PensionsMay 23, 2024

NYC Pensions Fail to Persuade BlackRock Shareholders to Eject Aramco CEO From Board

Despite objections, Amin Nasser was not only overwhelmingly re-elected to BlackRock’s board, but he received nearly 3 million more votes than Chairman Larry Fink.

Reported by Michael Katz

Despite objections from New York City Comptroller Brad Lander and the $86 billion New York City Employees’ Retirement System, BlackRock shareholders overwhelmingly voted to re-elect Saudi Aramco CEO Amin Nasser to the company’s board of directors.

Nasser received approximately 119.8 million votes to remain on the board for a second year, while approximately 1.8 million votes went against him. All 16 board members were re-elected by a large margin, including CEO and Chairman Larry Fink, who received approximately 117 million votes to remain on the board, with approximately 4.5 million votes going against him.

In a regulatory filing submitted to the SEC earlier in May, Lander urged BlackRock shareholders to vote against Nasser remaining on the board, saying his role with Saudi Aramco is a conflict of interest that compromises his ability to provide independent oversight, particularly concerning BlackRock’s decarbonization strategy.

“Nasser is not qualified to serve as an independent member of BlackRock’s Board,” Lander wrote in the SEC filing. “His nomination represents a step backward for the company, aligning BlackRock with outdated perspectives and practices that are incompatible with the pressing need for climate action and responsible business practices as reflected in BlackRock’s own commitments.”

Lander said in the filing that Nasser has been an advocate for expanding fossil fuels and moving away from decarbonization efforts, and that his position “as CEO of a company implicated in one of the largest alleged climate-related breaches of international human rights law is an unwarranted reputational risk for BlackRock, its board of directors, and its shareholders.”

According to the filing, NYCERS has approximately $43 million invested in BlackRock, which in turn manages approximately $19 billion on behalf of the retirement system.

Lander took issue with BlackRock regarding Nasser as an independent director, noting that Aramco has conducted “sizeable, related-party transactions with BlackRock within the past three years,” including the acquisition of a 49% equity stake in Aramco Gas Pipelines Company for $15.5 billion by a consortium of investors co-led by BlackRock.

In the filing, Lander cited NYSE listing standards saying that a director is not considered independent if the director works for a company that has made payments to, or received payments from, the listed company “in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues.”

Lander also cited a letter Nasser received in June 2023 from United Nations-appointed independent human rights experts raising concerns that “Saudi Aramco’s actions may contribute to the undermining of the Paris Agreement and international cooperation in the face of the existential threat to human rights posed by climate change.”

According to BlackRock’s May 15 proxy statement, the firm’s nominating, governance and sustainability committee identified Nasser in 2023 as a candidate with “significant leadership skills and experience in international business, sustainability and the energy transition, and the Middle East region.” BlackRock said its NGSC regularly reviews the overall composition of the board “to assess whether it reflects the appropriate mix of skills, experience, backgrounds and qualifications that are relevant to BlackRock’s current and future global business and strategy.”