{ "docId": "019dd923-622b-71dc-a6dc-fa6e41e27e56", "docSlug": "2066928ad734", "documentTitle": "BlackRock (BLK)", "authorId": "23_Bluebell_Capital", "authorName": "Giuseppe Bivona and Marco Taricco", "documentKindSlug": "shareholder-letter", "documentKindLabel": "Shareholder letter", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2024-04-30 00:00:00", "orientation": "portrait", "aspectRatio": 0.7070707, "pageNumber": 5, "pageCount": 7, "prevPage": 4, "nextPage": 6, "slideType": "villain_critique", "function": "name_villain", "density": "overcrowded", "nDataPoints": 8, "notes": "This is a page from an activist investor letter (Bluebell Capital Partners) attacking BlackRock's leadership.", "elementsJson": [ "paragraph", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622b-71dc-a6dc-fa6e41e27e56/5", "deckHref": "/decks/019dd923-622b-71dc-a6dc-fa6e41e27e56", "deckJsonHref": "/decks/019dd923-622b-71dc-a6dc-fa6e41e27e56.json", "deckAnchorHref": "/decks/019dd923-622b-71dc-a6dc-fa6e41e27e56#slide-5", "components": [ { "bbox": null, "kind": "callout", "text": "BlackRock is a textbook example of bad corporate governance due to an oversized Board (16 directors vs. the S&P500 average of 10.8), low women representation (31% vs. the S&P500 average of 33%), long tenure of directors as a symptom of lack of independence (10 yrs vs. the S&P500 average of 7.8 yrs), low presence of independent directors (81% vs. the S&P500 average of 85%), and above all, a Chairman who is also the CEO (Mr. Fink).", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-ee3b-7248-a19d-4ade13ae47c3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.74, "x": 0.13, "y": 0.1 }, "kind": "paragraph", "text": "Our view (which now starts to be more widely shared), is BlackRock is just a champion of messaging, and the hypocritic manner in which it pivots between rhetoric and reality, risks imploding the asset management industry for betraying the fiduciary relationship between asset manager and clients: BlackRock is not only not a champion of stewardship in the companies in which it invests but also not in its own backyard.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "05bfe6a8-1814-403e-9a0c-41870790adf8", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.18, "w": 0.74, "x": 0.13, "y": 0.21 }, "kind": "paragraph", "text": "For the reasons explained, BlackRock is a textbook example of bad corporate governance due to an oversized Board (16 directors vs. the S&P500 average of 10.8), low women representation (31% vs. the S&P500 average of 33%), long tenure of directors as a symptom of lack of independence (10 yrs vs. the S&P500 average of 7.8 yrs), low presence of independent directors (81% vs. the S&P500 average of 85%), and above all, a Chairman who is also the CEO (Mr. Fink) with 'checks and balances' is ensured (!!!) by a lead-independent director (Mr. Murry Gerber) who has been on the Board for 'just' 24 years and more importantly was given very limited powers and authorities to properly exercise its function.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a3055900-76c4-47a0-8fe6-88f5a6ba9e86", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.74, "x": 0.13, "y": 0.4 }, "kind": "paragraph", "text": "BlackRock's Board - one of the most exclusive clubs of 'Corporate America' which has recently taken a commercial opportunity to open its door to Saudi Arabia - has even recognized as an independent director the co-founder of BlackRock (Ms. Susan Wagner), who has been with BlackRock since 1988, first as a senior executive and then as a director since 2012. BlackRock could be viewed as a perfect example of the hypocrisy that undermines the credibility of the entire asset management industry, including when it describes performances: \"our ability to adapt, evolve, and grow has generated a total return of 9,000% for our shareholders since our IPO in 1999. That is well in excess of the S&P 500 return of 490% and representative of a business model serving all our stakeholders\" (CEO Larry Fink, 2024 Letter to investors). Mr. Fink omitted to say that the outperformance relative to the S&P500 effectively ceased 15 years ago, subtly implying that it has continued ever since.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e2664114-6832-4618-bb66-14ddb539d282", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.74, "x": 0.13, "y": 0.66 }, "kind": "paragraph", "text": "The same hypocrisy label could be levelled to the function of corporate stewardship where BlackRock claims that its \"approach to corporate governance can be described as value-focused engagement\" and that its ability in \"executing a value-focused engagement approach requires a sophisticated team, and we have an expert group of corporate governance specialists to review issues and manage the process, including proxy voting\" (BlackRock Larry Fink, 'Dear CEOs Letter', 2012): said differently, \"BlackRock engages with companies to drive the sustainable, long-term growth that our clients need to meet their goals\" (BlackRock Larry Fink, 'Dear CEOs Letter', 2012). The reality is shown to be quite different based on the facts.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f0d5afc1-fcce-41a3-8e38-a3c89e26be62", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"our ability to adapt, evolve, and grow has generated a total return of 9,000% for our shareholders since our IPO in 1999. That is well in excess of the S&P 500 return of 490% and representative of a business model serving all our stakeholders\" — CEO Larry Fink, 2024 Letter to investors; \"approach to corporate governance can be described as value-focused engagement\" — BlackRock Larry Fink, 'Dear CEOs Letter', 2012; \"BlackRock engages with companies to drive the sustainable, long-term growth that our clients need to meet their goals\" — BlackRock Larry Fink, 'Dear CEOs Letter', 2012.", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd952-ee3b-7248-a19d-4d78712e7119", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.5, "x": 0.13, "y": 0.85 }, "kind": "source-note", "text": "4, 5, 6: References to BlackRock annual/CEO letters.", "attrs": { "numbered": true }, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ad90dc7a-4456-4c12-9dee-20984e2a93c5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.28, "x": 0.61, "y": 0.05 }, "kind": "title", "text": "BLUEBELL CAPITAL PARTNERS", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8cdb373c-b06c-4a08-a140-3f120066a303", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "5b467dd9-ccac-4070-bcae-5a343f7dea65", "evidence": "Contrasting CEO rhetoric with board governance facts", "confidence": 0.9 } ], "arcBeats": [ { "to": 5, "from": 4, "beatId": "0c964938-fcf1-4bc4-aaa1-532a520aa991", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "Critique of the Status Quo", "beatSlug": null, "evidence": "Executive summary and critique of current governance", "position": 1, "confidence": 0.7, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [ { "to": 5, "from": 4, "name": "Cost Of Inaction", "slug": "27-cost-of-inaction", "bestFor": "Urgent budget requests, compliance, risk mitigation", "matchId": "42a7e1ee-edbb-436b-bf54-1dd499f750b3", "evidence": "The critique of current governance implies potential negative consequences of inaction", "position": 0, "objective": "Highlight the risks of not amending the bylaws", "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point", "confidence": 0.6, "description": "Quantify what happens if the audience does nothing" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }