BlackRock has bumped up the pay of its chief executive officer and other executives after a year of strong performance.
According to a filing made Friday by the asset manager, CEO Larry Fink’s pay increased approximately 10 percent in 2017, as compared with the previous year. The filing said Fink made a total of $27.95 million in 2017, a 9.6 percent boost from the $25.5 million Fink made in 2016, according to BlackRock’s filing last year.
Fink has differentiated himself from other asset managers in the past year, calling on companies to make positive contributions to society in January, ushering in a new era of shareholder activism for BlackRock.
[II Deep Dive: Larry Fink to CEOs: Contribute to Society or Lose BlackRock’s Investment]
Fink wasn’t the only BlackRock executive to receive a pay increase. According to BlackRock’s Securities and Exchange Commission filing, Rob Kapito, president of the firm, got a boost of 10 percent, as well, with his salary clocking in at $22.015 million. Chief operating officer Rob Goldstein’s pay increased 12 percent, $8.2 million.
Head of the Americas, Mark McCombe, saw his compensation rise 11 percent, to $6.95 million. Gary Shedlin, chief financial officer, also got an 11 percent bump, to $6.8 million.
In 2017, BlackRock took in record full-year net inflows of $367 billion and grew assets organically by 7 percent, according to its SEC filing. The firm’s diluted earnings per share, as adjusted, were $22.60, an increase of 17 percent since 2016, according to the filing.
BlackRock determines its executives’ incentive amounts using three categories. Half of executive incentives are based on financial performance, including new business, new base fee growth, operating income, operating margin, diluted earnings per share, and share prices.
It uses a category called business strength to determine 30 percent of executive incentives. Business strength is determined by measuring the firm’s abilities to “deliver superior client experience through competitive investment performance across global product groups,” drive internal discipline through strategic initiatives, and “lead in a changing world,” according to its SEC filing.
The remaining 20 percent is calculated based on organizational strength, which is measured by looking at executives’ ability to drive performance, to build a diverse and inclusive culture, and to develop new leaders.
Only part of executive pay is based upon incentives, though. For instance, Fink’s base salary is $900,000. He is paid the remainder based on these incentives, which are evaluated yearly.
