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May 26, 2016
BlackRock Shareowners Vote on CEO Pay
    by Robert Kropp

The Stephen M. Silberstein Revocable Trust files a shareowner resolution with the mutual funds giant, requesting that its proxy voting practices reflect a link between executive compensation and corporate performance.


Despite his millionaire status, Stephen Silberstein is viewed as a supporter of liberal causes, mostly through the Stephen M. Silberstein Foundation. But his Revocable Trust is also a shareowner in the $4.5 trillion mutual fund giant BlackRock, whose CEO Larry Fink received compensation totaling $26 million in 2015. Identified by As You Sow as one of the most overpaid executives in the S&P 500, Fink saw his compensation actually increase last year, by eight percent; “and at a time that BlackRock shares fell five percent in value during the year,” a press release states.

Using data compiled by Jackie Cook of
Fund Votes, As You Sow also reported that BlackRock owns shares in 99 of the 100 S&P companies with the most overpaid executives, and that BlackRock voted against executive pay packages at only three of the 99. Such a poor voting record invites the question of whether the firm is exercising proper fiduciary duty; as Rosanna Landis Weaver of As You Sow said, “BlackRock arguably is the posterchild today for excessive CEO compensation. It embraces it in its own ranks and it shows no concern about high CEO pay elsewhere.”

In response, Silberstein filed a
shareo wner resolution with BlackRock, requesting that the firm issue a report “which evaluates options for bringing its voting practices in line with its stated principle of linking executive compensation and performance, including adopting changes to proxy voting guidelines, adopting best practices of other asset managers and independent rating agencies, and including a broader range of research sources and principles for interpreting compensation data.”

“Such report should assess whether and how the proposed changes would advance the interests of its clients and shareholders,” the resolution continued.

Silberstein said, “Investment companies have a fiduciary responsibility to act in the best interest of their customers and an obligation to vote accordingly. It is not in the best interests of investors, or the shareholders of BlackRock, to have ever escalating CEO pay, or even high CEO pay, at the companies in which they invest.”

BlackRock's annual general meeting was held in Manhattan yesterday. Although Silberstein's resolution captured only four percent of shareowners' votes, it was enough to qualify the resolution for next year's proxy ballot according to Securities and Exchange Commission (SEC) rules. The annual say-on-pay resolution addressing BlackRock's own executive compensation was opposed by ten percent of shareowners.

“BlackRock tried to squash us off the ballot, so we didn’t know until a month ago if this proposal would ever even see the light of day,” Silberstein was quoted
by The Nation as stating after the vote. “But in the end it got a lot of light of day. We got their attention.”

 

 
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