BlackRock CEO Laurence Fink Takes Pay Cut
By Dawn Lim
The boss of the world's largest money manager took a pay cut in 2018, a reflection of a tougher year for the industry.
BlackRock Inc. Chief Executive Laurence Fink received $24 million for his performance last year, a 14% decrease from 2017, according to a regulatory filing Friday. The amount includes a $7.75 million cash award, $14.75 million in deferred equity and incentives, as well as a base salary of $1.5 million. In 2017, he earned $27.95 million.
By another measure, which incorporates incentive payouts differently, Mr. Fink was paid $26.5 million in 2018, down from $27.7 million a year ago.
The decline reflects a difficult 2018 for BlackRock and the asset-management industry. Many firms faced slowing net inflows, while a December market rout eroded the value of many of their assets and fees they pocket as a percent of assets they managed.
BlackRock, a roughly $6 trillion giant, provides everything from stock funds to alternatives to software for Wall Street.
"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," Mr. Fink said in a letter that accompanied Friday's filing.
A rebound in stocks in 2019 has given some asset managers a reprieve as they prepare to report quarterly earnings in coming weeks. BlackRock's stock has so far posted a total return of roughly 16% year to date, after a decline of more than 20% in 2018.
BlackRock assets fell below $6 trillion mark last year. Its net inflows -- a measure of how much investor money is added to the firm -- were roughly $123.6 billion in 2018, down from $367.3 billion in 2017.
BlackRock's compensation committee said it lowered Mr. Fink's pay as the firm's financial results fell short of expectations and funds designed to beat markets underperformed. BlackRock also said Mr. Fink has pushed the firm to be a bigger provider of technology and alternatives and it increased revenue in the past year.
The firm has rolled out sweeping changes in recent months, from reorganizing its institutional sales team to installing new leadership at a unit that runs alternative strategies to stocks and bonds, to boost growth.
Asset-management professionals will end 2019 with flat growth in bonus packages over 2018, according to a projection by compensation consultant Johnson Associates. Last year asset-management professionals ended with bonus packages 3% to 4% higher than the previous year.
The group of executives included in the firm's proxy as its highest paid employees included Mr. Fink, President Rob Kapito, Chief Operating Officer Robert Goldstein, fixed-income chief Richard Kushel and Chief Financial Officer Gary Shedlin.
Write to Dawn Lim at email@example.com