Icahn’s Proposal for $50 Billion Apple Buyback Opposed by ISS

Activist investor Carl Icahn’s push for Apple Inc. (AAPL) to buy back $50 billion of stock this year was opposed by an influential proxy-voting service, which said such a motion would “micromanage” how the company uses capital.

Investors should vote against the non-binding proposal, Institutional Shareholder Services Inc. said in a Feb. 9 report. Icahn said last month he increased his Apple stake by $500 million to about $3.6 billion.

The billionaire Icahn said in December he would seek a vote to push Apple to repurchase more stock and unlock cash held by the Cupertino. California-based company, which had $159 billion in cash and marketable securities as of Dec. 28. The iPhone maker bought $14 billion of its own shares after reporting earnings on Jan. 28, taking buybacks to more than $40 billion in the past 12 months.

“While the board has failed to articulate a strategy for addressing its long-term capital needs, it has returned the bulk of its U.S.-generated cash to shareholders,” ISS, a subsidiary of MSCI Inc. (MSCI), wrote. “The board’s latitude should not be constricted by a shareholder resolution that would micromanage the company’s capital allocation.”

The Wall Street Journal last week published an interview with Apple Chief Executive Officer Tim Cook in which he outlined the most recent share repurchase.

“Keep buying Tim! You still have $145 billion cash,” Icahn said in a message on his Twitter Inc. account last week.

Apple has recommended investors vote against Icahn’s proposal.

ISS also opposed shareholder-proposed resolutions for Apple to establish a committee on human rights, report on trade associations and organizations that promote sustainability, and grant proxy access.

To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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