According to As You Sow, Blackrock voted against three executive compensation packages out of 99 say-on-pay votes related to the "overpaid" CEO list, and opposed 1 percent of executive compensation packages overall.
Silberstein’s shareholder resolution identifies BlackRock as the posterchild for excessive CEO compensation, “By rejecting only 1 percent of CEO pay packages, Blackrock is exercising less fiduciary responsibility — by a factor of 10 — than the median investment manager, which rejects about 10 percent of CEO pay packages. Blackrock also fails to meet the standards suggested by the two advisory services, which recommend rejecting about 15 percent of CEO pay packages, and it falls below numerous pension funds which reject 20 percent or more of CEO pay packages.”
BlackRock is also the target of an online petition campaign calling for the company to “stop runaway CEO pay” that has attracted nearly 74,000 votes, including more than 1,500 ETF clients, 1,750 BlackRock investors and more than 2,000 customers.
So why single out BlackRock?
As You Sow notes that BlackRock’s CEO, Larry Fink, ranks No. 51 on its list of "overpaid" CEOs. According to its report, Fink’s pay was raised 8 percent in 2015 to $26 million annually at a time when the company’s share price fell.
“It’s a double-whammy,” Landis-Weaver says. “He’s also made himself a public figure that speaks in a way where you would expect that his company is paying close attention to this issue. Larry Fink speaks eloquently against short-termism, but there’s a blatant disconnect between the values he espouses and the way BlackRock votes on say-on-pay.
BlackRock declined comment on Fink’s compensation, but argued that most of their effort to address executive compensation issues isn’t reflected in their proxy voting record.
“Our independent corporate governance team takes a holistic approach to promoting sound governance practices that affect returns for our clients including director independence and effectiveness, accurate financial reporting, and alignment with shareholders’ expectations – including compensation,” said Ed Sweeney, BlackRock’s director of corporate communications. “Executive compensation that is disconnected from company performance is a symptom of broader governance failures. “
Before using a say-on-pay vote to weigh in on corporate governance, BlackRock says in its proxy voting guidelines that it chooses to engage directly with senior management to address investor concerns.
In 2015, BlackRock engaged with approximately 700 companies in the U.S., and corporate governance was a focus of 45 percent of those meetings, said Sweeney. “If we determine that issues will not be remediated through engagement, we vote against specific proposals and will generally also vote against the directors on related committees.”