Competitors have poached plenty of mid- and top-level executives from BlackRock Inc. recently, and reports of mixed morale are trickling out.
Among some high-profile departures, Scott Thiel, chief fixed-income strategist at BlackRock, took an early retirement in March after a 20-year tenure that spanned the firm's growth into the world's biggest asset manager. Paul Bodnar, managing director and global head of BlackRock's $500 billion sustainable investments platform, is leaving the firm to join the $10 billion charitable Bezos Earth Fund in April. Daniel Gamba, managing partner, co-head of fundamental equities at BlackRock, in February, was appointed president of Northern Trust Asset Management. And Zach Buchwald, former head of BlackRock's North America institutional business, is taking over the CEO role at Russell Investments.
In 2022, BlackRock's overall compensation fell to $5.7 billion from $6 billion in 2021. And in January, BlackRock said it plans to dismiss about 500 employees, roughly 2.5% of its global workforce, after the world's biggest asset manager grappled with sharp declines last year in equity and bond markets.
And yet, veteran recruiter George R. Wilbanks, managing partner of Wilbanks Partners LLC, Stamford, Conn., said in an interview that he is "not seeing an exodus at BlackRock and like other investment management companies, the company is subject to natural employee attrition of between 5% and 10% headcounts annually."
"When a highflier like BlackRock hits its first big bump in a long time, the road seems worse," said Alan Johnson, managing partner of compensation specialist firm Johnson Associates Inc., New York, in an interview.
Last year "was a really, really tough year for money managers," Mr. Johnson said, adding that "I assume that like other managers, compensation was lower for BlackRock employees."
"It's bad news and disappointing for the firm's employees but it's the right thing to do given circumstances," Mr. Johnson said, adding "BlackRock will have no trouble recruiting new people when needed."
BlackRock's lower compensation, including bonuses that were down dramatically across the board, disappointed employees universally, said a recruiter who spoke on condition of anonymity.
BlackRock employees have been reaching out to recruiters because "bonuses were down dramatically in more of a blanket way rather than being based on merit," the source said.
Reviews by current and former employees on sites like Glassdoor.com confirm that BlackRock's compensation is a hot topic: "The firm just doesn't keep your wages competitive with the market over time," wrote one employee this year. "If you're talented and in an investment role, you can generally double comp by leaving. Very quick to pay people down in bad years, but no real upside in good years."
Like Mr. Johnson, the recruiter said BlackRock's "layoffs changed the mood of the employee base."
Because of the pressure on BlackRock about its ESG stance, the firm's sales teams have to contend with "the noise around ESG, which is making it harder to attract new capital," said the source.
BlackRock Vice Chairman Mark McCombe weighed in on morale.
"The good news is, the vast majority of employees are working in places like Europe. They're not directly impacted" by the headlines about BlackRock and ESG, he said. "Larry's getting mud thrown at him left and right. They're not immune to that. Ironically, when you're inside, the culture feels very partnerly. It's built on the partnership model. We have each other's backs. It's palpable."
More importantly, "We don't use the word fiduciary lightly. We do what our clients tell us."