Blackrock to CEOs: Show us Your Social Actions

In his 2018 letter to CEOs, Larry Fink, Blackrock’s Chairman and CEO, tells them to prepare for year-round engagement from Blackrock. With stocks continuing to climb, while employees see stagnant wages and have concerns for their retirement, Fink tells companies they must do more than drive quarterly earnings. He begins by asking each company to share their strategic framework for long-term growth and concluded by telling companies they

Larry Fink, CEO Blackrock

“must ask themselves:
What role do we play in the community?
How are we managing our impact on the environment?
Are we working to create a diverse workforce?
Are we adapting to technological change?
Are we providing the retraining and opportunities that our employees and our business will need to adjust to an increasingly automated world?
Are we using behavioral finance and other tools to prepare workers for retirement, so that they invest in a way that will help them achieve their goals?”

Blackrock is backing up their request by doubling the size of their investment stewardship team over the next 3 years.

Why kill stock options?

Dear Congress,

There are many good tax reform issues in both versions of the tax plan. The top marginal rate for corporations has to be lowered. Good job on that. At the same time, US companies do not come close to paying the most taxes of any industrialized economy, so stop saying they do and don’t go borrowing $1.5 Trillion from our children — $1.2 Trillion of it to provide corporate income tax cuts — to pay for these cuts. By the way, this seems to go against the years of debt reduction talk. So let me make it clear, “Don’t add to our children’s debt burden! Just don’t!”

And as Lt. Columbo would often say, “Oh, oh, one more thing before I forget.”

Taxing stock options and RTUs at the time of vesting will be a start-up and innovation killer. It’s not complicated. You are taxing folks for “earnings” when those “earnings” not only have not been converted to cash, in many cases the holder CANNOT convert them to cash. This makes no sense.

Many early stage companies attract talent by offering lower cash compensation and stock options. These options align employee and company incentives. They reduce the capital required by the company, increasing the chance they will be successful. Some of these companies become very valuable and create a lot of wealth for the employees due to these options. For any one company there is a small chance the stock becomes valuable. For any one person, there is even a smaller chance that your options have value when you leave the company. Your plans to tax these options when they vest will create a tax liability for an asset that has not yet delivered any cash, and may never deliver any value. Only wealthier employees will be able to pay the liability and it’s unlikely they will be eager to do so. Younger and less well-to-do employees will not be able to participate in this company ownership program at all.

The bottom line is managers like me will greatly reduce or simply stop offering stock option programs. The harm from this tax liability will be too great for our employees. Therefore fewer talented people will go to early stage, innovative companies. I’m not the only one that feels this way. And less talent to innovative companies will hurt the US. This will hurt younger employees. This will hurt people from poorer families.

Is that what you want? Are you trying to stop companies from issuing options as compensation? Why are you doing this?

If it ain’t broke don’t go busting it

Politics & Leadership: Jeff Flake says “Enough”

Politics & Leadership: Jeff Flake says “Enough”

Jeff Flake, the Jr. senator from Arizona, took to the floor of the Senate to tell his fellow Republicans they can no longer silently wait for the current administration to pivot from the harmful practices of labeling truth as lies and offering lies as truth without being complicit in the normalizing of these and other dangerous political processes.

Citing Madison and the US Constitution’s separation of powers under Article 1 and more fully outlined in Federalist 51, Flake asks his GOP colleagues if they would accept the same actions from a Democratic executive administration.

Of course, we wouldn’t, and we would be wrong if we did. When we remain silent and fail to act, when we know that silence and inaction is the wrong thing to do because of political considerations, because we might make enemies, because we might alienate the base, because we might provoke a primary challenge, because ad infinitum, ad nauseam, when we succumb to those considerations in spite of what should be greater considerations and imperatives in defense of our institutions and our liberty, we dishonor our principles and forsake our obligations. Those things are far more important than politics.

Jeff Flake


Quoting President Theodore Roosevelt at length, Flake clearly outlined not only the freedom of criticizing a sitting president, but it being a patriotic duty to call out failures of the office holder, especially when those failings are against the interest of the nation.

The president is merely the most important among a large number of public servants. He should be supported or opposed exactly to the degree which is warranted by his good conduct or bad conduct, his efficiency or inefficiency in rendering loyal, able and disinterested service to the nation as a whole.

Therefore, it is absolutely necessary that there should be — that there should be a full liberty to tell the truth about his acts and this means that it is exactly as necessary to blame him when he does wrong as to praise him when he does right. Any other attitude in an American citizen is both base and servile. To announce that there must be no criticism of the president or that we are to stand by a president, right or wrong, is not only unpatriotic and servile, but is morally treasonable to the American public.

Theodore Roosevelt

U.S. President

Flake went on to highlight the US’s leadership since World War II in rebuilding shattered economies and creating stabilizing international institutions which have greatly contributed to peace and prosperity for more than 70 years. Institutions which it seems the US is all too eager to abandon and Flake claims, “The implications of this abandonment are profound and the beneficiaries of this rather radical departure in the American approach to the world are the ideological enemies of our values.” Then in calling on Senators to speak up about this, he says this is too important to remain silent due to the requirement of politics.

Flake is retiring from the Senate after his term ends in January of 2019. He was not likely to win the GOP nomination. He is a conservative Republican and votes with the administration over 95% of the time, yet his opponent received the executive branch endorsement. It seems having the same policy goals is not good enough anymore. And the request for not only policy support, but for support for dialog that opposes the 1st Amendment’s guarantee of free speech, the repulsive language about our Mexican neighbors to the south, and the dangerous, childish namecalling of leaders and opponents were more than Jeff Flake was willing to provide. “Enough!” Senator Flake exclaimed. Before this becomes normal, we must stand and say, “Enough!”

Use Teamwork to Address a Narcissistic Coworker

Use Teamwork to Address a Narcissistic Coworker

Have you ever managed a capable person that few or maybe no one wanted to work with because he was a self-absorbed, condescending, braggadocious jerk. Well, you would be lucky to have spent more than a few years in the workforce and not come across someone with strong narcissistic traits.  Used wisely, their drive can create impressive results. Carried too far, their behavior can destroy a work environment.

Narcissistic people are charming and manipulative, so they often advance through organizations quickly. When their idea of success aligns with the group, all do well. However, the cost of this success is of little interest to them. They see themselves as “special” and struggle to empathize with the masses they believe to be beneath them.

All too often, they aren’t treated as special as they believe they should be, becoming agitated, impatient, and angry. It is all about them, and they don’t easily see or concern themselves with the needs of others. For all their grandiose proclamations of their own capability and worth, they are usually insecure and questioning of their capability. Combined with their thin-skin, they have difficulty accepting criticism and rarely with admit to a shortcoming or having made a mistake. Therefore, you will not likely encounter a narcissistic person willing to admit they have a problem. In fact, you are likely to be perceived as the problem.

All is not lost. While attempting to change a personality is a difficult, slow, and low probability of success endeavor, there are actions we managers can take to help people work together.  Manfred F. R. Kets de Vries, the Distinguished Clinical Professor of Leadership Development and Organizational Change at INSEAD and the author of Riding the Leadership Rollercoaster: An Observer’s Guide,  has quite a few ideas (See the Sidebar) about using the team environment to reduce narcissistic behavior and help folks understand how to better work with others.

You can find more details in his Harvard Business Review article, “How to Manage a Narcissist“.

Manfred F. R. Kets de Vries suggests creating a strong team environment to effectively work with the narcissist in your midst.

Create a strong sense of team cohesion.
A group setting makes dysfunctional acting out more noticeable, more controllable, more discussable, and therefore less acceptable. Peer pressure will push the narcissist to adapt to the group’s norms. Thus, it is the peers that will take on the role of “enforcers,” to encourage the narcissist to listen and empathize with others.

Use this strong team to promote peer feedback.
For narcissists, it’s often less threatening to receive feedback from peers, rather than from a single person or leader. Of course, feedback from many people is harder to ignore than feedback from one person. If the dynamics of the group are facilitated effectively, the narcissist’s view of themselves will be revealed, mirrored, challenged, and can be modified.

Create a safe, somewhat playful space.
This can become an environment where people with a narcissistic disposition learn to develop trust, explore boundaries, accept feedback, and increase self-awareness. In such a setting, the narcissist’s peers will be able to constructively confront problematic behavior while simultaneously offering a modicum of understanding.

Don’t confront the narcissist directly.
Instead, support the team. Returning to George, the group facilitator was very careful not to confront him too forcefully when he acted inappropriately in the group leadership development sessions. When needed, the facilitator would empathize with George (showing surprise and hurt) as a result of the confrontations with and feedback given by his peers. At the same time, the facilitator empowered George’s peers not to accept his way of dominating the conversations, to interrupt him when he went on for too long, and thus to make him realize that he didn’t always need to be the smartest person in the room.

A Right Time for Everything

What is the best time of day to ask for a raise? Get a haircut? Grab that cup of coffee? Well experts from various fields have weighed in on these and Net Credit compiled them into an easy to understand infographic for your use. You may want to look at this again around 10:00 PM tonight so you have a better chance of remembering it.

So, go ahead and take that morning break at 10:30, grab lunch at noon, catch a 2:00 PM nap and be refreshed to ask for that raise at 5:00 PM. Make big decisions before the nap and if you want to come up with the better mousetrap, you’d have a better chance of getting it right if you brainstorm around 6:00 PM and then grab dinner.

Courtesy of: NetCredit