Apple Inc on Thursday adopted a measure long desired by investors and corporate governance activists, granting its shareholders a bigger say in the appointment of directors to the board of the world’s most valuable technology company.
CEO Tim Cook also repeated that he has been “thinking very deeply” about investors’ demands that the consumer electronics company return a portion of its US$98 billion in cash and securities to shareholders via a dividend.
Investors are betting on the rising likelihood that some of that enormous war chest could be doled out this year, since Cook told investors last week that discussions around that hoard had intensified.
“We’ve been thinking about cash very deeply,” he said, echoing previous comments. “Frankly speaking, it’s more than we need to run the company.”
At its annual shareholders meeting in Cupertino, California, Apple finally acceded to demands from US pension fund Calpers and other major investors that it require unopposed directors to secure a majority-share vote before getting elected to the board.
Apple general counsel Bruce Sewell said the firm had previously resisted the change because it creates legal complications.
“But this is Apple and we don’t let complexity get in our way,” he said.
The proposal’s adoption predictably pleased Calpers, the largest US pension fund that has long sought support for such a measure to be adopted at scores of other US corporations.
Speaking to shareholders and executives, Calpers portfolio manager Anne Simpson invoked the words of former British prime minister Winston Churchill.
“We think Apple deserves the best, we want to keep Apple fresh,” she said. “Democracy is a wonderful thing. Despite its complexity and challenges, as Churchill said, it may be the worst of all systems until you consider the alternatives.”
Apple said directors who do not manage to secure a majority vote will voluntarily resign their positions.
The meeting comes days after Apple touched a historical high of US$526.29, cementing its ranking as the most valuable US company with more than US$450 billion in market capitalization.
Some analysts say the stock may even scale new heights next month, when the firm is expected to unveil a new version of its best-selling iPad.
Apple’s yearly powwows with shareholders at 1 Infinite Loop are generally contention-free affairs, with executives mostly deflecting questions about upcoming products — whose new features are guarded fiercely.
One shareholder nonetheless tried to find a way around executives’ wall of silence about its pipeline, including rumors of an Apple TV debuting this year to take on market leader Samsung Electronics .
“I just bought a 55-inch LG TV for the Superbowl and I have 60 days to return it. Should I return it?” one shareholder asked as laughter erupted.
Cook declined to comment.
Away from its gadgets and bottom line, Cook continues to grapple with negative publicity surrounding accusations of inhumane working conditions at the company’s manufacturing partners in China.
A handful of protesters gathered outside the meeting, holding up small placards urging Apple to make an “ethical” iPhone.
The company has been trying to direct the spotlight on its efforts to urge partners to treat their employees better.