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BlackRock Pared Larry Fink's Compensation 14% in Tough Year

BlackRock Pared Larry Fink's Compensation 14% in Tough Year

(Bloomberg) -- BlackRock Inc. cut Chief Executive Officer Larry Fink’s compensation by about 14 percent to $24 million for 2018 after the company faced institutional outflows and saw its share price drop.

The world’s largest asset manager gave Fink a $7.8 million cash bonus, the company reported Friday in a regulatory filing. He earned a $1.5 million salary and $14.8 million in equity awards.

BlackRock faced a difficult year in 2018. The share price fell 24 percent and institutions pulled money from its investment products for three straight quarters. The firm began 2019 with some major changes. It announced plans to cut 500 jobs, or 3 percent of its global workforce. Several executives got new roles in a management shuffle earlier this month.

BlackRock Pared Larry Fink's Compensation 14% in Tough Year

In the filing released today, the firm’s compensation committee detailed the rationale for reducing Fink’s pay.

“In 2018, BlackRock expanded operating margin, executed on key strategic initiatives, made significant progress towards inclusion and diversity objectives, and outperformed” certain peers, the report said. “Nonetheless, due to BlackRock’s financial performance relative to expectations and underperformance in alpha-generating products, the compensation committee’s assessment resulted in a Partially Meets determination.”

Fink, 66, acknowledged the turmoil his industry faced in the past year in a separate annual letter to shareholders.

“2018 was a difficult year for the asset management industry and a marker of things to come: greater focus on value, tougher competition, more operating complexity and disruption of legacy business models,” he wrote. “Many asset managers have not adequately prepared for these changes.”

BlackRock shares rose 14 percent this year through April 11.

To contact the reporters on this story: Annie Massa in New York at amassa12@bloomberg.net;Anders Melin in New York at amelin3@bloomberg.net

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Alan Mirabella

©2019 Bloomberg L.P.