Apple Inc. will be holding its annual shareholder meeting Wednesday, at 10:00 AM PST at the company’s Cupertino headquarters. On tap is the reelection of Apple’s board of directors and a pair of important shareholder proposals regarding leadership issues. Apple has not said if CEO Steve Jobs will be at the meeting — Mr. Jobs is on an open-ended medical leave of absence.
The first shareholder proposal on the ballot is backed by various institutional investors, including the pension fund used by the Laborers’ International Union of North America (LIUNA). The proposal would require Apple’s board of directors to reveal its succession plan for the company’s top leadership, including the role of CEO.
The labor union announced on February 3rd that its proposal had won the backing of Institutional Shareholder Services, a third party consultancy on issues of corporate governance.
This issue has been a hot one for some shareholders for some time, but Apple has resisted previous proposals and shareholder requests on the grounds that revealing the plans it has in place would give the competition an advantage and that it could be disruptive in the internal ranks of the company’s executives.
The other major shareholder proposal would change the election process for Apple’s board of directors from a plurality vote to a majority vote. It is being pushed by the California Public Employees’ Retirement System, another major institutional investor in Apple.
The current system allows shareholders to withhold support for a given board member, but not actually vote against their selection. The practical effect is that a board member can be elected or re-elected with as little as 25% of shareholders voting in favor of that candidate.
This is another hot-button issue for some shareholders, and one that is also resisted by Apple’s leadership. Apple’s argument against the proposal is that the mechanics of California laws governing corporate governance could allow even a board member that enjoyed overwhelming support from shareholders to be forced out if not enough shareholders actually cast ballots.
Similar proposals have failed in the past, and considering Apple’s outstanding performance and record-high share prices the company has enjoyed even after Steve Jobs’s medical leave of absence, few expect it to pass this time around.
The Mac Observer will be on hand for the meeting to report on these topics and the antics of perennial local “character” shareholder and climate change denier Shelton Erhlich.
*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.