Proxy Summary

Proxy Summary

This summary gives you 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:Thursday, May 25, 2017
Time:8:00 am EST
Location:Lotte New York Palace Hotel, 455 Madison Avenue, New York, New York 10022
Record Date:March 30, 2017

Voting Matters

Shareholders will be asked to vote on the following matters at the Annual Meeting:

 Board Recommendation
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
ITEM 2. Non-Binding Advisory Vote on Compensation for Named Executive Officers
BlackRock seeks a non-binding advisory vote from its shareholders to approve the compensation of the named executive officers (“NEOs”) 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
ITEM 3. Non-Binding Advisory Vote on Frequency of Future Executive Compensation Advisory Votes
BlackRock seeks a non-binding advisory vote from its shareholders to recommend the frequency of future executive compensation advisory votes for the NEOs. The Board values the opinions of our shareholders and will take into account the outcome of this advisory vote when considering the frequency with which advisory votes are sought.
Vote ONE YEAR
ITEM 4. Ratification of Appointment of Independent Registered Public Accounting Firm
The Audit Committee has appointed Deloitte & Touche LLP to serve as BlackRock’s independent registered public accounting firm for the 2017 fiscal 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 & Touche LLP to serve as BlackRock’s independent auditors is in the best interests of the Company and its shareholders.
Vote FOR
ITEM 5. Shareholder Proposal – Proxy Voting Record on Executive Compensation
The Board believes that the actions requested by the proponent are unnecessary and not in the best interest of our shareholders.
Vote AGAINST
ITEM 6. 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

 

whats-new We have updated our Proxy Statement this year to help our shareholders better understand our Company’s governance and compensation practices. We believe a broader understanding of our Company and our perspective on governance will be beneficial to you as you consider many of the matters on which we are asking you to vote.
In this year’s Proxy Statement you will find new content and a new format to help facilitate your understanding of key corporate governance metrics and executive compensation policies. In addition, this year’s Proxy Statement includes a discussion of recent changes to our governance policies, including the adoption of our new Lead Independent Director Guidelines as well as enhanced disclosure on Board and executive succession and compensation.

 

Board Composition

18 director nominees

The Nominating and Governance Committee (the “Governance Committee”) regularly reviews the overall composition of the Board and its Committees to assess whether it reflects the appropriate mix of skill sets, experience, backgrounds and qualifications that are relevant to BlackRock’s current and future global strategy, business and governance.

Board Tenure

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

board-tenure

Board Diversity

diversity

Board Independence and Lead Independent Director

Each year the Board reviews and evaluates our Board leadership structure. The Board has appointed Laurence Fink as its Chairman and Murry Gerber as its Lead Independent Director.

independence

Our Director Nominees

Board-Members

Governance Highlights

We are vocal advocates for the adoption of sound corporate governance policies that include strong Board leadership, 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 Approval of Executive Compensation
  • Adoption of Proxy Access

 

Stock Ownership Guidelines

Our stock ownership guidelines require the Company’s Global Executive Committee (“GEC”) members to own and maintain shares with a target value of:

  • $10 million for the CEO;
  • $5 million for the President; and
  • $2 million for all other GEC members.
As of December 31, 2016, all NEOs exceeded our stock ownership guidelines.

Shareholder Engagement and Outreach

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

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

Compensation Policies and Practices

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

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 that allows for the recoupment of annual and long-term performance-based compensation in the event that financial results are restated due to the actions of an employee;
Apply a one-year minimum vesting requirement to awards granted under our stock incentive plan, subject to limited exceptions;
Maintain robust stock ownership and retention guidelines;
Maintain robust stock ownership and retention guidelines;
  • prohibits executive officers from short selling BlackRock securities;

  • prohibits executive officers from pledging shares as collateral for a loan (among other items); and

  • prohibits engaging in any transactions that have the effect of hedging the economic risks and rewards of BlackRock equity awards.
Limit perquisites;
Assess and mitigate risk in compensation plans, as described in “Risk Assessment of Compensation Plans” on page 58;
Hold an advisory vote on executive compensation on an annual basis in order to provide shareholders with a frequent opportunity to give feedback on compensation programs; and
Review the independence of the Management Development and Compensation Committee’s (“MDCC”) independent compensation consultant on an annual basis.
What We Don't Do
No ongoing employment agreements or guaranteed compensation arrangements with our NEOs;
No arrangements with our NEOs providing for automatic single trigger vesting of equity awards upon a change-in-control or transaction bonus payments upon a change-in-control;
No dividends or dividend equivalents on unearned RS or RSUs; no dividend equivalents on stock options or stock appreciation rights;
No repricing of stock options;
No cash buyouts of underwater stock options;
No tax reimbursements for perquisites or tax gross-ups for excise taxes incurred due to the application of Section 280G of the Internal Revenue Code;
No supplemental retirement benefit arrangements with our NEOs; and
No supplemental severance benefit arrangements with our NEOs outside of the standard severance benefits under BlackRock’s Severance Pay Plan (the “Severance Plan”).

2016 Performance Highlights¹

BlackRock’s 2016 results demonstrated the strength and stability of our diversified, multi-client platform. Full-year results reflected industry-leading organic growth, continued operating margin expansion and consistent capital management. Investment performance results across our active and index strategies as of December 31, 2016 are detailed in Item 1 of our 2016 Form 10-K.

Differentiated Organic Growth

Organic asset growth of 4% in 2016 contributed to positive Organic Revenue growth²:

  • Long-term net inflows of $181 billion reflected positive net inflows across asset classes and benefitted from significant inflows into iShares;
  • Flows contributed to long-term annual organic asset growth of 13% in iShares, 2% in Institutional and (2)% in Retail;
  • BlackRock Solutions achieved 11% revenue growth; and
  • Total revenue declined 2% from 2015 to $11,155 million driven by a decline in performance fees.

assets-under-mgmt

Operating Leverage

Operating income, as adjusted, was flat versus 2015. Continued margin expansion was driven by realizing the benefits of scale and expense discipline:

  • As adjusted operating income of $4,674 million was flat versus 2015, despite a 2% decline in revenue;
  • As adjusted compensation and benefits expense-to-revenue ratio was 34.5%, representing a decrease of 40 basis points (“bps”) from 2015;
  • G&A expense of $1.3 billion was 6% below 2015 levels despite the impact of acquisitions, reflecting expense awareness in a volatile market environment; and
  • Operating Margin, as adjusted, of 43.7% was up 80 bps from 2015.

operating-income

Consistent Capital Return

$2.7 billion was returned to shareholders in 2016:

  • Annual dividend of $9.16 per share, reflected an increase of 5% from $8.72 in 2015; and
  • $1.1 billion of outstanding shares were repurchased in 2016, driving a reduction in net share count of 2.5 million shares.

cash-div-per-share

Earnings Growth

As adjusted diluted earnings per share (“EPS”) of $19.29 declined 2% versus 2015:

  • Despite organic growth, operating margin expansion and share repurchases in 2016, EPS declined versus 2015 due to lower non-operating income and a higher tax rate in 2016.

earnings-per-share

1 Amounts in this section, where noted, are shown on an “as adjusted” basis. For a reconciliation with generally accepted accounting principles in the United States, please see Annex A.
2 Organic Revenue growth is a measure of the expected annual revenue impact of BlackRock’s net new business, including net new Aladdin revenue, excluding the subsequent effect of market appreciation/(depreciation) and foreign exchange. Organic Revenue is not directly correlated with the actual revenue earned in the current year.

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 executive compensation is performance based and “at risk.” Compensation mix percentages shown below are based on 2016 year-end compensation decisions for individual NEOs by the MDCC.

total-annual-comp

1 All grants of BlackRock equity (including the portion of the annual incentive awards granted in RSUs and BlackRock Performance Incentive Plan (“BPIP”) awards) are approved by the MDCC under the Second Amended and Restated 1999 Stock Award and Incentive Plan (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 2016 long-term incentive BPIP awards and the value of the equity portion of the bonus for 2016 annual incentive awards was converted into RSUs by dividing the award value by $375.22, which represented the average of the high and low prices per share of common stock of BlackRock on January 17, 2017.
3 For NEOs other than the CEO and President, higher annual incentive awards are subject to higher deferral percentages, in accordance with the Companywide deferral policy, as detailed on page 54.

NEO Total Annual Compensation Summary

Following a review of full-year business and individual NEO performance, the MDCC determined 2016 total annual compensation outcomes for each NEO, as outlined in the table below.

2016-annual-incentive

The amounts listed above as “2016 Annual Incentive Award: Deferred Equity“ and “Long-Term Incentive Award (“BPIP”)“ were granted in January 2017 in the form of equity and are separate from the cash award amounts listed above as “2016 Annual Incentive Award: Cash.” In conformance with SEC requirements, the 2016 Summary Compensation Table on page 67 reports equity in the year granted, but cash in the year earned.

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