Stay current on changes and developments in corporate law with a wide variety of resources and tools.
By Che Odom
April 8 — BlackRock Inc. shareholders may get to vote on a proposal next month designed to pressure other companies to link executive compensation to corporate performance.
The Securities and Exchange Commission staff April 6 declined to allow BlackRock to omit a shareholder resolution calling on the asset manager to evaluate ways in which it can bring its voting practices in line with its stated principle of linking executive pay to performance.
The firm is one of the largest institutional investors in the U.S. and owns significant holdings in most of the S&P 500. In the supporting statement to the resolution, submitted to BlackRock Dec. 14, proponent Stephen M. Silberstein said the firm's voting record is inconsistent with the evidence on corporate long-term performance.
As executive pay packages continue to climb, companies are increasingly being pressured by stockholders to tie pay to performance . Last month, large-investor representatives at a Council of Institutional Investors conference in Washington vowed to continue that pressure.
Some at the conference expressed disappointment with BlackRock, Vanguard Group and other large investors for not taking a firmer stand on the issue.
A recent report by a shareholder advocacy group, As You Sow, said that BlackRock and Vanguard almost always side with corporate boards when it comes to CEO pay . The two voted with directors on executive pay packages 97 percent of the time in 2015.
In its no-action response, the SEC Division of Corporation Finance rejected BlackRock's arguments that Silberstein's resolution was misleading and infringed on ordinary business operations, which would be grounds for omitting it from the proxy.
The asset manager could try to negotiate an agreement with Silberstein to prevent him from presenting the resolution to shareholders, thereby preventing a vote at the firm's May 25 annual meeting in New York.
Attempts to reach the company for comment weren't immediately successful April 8.
According to its website, BlackRock's policy is that companies should “explicitly disclose how incentive plans reflect strategy and incorporate long-term shareholder value drivers,” though compensation committees are in the best position to make compensation decisions.
Ed Sweeney, a spokesman for BlackRock, told Bloomberg in February that the firm follows proxy-voting guidelines that encourage companies to tie pay to strategy and shareholder value.
To contact the reporter on this story: Che Odom in Washington at email@example.com
To contact the editor responsible for this story: Yin Wilczek at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)