Fri, Feb 25, 2011 - Page 10 News List

Apple succession plan proposal rejected

A ROSY FUTURE?The fate of Apple Inc is tied to how the iPhone and iPad maker handles the eventual departure of its iconic co-founder and ailing chief Steve Jobs

Reuters, CUPERTINO, CALIFORNIA

Apple Inc shareholders rejected demands that the company disclose a succession plan for ailing chief Steve Jobs and the company kept mum on how many had backed the proposal.

The reluctance to reveal details of the vote on a proposal by the Central Laborers’ Pension Fund raised speculation that a sizable contingent of shareholders may have supported it and prompted an affiliated group to push for more disclosure.

“It appears likely that a large number of long-term, institutional shareholders voted in its favor,” the Laborers’ International Union of North America said in a statement following the meeting.

The fate of Apple, among the world’s most powerful technology companies, is tied to how the iPhone and iPad maker handles the eventual departure of its iconic co-founder and leader. Last month, Jobs took a third medical leave for unknown reasons, with many not expecting him to return to lead the company he founded in 1976.

However, in a rare show of activism for a group of investors often content with Apple’s sizzling growth and lofty share price, shareholders approved a proposal giving them a bigger say in appointing directors — against the company’s recommendation they reject the proposal. About 74 percent of votes cast favored a proposal that unopposed candidates for the company’s board receive a majority of votes to win election, according to the fund.

The largest US pension fund is calling on 58 companies to adopt majority rather than plurality voting that allows unopposed directors to be elected easily. The US$226 billion fund painted Wednesday’s result as a victory for transparency and investor interests.

“It was very important that shareowners spoke, and spoke with conviction,” Central Laborers’ Pension Fund senior portfolio manager Anne Simpson said after the vote. “The message was loud and clear.”

Even with Jobs sidelined, shareholders voted down a proposal to outline a plan for who will succeed the visionary chief and not one shareholder asked about Jobs or his health, in an apparent sign of their growing confidence in the executive bench.

Some investors have urged the company to make better use of its cash, whether via buybacks or dividends.

Apple chief financial officer Peter Oppenheimer told shareholders that the firm wants to retain its cash so that it can “very quickly take advantage of a strategic opportunity that would come along, and we’re constantly keeping our eyes open.”

Apple is engaged in a battle in the smartphone market with Google, whose Android operating system was installed on more devices than Apple’s for the first time last year. The company dominates the fledging tablet computer market it helped create with the iPad, but it will confront a number of challenges this year.

Apple sent invitations to a special event on Wednesday. The company is widely expected to introduce a new, thinner iPad at the event.

The company will also launch the fifth iteration of its popular iPhone as rivals from Motorola Mobility to Samsung Electronics apply pressure.

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