Name: Laurence Fink
Company: BlackRock Inc.
Position: Chairman and CEO
Previous roles: Director of BlackRock
Education: Bachelor of Arts (1974) from UCLA and MBA (1976) from UCLA Anderson School of Management
Quote: "I've personally said I would be 100 percent in equities. That fits my own risk profile, though obviously it's not appropriate for everyone."
Laurence Fink -- CEO of BlackRock -- once lost around $100 million on an interest rate prediction and left First Boston unceremoniously, ostracized and humiliated. But decades later, some of the country's brightest minds turned to Fink for financial advice when the U.S. economy was in dire straits.
His story is that of a phoenix's: crushing burnout followed by unprecedented success. Few business leaders experience the lows or highs of Fink, who plays large hands in a high-stakes industry. Despite his occasional missteps, this son of a shoemaker now oversees over $3.5 trillion, prompting New York magazine to describe him as "one of, if not the, most powerful people in finance today."
After graduating from business school, Fink started his career with the investment bank First Boston. He quickly distinguished himself as one of Wall Street's first mortgage-backed securities traders. As a leader of the taxable fixed-income division, Fink demonstrated his tolerance for tremendous responsibility when he oversaw trading and distribution of all corporate, government and mortgage securities. Not one to settle for simply inheriting positions, he began the financial futures and options group, demonstrating a desire to create his own path. Over time he contributed $1 billion to First Boston's bottom line.
But this insatiable drive didn't always take him in the right direction. He also lost the company around $100 million from his erroneous prediction that interest rates would rise. Based on Fink's calculations, his traders established substantial positions in the market to benefit from the anticipated ascent. When interest rates suddenly dropped, Fink was publicly humiliated and essentially forced out of the company. A shadow of doubt and uncertainty loomed over this period of his career. Fink admitted, "I was losing my self-confidence."
In 1988, Fink co-founded what would become his most notable project, BlackRock, using seed money from the Blackstone Group. BlackRock began operations as a bond-investment company in a small rented office on Bear Stearns' bond-trading floor.
BlackRock, now the world's largest asset management firm, grew at an impressive rate and went public in 1999. Fink led the corporation to purchase State Street Research & Management Co. and merge with Merrill Lynch, effectively doubling BlackRock's portfolio for asset management. Under Fink's leadership, perhaps most notably, BlackRock obtained Barclays' global asset-management business. With this purchase, BlackRock became the world's biggest money-management firm.
Fink's leadership garnered respect from the same financial establishment that once shunned him. But the admiration didn't come from the people he passed in the First Boston hallways--it came from the economic elites. Fink helped negotiate the resignation of the New York Stock Exchange's CEO, Richard Grasso, demonstrating the recognition and trust Fink received from the old guard. During the late-2000s financial crisis, the major CEOs of Wall Street--Jamie Dimon, John Mack, Robert Willumstad--all turned to Fink for guidance.
This isn't to say that Fink's BlackRock career was blemish-free. In 2006, Fink purchased a housing complex in Manhattan for $5.4 billion, and this massive real estate deal lost BlackRock clients millions when the complex defaulted.
According to the Form 14A proxy statement filed with the Securities and Exchange Commission, Fink's base salary has remained $500,000 since 2001. Last year, he received a cash bonus of $8.13 million, a stock bonus of $7.18 million and challenge award of $3.75 million. Altogether, this accumulates to Fink's 2011 compensation of $19.55 million. Taking into account his previously granted long-term investments, his aggregate annual take-away was $22.89 million.
Fink is a Boys' Club of New York trustee. He also holds various positions at New York University and serves on the board of trustees. He also co-chairs the NYU Langone Medical Center board of trustees.