Apple to Elect Board by Majority After Investor Pressure
Chief Executive Officer Tim Cook, speaking today at an annual investor meeting, also said Apple was continuing “active discussions” about what to do with its $97.6 billion in cash and investments, saying the cash hoard was “more than we need to run a company.”
Investors at today’s meeting passed a nonbinding measure in favor of the board-election change. A similar initiative was approved at the gathering last year, though it wasn’t adopted by Apple. The company changed its stance after previously saying that the change would cause board members to lose their seats in cases where too few shareholders cast votes.
Some investors also are demanding that Apple return cash to investors in the form of a dividend or stock buybacks. The money pile, which includes short- and long-term investments, has risen more than 63 percent since last year’s annual meeting of shareholders.
“The board and management team are thinking about this very deeply,” Cook said.
The move would provide a long-term boost to Apple’s stock price by bringing in a new class of investors who only buy shares in companies with a dividend, according to Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co.
In the years since Apple last offered a dividend, the introduction of the iPod, iPhone and iPad have turned the company into a profit engine, letting it accumulate a stockpile of cash and investments that exceeds the market value of Citigroup Inc. Jobs had long spurned calls to return the money to investors.
Shares of Cupertino, California-based Apple rose less than 1 percent to $516.39 at the close in New York. The shares have climbed 28 percent this year.
The meeting was the first since the death of Jobs. Even before Cook’s promotion to the top job in August, Cook served as Apple’s main liaison to shareholders, a role Jobs avoided.
All of the board members on the slate were elected: Genentech Inc. veteran executive Art Levinson, who serves as Apple’s chairman; Intuit Inc. Chairman Bill Campbell; former U.S. Vice President Al Gore; Walt Disney Co. CEO and Chairman Bob Iger; former head of Northrop Grumman Corp. Ron Sugar; J. Crew Group Inc. CEO and Chairman Mickey Drexler; Avon Products Inc. Chairwoman Andrea Jung; and Cook.
Investors also voted down a proposal calling for Apple to release a “conflict of interest report” that outlines how board members may financially benefit from company decisions. Another rejected measure would have asked Apple to release a report on its political contributions and expenditures. The company opposed those initiatives.
Cook said Facebook Inc., the world’s largest social- networking company, is more of a “friend” than a competitor. Apple and Facebook “could do a lot more together,” he said in response to a question from a shareholder.
Turning the conversation back to cash, an investor asked whether Apple would consider using its cash to buy Greece, which faces a debt crisis.
“We’ve looked into many things,” but not that, Cook said.