Apple is facing another shareholder lawsuit. Reuters reported that Brian Gralnick of Elkins Park, Pennsylvania has sued Apple over two proxy proposals the company's management has put forth for its 2013 shareholder meeting on February 27th. The suit shares some similarities with a suit from David Einhorn's Greenlight Capital.
The first proposal targeted in Mr. Gralnick's suit would prohibit Apple from issuing preferred stock. Apple CEO Tim Cook told Goldman Sachs analyst Bill Shope on Tuesday that this proposal would not so much eliminate Apple's ability to issue preferred stock, but rather prevent Apple from doing so without shareholder approval.
David Einhorn wants Apple to issue a preferred stock that pays a perpetual 4 percent dividend to its existing shareholders as a way of returning more of Apple's immense cash hoard to those shareholders. Mr. Gralnick is also interested in forcing Apple's hand in returning more of its money to shareholder, and wants his case to be part of a hearing being held for the Greenlight suit on February 19th.
Tim Cook characterized Greenlight's suit as a "silly sideshow," defending his company's efforts to return profits to shareholders as prudent and considered.
The other proposal upsetting Brian Gralnick refers to an upcoming say-on-pay shareholder vote for Apple executives. The lawsuit argues that Apple's management has failed to disclose details on how executive pay is determined.
$AAPL ended the day slightly down at US$467.01, a loss of $0.89 (-0.19 percent), on light volume of 16.96 million shares trading hands.
*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.