Apple's annual shareholder meeting is scheduled for Wednesday morning at the company's Cupertino headquarters, and this year may see executives facing more pressing questions thanks to a lawsuit that successfully blocked a planned vote on whether or not preferred stock options should require shareholder approval.
The lawsuit was filed by hedge fund investor David Einhorn and his Greenlight Capital because he feels Apple should be giving back more money to investors and that preferred stock is the way to go.
His lawsuit targeted the fact that Apple had planned on including the measure on a ballot along with two other topics, which he claimed violated U.S. Securities and Exchange Commission rules by bundling multiple proposals into a single vote. Judge Richard Sullivan ultimately agreed and even went so far as to grant an injunction blocking a vote on that particular measure.
Apple CEO Tim Cook called Mr. Einhorn's lawsuit a "silly sideshow," and questioned why he would want to block a vote on "something that's good for shareholders." Mr. Cook said that by requiring shareholder approval before issuing any preferred stock options, Apple was adding accountability instead of leaving the door open for executives to issue what he said amount to blank check shares.
What Mr. Einhorn is hoping for from Apple is a perpetual quarterly payout of US$0.50 per preferred share, and called his Gobstopper stock the "iPref."
"This is not complicated, it's merely unfamiliar," he said. "Here's the product that Apple doesn't yet know it needs."
The controversy he stirred up will likely play out, at least to a degree, during the shareholder meeting this morning with questions from attendees. Apple has become somewhat more straightforward with its responses to investors, journalists, and the public over the past year, so it's possible we'll get some clear answers about what the company has planned -- but don't expect any surprise announcements about future product plans.
With over $137 billion in cash, some investors think it's time for Apple to give more back than they get through the company's new dividend program. At least a few of those people will be at today's shareholder meeting and will be expecting some answers.
Apple's stock is currently trading at $445.76, down 3.21 (0.72%).