BLK » Topics » Market Compensation Data

This excerpt taken from the BLK DEF 14A filed Apr 17, 2009.

Market Compensation Data

 

The MDCC considers market intelligence on compensation to be an important data point in the determination of pay for the named executive officers. Market data is one factor in evaluating overall pay levels within BlackRock. However, quantitative and qualitative assessments of BlackRock’s performance and each individual’s contribution to that performance remain the primary determinants of individual pay decisions.

 

To gather market data annually and to analyze the competitiveness of its executive compensation programs, management engages McLagan Partners, a compensation consultant

 

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that specializes in conducting proprietary compensation surveys and interpreting pay trends in the asset management industry. The companies that participate in the McLagan Partners’ surveys represent direct peers, including organizations that do not publicly disclose compensation data for their executive asset management roles. Confidentiality obligations to McLagan Partners and to its survey participants prevent BlackRock from disclosing the firms included in the surveys. In addition, the McLagan Partners surveys maintain the confidentiality of individual company pay practices from other participants. The results of McLagan Partners’ surveys were:

 

   

Analyzed to account for differences in the scale and scope of operations between survey incumbents and BlackRock;

 

   

Used to evaluate BlackRock’s overall competitive compensation position as well as its position by functional business and by title; and

 

   

Used to make comparisons on an officer-by-officer basis, where an appropriate match of position scope and responsibilities could be made and sufficient market data was available to maintain the confidentiality of all participant firms.

 

The MDCC was presented with the results and analyses of the surveys and discussed with management and consultants the impact of market trends in compensation on the ability to attract and retain top talent. The MDCC also reviewed the types and mix of compensation elements offered by peer companies to their employees. When determining the appropriate competitive market data to use, the MDCC considered the size and complexity of BlackRock, and the scope of individual positions.

 

The MDCC directly retained Semler Brossy Consulting Group LLC (“Semler Brossy”), a compensation consultant, to provide objective advice on the practices and the competitive landscape for the compensation of BlackRock’s executive officers. Semler Brossy reviewed the firms included in the McLagan Partners’ analyses and the results of the competitive surveys. Semler Brossy also reviewed publicly disclosed pay information for executive management roles within certain publicly traded asset management firms, including Affiliated Managers Group, Inc., AllianceBernstein Holdings L.P., Eaton Vance Corp., Federated Investors, Inc., Franklin Resources, Inc., Invesco Ltd., Janus Capital Group Inc., Legg Mason, Inc., and T. Rowe Price Group, Inc. These firms were selected because, among companies for which publicly available data exists, these are the most similar to BlackRock in terms of size, scope and complexity. However, these firms do not provide ideal comparisons (for example, they are generally smaller than BlackRock) and therefore were used only to understand pay trends among other public asset managers. The companies used in the McLagan Partners study (which include both public and private companies) offer more suitable comparisons for these purposes. The MDCC also consulted with Semler Brossy on pay trends and emerging compensation practices among financial services firms beyond the asset management sector for general context and perspective on the industry.

 

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