BlackRock, the largest asset manager on the planet, has a big transparency problem

BlackRock just dropped a 50-page proxy statement stuffed with corporate jargon that couldn’t explain why its CEO, Larry Fink, earned $37 million in 2024. That’s the number staring every shareholder in the face, and they’re not getting answers.

According to Bloomberg, investors are still furious after last year’s historic pushback against the firm’s executive pay plan, one of the most aggressive protest votes BlackRock has ever faced.

That protest came after both Institutional Shareholder Services Inc. (ISS) and Glass Lewis & Co., the top proxy advisory firms, told investors to vote against the company’s say-on-pay motion. Shareholders listened. They hit back, and they hit hard.

After that, the company’s board committee responsible for pay tried damage control. They made phone calls. They set up meetings. They asked shareholders what pissed them off the most. Two things came up: a lack of clarity on how pay decisions were made, and the use of one-time bonuses with no real conditions.

BlackRock changes little after last year’s investor rebellion

Despite the noise, almost nothing changed. BlackRock still claims that half of executive bonuses depend on financial performance. The other half is split between vague objectives labeled “business strength” and “organizational strength.”

The company did update its list of financial metrics, adding one new metric to the previous seven. These eight now fall under three loose targets: “drive shareholder value creation,” “accelerate organic revenue growth,” and “enhance operating leverage.”

But those aren’t ranked. No weights are assigned. Shareholders still don’t know which metric matters most. The business goals haven’t improved either. Phrases like “lead in a changing world” and new tasks related to integrating acquisitions sound more like motivational posters than measurable objectives.

The board says Larry “far exceeded” expectations, but those expectations are nowhere to be found. The only real number is 23% growth in adjusted operating income, but BlackRock doesn’t explain what target was beat or what the comparison baseline was.

And this is a company that benefits from scale automatically, so those numbers don’t say much without context. The non-financial achievements are no better. That part of the proxy reads like someone tried to cram as many buzzwords as possible into a performance review.

There are barely any comparisons to other firms. The only data points given are BlackRock’s total shareholder returns over one, three, and five years, its asset growth, and a price-to-earnings ratio that’s still twice as high as its traditional peers. That’s it.

On one-time awards, the firm said there were none given in 2024. But they also didn’t say whether that’s now formal policy or just a one-off choice, so the shareholders still have no idea what to expect next year.

Glass Lewis and ISS still see problems in the pay process

Glass Lewis said the company’s updates were “adequate.” That’s the actual word they used. They backed the pay plan this year—not because they were impressed, but because most of the pay is tied to stocks and future performance.

ISS wasn’t any more forgiving, calling the changes “incremental.” The core problem remains: BlackRock is giving itself too much room to make decisions without showing how those decisions are reached.

Discretion isn’t always bad. It can stop bad outcomes when metrics are met due to macroeconomic factors rather than performance.

But discretion shouldn’t mean guesswork. There’s a middle ground where companies use formulas as a base and then tweak outcomes using human judgment. That only works when shareholders can actually follow the reasoning—and right now, they can’t.

The committee says it “takes shareholder feedback very seriously.” But if that’s true, they’ve got another shot to prove it. New incentives have been added for performance tied to private-market investments. That’s a second chance to show investors that the process won’t be this opaque forever.

Even now, neither Glass Lewis nor ISS is attacking the $37 million payout directly. They aren’t questioning whether Larry deserved it. But they are asking for a better process and more transparency. And that’s the core issue here.

BlackRock is not just a Wall Street giant, it’s now a crypto giant too, and Bitcoin’s whole thing has always been transparency. So what does that tell you about the largest asset manager in the world?

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