May 30, 2023

BlackRock now paying for guards, home security for CEO Larry Fink

BlackRock has begun paying for personal and home security for CEO Larry Fink and President Rob Kapito, in light of increased safety concerns related to their jobs.

Mr. Fink, who is also chairman, has become a lightning rod for national debates about investing that incorporates environmental, social and governance factors, or ESG, and is increasingly criticized by politicians and activists on both sides of the debate.

The $9.09 trillion New York-based asset manager began providing executive protection services to Mr. Fink in 2022, including security guards and upgraded home security systems at his private residences. The price tag was $376,360 in 2022, according to the firm's May 24 proxy statement.

Similar services for Mr. Kapito began in early 2023, the proxy said.

The new, boosted residential protection for both executives comes on top of existing travel safety benefits, including ground transportation services and a $295,000 annual allowance for private jets.

According to BlackRock's proxy statement, the company's board of directors made the decision to tighten security for Messrs. Fink and Kapito last year, to "address potential threats to their safety that have originated in connection with their roles."

A spokesman for BlackRock declined to comment on what security concerns led to the decision to upgrade Messrs. Fink and Kapito's home security, saying only that "BlackRock has a robust security program in place aimed at protecting our employees and offices."

The criticism of BlackRock comes from across the political spectrum. Last fall, a small group of climate activists protested BlackRock's investment in fossil fuels at the company's New York headquarters, blocking escalators and reportedly strewing coal across the floors. Earlier this year, climate activists heckled Mr. Kapito at a financial conference in New York.

The company has also drawn the ire of Republicans, who claim BlackRock's ESG investing is an overreach that unfairly discriminates against the energy industries in red states.

And in France earlier this year, anti-pension reform protesters stormed BlackRock's Paris headquarters with smoke bombs and flares.

Matthew J. Dumpert, managing director of Kroll's security risk management practices and a former special agent with the U.S. State Department, said it was "not atypical at all" for a company like BlackRock to provide additional security benefits to its executives. Kroll is a global risk consulting firm.

Executive protection programs such as the one put in place by BlackRock are "very standard in Fortune 200, Fortune 300" companies, according to New York-based Mr. Dumpert, and "can range in size and composition from offering simply a car and driver for commute to and from work to 24 hour a day, seven days a week guards at residences, guards that travel with the executives in the family, private and charter aircraft, (and) threat intelligence reporting when they travel overseas."

The level of protection provided depends on the threat environment for each executive, Mr. Dumpert added.

"These things are costly, so to get these by a board of directors or independent investors is not easy."

Though Mr. Dumpert declined to provide an estimate for how much round-the-clock residential security services could cost, another security provider, Kent Moyer, founder, president and CEO of Los Angeles-based World Protection Group, suggested a minimum cost could be anywhere from $500,000 to $3 million per year.

Both men said that, if there's a demonstrated threat environment, executive protection services can often be non-taxable.

BlackRock did not comment on whether the company was planning to roll out similar benefits for any of the company's other executives.