The Laborers’ International Union of North America (LIUNA) and Institutional Shareholder Services (ISS) announced Thursday that the ISS was backing an AAPL shareholder proposal endorsed by the union that would require the company to disclose a succession plan for the company’s CEO spot on an annual basis. The move adds to the institutional investor weight behind forcing Apple to make such a plan public.
“All companies should have succession planning policies and succession plans in place, and boards should periodically review and update them,” said in an analysis of the proposal. “ISS believes that shareholders would benefit by having a report on the company’s succession plans disclosed annually. Such a report would enable shareholders to judge the board on its readiness and willingness to meet the demands of succession planning based on the circumstances at that time.”
The ISS is an independent advisory company that focuses on corporate governance, and the group’s customers are institutional investors, such as the pension funds where the LIUNA has its members funds invested. It is one of those funds - the Central Laborers’ Pension Fund - that has submitted the shareholder proposal, and the union backed it on behalf of its members.
For its part, Apple has resisted any and all attempts from shareholders large and small to publicly address the issue of a succession plan, though shareholder angst over the issue has steadily increased since it was first revealed that CEO Steve Jobs had undergone surgery for a previously undisclosed case of pancreatic cancer, and then later survived a liver transplant during a second medical leave of absence.
Pressure has mounted even more when it was announced in January that Mr. Jobs was taking his third medical leave of absence.
In January, LIUNA issued a statement trying to make the case for Apple to change its position on this issue, saying, “We believe Apple has misconstrued our proposal – we do not expect them to provide specific names of future executives, but merely demonstrate they have a plan in place for naming one. This proposal would not only benefit our members’ retirement savings, but also would give reassurance to other Apple shareholders and help the company.”
The current proposal is on the ballot for AAPL investors for the annual shareholder meeting that will take place on February 23rd, 2011.
*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.