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:||Wednesday, May 23, 2018|
|Time:||8:00 AM EDT|
|Place:||Lotte New York Palace Hotel
455 Madison Avenue
New York, New York 10022
|Record Date:||March 29, 2018|
Shareholders will be asked to vote on the following matters at the Annual Meeting:
|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. 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.
|ITEM 3. Approval of an Amendment to the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan|
BlackRock is asking shareholders to approve an amendment to the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan (“Stock Plan”) to increase the number of shares of common stock authorized for issuance under the Stock Plan. This increase will allow BlackRock to continue to provide equity incentive awards as part of our pay-for-performance compensation program, which the Board believes is essential to maintaining a competitive compensation program aligned with shareholder interests.
|ITEM 4. 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 2018 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 LLP to serve as BlackRock’s independent auditors is in the best interests of the Company and its shareholders.
|ITEM 5. 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.
|This year, we have updated our Proxy Statement to help you better understand BlackRock’s governance and compensation practices. We believe a broader understanding of BlackRock and our perspective on governance will be beneficial to you as you consider this year’s voting matters. This year’s updated items include:
(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 they reflect the appropriate mix of skill sets, experience, backgrounds and qualifications that are relevant to BlackRock’s current and future global strategy, business and governance. Over the course of the past year, the Governance Committee identified three new candidates with strong senior executive, international, technology and financial services experience who were elected to the Board in March of this year.
The Board considers length of tenure when reviewing nominees in order to maintain an overall balance of experience, continuity and fresh perspective.
Board Independence and Lead Independent Director
Our Director Nominees
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
- Annual review of Committee charters and Corporate Governance Guidelines
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 Chief Executive Officer (“CEO”);
- $5 million for the President; and
- $2 million for all other GEC members.
|As of December 31, 2017, 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 and sustainability developments to our Board and its Committees and work with them to both enhance our 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|
|✗ What We Don't Do|
2017 Performance Highlights(1)
The strength of BlackRock’s 2017 results reflect the long-term strategic advantages we have created by consistently investing in our business. Full-year results reflected industry-leading organic growth, with record full-year net inflows of $367 billion, continued Operating Margin expansion and consistent capital management. Investment performance results across our alpha-seeking and index strategies as of December 31, 2017 remain strong and are detailed in Item 1 of our 2017 Form 10-K.
1 Amounts in this section, where noted, are shown on an “as adjusted” basis. For a reconciliation with generally accepted accounting principles (“GAAP”) in the United States, please see Annex A.
2 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.
How We Determine Annual Incentive Amounts for Our CEO and President
1. Amounts are shown on an “as adjusted” basis. For a reconciliation with GAAP in the United States, please see Annex A.
2. Large Cap (“LC”) Traditional Peers refers to Alliance Bernstein, Affiliated Managers Group, Inc., Franklin Resources, Inc., Eaton Vance, Invesco, Legg Mason and T. Rowe Price.
3. NTM P/E multiple refers to the Company’s share price as of December 31, 2017 divided by the consensus estimate of the Company’s expected earnings over the next 12 months. Sourced from Factset.
In addition to annual incentive awards, the Compensation Committee expects to continue to make annual grants of long-term equity awards to both Messrs. Fink and Kapito, with at least half of such awards being contingent on future financial or other business performance requirements in addition to share price performance.
NEO Total Annual Compensation Summary
Following a review of full-year business and individual Named Executive Officer (“NEO”) performance, the Compensation Committee determined 2017 total annual compensation outcomes for each NEO, as outlined in the table below.
The amounts listed above as “2017 Annual Incentive Award: Deferred Equity” and “Long-Term Incentive Award (“BPIP”)” were granted in January 2018 in the form of equity and are separate from the cash award amounts listed above as “2017 Annual Incentive Award: Cash.” In conformance with SEC requirements, the 2017 Summary Compensation Table on page 68 reports equity in the year granted but cash in the year earned.
In the fourth quarter of 2017, BlackRock implemented a key strategic part of our long-term management succession plans by granting long-term incentive awards in the form of performance-based stock options to a select group of senior leaders, excluding the CEO and President, who we believe will play critical roles in BlackRock’s future. Consequently, we do not consider these awards to be part of our regular annual compensation determinations for 2017. For more information regarding these performance-based stock options, see “Performance-Based Stock Options” on page 55.
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 2017 year-end compensation decisions for individual NEOs by the Compensation Committee.