Apple announced a significant change in its corporate bylaws that will make it easier for shareholders to nominate candidates for Apple's board of directors. According to The Wall Street Journal, Apple filed amended bylaws with the Securities and Exchange Commission (SEC) giving shareholders "proxy access" for a limited number of board positions.
Proxy access is a new trend in open governance, and The Journal said that Apple was one of the most prominent to adopt the policy. It allows shareholders to include nominations on a company's proxy statement, making it more likely those candidates can get voted on by other shareholders.
Activist shareholders of all persuasions—predatory investors, social activists, and fans of a company—want proxy access because it gives them more opportunities to change the direction of a corporation.
Usually, that is. In Apple's case, a shareholder or group of shareholders who have owned 3 percent or more of Apple's shares for three contiguous years to nominate up to 20 percent of Apple's directors. Apple has a remarkably small board for a company its size at just eight members, meaning that shareholders can nominate just one candidate. That leaves Apple's chosen nominees firmly in control of the company.
James McRitchie, an activist investor who was pushing this change for Apple, said that he didn't want Apple to adopt proxy access because he expected to use it, but because Apple is a leader in the corporate world.
"We need to get proxy access on the books where it’s really needed," Mr. McRitchie told The Journal. "One way to do that is to get it where it’s not needed and point to those companies."
In general, Apple's shareholders greatly support the company's management, and for good reason. Apple's stock is well off its high, but it has still risen tremendously during Tim Cook's stewardship. That doesn't stop Carl Icahn from pushing for measures that he thinks will make him more money, and it won't stop activists on the left and right trying to push their agendas onto Apple.
Having attended many $AAPL shareholder meetings and covering them extensively, I'd be shocked if a shareholder nomination not supported by Apple's management could get elected in today's environment.
*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.