BlackRock increased the pay of Larry Fink, its chief executive, by 5 per cent to $25.3 million (€23 million) last year as the fund manager's assets under management swelled to a record high.
The pay rise, which in part reflects the 28 per cent rebound in BlackRock’s stock price in 2019, partially reverses Mr Fink’s pay cut from the year before, when his compensation fell 14 per cent from the $28 million he received in 2017.
Mr Fink pointed to BlackRock’s record inflows of $429 billion for the year and revenues of nearly $1 billion for its technology business, which includes its Aladdin platform, in a letter to shareholders alongside the company’s proxy statement.
The group’s assets under management hit a record $7.4 trillion last year, but will have taken a sharp hit as markets have fallen around the world due to the coronavirus pandemic. The company is due to report results for the first quarter next week.
“We believe we are better positioned than any firm to weather shocks like these and help our clients do the same,” Mr Fink said. “We remain committed to growing and investing in the business.”
A higher payout from BlackRock’s long-term incentive programme for executives accounted for the increase in Mr Fink’s overall pay – $11.8 million, compared with $10.5 million for 2018.
He earned 182 times the median BlackRock employee did last year, down from 195 times the year before.
Compensation for Rob Kapito, BlackRock's president, also increased 5 per cent to $20 million, while Rob Goldstein, chief operating officer, received $9.9 million last year, 25 per cent higher than 2018.
The fund manager’s stock has fallen 6 per cent since the start of 2020, faring better than the average 19 per cent drop for asset managers in the S&P 500 and better than the broader US stock market, which has slipped 14 per cent.
BlackRock has taken a central role in the US government's response to the economic and financial impacts of coronavirus. The company is managing three programmes to buy bonds, credit exchange traded funds and commercial mortgage-backed securities for the New York branch of the Federal Reserve.
The appointment has attracted criticism in some quarters because of BlackRock’s dominant role in fixed income ETFs, where the company represents about half of the market. BlackRock has declined to take fees from the ETFs the Fed purchases.
In his letter, Mr Fink reiterated comments made in a separate message to shareholders last month where he raised the prospect of doing acquisitions.
“There are tremendous opportunities to be had in today’s markets,” he said. “Throughout the firm’s history, it has been times like these when BlackRock has most distinguished itself with both clients and shareholders.” – Copyright The Financial Times Limited 2020
