No Fireworks at Tame $AAPL Shareholder Meeting [Update]

| Analysis

$AAPLThere were no fireworks at Apple's annual shareholder meeting on Wednesday, as shareholders backed management's proposals and blocked activists proposals. While much ado has been made about apple returning more money to shareholders, shareholders in attendance weren't making any demands at the meeting.

Nuts & Bolts

All of Apple's board of directors were re-elected with overwhelming majorities, though some were more overwhelming than others. The numbers below are the proxy votes tallied before the meeting. The final numbers should be similar.

  • Bill Campbell: 98.4 percent
  • Tim Cook: 99.1 percent
  • Millard Drexler: 87.9 percent
  • Al Gore: 87.8 percent
  • Bob Iger: 99 percent
  • Andrea Jung: 84 percent
  • Ronald D. Sugar: 98.6 percent
  • Art Levinson: 98.1 percent

Five of those directors received 98 percent approval or higher. The three who didn't represent very different stories.

Al Gore: Former U.S. Vice President Al Gore is a punching bag for the political right, many of whom hate him. While Apple's shareholders seem to skew left of center compared to some other large companies—at the very least, this is very true of the people who attend the shareholder meetings—there are plenty of conservative shareholders counted amongst their number, too.

Some, like Silicon Valley fixture Shelton Ehrlich, have often voiced their displeasure with Mr. Gore's presence on the board. This year, for instance, the comment period for electing Apple's board featured a shareholder arguing that Mr. Gore shouldn't be on Apple's board—or any "decent" board—because he sold his Current TV network to Al Jazeera.

Much of his relatively low shareholder approval can be attributed to folks with a vehement philosophical disagreement over Mr. Gore's politics and his stance on climate change.

Andrea Jung: Ms. Jung is the former CEO of Avon, though she remains a "special advisor" to Avon's board of directors. She stepped down from that position in late 2011 in the wake of a bribery scandal related to Avon's entry into the Chinese market. She is the only female on Apple's board, indeed, she's the only member who isn't a white male, and she kept her Apple board seat, but she's had her critics since her downfall at Avon.

Millard Drexler: I'm at a loss to explain Mr. Drexler's low vote, at 87.9 percent. He's the CEO and Chairman of J. Crew, and he has been credited with working with the late Steve Jobs and former retail chief Ron Johnson in developing the early versions of the Apple Store retail locations.

Proposals

Apple's shareholders voted overwhelmingly (99.4 percent) to continue Ernst & Young's role as auditor. This was a routine proposal (#3). Apple voted 61.05 percent to enact a non-binding (i.e. pointless) advisory resolution to approve executive compensation. This was proposal 4.

Shareholders rejected proposal al #5, an activist proposal that would require executives to retain ownership of 33 percent of any stocks they earned in compensation until they retired ("hold to retirement requirement").

Shareholders also rejected proposal #6, an activist proposal that would require Apple to have a board of human rights to monitor the human rights of its workers. As left-of-center as Apple's shareholders may be (see above), they are clearly not interested in this issue. This proposal received only 5.6 percent of the vote.

Less Is More?

One interesting aspect of Wednesday's meeting is that Apple CFO Peter Oppenheimer wasn't in attendance. At past events, Mr. Oppenheimer and/or his predecessor Fred Anderson took the stage alongside CEO Tim Cook, and before he passed away, Steve Jobs. Mr. Oppenheimer may have been in attendance in the audience with other Apple execs, but he did not take the stage today.

Tim Cook

Apple CEO Tim Cook took the stage with aplomb and confidence. In his opening comments, he immediately addressed Apple's stock decline over the last five months, saying, "I want you to know I don't like it, either."

He reiterated his and predecessor Steve Jobs's position that Apple is focused on the long term, and he said that Apple believed in focusing on making the best products. If you do so, he said, revenue and profits will fall into place.

Mr. Cook bragged about Apple's growth, noting that Apple's revenue growth of $48 billion in fiscal 2012 was, "more than the growth of Google, Microsoft, Dell, HP, RIM (now called BlackBerry), and Nokia combined."

He reiterated his comments from January's conference call with analysts that Apple's $55.6 billion in revenue in the December quarter was the largest quarter of any tech company in history.

Shares of $AAPL closed lower on Wednesday, ending the day at $444.57, down $4.40 (-0.98 percent), on heavy volume of 20.9 million shares trading hands.

Stay tuned for additional coverage from the meeting at The Mac Observer.

[Update: This article was updated with more information on Al Gore's election to Apple's board. - Editor]

*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.

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Comments

Hagen

A pleasure to see Mr. Shelton Erlich stand up again this year. He was present at last year’s meeting, but (uncharacteristically) didn’t say anything then. I believe this marks his fifth attendance and fourth commentary against Mr. Gore.

Bosco (Brad Hutchings)

How much capital was tied up to support that revenue growth of $48B? That is the issue that investors are having which is putting a drag on the stock price. Investors are implicitly saying that they would expect better returns from the combination of 10 companies each 1/10 the size (market cap) of Apple than from Apple itself.

As for Gore, remember the good old days when people hated him because his wife was a censorious c-word?

llg4nlp

Bryan, I thought I saw Peter Oppenheimer there, sitting with the other execs.  It looked to me as though he’s lost a little weight, which would be good.

James McRitchie

The nonbinding resolutions for “say-on-pay” and mine on hold 33% of equity pay until retirement were anything but pointless. 40% voting against the pay package and 30% voting hold until retirement indicates a substantial minority is displeased with pay practices that are too frequently not tied to performance and that reward for short-term bumps too much.

See http://proxydemocracy.org/data/proposals/347160 for how some institutional investors voted.

Shelton Ehrlich

This is the best coverage of the meeting I’ve seen.  I’m pleased I’ve found your site.  I’ll be checking often.

Bryan, I think Al Gore’s vote this year was low because of the Al Jazeera.  Nothing else has changed since three years ago when, after my comments, a fellow got up to praise Gore to very loud applause.  Last year Gore’s entrance drew applause but not this year.

The reason I was silent last year (and the year before) is that I was got to the meeting too late to get into the main room.

McRitchie’s proposal was reasonable.  The first time I saw a similar proposal was at an Oracle meeting and the Nathan Cumming’s Foundation set the hold-to-retirement at 75%.  But, I think he’s wrong on the reason the say-on-pay vote was so low.  The stock price dropped and that vote was the only way an individual shareholder could express displeasure.

Shelton Ehrlich

Oh, no.  Please fix the typo’s.  Thanks

James McRitchie

Yes, Ehrlich is correct that some probably voted against pay just to express displeasure with stock price drop. I doubt that was true of institutional investors who own 65% of the shares.

I feel like I accomplished something. Last year I proposed say on pay for directors. It got few votes but Apple cut the pay of some directors in half. This year after I submitted my equity pay retention proposal, Apple changed its policy and now requires executives to hold 3x salary in stock http://www.macnn.com/articles/13/02/28/change.may.have.come.from.persuasion.by.calpers/

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