Apple Inc. said a shareholder proposal that would make it harder for unopposed directors to be elected passed with a vote of 73 percent, including abstentions -- a sign that investors want more control over the board.
The measure, which Apple’s management opposed, stipulates that board members need a majority of the vote to win election, rather than just a plurality. The initiative won 422.5 million votes at Apple’s shareholder meeting yesterday, with 151.5 million against it, Apple said in a filing. An additional 1.74 million abstained from voting.
A separate proposal that would have asked the board to reveal its succession plan for Chief Executive Officer Steve Jobs was rejected by almost 70 percent of votes cast, including abstentions. Apple argued that the measure would expose company secrets to competitors and make it harder to retain executives.
The success of the majority-vote proposal, backed by the California Public Employees’ Retirement System, suggests that investors want a bigger role in choosing board members. Corporate-governance advocates have complained in the past that Jobs had too much sway over directors. The close-knit nature of the board may have resulted in the limited disclosures about Jobs’s health, Jeffrey Sonnenfeld, a dean at Yale University’s School of Management, said last year.
‘Not a Coronation’
“We’re asking for an election, not a coronation of the board,” Anne Simpson, a senior portfolio manager at Calpers, said in a statement yesterday. “An election where you can be voted in without a majority is unworthy of a great company like Apple.” Calpers, the largest U.S. pension fund, owns 2.6 million Apple shares, according to the statement.
In arguing against the measure, Apple management said board members would risk losing their seats simply because too few shareholders cast votes.
Apple shares gained 26 cents to $342.88 at 4 p.m. New York time on the Nasdaq Stock Market. The stock has climbed 6.3 percent this year.
“Shareholders deserve to know the company has a plan in place,” Jennifer O’Dell, assistant director of corporate affairs for the union, said before the vote. “We want to know that companies are considering these issues.”
Yesterday’s meeting, held at Apple’s headquarters in Cupertino, California, was the first time the board was available for questioning since Jobs announced a leave of absence on Jan. 17. He handed day-to-day operations to Chief Operating Officer Tim Cook for the third time in seven years.
Apple shareholder Kirk DeBernardi, of Brentwood, California, said a public succession plan isn’t necessary.
“They are secretive, but it doesn’t worry me,” he said at the meeting yesterday. “Companies can have their own private plans.”