You know that BlackRock’s Larry Fink has taken on the role of arbiter of corporate ethics. He’s feeding his own EGO. His push to use investor money to sway board decisions on so-called environmental, social, and governance issues (ESG), has had major effects on how corporations are being run. Instead of focusing on returning value to shareholders, CEOs, whose pay is often tied to the company’s short-term stock price (not long-term performance), are focused on making sure company stock ends up in BlackRock’s latest ESG index fund offering. If it’s included, the CEOs can expect a major bump in their pay.
With a growing reputation for putting his $9.5 trillion-sized finger on the scales in boardroom fights, striking coal miners have come to New York City to demand Larry Fink aid them in their battle for higher wages. It may not have occurred to them yet that BlackRock’s ESG push is part of what has hurt coal companies in the first place, making it harder for them to pay higher wages. Fola Akinnibi reports in Bloomberg:
Coal miners from states including Alabama and West Virginia picketed outside BlackRock Inc.’s New York headquarters Wednesday in a bid to get the world’s largest asset manager to pressure Warrior Met Coal Inc. for better wages and employee benefits.
About 120 miners and supporters descended on BlackRock’s offices in midtown Manhattan, carrying signs that read “we are one,” chanting in unison and speaking out against their treatment by the coal company. Union members from other industries joined the picket line, while truck drivers and garbage men who drove by honked in solidarity. BlackRock was listed as Warrior Met’s biggest shareholder as recently as March 31.
More than 1,000 miners represented by the United Mine Workers of America have been on strike for almost five months as they pursue a new collective-bargaining agreement with Warrior Met, a Brockwood, Alabama-based miner of metallurgical coal used in steel making. The workers are seeking support from BlackRock, arguing the asset manager has allowed the coal company to exploit them in labor negotiations and on the job.
“We’re in New York City because we are simply following the money, and demanding that those who created that wealth, the miners, get their fair share of it,” said UMWA International President Cecil Roberts in a statement.
As Warrior Met was looking to emerge from bankruptcy in 2016, the miners took pay and benefit cuts to keep their jobs. That collective-bargaining agreement ended April 1. The miners are now looking for pay and benefit increases beyond what Warrior Met is offering, saying the company has the financial wherewithal to reverse the reduced wages from the last agreement.
Chris Brubaker, 47, who traveled from his home in Jasper, Alabama, to attend the rally, said he took a $6 per hour pay cut in the old contract and Warrior Met is only offering $2 per hour in raises over the next five years.
“All we want is a fair contract,” Brubaker said. “We don’t want no more than what’s owed to us. We go underground in conditions that at any moment can get you killed.”
Action Line: When CEOs start making company decisions based more on their own goals than those of shareholders it raises an alarm. The fact is, in these instances, you invest, but they win.