perspectives on a variety of corporate governance matters, including executive compensation, corporate governance policies and corporate sustainability practices. Our directors also have engaged directly with shareholders during the last two years. We also communicate with shareholders through a number of routine forums, including quarterly earnings presentations, U.S. Securities and Exchange Commission (“SEC”) filings, the Annual Report and Proxy Statement, the annual shareholder meeting, investor meetings and conferences and web communications. We relay shareholder feedback and trends on corporate governance and sustainability developments to our Board and its Committees and work with them to both enhance our practices and improve our disclosures. Additionally, four of our independent directors attended our 2018 Investor Day presentation.

 

4    BLACKROCK, INC. 2019 PROXY STATEMENT

 


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:

 

 

   LOGO  

 

 

 

 

What We Do

   Review pay and performance alignment;

 

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

 

   Maintain a clawback policy;

 

   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”);

 

   Maintain robust stock ownership and retention guidelines;

 

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

 

 

   Limit perquisites;

 

   Assess and mitigate compensation risk;

 

   Solicit an annual advisory vote on executive compensation; and

 

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

 

 

 

   LOGO  

 

 

 

 

What We Don’t Do

 No ongoing employment agreements or guaranteed compensation arrangements for NEOs;

 

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

 

 No dividends or dividend equivalents on unearned restricted stock, restricted stock units, stock options or stock appreciation rights;

 

 No repricing of stock options;

 

 

 No cash buyouts of underwater stock options;

 

 No tax reimbursements for perquisites;

 

 No tax gross-ups for excise taxes;

 

 No supplemental retirement benefits for NEOs; and

 

 No supplemental severance benefits for NEOs beyond standard severance benefits under BlackRock’s Severance Pay Plan.

 

 

BLACKROCK, INC. 2019 PROXY STATEMENT    5

 


Table of Contents

 

 

Proxy Summary    |    Compensation Discussion and Analysis Highlights

 

2018 Financial Performance(1),(2)

BlackRock’s 2018 results reflect the investments we have made over time to leverage our scale and optimize our strategic positioning. We generated $124 billion of net inflows for the full year, representing 2% organic growth, delivered revenue growth, expanded our operating margin and returned $3.6 billion to shareholders, despite meaningful headwinds in the asset management industry. Long-term investment performance results across our alpha-seeking and index strategies as of December 31, 2018 remain strong and are detailed in Part I, Item 1 – Business of our 2018 Form 10-K.

 

Differentiated Organic Growth

 

   

Operating Leverage

 

 

Organic asset growth of 2% and record technology services revenue in 2018 contributed to continued revenue growth

 

   

 

Operating Margin, as adjusted, of 44.3% was up 20 bps from 2017

 

 

LOGO

   

 

 

LOGO

 

   

Consistent Capital Return

 

   

Earnings Growth

 

 

$3.6 billion returned to shareholders in 2018 through a combination of dividends and $1.7 billion of share repurchases

   

 

Diluted earnings per share, as adjusted, of $26.93 increased 20% versus 2017, reflecting execution of shareholder value framework and the impact of a lower effective tax rate

 

 

 

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)

Results for 2016 and 2017 were recast to reflect the adoption of the new revenue recognition standard. For further information, refer to Note 2, Significant Accounting Policies, in the consolidated financial statements in our 2018 Form 10-K.

 

(3)

Traditional LC Peers refers to Alliance Bernstein, Affiliated Managers Group, Franklin Resources, Eaton Vance, Invesco, Legg Mason and T. Rowe Price.

 

6    BLACKROCK, INC. 2019 PROXY STATEMENT

 


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. The Compensation Committee uses the associated weightings to assess each NEO. The Committee’s performance assessment is directly related to each NEO’s total incentive outcome, which includes all variable pay (annual discretionary cash award, annual discretionary deferred equity award and long-term equity awards).

For each NEO’s performance assessment, please refer to the section “2018 NEO Compensation and Performance Summaries” on page 66.

How We Determine Total Incentive Amounts for NEOs

 

   

  BlackRock Performance

  % of Award Opportunity

 

  

Measures

 

 

Indicative BlackRock Performance Metrics

 

    

 

2017                                

 

 

 

2018                    

 

 

  Financial

  Performance

 

 

LOGO

  

 

Net New Business ($bn)

 

 

 

$367

 

 

 

$124

 

   
  

 

Net New Base Fee Growth

 

 

 

7%

 

 

 

2%

 

   
  

 

Operating Income, as adjusted(1) ($m)

 

 

 

$5,269

 

 

 

$5,531

 

   
  

 

Year-over-year change

 

 

 

+13%

 

 

 

+5%

 

   
  

 

Operating Margin, as adjusted(1)

 

 

 

44.1%

 

 

 

44.3%

 

   
  

 

Year-over-year change

 

 

 

+30bps

 

 

 

+20bps

 

   
  

 

Diluted Earnings Per Share, as adjusted(1)

 

 

 

$22.49

 

 

 

$26.93

 

   
  

 

Year-over-year change

 

 

 

+17%

 

 

 

+20%

 

 
   Share Price Data   BLK  

 

Traditional LC Peers(2)

 

  

 

NTM P/E Multiple(3)

 

 

 

14.2x

 

 

 

9.3x

 

   
    

 

Annual appreciation/depreciation

 

 

 

- 24%

 

 

 

- 31%

 

   

 

  Business

  Strength

 

LOGO

  

 

Deliver superior client experience through competitive investment performance across global product groups

 

 

Long-term performance remains strong over the 3- yr and 5-yr period, although 1-year performance was pressured in a difficult market environment.

 

Maintained #1 global share in our ETF business and gained market share in our global Retail and Institutional client businesses.

 

  

 

Drive organization discipline through execution of our strategic initiatives

 

 

Demonstrated successful execution across most of our Strategic Initiatives, highlighted by illiquid alternatives and private credit.

 

  

 

Lead in a changing world

 

 

Sustained progress on key long-term growth drivers, particularly in Technology, with related revenue up 19% year-over-year.

 

 

  Organizational

  Strength

 

LOGO

  

 

Drive high performance

 

 

Launched Growing More Great Investors initiative and continued to build out the BlackRock Academies, aimed to build mastery in key subject areas amongst employees.

 

  

 

Build a more diverse and inclusive culture

 

 

Expanded representation of female and ethnically diverse employees at the managing director and director levels.

 

  

 

Develop great managers and leaders

 

 

Strengthened the firm’s leadership bench by refreshing succession plans for more than 100 key roles through a robust, peer-reviewed process.

 

 

(1)

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

 

(2)

Traditional LC Peers refers to Alliance Bernstein, Affiliated Managers Group, Franklin Resources, Eaton Vance, Invesco, Legg Mason and T. Rowe Price.

 

(3)

Next Twelve Months (“NTM”) P/E multiple refers to the Company’s share price as of December 31, 2018 divided by the consensus estimate of the Company’s expected earnings over the next 12 months. Sourced from Factset.

 

BLACKROCK, INC. 2019 PROXY STATEMENT    7

 


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 2018 total annual compensation outcomes for each NEO, as outlined in the table below.

 

 
           

2018 Total Incentive Award

 

               
           

Name

 

  

Base Salary

 

    

Cash

 

    

Deferred

Equity

 

    

Long-Term

Incentive Award

(“BPIP”)

 

    

Total Annual

Compensation

(“TAC”)

 

    

% change in

TAC vs. 2017

 

 

 

Laurence D. Fink

 

  

 

 

 

 

$1,500,000

 

 

 

 

  

 

 

 

 

$7,750,000

 

 

 

 

  

 

 

 

 

$4,250,000

 

 

 

 

  

 

 

 

 

$10,500,000

 

 

 

 

  

 

 

 

 

$24,000,000

 

 

 

 

  

 

 

 

 

(14%)

 

 

 

 

 

Robert S. Kapito

 

  

 

 

 

 

$1,250,000

 

 

 

 

  

 

 

 

 

$6,250,000

 

 

 

 

  

 

 

 

 

$3,500,000

 

 

 

 

  

 

 

 

 

$  8,000,000

 

 

 

 

  

 

 

 

 

$19,000,000

 

 

 

 

  

 

 

 

 

(14%)

 

 

 

 

 

Robert L. Goldstein

 

  

 

 

 

 

$   500,000

 

 

 

 

  

 

 

 

 

$2,950,000

 

 

 

 

  

 

 

 

 

$2,000,000

 

 

 

 

  

 

 

 

 

$  2,400,000

 

 

 

 

  

 

 

 

 

$  7,850,000

 

 

 

 

  

 

 

 

 

(4%)

 

 

 

 

 

J. Richard Kushel

 

  

 

 

 

 

$   500,000

 

 

 

 

  

 

 

 

 

$2,712,500

 

 

 

 

  

 

 

 

 

$1,762,500

 

 

 

 

  

 

 

 

 

$  1,700,000

 

 

 

 

  

 

 

 

 

$  6,675,000

 

 

 

 

  

 

 

 

 

(5%)

 

 

 

 

 

Gary S. Shedlin

 

  

 

 

 

 

$   500,000

 

 

 

 

  

 

 

 

 

$2,475,000

 

 

 

 

  

 

 

 

 

$1,525,000

 

 

 

 

  

 

 

 

 

$  1,950,000

 

 

 

 

  

 

 

 

 

$  6,450,000

 

 

 

 

  

 

 

 

 

(5%)

 

 

 

 

The amounts listed above as “2018 Annual Incentive Award: Deferred Equity” and “Long-Term Incentive Award (“BPIP”)” were granted in January 2019 in the form of equity and are separate from the cash award amounts listed above as “2018 Annual Incentive Award: Cash.” In conformance with SEC requirements, the 2018 Summary Compensation Table on page 77 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 2018 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 Restricted Stock Units (“RSUs”) and the portion granted under the BlackRock Performance Incentive Plan (“BPIP Awards”), our long-term incentive plan) are approved by the Compensation Committee under the Stock Plan, which has been previously approved by shareholders. The Stock Plan allows multiple types of awards to be granted.

 

(2)

The value of the 2018 long-term incentive BPIP Awards and the value of the equity portion of the bonus for 2018 annual incentive awards were converted into RSUs by dividing the award value by $410.315, which represented the average of the high and low prices per share of common stock of BlackRock on January 17, 2019.

 

(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 59.

 

8    BLACKROCK, INC. 2019 PROXY STATEMENT

 


Table of Contents

 

Item 1:

 


 

Election of

Directors

 

 

 

“It has always been important
that BlackRock’s Board of Directors functions as a key strategic and governing body that challenges our leadership team to be better and more innovative.”

 

Laurence D. Fink

Chairman and Chief Executive Officer

 

   

 

Director Nominees

 

Our Board has nominated 18 directors for election at this year’s Annual Meeting on the recommendation of our Governance Committee. Each director will serve until our next annual meeting and until his or her successor has been duly elected, or until his or her earlier death, resignation or retirement.

 

We expect each director nominee to be able to serve if elected. If a nominee is unable to serve, proxies will be voted in favor of the remainder of those directors nominated and may be voted for substitute nominees, unless the Board decides to reduce its total size.

 

If all 18 director nominees are elected, our Board will consist of 18 directors, 15 of whom, representing approximately 83% of the Board, will be “independent” as defined in the New York Stock Exchange (the “NYSE”) listing standards.

 

Stockholder Agreement with The PNC Financial Services Group, Inc.

 

BlackRock’s stockholder agreement with PNC (the “PNC Stockholder Agreement”) provides, subject to the waiver provisions of the PNC Stockholder Agreement, that BlackRock will use its best efforts to cause the election at each annual meeting of shareholders so that the Board will consist of:

 

  no more than 19 directors,

 

  not less than two nor more than four directors who will be members of BlackRock management,

 

  two directors who will be designated by The PNC Financial Services Group, Inc. (“PNC”), and

 

  the remaining directors being independent for purposes of the rules of the NYSE and not designated by or on behalf of PNC or any of its affiliates.

 

Laurence D. Fink and Robert S. Kapito are members of BlackRock’s management team and are currently members of the Board. PNC has designated one member of the Board, William S. Demchak, Chairman, President and Chief Executive Officer of PNC. PNC has notified BlackRock that for the time being it will not designate a second director to the Board, although it retains the right to do so at any time in accordance with the PNC Stockholder Agreement. PNC has additionally been permitted to invite an observer to attend meetings of the Board as a non-voting guest. The PNC observer is Gregory B. Jordan, the General Counsel and Chief Administrative Officer of PNC. For additional detail on the PNC Stockholder Agreement, see Certain Relationships and Related Transactions – PNC Stockholder Agreement” on page 46.

 


 

BLACKROCK, INC. 2019 PROXY STATEMENT    9


Table of Contents

 

ITEM 1: Election of Directors    |    Director Nominees

 

Majority Vote Standard for Election of Directors

Directors are elected by receiving a majority of the votes cast in uncontested elections (the number of shares voted “for” a director nominee must exceed the number of shares voted “against” that director nominee). In a contested election (a situation in which the number of nominees exceeds the number of directors to be elected), 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. Whether an election is contested is determined seven days in advance of when we file our definitive Proxy Statement with the SEC.

Director Resignation Policy and Mandatory Retirement Age

Under the Board’s Director Resignation Policy, any incumbent director who fails to receive a majority of votes cast in an uncontested election must tender his or her resignation to the Board. The Governance Committee would then make a recommendation to the Board about whether to accept or reject the resignation or take other action. The Board will act on the Governance Committee’s recommendation and publicly disclose its decision and rationale within 90 days from the date the election results are certified. The director who tenders his or her resignation under the Director Resignation Policy will not participate in the Board’s decision.

The Board has established a mandatory retirement age of 75 years for directors, as reflected in BlackRock’s Corporate Governance Guidelines.

Director Nomination Process

The Governance Committee oversees the director nomination process. The Committee leads the Board’s annual review of Board performance and reviews and recommends to the Board BlackRock’s Corporate Governance Guidelines, which includes the minimum criteria for membership on the Board. 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 submit for election at each annual meeting of shareholders. The 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 on potential director candidates 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 96.

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.

 

Criteria for Board Membership

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 candidate 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 candidate 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.

 

10    BLACKROCK, INC. 2019 PROXY STATEMENT


Table of Contents

 

ITEM 1: Election of Directors    |    Criteria for Board Membership

 

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, ethnicity, age, career experience and geographic location – as well as diversity of mind – a priority when considering director candidates. The diverse backgrounds of our individual directors help the Board better evaluate BlackRock’s management and operations and assess risk and opportunities for the Company’s business model. BlackRock’s commitment to diversity enhances Board involvement in our Company’s multi-faceted long-term strategy and inspires deeper engagement with management, employees and clients around the world.

Our Board has nominated 18 candidates for election, 15 of whom are independent. The slate of director nominees includes 5 women, 1 of whom is African American, and 6 directors who are 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.

As BlackRock’s business has evolved, so has its Board. Our slate of director nominees consists of senior leaders (including 13 current or former company CEOs) with substantial experience in financial services, consumer products, manufacturing, technology, banking and energy, and several directors have held senior policy and government positions. Core qualifications and areas of expertise represented on our Board (including those of our new director nominee) include:

 

Senior Executive & Corporate Governance

 

 

LOGO

Directors bring valuable senior executive experience on matters relating to corporate governance, management, operations and compensation.

Global Business

 

 

LOGO

Directors bring international business strategy, operations and substantive expertise in international matters relevant to BlackRock’s global business.

Risk Management & Compliance

 

 

LOGO

Directors have experience in risk management and compliance oversight relevant to exercising corporate and fiduciary responsibilities.

Financial Services

 

 

LOGO

Directors possess in-depth knowledge of the financial services industry or asset management and provide valuable perspectives on issues faced by BlackRock.

Public Company & Financial Reporting

 

 

 

LOGO

Directors have experience in the oversight of internal controls and reporting of public company financial and operating results.

Public Policy & Government/Regulatory Affairs

 

 

LOGO

Directors possess insight and expertise in managing governmental and regulatory affairs relevant to BlackRock’s business operations

Branding & Marketing

 

 

LOGO

Directors bring expertise in brand development, marketing and sales in local markets at a global scale relevant to BlackRock’s global business.

 

 

Technology

 

 

LOGO

 

Directors possess experience in the development and embracing of new technology as well as leading innovation initiatives at companies.

 

Board Tenure and Size

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 seven years and the average tenure for independent director nominees is approximately six years.

Following the 2019 Annual Meeting of Shareholders, assuming all of the nominated directors are elected, there will be six directors, comprising 33% of the Board, who have joined the Board within the past five years and bring fresh perspective to Board deliberations. Seven directors, comprising 39% of the Board, have served between 5 and 10 years. Five directors, comprising 28% of the Board, have served more than 10 years and bring a wealth of experience and knowledge concerning BlackRock.

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 and risk management. As described in “Board Evaluation Process” on page 26, 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.

 

BLACKROCK, INC. 2019 PROXY STATEMENT    11


Table of Contents

 

ITEM 1: Election of Directors    |    Criteria for Board Membership

 

Compliance with Regulatory and Independence Requirements

The Governance Committee takes into consideration regulatory requirements, including competitive restrictions and financial institution interlocks, independence requirements under the NYSE listing standards and our Corporate Governance Guidelines in its review of director candidates for the Board and 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. BlackRock’s CEO does not currently serve on the board of directors of any other public company, and none of our current directors serve on more than four public company boards, including BlackRock’s Board.

Director Candidate Search

Consistent with BlackRock’s age-based retirement policy, at least three of BlackRock’s current directors will retire within the next six years. In order to maintain a Board with an appropriate mix of experience and qualifications, the Governance Committee, with the help of management and an outside consultant, engages in a year-round process to identify and evaluate new director candidates in conjunction with its recurring review of Board and Committee composition. Consistent with our long-term strategic goals and the qualifications and attributes described above, search criteria include significant experience in financial services, the technology sector and consumer branding, as well as international experience. In March of this year, the Governance Committee identified Bader M. Alsaad as a candidate with significant leadership and experience in international business and the financial sector and recommended him to the Board for consideration. Mr. Alsaad was recommended for consideration to the Governance Committee by our CEO. On March 14, 2019, the Board voted unanimously to nominate him to join our Board.

Board Recommendation

For this year’s election, the Board has nominated 18 director candidates. The Board believes these director nominees provide BlackRock with the combined depth and breadth of skills, experience and qualities required to contribute to an effective and well-functioning Board. The composition of the current Board reflects a diverse range of skills, qualifications and professional experience that is relevant to our global strategy, business and governance.

The following biographical information about each director nominee highlights the particular experience, qualifications, attributes and skills possessed by each 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 25, 2019.

 

LOGO

 

12    BLACKROCK, INC. 2019 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 a member of the Executive Committee of the Board of Directors of the Kuwait Investment Authority (KIA) since 2003. He was 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 Supervisory Board of Daimler AG, a member of the Global Advisory Council of Bank of America, and a member of the Board of Directors of the Kuwait Fund for Economic Development. He is a founding member of the International Forum of Sovereign Wealth Funds and served as its Chairman and Deputy Chairman from its inception in 2009 until October 2015.

 

Qualifications

 

Mr. AIsaad’s extensive experience in the strategically important Middle East region and 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

61

 

 

Tenure

0 Years

 

Committees

• None

 

Qualifications

• Senior Executive & Corporate Governance

 

• Financial Services

 

• Global Business

 

• Public Policy & Government/Regulatory Affairs

 

• Risk Management & Compliance

 

 
     

 

LOGO

 

   

 

 

Mathis Cabiallavetta

 

Mr. Cabiallavetta has served as a member of the board of directors of Swiss Reinsurance Company Ltd. (Swiss Re) since 2008 and as the Vice Chairman of its board between 2009 and 2015. Mr. Cabiallavetta retired as Vice Chairman, Office of the Chief Executive Officer of Marsh & McLennan Companies, Inc. and as Chairman of Marsh & McLennan Companies International in 2008. Prior to joining Marsh & McLennan Companies, Inc. in 1999, Mr. Cabiallavetta was Chairman of the board of directors of Union Bank of Switzerland (UBS A.G.).

 

Qualifications

 

As a former leader of Swiss Re and Marsh & McLennan Companies, Inc. as well as UBS A.G., Mr. Cabiallavetta brings executive experience from these large and complex multinational businesses and provides substantial expertise in global capital markets, and as a result he offers unique insights to the Board’s oversight of BlackRock’s global operations and risk management.

 

Other Public Company Directorships (within the past 5 years)

 

  Swiss Re Ltd. (2008 – present) (Vice Chairman from 2009 – 2015)

  Philip Morris International Inc. (2002 – 2014)

Age

74

 

 

Tenure

11 Years

 

Committees

• Audit

 

• Nominating & Governance

 

Qualifications

• Senior Executive & Corporate Governance

 

• Financial Services

 

• Global Business

 

• Public Company & Financial Reporting

 

• Risk Management & Compliance

 

 

 

BLACKROCK, INC. 2019 PROXY STATEMENT    13


Table of Contents

 

ITEM 1: Election of Directors    |    Director Nominee Biographies

 

 

 

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. Ms. Daley joined GE in 1989 as Tax Counsel. Previously, Ms. Daley was a Partner of Morgan, Lewis & Bockius, a large US 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)

  BG Group (2014 – 2016)

Age

66

 

 

Tenure

5 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

 

 
     

 

LOGO

 

   

 

 

William S. Demchak

 

Mr. Demchak has served as Chairman of the board of directors of PNC since April 2014, as Chief Executive Officer since April 2013 and as President since April 2012. Prior to that, Mr. Demchak held a number of supervisory positions at PNC, including Senior Vice Chairman, Head of Corporate and Institutional Banking and Chief Financial Officer. Before joining PNC in 2002, Mr. Demchak served as the Global Head of Structured Finance and Credit Portfolio for J.P. Morgan Chase & Co. and additionally held key leadership roles at J.P. Morgan prior to its merger with Chase Manhattan Corporation in 2000.

 

Qualifications

 

As the Chairman, President and Chief Executive Officer of PNC, a large, national, diversified financial services company providing traditional banking and asset management services, Mr. Demchak brings substantial expertise in financial services, risk management and corporate governance to bear as a member of the Board. Mr. Demchak was designated to serve on the Board by PNC pursuant to the PNC Stockholder Agreement.

 

Other Public Company Directorships (within the past 5 years)

 

  PNC (2013 – present) (Chairman from 2014 – present)

Age

56

 

 

Tenure

16 Years

 

Committees

• Executive

 

• Risk

 

Qualifications

• Senior Executive & Corporate Governance

 

• Branding & Marketing

 

• Financial Services

 

• Public Company & Financial Reporting

 

• Risk Management & Compliance

 

 

 

14    BLACKROCK, INC. 2019 PROXY STATEMENT


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

71

 

 

Tenure

6 Years

 

Committees

• Management Development & 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

66

 

 

Tenure

19 Years

 

Committees

• Executive (Chair)

 

Qualifications

• Senior Executive & Corporate Governance

 

• Financial Services

 

• Global Business

 

• Public Company & Financial Reporting

 

• Public Policy & Government/ Regulatory Affairs

 

• Risk Management & Compliance

 

 

 

BLACKROCK, INC. 2019 PROXY STATEMENT    15


Table of Contents

 

ITEM 1: Election of Directors    |    Director Nominee Biographies

 

 

 

  LOGO

 

            

 

 

William E. Ford

 

Mr. Ford is the Chief Executive Officer of General Atlantic, a position he has held since 2007. He also serves as Chairman of General Atlantic’s Management Committee and is a member of the firm’s Investment and Portfolio Committees. 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 world’s leading growth equity firms.

 

Other Public Company Directorships (within the past 5 years)

 

  Axel Springer (2016 – April 2018)

  IHS Markit Ltd. (July 2016 – present)

Age

57

 

 

Tenure

1 Year

 

Committees

• Audit

 

• Management Development & Compensation

 

Qualifications

• Senior Executive & Corporate Governance

 

• Financial Services

 

• Global Business

 

• Public Company & Financial Reporting

 

 
     

 

  LOGO

 

   

 

 

Fabrizio Freda

 

Mr. Freda has served as President and Chief Executive Officer of The Estée Lauder Companies Inc. (Estée Lauder) since July 2009, and is also a member of its board of directors. 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

61

 

 

Tenure

6 Years

 

Committees

• Nominating & Governance

 

Qualifications

• Senior Executive & Corporate Governance

 

• Branding & Marketing

 

• Global Business

 

• Risk Management & Compliance

 

• Technology

 

 

 

16    BLACKROCK, INC. 2019 PROXY STATEMENT


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. Murry 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

66

 

 

Tenure

19 Years

 

Committees

• Audit

 

• Executive

 

• Nominating & Governance

 

Qualifications

• Senior Executive & Corporate Governance

 

• Global Business

 

• Public Company & Financial Reporting

 

• Risk Management & Compliance

 

• Technology

 

 
     

 

LOGO

 

   

 

 

Margaret L. Johnson

 

Ms. Johnson has been an Executive Vice President of Business Development at Microsoft Corporation since September 2014. She is responsible for driving strategic business deals and partnerships across various industries. Ms. Johnson joined Microsoft from Qualcomm Incorporated, where she served in various leadership positions across engineering, sales, marketing and business development. She most recently served as Executive Vice President of Qualcomm Technologies, Inc. and President of Global Market Development. Ms. Johnson is a Director of PATH and a Trustee of The Paley Center for Media.

 

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

57

 

 

Tenure

1 Year

 

Committees

• Audit

 

• Management Development & Compensation

 

Qualifications

• Senior Executive & Corporate Governance

 

• Branding & Marketing

 

• Global Business

 

• Public Policy & Government/ Regulatory Affairs

 

• Technology

 

 

 

BLACKROCK, INC. 2019 PROXY STATEMENT    17


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. Mr. Kapito co-founded BlackRock in 1988 and is also a director of iShares, Inc. 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

62

 

 

Tenure

12 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, an investment company that grows and builds businesses in Sub-Saharan Africa. Previously, she served as Chief of Staff to 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 and as General Counsel. She also served as Secretary of the University’s Board of Trustees. From 1999 to 2001, Ms. Mills was Senior Vice President for Corporate Policy and Public Programming at Oxygen Media. Prior to joining Oxygen Media, Ms. Mills served as Deputy Counsel to President Clinton and as the White House Associate Counsel. She began her career as an Associate at the Washington, D.C. law firm of Hogan & Hartson. 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 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)

 

  None

Age

54

 

 

Tenure

5 Years

 

Committees

• Management Development & Compensation

 

• Nominating & Governance

 

Qualifications

• Senior Executive & Corporate Governance

 

• Branding & Marketing

 

• Global Business

 

• Public Policy & Government/ Regulatory Affairs

 

• Risk Management & Compliance

 

 

 

18    BLACKROCK, INC. 2019 PROXY STATEMENT


Table of Contents

 

ITEM 1: Election of Directors    |    Director Nominee Biographies

 

 

 

LOGO

 

            

 

 

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

 

Mr. Nixon was 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 was named Chairman of the board upon his re-election in April 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)

  George Weston Limited (2014 – present)

Age

62

 

 

Tenure

3 Years

 

Committees

• Executive

 

• Management Development & Compensation

 

• Nominating & Governance
(Chair)

 

Qualifications

• Senior Executive & Corporate Governance

 

• Financial Services

 

• Global Business

 

• 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 serves as Chairman of the U.S.-Japan Business Council, Chair of the IT Governors Steering Committee for the World Economic Forum and is a member of the International Business Council for the World Economic Forum and the Business Roundtable. Mr. Robbins is also on the Board of Directors for the Business Roundtable and is also a Trustee for 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

53

 

 

Tenure

1 Year

 

Committees

• Risk

 

Qualifications

• Senior Executive & Corporate Governance

 

• Branding & Marketing

 

• Global Business

 

• Public Policy & Government/ Regulatory Affairs

 

• Technology

 

 

 

BLACKROCK, INC. 2019 PROXY STATEMENT    19


Table of Contents

 

ITEM 1: Election of Directors    |    Director Nominee Biographies

 

 

 

LOGO

 

            

 

 

Ivan G. Seidenberg

 

Mr. Seidenberg retired as the Chairman of the board of Verizon Communications Inc. in December 2011 and previously served as its Chief Executive Officer from 2002 to 2011. Prior to the creation of Verizon Communications Inc., Mr. Seidenberg was the Chairman and Chief Executive Officer of Bell Atlantic and NYNEX Corp. Mr. Seidenberg has been an Advisory Partner of Perella Weinberg Partners, a global independent advisory and asset management firm, since June 2012.

 

Qualifications

 

Mr. Seidenberg brings extensive executive leadership, technological, and operational experience to the Board from his tenure at Verizon Communications Inc., one of the world’s leading providers of communications services. Through his extensive experience on the boards of public companies, he has developed an in-depth understanding of business and corporate governance.

 

Other Public Company Directorships (within the past 5 years)

 

  Boston Properties, Inc. (2014 – 2016)

Age

72

 

 

Tenure

8 Years

 

Committees

• Executive

 

• Management Development & Compensation (Chair)

 

• Nominating & Governance

 

Qualifications

• Senior Executive & Corporate Governance

 

• Branding & Marketing

 

• Public Company & Financial Reporting

 

• Public Policy & Government/ Regulatory Affairs

 

• Technology

 

 
     

 

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)

  Teléfonos de México, S.A.B. de C.V. (1995 – 2014)

Age

50

 

 

Tenure

7 Years

 

Committees

• Audit

 

• Management Development & Compensation

 

Qualifications

• Senior Executive & Corporate Governance

 

• Financial Services

 

• Global Business

 

• Public Company & Financial Reporting

 

• Risk Management & Compliance

 

 

 

20    BLACKROCK, INC. 2019 PROXY STATEMENT


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 currently serves as a director of Color Genomics (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

57

 

 

Tenure

6 Years

 

Committees

• Nominating & Governance

 

• Risk

 

Qualifications

• Senior Executive & Corporate Governance

 

• Financial Services

 

• Global Business

 

• Public Company & Financial Reporting

 

• Risk Management & Compliance

 

 
     

 

LOGO

 

   

 

 

Mark Wilson

 

Mr. Wilson served as the Chief Executive Officer of Aviva plc (Aviva), a multinational insurance company headquartered in the UK, from January 2013 to October 2018. Prior to joining Aviva, Mr. Wilson worked in Asia for 14 years, including as Chief Executive Officer of AIA Group Limited, a 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. In addition, he is a member of the Development Board of the Royal Foundation for the Duke and Duchess of Cambridge and the Duke and Duchess of Sussex.

 

Qualifications

 

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

 

Other Public Company Directorships (within the past 5 years)

 

  Aviva plc (2013 – October 2018)

Age

52

 

 

Tenure

1 Year

 

Committees

• Risk

 

Qualifications

• Senior Executive & Corporate Governance

 

• Financial Services

 

• Global Business

 

• Public Company & Financial Reporting

 

• Public Policy & Government/ Regulatory Affairs

 

 

 

BLACKROCK, INC. 2019 PROXY STATEMENT    21


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 make an effort 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. Because corporate governance practices evolve over time, our Board reviews and approves our Corporate Governance Guidelines, Committee charters and other governance policies at least once a year and updates them as necessary and appropriate.

Our Board is guided by our Corporate Governance Guidelines, which address director responsibilities, director access to management, director orientation and continuing education, director retirement, and the annual performance evaluations of the Board and Committees. The Corporate Governance Guidelines also directs that the Governance Committee consider the periodic rotation of Committee members and Committee Chairs as a means of introducing fresh perspectives and broadening and diversifying the views and experience represented on Committees.

 

The full versions of our Corporate Governance Guidelines, Committee Charters and other corporate governance policies are available on our website at www.blackrock.com under the headings “Our Company and Sites / Our Firm / Investor Relations / Corporate Governance.”

 

22    BLACKROCK, INC. 2019 PROXY STATEMENT


Table of Contents

 

Corporate Governance    |    Our Corporate Governance Framework

 

 

BlackRock’s culture is vital to our success

 

BlackRock’s culture is a key differentiator of our strategy and helps to drive our results and long-term growth. Our culture embraces our fiduciary commitment to serve clients and stay ahead of their needs. Our culture unifies the firm and helps to reinforce ethical behavior at all levels.

 

Our approach to instilling, reinforcing and enhancing our culture is deliberate and intentional. You can listen to Jeff Smith, our Global Head of Human Resources, talk about our approach during BlackRock’s 2018 Investor Day at www.ir.blackrock.com.

 

 

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 that is the foundation for our Company’s strategic plans.

We believe 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.

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.

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

Our Board plays an active part in our talent development as well, dedicating at least one meeting per year to talent review, evaluating whether we have the right people in the right places to execute our long-term strategy, reviewing the results of Employee Opinion Surveys, and making certain we are developing others to fill key roles in the future. Building a generation of future leaders, open to both Board and external

ideas, is vital to BlackRock’s long-term success. For more information, please refer to “BlackRock’s Approach to Human Capital Management” on page 34.

Twice a year, Board and Committee meetings are held outside of New York, including at least one set of meetings outside of the United States. These off-site meetings provide our directors with an opportunity to focus on reviewing of regional strategies, to meet with employees and management based outside of our New York corporate headquarters, and to engage with local clients and government officials. These meetings provide our directors with firsthand exposure to BlackRock’s corporate culture and how employees globally demonstrate BlackRock’s principles and purpose. In 2018, the Board travelled to Boston, Massachusetts and Tokyo, Japan.

Our Board also takes an active role in ensuring we embrace “best practices” in corporate governance. Members of the Governance Committee are briefed on significant trends and developments in corporate governance and regulatory issues, including briefings from BlackRock’s Investment Stewardship and Global Public Policy teams as well as feedback from shareholders. In 2018, we incorporated feedback from shareholders to enhance disclosure on how the Board oversees our Company’s corporate culture.

The partnership and oversight of a strong, experienced and multi-faceted Board with diverse perspectives in finance, industry, academia, technology and government is essential to creating long-term shareholder value.

 

 

BLACKROCK, INC. 2019 PROXY STATEMENT    23


Table of Contents

 

Corporate Governance    |    Our Corporate Governance Framework

 

 

 

Beyond the Boardroom

 

      

 

     On-site Visits to

     BlackRock Offices and

     BlackRock’s Technology

     Showcase

  

 

In addition to Board and Committee off-site meetings, members of our Board are encouraged to make on-site visits to other BlackRock offices. In 2018, the Audit Committee Chair visited with members of BlackRock’s Asia-Pacific audit and financial control groups in Tokyo, Japan.

 

Also in 2018, BlackRock inaugurated its “Meet the Board” program – a series of globally broadcast “fire-side” chats and town halls designed to give directors an opportunity to engage with employees directly and afford employees an opportunity to ask questions and get to know members of BlackRock’s Board. This year, five directors participated in the program. Additionally, several of our independent directors attended our 2018 Investor Day presentation and nearly the entire Board attended our 30th Anniversary celebrations in the Spring of 2018, where they engaged directly with, employees and members of the investor community, and heard first-hand how BlackRock is developing its brand and strategy in keeping with its core culture and principles. Finally, in November 2018, two of our independent directors visited our Palo Alto artificial intelligence laboratory to meet with local management and employees, tour our facilities, and expand their knowledge of BlackRock’s use of, and research relating to, artificial intelligence.

 

Our directors also attended a technology showcase led by BlackRock employees of all levels who specialize in technology development, as part of the Company’s tech2020 strategy, and experienced first-hand our technology and where it is leading us.

 

   

 

     Director Orientation

  

 

Under the oversight of management and the Board, BlackRock provides each new director with an orientation program conducted over the course of the first three months of their tenure. Orientation includes the opportunity to rotate through each of the Board’s standing Committees and presentations by senior management to familiarize our new directors with BlackRock’s:

 

   Financial position and strategic plans;

 

   Significant financial, accounting and risk management issues;

 

   Compliance programs, conflict policies, code of ethics and other controls; and

 

   Our principal officers and internal and independent auditors.

 

   

 

     Continuing Education

  

 

All directors are encouraged to attend continuing educational programs offered by BlackRock or sponsored by universities, stock exchanges or other organizations related to fulfilling their duties as Board or Committee members. For example, members of our Audit Committee have participated in conferences and symposiums hosted by Deloitte and Ernst & Young.

 

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.

 

   

 

24    BLACKROCK, INC. 2019 PROXY STATEMENT


Table of Contents

 

Corporate Governance    |    Our Board Leadership Structure

 

Our Board Leadership Structure

Why our Board leadership structure is right for BlackRock

Our Board and Governance Committee regularly review and evaluate the Board’s leadership structure. Mr. Fink serves as both BlackRock’s CEO and Chairman of the Board, which the Board has determined is the most appropriate and effective leadership structure for the Board and the Company at this time. Mr. Fink has served in this capacity since founding BlackRock in 1988 and, as such, brings over 30 years of strategic leadership experience and an unparalleled knowledge of BlackRock’s business, operations and risks to his role as Chairman of the Board.

The Board does not have a policy on whether the roles of the Chairman and CEO should be separated, but believes the current combination of the two roles provides BlackRock with, among other things, a clear and effective leadership structure to communicate the Company’s business and long-term strategy to its clients, shareholders and the public. The combined Chairman-CEO structure also provides for robust and frequent communication between the Board’s independent directors and the management of the Company.

To further facilitate coordination with the independent directors and to ensure the exercise of independent judgment by the Board, the independent directors annually select one of the independent members to serve as the Lead Independent Director.

Under our Lead Independent Director Guidelines, the Lead Independent Director will be elected annually by BlackRock’s independent directors and serve until a successor is elected. Although elected annually, we generally expect the Lead Independent Director to serve for more than one year.

 

 

 

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:

 

  In consultation with the Chairman and Committee Chairs, develops and approves the agenda for Board meetings and leads executive sessions.

 

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

 

  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 self-evaluations, in consultation with the Governance Committee.

 

  Serves as the primary Board contact for shareholder engagement.

 

Executive Sessions

Executive sessions of non-management directors are held at most regularly scheduled Board meetings, and six executive sessions were held in 2018. Each session is chaired by the Lead Independent Director, who facilitates discussion of the Company’s strategy, key governance issues, succession planning and the performance of senior executives. Any non-management director may request that an additional executive session be scheduled. At least once a year an executive session is held for only those directors determined to be “independent,” within the meaning of the listing standards of the NYSE.

 

The full versions of our Lead Independent Director Guidelines, Corporate Governance Guidelines, Committee Charters, Code of Business Conduct and Ethics and other corporate governance policies are available on our website at www.blackrock.com under the headings “Our Company and Sites / Our Firm / Investor Relations / Corporate Governance”.

 

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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 ensure their effectiveness, the Board and each Committee conduct comprehensive annual self-evaluations to identify and assess areas for improvements.

The evaluation process includes the following steps:

 

 

LOGO

1 Questionnaires Tailored assessments are reviewed and updated by the Governance Committee Chair, the Lead Independent Director and Committee Chairs. These assessments focus on: Board and Committee performance, effectiveness and contributions to BlackRock: Board composition, Board processes, meeting dynamics and agendas: and access to resources and senior management. 2 Governance Committee Review The Governance Committee Chair, Lead Independent Director and Chairman review each directors responses to the questionnaires. They also share the results of the Committee evaluations with each of the respective Chairpersons of the Audit. MDCC and Risk Committees. 3 Individual Director Interviews The Chairman and/or the Lead Independent Director meet with each independent director on an individual basis to discuss Board, Committee and individual director performance and effectiveness. 4 Board Summary And Feedback The Chair of the Governance Committee along with the Chairman of the Board and Lead Independent Director provide the Board with a summary of the questionnaires and additional feedback received from individual directors annually in the fall or winter. 2018 Board Follow Up Actions Based on responses from the most recent self-assessment, senior management has increased the types of and time allocated to the Companys strategic topics presented to the Board.

 

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Board Refreshment

The Governance Committee is responsible for identifying and evaluating potential director candidates, reviewing Board and Committee composition and making recommendations to the full Board. This ongoing process includes:

 

 

LOGO

Director Recruitment 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. Director Onboarding All new Directors participate in an extensive orientation program, enabling new directors to quickly enhance their strategic value to our board. Board Committee Rotation The Governance Committee also considers the periodic rotation of Committee members and Committee Chairs to introduce fresh perspectives and to broaden and diversify the views and experience represented on Board Committees Board and Committee Evaluations Annual Board and Committee assessments help Identify director skills that would enhance Board effectiveness The Governance Committee actively engages in Board succession planning to anticipate the future needs of the Board and its Committees. Director Tenure and Mandatory Retirement Age To ensure the Board has an appropriate balance of experience, continuity and fresh perspective, the Board considers length of tenure when reviewing nominees. The average tenure of BlackRock's director nominees is approximately 7 years, while the average tenure for independent director nominees is approximately 5 years. The Board has established a mandatory retirement age of 75 years for Directors Our tenure and age-based retirement practices help the Board to anticipate future Board turnover.

 

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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

              
                          

 

Mathis Cabiallavetta

  

     

     
                          

 

Pamela Daley

  

        

  

                          

 

Jessica P. Einhorn

     

     

  
                          

 

William E. Ford

  

  

        
                          

 

Fabrizio Freda

        

     
                          

 

Murry S. Gerber

(Lead Independent Director)

  

     

     

                          

 

Margaret L. Johnson

  

  

        
                          

 

Sir Deryck Maughan

  

        

  

                          

 

Cheryl D. Mills

     

  

     
                          

 

Gordon M. Nixon

     

  

     

                          

 

Charles H. Robbins

           

  
                          

 

Ivan G. Seidenberg

     

  

     

                          

 

Marco Antonio Slim Domit

  

  

        
                          

 

Susan L. Wagner

        

  

  
                          

 

Mark Wilson

           

  
                          

 

NON-INDEPENDENT DIRECTORS

              
                          

 

Laurence D. Fink

              

                          

 

Robert S. Kapito

              
                          

 

William S. Demchak

           

  

                          

 

Number of Meetings Held in 2018

 

  

14

 

  

9

 

  

7

 

  

6

 

  

0

 

Chairperson

The Board met seven times during 2018. In 2018, 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. Eighteen directors who were serving on the Board last year attended the 2018 Annual Meeting of Shareholders. Sir Deryck Maughan is retiring from the Board and will not be standing for re-election at the 2019 Annual Meeting of Shareholders.

 

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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 Committees. On March 15, 2018, the Board appointed Mr. Ford and Ms. Johnson to serve on the Audit and Compensation Committees. Mr. Ford brings CEO, global business and financial services expertise. Ms. Johnson brings business development, technology, investment and talent management expertise. On March 15, 2018, the Board also appointed Mr. Wilson to serve as a member of the Risk Committee. He brings expertise in global business, public policy and regulatory affairs as well as experience as a former CEO. On March 14, 2019, the Board appointed Ms. Wagner to serve as Chair of the Risk Committee and a member of the Audit and Executive Committees, each appointment effective May 23, 2019.

Outlined below are the Company’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(1)

  

 

Mathis Cabiallavetta

William E. Ford

 

 

 

Murry S. Gerber

Margaret L. Johnson

  

 

Sir Deryck Maughan

Marco Antonio Slim Domit

 

 

 

 

Role and Responsibilities

 

The Audit Committee’s primary responsibilities include oversight of the integrity of BlackRock’s financial statements and public filings, the independent auditor’s qualifications and independence, the performance of BlackRock’s internal audit function and independent auditor, and BlackRock’s compliance with legal and regulatory requirements.

 

The Audit Committee receives reports on:

 

 

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

 

   External audit findings regularly, as provided by BlackRock’s independent registered public accounting firm, Deloitte LLP (“Deloitte”);

 

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

 

   The Company’s Risk Management program on an annual basis, as provided by BlackRock’s Chief Risk Officer;

  

   Financial updates regularly, as provided by the Chief Financial Officer;

 

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

 

   Compliance updates, as provided by the Chief Compliance Officer;

 

   Litigation, regulatory and material ethics matters regularly, 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.

 

 

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

 

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

 

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

 

 

 

(1)

Ivan G. Seidenberg served as a member of the Audit Committee until June 30, 2018.

 

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Corporate Governance    |    Board Committees

 

 

 

Management Development & Compensation Committee

 

 

Chair

 

 

Ivan G. Seidenberg

  

 

Members(1)

  

 

Jessica P. Einhorn

William E. Ford

    

 

Margaret L. Johnson

Cheryl D. Mills

 

  

 

Gordon M. Nixon

Marco Antonio Slim Domit

 

Role and Responsibilities

 

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

 

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

 

    Periodically reviewing and approving director compensation;

 

    Reviewing, approving, recommending to the Board, or delegating to management, BlackRock’s benefits plans;
    Providing oversight of BlackRock’s executive compensation program, and determining whether our program remains effective to attract, motivate and retain senior officers capable of making significant contributions to BlackRock’s long-term success;

 

    Reviewing, assessing, and making reports and recommendations to the Board on BlackRock’s talent development and succession planning, with an emphasis on performance and succession at the highest management levels; and

 

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

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

Additional information on the Compensation Committee’s processes and procedures for consideration of NEO compensation is addressed in the “Compensation Committee Report” on page 52 and “Compensation Discussion and Analysis” beginning on page 53.

 

(1)

Sir Deryck Maughan and Murry S. Gerber served as members of the Compensation Committee until March 13, 2018 and June 30, 2018, respectively.

 

 

Nominating & Governance Committee

 

 

Chair

 

 

Gordon M. Nixon

  

 

Members

  

 

Mathis Cabiallavetta

Fabrizio Freda

 

 

 

Murry S. Gerber

Cheryl D. Mills

  

 

Ivan G. Seidenberg

Susan L. Wagner

 

Role and Responsibilities

 

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

 

    Identifying candidates qualified to become members of the Board;

 

    Recommending to the Board the director nominees for the next annual meeting of shareholders;

 

    Recommending to the Board members for each Committee;

 

    Leading the Board in its annual review of the Board’s performance;
    Evaluating and recommending to the Board corporate governance policies, practices, and guidelines applicable to the Company;  

 

    Overseeing BlackRock’s Related Persons Transaction Policy;

 

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

 

    Periodically reviewing corporate governance trends, best practices, and regulations applicable to the corporate governance of the Company.
 

 

The Board has determined that each member of the Governance Committee is “independent” as defined in the NYSE listing standards and applicable SEC rules.

 

 

 

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Risk Committee

 

 

Chair

 

 

Sir Deryck Maughan

  

 

Members(1)

  

 

Pamela Daley

William S. Demchak

 

 

 

Jessica P. Einhorn

Charles H. Robbins

  

 

Susan L. Wagner

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;

 

    Credit risk of default by indemnified securities lending counterparties;

 

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

 

    The impact of firm-wide risk assessments including the quantification and analysis of requirements (liquidity, insurance, capital or other risk mitigation) associated with our key risks;

 

    Risks related to regulatory reform; and

 

    Technology and cybersecurity risks relating to information security, business continuity/resiliency and system capacity.

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 2018 Form 10-K and received reports from members of management responsible for identifying and monitoring these risks.

 

(1)

Mathis Cabiallavetta and Gordon M. Nixon served as members of the Risk Committee until June 30, 2018.

 

 

Executive Committee

 

 

Chair

 

 

Laurence D. Fink

  

 

Members

  

 

Pamela Daley

William S. Demchak

 

 

 

Murry S. Gerber

Sir Deryck Maughan

  

 

Gordon M. Nixon

Ivan G. Seidenberg

 

Role and Responsibilities

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

 

 

 

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Board and Committee Oversight of Strategy

The Board of Directors actively engages with senior management by providing guidance on the formation and implementation of strategic initiatives. On an annual basis our Global Head of Corporate Strategy previews the Board’s agenda, focusing on business reviews and the strategic topics for the coming year, with the Governance Committee 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 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

 

                            

Full Board

 

The Board has ultimate responsibility for oversight of BlackRock’s risk management activities.

The Risk, Audit, Compensation and Governance Committees assist the Board in fulfilling this important role.

 

The Committees report to the full Board at least 6 times a year with updates on their areas of designated risk oversight responsibilities. These Committees work together and with the full Board to help ensure that the Committees and the Board have received all information necessary to permit them to fulfill their duties and responsibilities with respect to oversight of risk management activities.

                            

 

LOGO

 

       

 

LOGO

 

       

 

LOGO

 

       

 

LOGO

 

                      

Risk

Committee

 

Responsible for assessing and overseeing BlackRock’s levels of risk and risk management and related policies and processes in connection with fiduciary and enterprise risks and other areas of risk determined by the Board. Reflecting the increased importance of information security, the Risk Committee included cybersecurity as a recurring topic at each meeting during 2018.

 

    

Audit

Committee

 

Oversees the integrity of BlackRock’s financial statements and other disclosures, the effectiveness of the internal control environment, the internal audit function and the external auditors, and compliance with legal and regulatory requirements.

    

Compensation

Committee

 

Responsible for overseeing risks associated with BlackRock’s executive and employee compensation practices and the effective management of executive succession.

    

Governance

Committee

 

Oversees risks related to Board and Committee succession and other corporate governance policies and practices.

 

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Our Board Oversight of Cybersecurity

Our Board is actively engaged in the oversight of BlackRock’s cybersecurity and information security programs. Our Risk Committee receives reports on the Company’s cybersecurity program and developments in information security at each meeting from our Chief Information Security Officer. Additionally, on an annual basis, senior members of BlackRock’s technology, risk and information security teams provide a comprehensive overview of BlackRock’s cyber risk and information security program to a joint session of the Risk and Audit Committees.

Our global information security team, in collaboration with our technology risk team and independent third parties, assesses both risks and changes in the cyber environment and adjusts our cybersecurity program as needed.

 

Cybersecurity Highlights:

 

  LOGO   BlackRock employs an in-depth, multi-layer strategy of control programs including monitoring external and internal threats and events, managing access, facilitating use of appropriate authentication options, validating controls and programs by internal teams and independent third parties, and testing various compromise scenarios that are overseen by a global information security team.

 

  LOGO   BlackRock invests in threat intelligence and participates in financial services industry and government forums to improve both internal and sector cybersecurity defense.

 

  LOGO   BlackRock routinely performs penetration tests.

 

  LOGO   BlackRock’s cyber risk program incorporates external expertise.

Corporate Governance Practices and Policies

Director Independence

The Board determines annually the independence of directors in accordance with NYSE listing standards and applicable SEC rules. No director is considered independent unless the Board has determined that he or she has no material relationship with BlackRock. The Board has adopted categorical standards to help determine whether certain relationships between the members of the Board and BlackRock or its affiliates and subsidiaries (either directly or as a partner, shareholder or officer of an organization that has a relationship with BlackRock) are material relationships for purposes of NYSE listing standards. The categorical standards provide that the following relationships are not material for such purposes:

 

 

Relationships arising in the ordinary course of business, such as asset management, acting as trustee, lending, deposit, banking or other financial service relationships or other relationships involving the provision of products or services, so long as the products and services are being provided in the ordinary course of business and on substantially the same terms and conditions, including price, as would be available to similarly situated customers;

 

 

Relationships with companies of which a director is a shareholder or partnerships of which a director is a partner, provided the director is not a principal shareholder of the company or a principal partner of the partnership;

 

 

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 considered the relationships described under “Certain Relationships and Related Transactions.” Following its review, the Board has determined that Mses. Daley, Einhorn, Johnson, Mills and Wagner and Messrs. Alsaad, Cabiallavetta, Ford, Freda, Gerber, Nixon, Robbins, Seidenberg, Slim and Wilson are “independent” as defined in the NYSE listing standards and that none of the relationships between these directors and BlackRock are material under the NYSE listing standards. The Board had also previously determined that Sir Deryck Maughan, who was a director for all of 2018 and is not standing for re-election, was “independent.” Following the 2019 Annual Meeting of Shareholders, assuming all of the nominated directors are elected, BlackRock’s Board is expected to consist of 18 directors, 15 of whom, representing approximately 83% of the Board, will be “independent” as defined in the NYSE listing standards.

Management Succession Planning

Our Board plays an integral oversight role in talent development and recognizes the importance of succession planning for the CEO and other key executives at BlackRock. The Board, in consultation with the Compensation Committee, dedicates at least one full meeting per year to talent to ensure BlackRock has the right people in place to execute our long-term strategic plans and appropriate succession for key individuals. The Board also works with the Compensation Committee to consider potential successors to the CEO in the event of an emergency or the CEO’s retirement. Our CEO recommends and evaluates potential successors for BlackRock’s top

 

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Corporate Governance    |    Corporate Governance Practices and Policies

 

executives, along with a review of any development plans for these individuals. In the fourth quarter of 2017, we granted long-term incentive awards in the form of performance-based stock options to a select group of senior leaders who we believe will play critical roles in BlackRock’s future. We do not consider these awards to be part of our regular annual compensation. For more information about these awards, see “Performance-Based Stock Options” on page 62.

BlackRock’s Approach to Human Capital Management

BlackRock’s purpose to help our clients build better financial futures is fulfilled by our people. This is what informs our differentiated approach to talent and culture.

Each year, we set corporate objectives specifically related to talent and culture. We achieve these objectives through our commitment to fostering a unifying culture and encouraging innovation, ensuring that we are developing, retaining and recruiting the best talent, and incorporating inclusion and diversity into all levels of our organization.

Our Board plays a critical role in the oversight of talent and culture at BlackRock and devotes one full meeting annually to an in-depth review of the Company’s culture, talent development, retention and recruiting initiatives, inclusion and diversity strategy, leadership and succession planning, and employee feedback.

BlackRock’s talent initiatives are executed by our Human Capital Committee, which is comprised of fifty senior leaders who help design, drive, and sponsor everything we do around talent and culture in partnership with Human Resources.

Culture

As BlackRock transformed from an organization of 8 founders to more than 14,900 employees, a focus on autonomy and inclusion has helped foster a culture of emotional ownership and innovation among BlackRock employees around the world. Our culture is what unifies our employees across our diverse business model, ensures we are best positioned to serve our diverse clients globally and propels BlackRock’s continuous evolution. Our culture is rooted in four guiding principles, which you can read about on the back cover of this Proxy Statement.

Talent Development

It is the capabilities of our employees and our leaders that enable us to deliver for our clients, and we are focused on career development and total rewards programs that meet our employees’ needs. As we continue to grow, and our clients’ challenges become more complex, this focus becomes even more important.

We provide developmental opportunities for our employees through a robust set of formal and informal programs. The BlackRock Academies, for example, focus on enabling employees to build skills and thought leadership in specific facets of our business including client relationships, technology, investments, leadership and management and professional development. Knowing BlackRock Core is a set of resources and immersive experiences built around a series of Harvard Business School case studies about the Company that is designed to help employees explore our history and engage in shaping our future. Our leadership programs make a differentiated investment in our high potential, strong performing employees as we strive to deepen, enhance and diversify our leadership bench. These programs are intense, year-long experiences that include structured learning, assessments, external coaching, sponsorship, and hands-on work and provide a blend of full cohort, small group and individually tailored development.

We deliberately align employee incentives with the risk and performance frameworks of the firm. BlackRock’s Pay for Performance philosophy connects individual, business and company results to employee compensation, providing employees with opportunities to share in the firm’s growth and success. We offer employees a comprehensive Total Rewards package that meets the varying needs of our talent across the firm, including health and wellness, financial, educational and life management benefits. Also, we support employees in making an impact in their local communities and globally through environmental and social efforts that are meaningful to them.

Inclusion & Diversity

BlackRock is committed to cultivating and advancing diversity in all forms because we believe a wide range of perspectives is crucial to creating a richer culture for our employees and better results for our diversified global client base. We hold our businesses accountable for progress in inclusion and diversity. During our Quarterly Business Reviews, we have focused conversations with each business about its plans and progress and we report our progress against our inclusion and diversity initiatives regularly to our Board.

 

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Employee Feedback

We value continuous dialogue with our employees about their experiences. We have several employee feedback mechanisms including our annual Employee Opinion Survey which has a more than 90% participation rate annually and provides us with actionable feedback for each team and for BlackRock as a whole, an annual People Manager Insights Survey which provides managers with upward feedback on how they are progressing against their expectations as managers and the BlackRock Jam, a 3-day online conversation with employees around the world. Our employees describe our culture in a way that aligns with our principles and we believe the high participation in the mechanisms reflects their belief that their responses will lead to action by management. We continue to build training programs and tools to help managers better understand metrics on talent and culture and create more diverse and inclusive teams. Our businesses use these metrics to make the day-to-day decisions that drive our talent and culture initiatives across the organization.

Accountability

Employee feedback and metrics on talent and diversity initiatives are shared with and reviewed by the Board on a regular basis. Moreover, senior leaders are held accountable for progress on diversity through bonus pool allocations and individual compensation decisions.

The Board and Compensation Committee routinely engage with senior leadership on talent and culture. Talent and culture is included in the Organizational Strength component of our NEO (and broader senior leadership) compensation. For more information on organizational strength, see “2018 NEO Compensation and Performance Summaries” beginning on page 66. Talent and culture are integral to BlackRock’s success and its mission to generate long-term shareholder value. As such, BlackRock is committed to a diverse and inclusive workforce, and our Board works with management to provide oversight on culture, succession planning, employee development, recruiting and diversity and inclusion.

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.

The head of the Global Public Policy Group is a member of BlackRock’s Global Executive and Operating Committees and regularly briefs these committees on our public policy priorities and related advocacy efforts. BlackRock’s Chief Legal Officer and the head of the Global Public Policy Group 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 organizations and industry groups. The principal trade associations that we belong to are the Investment Company Institute, the Asset Management Group of the Securities Industry and Financial Markets Association, the European Fund and Asset Management Association and the Investment Association. BlackRock makes payments to these organizations, including membership fees and/or dues. However, BlackRock does not control these entities and may not always be aware of the entities’ activities. We recognize that these organizations and groups represent numerous other companies and there may be instances where their positions on certain issues diverge from those of BlackRock.

As an asset manager, BlackRock focuses on issues that impact the asset management industry and the clients for whom we act as agent in managing assets. In general, BlackRock’s efforts are focused at the national or regional level, rather than at a state-specific level.

 

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Corporate Governance    |    Corporate Governance Practices and Policies

 

Political Participation

Our ability to engage policy makers and participate in the public policy arena is subject to extensive laws and regulations at the international, federal, state and local levels. Under United States 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 United States are governed by Municipal Securities Rulemaking Board Rule G-37, SEC Rule 206(4)-5 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 https://www.senate.gov/legislative/lobbying.

BlackRock maintains a federal political action committee (“PAC”) that is funded in accordance with applicable federal law on a voluntary basis by U.S.-based employees of the Company. The PAC makes contributions at the federal level on 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 this policy 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

We conduct shareholder outreach throughout the year to engage with shareholders on issues that are important to them. We report back to our Board on this engagement as well as specific issues that need to be addressed.

Executive management, Investor Relations and the Corporate Secretary engage on a regular basis with shareholders to solicit feedback on a variety of corporate governance matters, including but not limited to executive compensation, corporate governance policies, and corporate sustainability practices. Our directors have also engaged directly with shareholders during the last two years. BlackRock also routinely interacts and communicates with shareholders through a number of other forums, including quarterly earnings presentations, SEC filings, the Annual Report and Proxy Statement, the annual shareholder meeting, investor meetings and conferences, and web communications. We share our shareholder feedback and trends and developments about corporate governance matters with our Board and its Committees as we seek to enhance our governance and sustainability practices and improve our disclosures. Additionally, 4 of our independent directors attended our 2018 Investor Day presentation.

Also see “Compensation Discussion and Analysis beginning on page 53 for a discussion of our compensation related shareholder engagement initiatives and our historical say-on-pay vote results.

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 / Investor Relations / Corporate 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.

   

 

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Corporate Governance    |    Communications with the Board

 

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 brought to the attention of the Chairperson of the Audit Committee and handled in accordance with procedures established for reporting certain matters to the Audit Committee.

Shareholders are encouraged to visit the “Our Firm / Investor Relations / Corporate Governance / Governance Overview” page of the BlackRock website at www.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. 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.

2018 Director Compensation

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 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, having a value equivalent to $375,000 (over four times the annual board retainer) within five years of being elected to the Board.

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 64.

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 $375,000 (over four times the annual board retainer) within five years of being elected to the Board. All directors have met or are on track to meet this requirement.

 

Director Compensation – Changes for 2018

The Compensation Committee engaged its independent compensation consulting firm, Semler Brossy, to conduct a competitive market study of its director compensation program for 2018. Based on the study’s findings, and in light of increasing demands and engagement from our Board, the Compensation Committee determined it was appropriate to simplify and modify its director compensation program effective as of the 2018 Annual Meeting of Shareholders. The compensation program changes included:

 

 

Increasing the Annual Retainer to $85,000, while no longer requiring a portion be received in common stock;

 

 

Increasing the Annual Equity Grant of deferred stock units to $240,000 (beginning with the 2019 Annual Equity Grant);

 

 

Increasing the annual fee for service as Lead Independent Director to $100,000;

 

 

Eliminating fees paid for attendance at Board and Committee meetings; and

 

 

Adjusting the payments awarded for Committee service. The Committee Annual Retainers for 2018 were approved as follows:

 

    $40,000 for the Chair and $25,000 for the members of the Audit Committee; and

 

    $30,000 for the Chairs and $15,000 for the members of Compensation, Governance and Risk Committees.

 

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Corporate Governance    |    2018 Director Compensation

 

The modifications to total director compensation preserve our program’s emphasis on deferred equity compensation, which aligns the interests of our directors with the performance of the firm in addition to promoting long-term shareholder interests.

2018 Elements of Director Compensation

For services provided in 2018 prior to the date of the 2018 Annual Meeting of Shareholders, each independent director received an Annual Retainer paid quarterly in arrears at an annualized rate of $75,000, as well as Committee Annual Retainers paid quarterly in arrears at the following annualized rates: $30,000 for Chair, and $15,000 for members, of the Audit Committee; $20,000 for Chair, and $10,000 for members, of the Compensation Committee; and $15,000 for Chairs, and $5,000 for members, of the Governance and Risk Committees. Our Lead Independent Director received an additional Annual Retainer paid quarterly in arrears at an annualized rate of $40,000. Each independent director also received Board and Committee Meeting Fees of $1,500 and $1,000 respectively, paid quarterly in arrears. At least one-third ($25,000 at the annualized rate) of the Annual Retainer for services provided through the 2018 Annual Meeting of Shareholders was required to be paid in the form of BlackRock common stock. 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 excess of such amount.

For services provided in 2018 on and after the date of the 2018 Annual Meeting of Shareholder, 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, deferred stock units valued at $175,000 were granted on the last business day of the first quarter of 2018. Beginning with the 2019 Annual Equity Grant, the deferred stock units will be valued at $240,000. These deferred stock units are fully vested on the date of grant and are generally settled in shares of BlackRock common stock on the earlier of the third anniversary of the date of grant and the date the director ceases to be a member of the Board. Directors also have a right to elect, no later than December of the prior calendar year, to receive their annual retainers or annual equity grant in the form of deferred stock units that are fully vested on the date of grant and are 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. Dividend equivalents accrue with respect to deferred stock units and are paid in the form of cash on the settlement date.

The following table shows the elements of director compensation provided by BlackRock for services on and after the date of the 2018 Annual Meeting of Shareholders.

 

   

 

Director Compensation Element1

 

  

Payment or Value of Equity

 

      

Board Service(2)

       

 

Board Service Annual Payments

Cash/Equity

 

LOGO

 

Annual Retainer(3)

     $  85,000    

Annual Equity Grant(4)

     $240,000       deferred stock units  
                  

 

Lead Independent Director

  

 

 

 

$100,000

 

 

 
                  

 

Committee Service(2)

    

Committee Annual Retainers

          Chair               Member  

Audit Committee

     $  40,000               $     25,000  

Compensation Committee

     $  30,000               $     15,000  

Governance Committee

     $  30,000               $     15,000  

Risk Committee

     $  30,000               $     15,000  
                       

 

(1)

Director Compensation elements reflect the changes to the compensation program effective as of the 2018 Annual Meeting of Shareholders, provided that the requirement to receive one-third ($25,000 at the annual rate) of the annual retainer in stock continued through the 2018 Annual Meeting of Shareholders.

 

(2)

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 or annual equity grant in the form of deferred stock units that are fully vested on the date of grant and are 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.

 

(3)

Retainers are paid in January, April, July and October, based on service during the prior quarter. New Board members rotating through 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.

 

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Corporate Governance    |    2018 Director Compensation

 

 

(4)

Annual award granted on the last business day of the first quarter of each year to all directors serving on that date and delivered on the earlier of (i) the third anniversary of the date of grant and (ii) the date such director ceases to be a member of the Board. The 2018 award was valued at $175,000, as it was granted prior to the changes effective as of the 2018 Annual Meeting of Shareholders. Beginning with the award granted on the last business day of the first quarter in 2019, the annual equity grant will be valued at $240,000.

2018 Total Director Compensation

Directors in 2018 who were also employees of BlackRock or designees of PNC are not listed in the below table because they did not receive compensation for serving as directors or Committee members. In 2018, directors who were not employees of BlackRock or PNC each received the amounts set forth in the below table and were also reimbursed for reasonable travel and related expenses. Each director who received compensation had the right to elect to receive BlackRock common stock valued at an equivalent fair market value in lieu of all or a portion of his or her annual retainer. In addition, each director who received compensation had the right to elect to receive their annual retainer or annual equity grant in the form of deferred stock units that settle 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.

2018 Total Director Compensation Table

 

     

Name

  

 

Fees Earned or
Paid in Cash
($)
(1)

    

Stock Awards
($)
(2)(3)

    

Total

($)

 

Abdlatif Y. Al-Hamad(4)

  

 

29,325

 

  

 

187,422

 

  

 

216,747

 

                            

Mathis Cabiallavetta

  

 

120,174

 

  

 

187,422

 

  

 

307,596

 

                            

Pamela Daley

  

 

129,556

 

  

 

187,422

 

  

 

316,978

 

                            

Jessica P. Einhorn

  

 

105,021

 

  

 

187,422

 

  

 

292,443

 

                            

William E. Ford(5)

  

 

90,092

 

  

 

187,422

 

  

 

277,514

 

                            

Fabrizio Freda

  

 

86,676

 

  

 

187,422

 

  

 

274,098

 

                            

Murry S. Gerber

  

 

195,133

 

  

 

187,422

 

  

 

382,555

 

                            

James Grosfeld(4)

  

 

33,859

 

  

 

187,422

 

  

 

221,281

 

                            

Margaret Johnson(5)

  

 

93,863

 

  

 

187,422

 

  

 

281,285

 

                            

Deryck Maughan

  

 

130,916

 

  

 

187,422

 

  

 

318,338

 

                            

Cheryl D. Mills

  

 

105,624

 

  

 

187,422

 

  

 

293,046

 

                            

Gordon M. Nixon

  

 

125,034

 

  

 

187,422

 

  

 

312,456

 

                            

Charles H. Robbins

  

 

87,175

 

  

 

187,422

 

  

 

274,597

 

                            

Ivan G. Seidenberg

  

 

133,274

 

  

 

187,422

 

  

 

320,696

 

                            

Marco Antonio Slim Domit

  

 

118,278

 

  

 

187,422

 

  

 

305,700

 

                            

Susan L. Wagner

  

 

94,483

 

  

 

187,422

 

  

 

281,905

 

                            

Mark Wilson(5)

  

 

81,287

 

  

 

187,422

 

  

 

268,709

 

                            

 

(1)

Includes fees paid in cash and shares of common stock granted on March 31, June 30, September 30 and December 31, 2018, respectively, based on closing market prices on such dates of $541.72, $499.04, $471.33 and $392.82, respectively, awarded at the election of the director in lieu of all or a portion of his or her board annual retainer. Each of the following directors elected to receive common stock in lieu of the following amounts: Mr. Al-Hamad – $29,325; Mr. Cabiallavetta – $31,967; Ms. Daley – $129,556; Ms. Einhorn – $19,353; Mr. Ford – $90,092; Mr. Freda – $86,676; Mr. Grosfeld – $33,859; Ms. Johnson – $20,975; Mr. Maughan – $130,916; Mr. Nixon – $125,034; Mr. Robbins – $87,175; Mr. Seidenberg – $133,274; Mr. Slim – $118,278; Ms. Wagner – $19,353; and Mr. Wilson – $16,733.

 

(2)

Includes the annual grants to each director of 323 deferred stock units of BlackRock with a grant date fair value of $175,000 pursuant to FASB ASC Topic 718. For complete valuation assumptions of the awards, see Note 14 to the consolidated financial statements in our 2018 Form 10-K. As of December 31, 2018, each non-employee director held the following outstanding deferred stock units: 1,443 deferred stock units for Mr. Seidenberg; 1,431 deferred stock units for Ms. Daley; 1,359 deferred stock units for Mr. Slim; 1,333 deferred stock units for Mr. Nixon; 1,244 deferred stock units for Mr. Gerber;1,219 deferred stock units for each of Messrs. Cabiallavetta, Freda, Maughan, Ms. Einhorn, Ms. Mills and Ms. Wagner; 466 deferred stock units for Mr. Ford; 344 deferred stock units for Mr. Wilson; and 323 deferred stock units for Ms. Johnson and Mr. Robbins. Messrs. Al-Hamad and Grosfeld did not have any deferred stock units outstanding as their units were settled upon retirement from the Board.

 

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Corporate Governance    |    2018 Director Compensation

 

 

(3)

Prior to the 2018 Annual Meeting of Shareholders, all directors were required to receive $25,000 of their annual retainer in the form of common stock. This includes the fees granted in shares of common stock on March 31 and June 30, 2018 based on closing market prices on such dates of $541.72 and $499.04, respectively, awarded in respect of the requirement. The entire expense for these awards was recorded on the date of grant. For retainers paid on and after the date of the 2018 Annual Meeting of Shareholders. there is no requirement for a portion to be delivered in common stock.

 

(4)

Messrs. Al-Hamad and Grosfeld retired from the Board effective May 23, 2018.

 

(5)

Messrs. Ford and Wilson and Ms. Johnson joined the Board effective March 15, 2018.

 

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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 15 and 18, 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.

 

 

Geraldine Buckingham

age 41

  

 

Senior Managing Director, has been Head of Asia Pacific since February 2019. From 2014 to 2019, Ms. Buckingham served as Global Head of Corporate Strategy. In this role, Ms. Buckingham was responsible for helping BlackRock develop and implement long-term goals, and respond to the competitive financial services landscape. Prior to joining BlackRock in 2014, Ms. Buckingham was a partner with McKinsey & Company’s financial services practice based in New York.

      

 

Robert L. Goldstein

age 45

  

 

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. Mr. Goldstein 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 52

  

 

Senior Managing Director, has been Global Head of Multi-Asset Strategies and Global Fixed Income since 2018. Mr. Kushel was the Head of Multi-Asset Strategies from 2016 to 2018, the Chief Product Officer and Head of Strategic Product Management from 2014 to 2016, the Deputy Chief Operating Officer of BlackRock from 2012 to 2014, the Head of the Portfolio Management Group of BlackRock from 2010 to 2012, and the Chairman of BlackRock’s International platform from 2009 to 2010. Mr. Kushel has been with BlackRock since 1991.

      

 

Rachel Lord

age 53

  

 

Senior Managing Director, has been Head of EMEA since 2017. Ms. Lord also chairs the EMEA Executive Committee and 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 53

  

 

Senior Managing Director, has been Head of Americas since 2017. Previously, he served as Global Head of BlackRock Alternative Investors. Mr. McCombe served as the Global Head of BlackRock’s Institutional Client Business from 2014 to 2016 and as the Chairman of BlackRock Alternative Investors from 2014 to 2017. He was the Chairman 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 50

  

 

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.

      

 

Gary S. Shedlin

age 55

  

 

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.

      

 

Jeffrey A. Smith, Ph.D.

age 48

  

 

Senior Managing Director, has been Global Head of Human Resources of BlackRock since 2009. In this capacity, Mr. Smith supports and advises the business, and the Board, on all aspects of its investment in people and culture and the management of organizational change. Mr. Smith’s service with the firm dates back to 2006, including his years with Barclays Global Investors (“BGI”), which merged with BlackRock in 2009. At BGI, Mr. Smith was Global Head of Human Resources.

      

 

Mark Wiedman

age 48

  

 

Senior Managing Director, has been Head of International and of Corporate Strategy since January 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.

      

 

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Table of Contents

 

 

 

Ownership of BlackRock

Common and Preferred Stock

Common Stock

The following table includes certain information about the beneficial ownership of BlackRock’s voting securities as of March 31, 2019 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 2018 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, 2019, through the exercise of any option, warrant or right. All fractional shares have been rounded to the nearest whole number.

 

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Ownership of BlackRock Common and Preferred Stock    |    Common Stock

 

As of March 31, 2019, there were 154,500,315 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 PNC Financial Services Group, Inc. and affiliates

  

 

34,047,710

(3) 

    21.59         

 

34,047,710

(3) 

One PNC Plaza

249 Fifth Avenue

Pittsburgh, PA 15222

         
                                   

 

The Vanguard Group, Inc.

  

 

8,888,309

(4) 

    5.63         

 

8,888,309

(4) 

100 Vanguard Blvd.

Malvern, PA 19355

         
                                   

Capital World Investors (U.S.)

  

 

8,053,967

(5) 

    5.10         

 

8,053,967

(5) 

333 South Hope Street

55th Floor

Los Angeles, CA 90071

         
                                   

 

Bader M. Alsaad

           *               
                                   

 

Mathis Cabiallavetta(6)

     6,297       *       1,337        7,634  
                                   

 

Pamela Daley

     3,068       *       1,337        4,405  
                                   

 

William S. Demchak

     1,200       *       0        1,200  
                                   

 

Jessica P. Einhorn

     2,415       *       1,337        3,752  
                                   

 

Laurence D. Fink

     987,046       *       19,459        1,006,505  
                                   

 

William E. Ford

     9,299       *       881        10,180  
                                   

 

Fabrizio Freda

     3,716       *       1,337        5,053  
                                   

 

Murry S. Gerber

     39,604       *       1,337        40,941  
                                   

 

Robert L. Goldstein

     34,184       *       9,299        43,483  
                                   

 

Margaret L. Johnson

     100       *       881        981  
                                   

 

Robert S. Kapito(6)

     369,823       *       15,517        385,340  
                                   

 

J. Richard Kushel(6)

     163,157       *       8,017        171,174  
                                   

 

Sir Deryck Maughan

     15,177       *       1,337        16,514  
                                   

 

Cheryl D. Mills

     2,252       *       1,337        3,589  
                                   

 

Gordon M. Nixon

     825       *       1,337        2,162  
                                   

 

Charles H. Robbins

     418       *       881        1,299  
                                   

 

Ivan G. Seidenberg

     12,817       *       1,337        14,154  
                                   

 

Gary S. Shedlin

     17,497       *       7,021        24,518  
                                   

 

Marco Antonio Slim Domit

     3,520       *       1,337        4,857  
                                   

 

Susan L. Wagner

     476,765       *       1,337        478,102  
                                   

 

Mark Wilson

     59       *       881        940  
                                   

 

All directors and executive officers as a group (28 persons)(6)

     2,196,318       1.42     110,836        2,307,154  
                                   

 

*

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 PNC Financial Services Group, Inc. and affiliates filed on February 1, 2019.

 

(4)

Based on the Schedule 13G of The Vanguard Group, Inc. filed on February 11, 2019.

 

(5)

Based on the Schedule 13G of Capital World Investors filed on February 13, 2019.

 

(6)

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

Preferred Stock

As of March 31, 2019, there were 823,188 shares of BlackRock’s Series B non-voting convertible participating preferred stock issued and outstanding, which has a liquidation preference of $0.01 per share (the “Series B Preferred Stock”). As of March 31, 2019, PNC owned all issued and outstanding shares of our Series B Preferred Stock.

 

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Section 16(a) Beneficial

Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires our directors, Section 16 officers and persons who own more than 10% of a registered class of BlackRock’s equity securities to file reports of holdings of, and transactions in, BlackRock shares with the SEC and the NYSE. To the best of BlackRock’s knowledge, based on copies of such reports and representations from these reporting persons, we believe that in 2018, our directors, Section 16 officers and 10% holders met all applicable SEC filing requirements.

 

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Certain Relationships and

Related Transactions

PNC and its Subsidiaries

As of March 31, 2019, PNC beneficially owned approximately 22.0% of BlackRock’s common stock outstanding and 22.4% of BlackRock’s capital stock, which includes outstanding common stock and non-voting preferred stock.

William S. Demchak, Chairman, President and Chief Executive Officer of PNC, serves as a director of BlackRock. Although PNC has a right to, and reserves the right to do so under the PNC Stockholder Agreement, PNC has elected not to appoint a second director to the Board at this time. In addition, PNC has been permitted to invite a non-voting observer to attend Board meetings. Gregory B. Jordan, General Counsel & Chief Administrative Officer of PNC, is the PNC observer.

BlackRock provides investment advisory and administration services to certain PNC subsidiaries and separate accounts for a fee based on assets under management. The amount of investment advisory and administration fees earned from PNC and its affiliates in relation to these services in 2018 totaled $2.1 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 $9.2 million for 2018. BlackRock also recorded revenue of $2.7 million related to non-discretionary trading services.

BlackRock incurred expenses of $1.6 million to PNC affiliates in 2018 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 2018. 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.

 

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Certain Relationships and Related Transactions    |    PNC and its Subsidiaries

 

PNC Stockholder Agreement

BlackRock is a party to the PNC Stockholder Agreement, which governs PNC’s ownership interests in and relationship with BlackRock. BlackRock and PNC are also parties to a registration rights agreement. The following table describes certain key provisions of the PNC Stockholder Agreement as amended and restated.

 

 

Share Ownership

  

 

The PNC Stockholder Agreement provides for a limit on the percentage of BlackRock capital stock that may be owned by PNC at any time (the “PNC ownership cap”). Due to the PNC ownership cap, PNC is generally not permitted to acquire any additional capital stock of BlackRock if, after such acquisition, it would hold greater than 49.9% of the total voting power of the capital stock of BlackRock issued and outstanding at such time or 38% of the sum of the total voting securities and participating preferred stock of BlackRock issued and outstanding at such time and issuable upon the exercise of any options or other rights outstanding at that time.

 

In addition, PNC may not acquire any shares of BlackRock from any person other than BlackRock or a person that owns 20% or more of the total voting power of the capital stock of BlackRock (other than itself) if, after such acquisition, it would hold capital stock of BlackRock representing more than 90% of the PNC voting ownership cap.

      

 

Prohibited

Actions

  

 

PNC is prohibited from taking part in, soliciting, negotiating with, providing information to or making any statement or proposal to any person, or making any public announcement, with respect to:

 

   An acquisition which would result in PNC holding more than the PNC ownership cap, or holding any equity securities of any controlled affiliate of BlackRock;

 

   Any business combination or extraordinary transaction involving BlackRock or any controlled affiliate of BlackRock, including a merger, tender or exchange offer or sale of any substantial portion of the assets of BlackRock or any controlled affiliate of BlackRock;

 

   Any restructuring, recapitalization or similar transaction with respect to BlackRock or any controlled affiliate of BlackRock;

 

   Any purchase of the assets of BlackRock or any controlled affiliate of BlackRock, other than in the ordinary course of its business;

 

   Being a member of a “group”, as defined in Section 13(d)(3) of the Exchange Act, for the purpose of acquiring, holding or disposing of any shares of capital stock of BlackRock or any controlled affiliate of BlackRock;

 

   Selling any BlackRock capital stock in an unsolicited tender offer that is opposed by the BlackRock Board;

 

   Any proposal to seek representation on the Board of BlackRock except as contemplated by the PNC Stockholder Agreement;

 

   Any proposal to seek to control or influence the management, Board or policies of BlackRock or any controlled affiliate of BlackRock except as contemplated by the PNC Stockholder Agreement; or

 

   Any action to encourage or act in concert with any third party to do any of the foregoing.

      

 

Additional

Purchase

of Voting

Securities

  

 

The PNC Stockholder Agreement gives PNC the right, in any issuance of BlackRock voting stock, (1) to purchase an amount of such stock or, at PNC’s option, Series B Preferred Stock, upon such issuance that would result in PNC holding the lesser of (a) the PNC ownership cap or (b) an ownership percentage in BlackRock equal to what it held prior to the issuance, and (2) if as a result of such stock issuance PNC’s beneficial ownership of the total voting power of BlackRock capital stock decreases to less than 38%, to exchange such number of shares of Series B Preferred Stock for shares of common stock on a one-for-one basis such that following the stock issuance, PNC will beneficially own shares of voting securities representing not more than 38% of the total voting power of BlackRock capital stock, unless such issuance constitutes a public offering and would not, together with any stock issuance constituting a public offering since September 29, 2006, after taking into account any share repurchases by BlackRock since September 29, 2006 and transfers by PNC, decrease PNC’s total voting power to 90% or less of the PNC ownership cap.

      

 

Share Repurchase

  

 

If BlackRock engages in a share repurchase, BlackRock may require PNC to sell an amount of securities to BlackRock that will cause its beneficial ownership of BlackRock capital stock not to exceed its total ownership cap or voting ownership cap.

      

 

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Certain Relationships and Related Transactions    |    PNC and its Subsidiaries

 

 

Transfer

Restrictions

  

 

PNC may not transfer any capital stock of BlackRock beneficially owned by it, except for transfers to its respective affiliates and transfers in certain other specified categories of transactions, which would result in the beneficial ownership, by any person, of more than 10% of the total voting power of issued and outstanding BlackRock capital stock with respect to transfers to persons who would be eligible to report their holdings of BlackRock capital stock on Schedule 13G or of more than 5% of the total voting power of issued and outstanding capital stock with respect to any other persons.

      

 

Right of Last

Refusal

  

 

PNC must notify BlackRock if it proposes to sell shares of BlackRock capital stock in a privately negotiated transaction. Upon receipt of such notice, BlackRock will have the right to purchase all of the stock being offered, at the price and terms described in the notice. These notification requirements and purchase rights do not apply in the case of tax-free transfers to charitable organizations or foundations and tax-deferred transfers.

      

 

Corporate

Governance

  

 

Board Designation: The PNC Stockholder Agreement provides that BlackRock will use its best efforts to cause the election at each annual meeting of shareholders such that the Board will consist of no more than 19 directors:

 

   Not less than two nor more than four directors who will be members of BlackRock management;

 

   Two directors who will be designated by PNC, provided, however, that if for any period greater than 90 consecutive days PNC and its affiliates shall beneficially own less than 10% of the BlackRock capital stock issued and outstanding, PNC shall promptly cause one of such PNC designees to resign and the number of PNC designees shall be reduced to one; and provided further, that, if for any period greater than 90 consecutive days PNC and its affiliates shall beneficially own less than 5% of the BlackRock capital stock issued and outstanding, PNC shall promptly cause the second PNC designee to resign and the number of PNC designees shall be reduced to zero; and

 

   The remaining directors who will be independent for purposes of the rules of the NYSE and will not be designated by or on behalf of PNC or any of its affiliates.

 

Of the current directors, William S. Demchak was designated by PNC. PNC has elected not to appoint a second director to the Board at this time, though it reserves the right to do so. In addition, PNC has been permitted to invite a non-voting observer to attend Board meetings. Gregory B. Jordan, General Counsel & Chief Administrative Officer of PNC, is the PNC observer.

 

Voting Agreement: PNC has agreed to vote all of its voting shares in accordance with the recommendation of the Board on all matters to the extent consistent with the provisions of the PNC Stockholder Agreement, including the election of directors.

 

Approvals: Under the PNC Stockholder Agreement, the following may not be done without prior approval of all of the independent directors, or at least two-thirds of the directors, then in office:

 

   Appointment of a new Chief Executive Officer of BlackRock;

 

   Any merger, issuance of shares or similar transaction in which beneficial ownership of a majority of the total voting power of BlackRock capital stock would be held by persons different from those currently holding such majority of the total voting power, or any sale of all or substantially all assets of BlackRock;

 

   Any acquisition of any person or business that has a consolidated net income after taxes for its preceding fiscal year that equals or exceeds 20% of BlackRock’s consolidated net income after taxes for its preceding fiscal year if such acquisition involves the current or potential issuance of BlackRock capital stock constituting more than 10% of the total voting power of BlackRock capital stock issued and outstanding immediately after completion of such acquisition;

 

   Any acquisition of any person or business constituting a line of business that is materially different from the lines of business BlackRock and its controlled affiliates are engaged in at that time if such acquisition involves consideration in excess of 10% of the total assets of BlackRock on a consolidated basis;

 

   Except for repurchases otherwise permitted under their respective stockholder agreements, any repurchase by BlackRock or any subsidiary of shares of BlackRock capital stock such that, after giving effect to such repurchase, BlackRock and its subsidiaries shall have repurchased more than 10% of the total voting power of BlackRock capital stock within the 12-month period ending on the date of such repurchase;

 

   Any amendment to BlackRock’s certificate of incorporation or Bylaws;

 

 

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Certain Relationships and Related Transactions    |    PNC and its Subsidiaries

 

    

 

   Any matter requiring shareholder approval pursuant to the rules of the NYSE; or

 

   Any amendment, modification or waiver of any restriction or prohibition on any significant shareholder (other than PNC or its affiliates) provided for under its stockholder agreement.

 

Committees: Consistent with applicable laws, rules and regulations, the Audit Committee, the Compensation Committee and the Governance Committee are to be composed solely of independent directors. The Risk Committee and Executive Committee are not subject to any similar laws, rules or regulations, and as such, are composed of a mix of independent and non-independent directors. The PNC Stockholder Agreement provides that the Executive Committee will consist of not less than five members, of which one must be designated by PNC.

      

 

Significant

Stockholder Transactions

  

 

The PNC Stockholder Agreement prohibits BlackRock or its affiliates from entering into any transaction with PNC or its affiliates, unless such transaction was in effect as of September 29, 2006, is in the ordinary course of business of BlackRock or has been approved by a majority of the directors of BlackRock, excluding those appointed by the party wishing to enter into the transaction.

      

 

Termination of the PNC Stockholder Agreement

  

 

The PNC Stockholder Agreement will terminate on the first day on which PNC and its affiliates own less than 5% of the capital stock of BlackRock, unless PNC sends a notice indicating its intent to increase its beneficial ownership above such threshold within 10 business days after it has fallen below such threshold, and PNC buys sufficient capital stock of BlackRock within 20 business days after PNC has notice that it has fallen below 5% of BlackRock capital stock such that it continues to own greater than 5% of BlackRock capital stock.

      

Transactions with BlackRock Directors, Executive Officers and Other

Related Parties

From time to time, certain directors, their family members and related charitable foundations may have investments in various BlackRock investment vehicles or accounts. For certain types of products and services offered by BlackRock’s subsidiaries, BlackRock directors may receive discounts that are available to our employees generally. In addition, certain of the companies or affiliates of the companies that employ BlackRock’s independent directors may have investments in various BlackRock investment vehicles or accounts 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 by a majority of the uninterested members of the Governance Committee or the Board. In the event it is not practicable for BlackRock to wait for approval until the next meeting of the Governance Committee or the Board, the Chairperson of the Governance Committee may approve the transaction. In reviewing any related person transaction, all of the relevant facts and circumstances must be considered, including:

 

 

The related person’s relationship to BlackRock and his or her interest in the transaction;

 

 

The benefits to BlackRock;

 

 

The impact on a director’s independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer;

 

 

The availability of comparable products or services that would avoid the need for a related person transaction; and

 

 

The terms of the transaction and the terms available to unrelated third parties or to employees generally.

 

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Certain Relationships and Related Transactions    |    Transactions with BlackRock Directors, Executive Officers and Other Related Parties

 

PNC Approval Process

The policy provides that transactions (other than transactions in the ordinary course of business) with PNC are governed by the special approval procedures detailed in the PNC Stockholder Agreement. Those approval procedures prohibit BlackRock or its affiliates from entering into any transaction (other than any transaction in the ordinary course of business) with PNC or its affiliates unless such transaction was in effect as of September 29, 2006 or has been approved by a majority of the directors of BlackRock, excluding those designated for appointment by the party wishing to enter into the transaction. Of the current directors, William S. Demchak was designated by PNC.

Prior to the adoption of this policy, related person transactions, including certain of the transactions described above under “— PNC and its Subsidiaries” and “— PNC Stockholder Agreement”, were reviewed with the Board at the time of entering into such transactions.

 

BLACKROCK, INC. 2019 PROXY STATEMENT    49


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Management Development

& Compensation Committee

Interlocks and Insider

Participation

The members of the Compensation Committee during 2018 were Mses. Einhorn, Johnson and Mills and Messrs. Ford, Gerber (until June 30, 2018), Grosfeld (until May 23, 2018), Maughan, Nixon, Seidenberg (Chairperson) and Slim. No member of the Compensation Committee was, during the fiscal year, an officer or employee, or formerly an officer or employee, involved in any related person transactions requiring disclosure in this Proxy Statement.

No executive officer of BlackRock served 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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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 74, as well as our “Compensation Discussion and Analysis” beginning on page 53.

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

The Board of Directors recommends you vote "FOR" the approval of the compensation of our NEOs.

 


 

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Management Development

& Compensation

Committee Report

Management Development & Compensation Committee Report on Executive Compensation for Fiscal Year 2018

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

Ivan G. Seidenberg, Chair

Jessica P. Einhorn

William E. Ford

Margaret L. Johnson

Cheryl D. Mills

Gordon M. Nixon

Marco Antonio Slim Domit

 

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Executive Compensation

 


 

Compensation Discussion and Analysis

BlackRock’s executive compensation program is designed to align management incentives with the long-term interests of our shareholders. Our total annual compensation structure embodies our commitment to align pay with performance. This Compensation Discussion and Analysis (“CD&A”) provides shareholders with information about BlackRock’s business and 2018 financial performance, our disciplined compensation approach and 2018 compensation decisions for our NEOs, listed below.

 

          

Laurence D. Fink

Chairman and Chief

Executive Officer

  

Robert S. Kapito

President

 

Robert L. Goldstein

Chief Operating Officer

  

J. Richard Kushel

Global Head of Multi-Asset Strategies and Global Fixed Income

  

Gary S. Shedlin

Chief Financial Officer

          

Table of Contents

 

3. Compensation Determination Process   
Compensation Timeline and Process      63  
Competitive Pay Positioning—Market Data      64  
Role of the Compensation Consultant      64  
Risk Assessment of Compensation Plans      65  
4. 2018 NEO Compensation and Performance Summaries   
Linking Pay and Performance      66  
5. Compensation Policies and Practices   
Summary of Executive Compensation Practices      74  
Executive Compensation Tables      77  
CEO Pay Ratio for 2018      83  
Equity Compensation Plan Information      84  
 

 


 

BLACKROCK, INC. 2019 PROXY STATEMENT    53

 


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Compensation Discussion and Analysis    |    1. Introduction

 

1.

Introduction

Shareholder Engagement on Executive Compensation

Our Board recognizes the importance of executive compensation decisions to our shareholders. 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 2018 Annual Meeting of Shareholders, the say-on-pay advisory vote received majority support, with 89% 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.

As in prior years, we engaged shareholders in advance of this year’s annual meeting to incorporate their views as we continue to enhance our compensation programs.

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 clients and shareholders; and

 

  Return capital to shareholders on a consistent and predictable basis.

 

 

LOGO

Organic Growth Operating Leverage Capital Management EPS Growth

 

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 build our business by adding new assets under

management (“AUM”) and technology offerings, 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 and shareholders. We take advantage of scale in numerous areas of our business including through our index-based investment strategies, brand spend, technology platform, including our Aladdin business, and our external vendor relationships.

Investing for the long-term is a key element of our strategy. Our diversified platform, in terms of styles, products, client types and geographies, enables us to generate stable cash flow through market cycles, positioning BlackRock to invest for future growth and consistently return capital to our shareholders. For more details, refer to “Business Outlook” on page 34 of our 2018 Form 10-K.

During 2018, we returned $3.6 billion to our shareholders through a combination of share repurchases and dividends.

 

 

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

 

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Compensation Discussion and Analysis    |    BlackRock 2018 Performance

 

BlackRock 2018 Performance(1),(2)

BlackRock’s 2018 results reflect the investments we have made over time to leverage our scale and optimize our strategic positioning. We generated $124 billion of net inflows for the full year, representing 2% organic growth, delivered revenue growth, expanded our operating margin and returned $3.6 billion to shareholders, despite meaningful headwinds in the asset management industry. Long-term investment performance results across our alpha-seeking and index strategies as of December 31, 2018 remain strong and are detailed in Part I, Item 1 — Business of our 2018 Form 10-K.

 

Differentiated Organic Growth

Organic asset growth of 2% and record technology services revenue in 2018 contributed to continued revenue growth

 

  Total net inflows of $124 billion, despite meaningful headwinds for the asset management industry. Long-term net inflows of $123 billion reflected 2% organic asset growth, compared to large cap asset management peers who saw on average -1% organic asset decay;

 

  Technology services revenue grew 19% year-over-year to a record $785 million, led by continued momentum in Aladdin and our digital wealth technology; and

 

  Total revenue increased 4% from 2017 to $14,198 million.

 

 

LOGO

2018 Organic Asset Growth Revenue ($M)

Operating Leverage

We continued to strategically invest in our business, targeting areas where we see the highest future growth potential, while simultaneously expanding our Operating Margin by 20 bps

 

  Operating income, as adjusted, of $5,531 million was up 5% versus 2017, reflecting our commitment to optimize organic growth in the most efficient way possible; and

 

  Compensation and benefits expense, as adjusted, as a percent of net revenue was 34.4%, representing a decrease of 110 bps from 2017, while G&A expense increased 13% year-over-year, reflecting higher planned levels of technology, data, and marketing spend as well as “non-core” items detailed on page 46 of our 2018 Form 10-K.

 

 

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Operating Income ($M) (as adjusted) Operating Margin (as adjusted)

Consistent Capital Return

$3.6 billion returned to shareholders in 2018, up 30% from 2017

 

  Annual dividend of $12.02 per share reflected an increase of 20% from $10.00 in 2017; and

 

  $1.7 billion of outstanding shares were repurchased in 2018, driving a reduction in net share count of 3.5 million shares.

 

 

Share Buyback ($M) Cash Dividend per share ($)

Earnings Growth

Diluted earnings per share, as adjusted, of $26.93 increased 20% versus 2017

 

  Execution of our shareholder value framework—differentiated organic growth, Operating Margin expansion and consistent repurchases—in 2018, and a lower effective tax rate, drove a 20% increase in earnings per share.

 

 

Net Income (as adjusted) ($M) Earnings per share (as adjusted) ($M)

 

 

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(1)

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

 

(2)

Results for 2016 and 2017 were recast to reflect the adoption of the new revenue recognition standard. For further information, refer to Note 2, Significant Accounting Policies, in the consolidated financial statements in our 2018 Form 10-K.

 

(3)

Traditional LC Peers refers to Alliance Bernstein, Affiliated Managers Group, Franklin Resources, Eaton Vance, Invesco, Legg Mason and T. Rowe Price.

 

BLACKROCK, INC. 2019 PROXY STATEMENT    55


Table of Contents

 

 

Compensation Discussion and Analysis    |    Our Compensation Framework

 

Our Compensation Framework

Our 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

In 2018, the Compensation Committee extended our total compensation framework, that in previous years applied only to our CEO and President, to cover all NEOs. Under this program, the Compensation Committee assesses each NEO’s performance individually, based on the three categories below. Each category is assigned a weighting factor, with 50% of the award opportunity dependent on BlackRock’s financial performance, 30% dependent on BlackRock’s business strengths, and 20% dependent on BlackRock’s organizational strengths.

At the beginning of the year, the Compensation Committee and management engaged in a rigorous review and approval of objectives for the CEO, President, and other NEOs. The objectives deliver on BlackRock’s shareholder value framework and commitment to serving client needs holistically and through market cycles. Throughout the year, the Compensation Committee received updates on the performance against these goals and objectives. At the end of the year, the Compensation Committee assesses each NEO’s performance against the objectives, while considering internal performance measures and peer group comparisons.

The Compensation Committee’s performance assessment is directly related to each NEO’s total incentive outcome, which includes all variable pay (annual discretionary cash award, annual discretionary deferred equity award, and long-term equity awards). Based on the Compensation Committee’s performance assessment, total incentive awards can range from 0% to 125% of the prior year’s total incentive pay.

Once the total incentive award is determined, the Compensation Committee determines the appropriate mix between cash, deferred equity, and long-term equity. For all NEOs, at least half of their total incentive award is delivered through equity. Additionally, for Messrs. Fink and Kapito, at least half of their equity awards are delivered through the BPIP Awards, which are contingent on future financial or other business performance requirements in addition to share price performance.

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 “2018 NEO Compensation and Performance Summaries” on page 66.

 

Financial Performance                          

  

Business Strength                           

  

Organizational Strength               

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  Net New Business

 

  Net New Base Fees

 

  Organic Revenue Growth

 

  Operating Income, as adjusted(1)

 

  Operating Margin, as adjusted(1)

 

  Diluted EPS, as adjusted(1)

 

  Total Shareholder Return and P/E Multiple

  

 

  Deliver Superior Client Experience

 

  Drive Organization Discipline

 

  Lead in a Changing World

  

 

  Drive High Performance

 

  Build a More Diverse and Inclusive Culture

 

  Develop Great Managers and Leaders

 

 

Performance

Assessment

  

Total Incentive Percentage   
Outcome
(2),(3)

Far Exceeds

  

110%-125%

Meets/Exceeds

  

90%-110%

Partially Meets

  

60%-90%

Does Not Achieve

  

0%-60%

 

(1)

For reconciliation with GAAP, please see Annex A.

 

(2)

Total incentive includes the NEO’s annual discretionary cash award, annual discretionary deferred equity award and long-term equity award.

 

(3)

2018 total incentive compensation is calculated using 2017 total incentive outcome multiplied by performance incentive percentage.

 

56    BLACKROCK, INC. 2019 PROXY STATEMENT


Table of Contents

 

 

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 2018 total annual compensation outcomes for each NEO, as outlined in the table below.

 

 

         
           

 

2018 Total Incentive Award

 

                  
             

Name

 

  

Base

Salary

 

    

Cash

 

    

Deferred

Equity

 

    

 

Long-Term
Incentive Award
(BPIP)

 

    

Total Annual
Compensation
(TAC)

 

    

% change in  
TAC vs. 2017  

 

  

Performance  

Assessment  

 

Laurence D. Fink

  

 

$1,500,000

 

  

 

$7,750,000

 

  

 

$4,250,000

 

  

 

$10,500,000

 

  

 

$24,000,000

 

  

 

(14%)

 

  

 

Partially Meets

 

                                                                

Robert S. Kapito

  

 

$1,250,000

 

  

 

$6,250,000

 

  

 

$3,500,000

 

  

 

$  8,000,000

 

  

 

$19,000,000

 

  

 

(14%)

 

  

 

Partially Meets

 

                                                                

Robert L. Goldstein

  

 

$   500,000

 

  

 

$2,950,000

 

  

 

$2,000,000

 

  

 

$  2,400,000

 

  

 

$  7,850,000

 

  

 

(4%)

 

  

 

Meets/Exceeds

 

                                                                

J. Richard Kushel

  

 

$   500,000

 

  

 

$2,712,500

 

  

 

$1,762,500

 

  

 

$  1,700,000

 

  

 

$  6,675,000

 

  

 

(5%)

 

  

 

Meets/Exceeds

 

                                                                

Gary S. Shedlin

  

 

$   500,000

 

  

 

$2,475,000

 

  

 

$1,525,000

 

  

 

$  1,950,000

 

  

 

$  6,450,000

 

  

 

(5%)

 

  

 

Meets/Exceeds

 

                                                                

The amounts listed above as “2018 Annual Incentive Award: Deferred Equity” and “Long-Term Incentive Award (BPIP)” were granted in January 2019 in the form of equity and are separate from the cash award amounts listed above as “2018 Annual Incentive Award: Cash.” In conformance with SEC requirements, the 2018 Summary Compensation Table on page 77 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 2018 year-end compensation decisions for individual NEOs by the Compensation Committee.

 

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(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 by the Compensation Committee under the Stock Plan, which has been previously approved by shareholders. The Stock Plan allows multiple types of awards to be granted.

 

(2)

The value of the 2018 long-term incentive BPIP Awards and the value of the equity portion of the bonus for 2018 annual incentive awards was converted into RSUs by dividing the award value by $410.315, which represented the average of the high and low prices per share of common stock of BlackRock on January 17, 2019.

 

(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 59.

 

BLACKROCK, INC. 2019 PROXY STATEMENT    57


Table of Contents

 

 

Compensation Discussion and Analysis    |    Pay-for-Performance - CEO

 

Pay-for-Performance - CEO

The graph below reflects BlackRock’s financial growth as well as CEO total compensation decisions during the period from 2009 to 2018. We strive to keep pay decisions aligned with performance.

 

 

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58    BLACKROCK, INC. 2019 PROXY STATEMENT


Table of Contents

 

 

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. In 2018, with the assistance of the Compensation Committee’s independent compensation consultant, Semler Brossy, a competitive review of our CEO and President base salaries was completed. It was determined that the base salary amounts, as part of total compensation, were low compared to peers and large financial services firms. As a result, Mr. Fink’s base salary was increased to $1,500,000 and Mr. Kapito’s base salary was increased to $1,250,000. These adjusted salaries make up less than 10% of their 2018 total compensation.

 

         

 

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 do not rely on a specific formula. 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 63.

 

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 2018 deferred equity, the award value was converted into a number of RSUs by dividing the award value by $410.315, which represented the average of the high and low prices per share of common stock of BlackRock on January 17, 2019.

 

BLACKROCK, INC. 2019 PROXY STATEMENT    59


Table of Contents

 

 

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

 

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

 

 

 

To recognize the scope of an individual employ