The chief executive of Blackrock last year called on executives to look past their quarterly earnings toward long-term value creation. In this year’s letter to business executives, he told them how: invest in their employees’ skills and financial well-being in a changing world.
In case anybody’s in doubt, that means dialing back buybacks that boost short-term share prices. In the 12 months ending September 30, he said, S&P 500 companies returned to shareholders more in dividends and buybacks than they earned in operating profit.
Some excerpts:
In order to fully reap the benefits of a changing economy – and sustain growth over the long-term – businesses will need to increase the earnings potential of the workers who drive returns, helping the employee who once operated a machine learn to program it.
The events of the past year have only reinforced how critical the well-being of a company’s employees is to its long-term success.
Companies must lend their voice to developing a more secure retirement system for all workers, including the millions of workers at smaller companies who are not covered by employer-provided plans.
As the world’s biggest investor with $5.1 trillion in assets, when Blackrock talks, people listen.
When BlackRock does not see progress despite ongoing engagement, or companies are insufficiently responsive to our efforts to protect our clients’ long-term economic interests, we do not hesitate to exercise our right to vote against incumbent directors or misaligned executive compensation.
