Today was the Annual Meeting of BlackRock, where resolutions pertaining to the functions of the company were voted on by the shareholders.
I had been a managing director of BlackRock for about ten years prior to retiring two years ago to assume the role of Chair of the Patriotic Millionaires. BlackRock is the world’s largest asset manager of funds which include the investments from many people. These funds, in aggregate, are part owners of almost every major public company in the world. Some of the funds are active, meaning that BlackRock professionals do research on the companies and decide how to invest the funds, and earn a fee for doing that. Other funds are passive, meaning that they more-or-less match a published index (such as the S&P 500 or the MSCI World Index) and BlackRock is paid a much smaller fee for operating those funds.
In either case BlackRock, as the manager, is responsible for voting all of those shares at the annuals meetings of all of the companies in which the funds have investments. BlackRock is required by government regulations to vote those shares in the best interests of the investors in the funds. Each company must have a shareholder vote to approve the pay of their senior executives (the “say on pay” rule). For resolutions on executive pay, BlackRock almost always votes “yes”. Most other investors also vote yes most of the time, but not as often as BlackRock.
Shortly after calling the meeting to order, Andrew Dickson called on Patriotic Millionaire Stephen Silberstein to present his proposal which would have BlackRock review its policy of approving executive pay packages in the future. You can read more of the details HERE.
Stephen made a compelling and provocative argument that many corporate executives were raping their companies with the consent of the voting shareholders. He made a strong case that facilitating this was creating a risk to BlackRock’s reputation, just as allowing sexual harassment creates a risk to company’s reputations.
After he presented his proposal and the votes were cast, Dickson then announced that the Stephen’s proposal had lost, receiving only 4% of the vote. Despite the loss, Stephen was pleased the proposal had crossed the threshold for being able to readdressed next year.
After that Larry Fink (chairperson and CEO) delivered some prepared remarks and addressed questions from several people (there were about 50 people in the room, most of whom were the members of the board, or senior officers of BlackRock. Three or four people recognized me.)
After the formal part of the meeting, Larry did talk to Stephen and me for a few minutes. He was defending BlackRock, saying that the firm often makes progress on executive pay by engaging companies prior to a formal vote, and occasionally voting no. Stephen pointed out that his resolution would increase BlackRock’s leverage more by being more willing to vote no, and that he should publicize the positive things that they are doing (and I noticed that BlackRock’s press spokesperson, Brian Beades was nodding at that point). Larry related that they had voted no recently, that the CEO of the subject company called then him angrily, and Larry said he responded by just saying that he did not make the decision personally, that BlackRock has a small group in charge of votes.
So while we did not win today, we will keep up the fight, keep up the pressure, and not rest until we create a more just, stable, and equitable system that protects all Americans.