BlackRock ups boardroom pressure as annual meetings get going

By Ross Kerber and Simon Jessop

BOSTON/LONDON (Reuters) -BlackRock voted against more company directors and backed more shareholder resolutions in the first quarter than a year earlier, as the world's biggest asset manager looks to push boards to do more on climate and other sustainability issues.

The information from the $9 trillion New York-based money manager in a report to be released on Wednesday helps to explain what is shaping up to be a tough shareholder voting season at major corporations this spring.

Just on Tuesday, investors rejected the pay of executives at GE Corp, for instance, and last week gave a record level of support, 81%, to a resolution calling for a report on plastics pollution at Dupont.

Both votes took place after the first-quarter period covered by BlackRock's report. But in a separate piece posted on its website on Wednesday, BlackRock said it voted against the pay at GE, and against board compensation committee members, "given the misalignment of pay and performance."

In addition, BlackRock said it supported a resolution calling for a so-called "say on climate" advisory vote on greenhouse gas emissions at Charter Communications Inc on April 27. The measure drew support from 39% of votes cast.

Together the material suggested BlackRock taking a more aggressive stance under Sandy Boss, the company's London-based global head of investment stewardship since 2020.

"We are accelerating the pace of our stewardship activities; resulting in more engagement and more voting, reflecting heightened expectations, which ... are just a function of the urgency of some of the issues," Boss said in an interview.

Boss declined to comment on votes since April or upcoming ones. Activists have urged BlackRock and other influential top investors to push their portfolio companies more after years of fund manager votes that rubber-stamped management wishes.

For instance, BlackRock said on Wednesday it had abstained from voting at Barclays PLC on a resolution calling for the bank to phase out fossil fuel financing shareholders largely opposed. BlackRock said the resolution's wording was "imprecise and ambiguous."

Citing that vote and others yet to come at companies like Duke Energy and ExxonMobil, Sierra Club official Ben Cushing said in a statement that BlackRock is "taking too much credit, too soon."

Among other things, BlackRock said it had backed three-quarters of the environment and social-focused resolutions filed by shareholders during the first quarter, including eight environment-focused votes.

In the same period last year, BlackRock's support for such resolutions was less than 10%, the report showed, including its opposition to all three environmental resolutions on which it cast ballots.

Of the 2,600 shareholder meetings held in the period, at which BlackRock voted on more than 21,000 proposals, the money manager said it had voted against management on one or more proposals at 35% of meetings, up from 30% a year earlier.

BlackRock said it did not back directors or director-related proposals 12% of the time, up from 9% a year ago. Reasons included a lack of board diversity, misaligned pay and a lack of independence.

(Reporting by Simon Jessop. Editing by Mark Potter, David Gregorio and Nick Macfie)