The Advisors' Blog

Meredith recently shared stats from BlackRock’s 2024 Investment Stewardship Report over on our Proxy Season Blog on TheCorporateCounsel.net. BlackRock published the 104-page report – and this 25-page summary – earlier this year. Here are a few takeaways on the asset manager’s compensation-related engagements and voting decisions:

– BIS may engage with companies where additional clarity would be helpful to understand how their compensation policies reward executives for accomplishments in the short-term and incentivize the delivery of long-term financial performance. In 2024, BIS held 1,272 engagements with 1,083 companies on incentives aligned with financial value creation.

– When analyzing a company’s disclosures, BIS seeks to determine whether the board’s approach to executive compensation is rigorous and reasonable, in light of the company’s stated long-term corporate strategy and specific circumstances, as well as local market and policy developments.

– Globally, BIS did not support the election of 1,109 directors at 648 companies due to executive compensation concerns in 2024. BIS may vote against members of the compensation committee or other directors if it perceives misalignment between pay and performance.

– Globally, BIS supported ~82% – or 15,858 out of 19,232 – of compensation-related management proposals put to a shareholder vote in 2024. Compensation-related proposals include Say on Pay proposals, remuneration policy proposals, proposals to approve new or revised incentive plans, and other compensation-related proposals. BIS supported ~82% of management proposals to approve Say on Pay and related grant approval proposals put to a shareholder vote in 2024

– Support was largely driven by many companies’ enhanced disclosures and a clearer articulation of how their policies align with shareholders’ long term financial interests. In general, companies improved their explanations of how short-and long-term incentive plans complement one another and are effective in rewarding executives who deliver long-term financial value.

– While BIS supported a greater proportion of Say on Pay proposals in 2024 compared to 2023, it continued to vote against programs that included large outside-of-program awards that lacked a compelling rationale, lacked sufficient linkages between compensation and financial returns to shareholders, or did not clearly connect compensation program design and corporate strategy. BIS noted that fewer companies made one-time adjustments to their pay programs in 2024.

The report includes case studies beginning on page 69 and also directs companies to this January 2025 bulletin on BlackRock’s approach to engagement on executive compensation.

Keep in mind that the lag time with these reports means that we don’t know the investors’ prior-year voting rationales or engagement case studies until after proxy season has passed – but they can still be helpful heading into this year’s off-season engagements. And we’ll soon also have the hard data on votes, which will give further insight into this year’s decisions.

– Liz Dunshee