(Photo: Edans / Flickr)
Wall Street’s top money manager, Larry Fink, enjoys sharing his economic wisdom with the Washington policy world. The BlackRock CEO reportedly has his eye on the Treasury secretary seat in a Hillary Clinton administration. He’s also been a passionate deficit hawk, with a particular zeal for raising the Social Security retirement age to 70. After all, he once said, most of us have jobs nowadays where we just “sit around.”
Fink may have been trying to prove this last point in 2015 by personally demonstrating how you can get a decent paycheck without doing much more than sit around. A really decent paycheck. Despite a five percent drop in BlackRock’s share price, Fink collected an eight percent raise—to $26 million.
Fink’s pay for nonperformance makes BlackRock a ripe target for shareholder scrutiny. But the firm’s role in our country’s executive pay problem goes far beyond its own CEO’s paycheck.
As the top money manager in the world, with an astonishing $4.6 trillion in assets, BlackRock holds shares in thousands of US corporations. What does BlackRock do with all this clout? In shareholder votes on CEO pay, the firm almost always supports whatever corporate boards propose—despite a purported commitment to linking compensation to rigorous long-term performance standards. Between July 1, 2014 and June 30, 2015, they approved compensation plans over 96 percent of the time.
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