BlackRock's 2023 costs to ensure the security of Chairman and CEO Larry Fink more than doubled from the year before, according to the $10.5 trillion, New York-based money manager’s April 4 proxy filing.
In the wake of the firm’s emergence in recent years as a focus of anti-ESG political campaigners, BlackRock reported in its latest proxy statement expenses of $780,350 for the year to protect Fink. That included $216,837 for security personnel and $563,513 to upgrade the home security systems at Fink’s residences.
The latest outlays compare with $376,360 for 2022, with $198,410 for security personnel and $177,950 to upgrade Fink’s home security systems.
The increase in security-related expenses points to continued caution by BlackRock’s board in the run-up to a presidential election in November, after Fink and the company became lightning rods for political pushback against an environmental, social and governance focus that had gone from strength to strength for much of the past decade.
After a period of full-throated support for ESG and climate-related factors in investing, which peaked with Fink's assertion in his 2020 annual letter to CEOs that “climate risk is investment risk," BlackRock's longtime head has striven to counter the narrative that the money manager effectively boycotts fossil fuel companies to the detriment of client returns. Fink stopped using the word ESG, claiming it had been "weaponized."
He has pointed to the hundreds of billions of dollars BlackRock invests in those companies, while emphasizing that the firm always invests in line with its clients’ preferences.
So far, 2024 has offered mixed signals as to whether that moderated message is resonating.
In March, for example, the $52.3 billion Texas Permanent School Fund, Austin, terminated BlackRock from $8.5 billion in equity mandates to comply with a local anti-ESG statute.
But in April, a committee set up by Arkansas’ state treasurer to identify money managers that boycott fossil fuel firms or other sectors for ESG-related considerations didn’t include BlackRock on its initial list of six money managers — a potentially significant sign that the firm has ceased to be a one-stop shop for anti-ESG campaigners.
In addition to the costs outlined for Fink’s security, expenses to ensure the security of Robert S. Kapito, BlackRock’s president, in 2023 totaled $51,464 — with $2,499 for security personnel and $48,965 to upgrade the home security system at Kapito’s residences, the proxy statement said.
BlackRock’s April 2023 proxy filing said home security measures were put in place for Fink from 2022 and for Kapito from early 2023. The proxy statement noted that the steps taken to ensure the security of BlackRock’s top executives were recommended by an independent, third-party security study and supported by BlackRock’s board as “necessary and in the interest of the company and its shareholders."
