“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
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.
Laurence D. Fink
Chairman and Chief Executive Officer