Before BlackRock Became Untouchable, Carl Icahn Told Larry Fink His $4.8 Trillion Empire Was Protecting B

During the July 2015 CNBC Institutional Investor Delivering Alpha Conference, activist investor Carl Icahn criticized Larry Fink and BlackRock Inc. (NYSE:BLK) for backing corporate management over activist shareholders.

Icahn said Fink’s annual letters to CEOs were effectively a “sales pitch” for BlackRock, encouraging companies to issue debt and pursue acquisitions under the guise of long-term planning rather than addressing poor management. He argued that this approach benefited BlackRock by increasing assets under management while shielding underperforming executives from accountability.

Using Motorola Solutions Inc. (NYSE:MSI) as an example, Icahn said the company had lost $9 billion in value before activists intervened. He claimed BlackRock refused to support his campaign to overhaul the company, adding, “We saved the company. Wouldn’t vote for me.”

Icahn also argued that BlackRock’s immense influence, managing about $4.8 trillion at the time, allowed it to protect entrenched management teams instead of supporting shareholder-driven reforms. “….you use it to protect these guys as long as they do what you want,” said Icahn.

While emphasizing that he respected Fink personally, Icahn said BlackRock’s voting practices were “very dangerous” for U.S. capital markets because they discouraged accountability and meaningful corporate change.