It turns out Apple shareholders think Apple is doing OK, as an activist shareholder proposal was overwhelmingly rejected by 98.3% of shareholders. And the reason should be obvious: Apple is one of the singularly most successful companies in the history of modern commerce, and shareholders don’t want anyone monkeying that up.
Apple held its annual shareholder meeting in Cupertino Friday, and the conservative shareholder proposal was the only proposal to elicit any commentary from shareholders on hand for the event. It was Shareholder Proposal 5, which was essentially an attempt to redefine diversity at Apple as picking people who think differently (as long as that different thought is conservative in nature). The purpose of which was to get more conservatives in place within the world’s most profitable company.
As noted above, it was rejected by shareholders, with 98.3% of them voting against the proposal. It did, however, elicit 15 minutes of commentary from several shareholders, with a mix of reactions ranging from supportive to unsupportive to confused.
Shelton Ehrlich Rides Again
Longtime conservative Silicon Valley investor Shelton Ehrlich spoke in favor of it in a rambling speech that included calling anti-racism watchdog The Southern Poverty Law Center a hate group. Apple gave a million dollars to that group, which apparently chapped Mr. Ehrlich’s hide. You may remember Mr. Ehrlich from such past shareholder meetings for demanding something be done about Al Gore being on Apple’s board of directors, railing against Apple’s environmental efforts, and supporting the National Center for Public Policy’s efforts to force Al Gore to admit to what they believed was a conflict of interest. Mr. Ehrlich really doesn’t like Al Gore.
Comments on Shareholder Proposal 5
Be that as it may, the political nature of Shareholder Proposal 5 is the one proposal that garnered even one comment, and all told I think it got eight comments. And despite the landslide votes against the proposal, those comments were mixed.
Apple itself didn’t respond to those comments, but during the Q&A session, CEO Tim Cook mentioned the discussion twice. The first simply acknowledged that the discussion took place. But the second time was in response to a shareholder who claimed to have a conservative friend employed at Apple. According to the shareholder, that friend was “living in fear,” apparently from the left wing fascists that make up Apple.
Tim Cook took this comment seriously, and at first, he focused on direct advice, which was that her friend should contact Tim Cook or VP of People Deirdre O’Brien. Because, he said, Apple was inclusive place and was a home for all of its employees, regardless of who they were.
He spring-boarded from there into one of those impassioned, off-the-cuff statements where he really comes alive. The first time I saw that was when he told the above-mentioned National Center for Public Policy that Apple would be investing in the environment and in going green, and that any shareholders who didn’t like that should not invest in Apple.
This time, it was still about Apple’s core values, but one essentially centered on how Apple—and Tim Cook—have a mixed set of guiding principles.
Apple CEO Tim Cook Comments on a Conservative Employee Living in Fear
Look, we are a home for everyone. One of our values that are deeply held by virtually everyone in the company is that we are open. We are open to people from all walks of life, from all ethnic backgrounds, to all religions. To all polical views. To sexual orientations. We are open.
So I would encourage them to come talk to me if they have an issue, or come talk to Deirdre [O’Brien].
On this point, I know we had a lot of discussion earlier. I’d like to share my point of view on this. We live in a very polarized world today. And, unfortunately, too often, people are identified in those respective camps, and the dialog that should take place to find that 99% or the 95% commonality or areas of interest doesn’t happen.
I don’t believe in that polarized world. I think it’s bad. I think it’s something I would love to help blow up. I think it’s not good for any of us.
What we do is we engage with people in all political parties. I’m a big believer in engagement. You can imagine if you’re a gay man from the South, you don’t exactly ask everybody whether you agree with that lifestyle, or you don’t have a lot of friends.
So I don’t check people at the doors as to who they are and what they believe. I care about skills and capabilities and contributions. I think that for us, we focus on policy things. I find that we sometimes are more in the thinking of one group and sometimes in another. And sometimes, all groups don’t like us. And sometimes, everybody can agree.
We are pro-environment. We are pro-immigration. We do believe in diversity in a strong way, in a broad way. We’re capitalists. We believe in privacy. We’re strong believers in privacy. And privacy has its fans from all walks of life and its detractors in all walks of life.
These things to us are not political things. They’re policies. We don’t look at the politics of it, we think about the policy of it.
I recognize that in a polarized world, many people don’t see in it. They see a policy and then align it to a particular group. But that is now how we look at it internally.
Success Breeds Permission
All of which sounds great to me, and when Mr. Cook concluded by noting that Apple doesn’t have a PAC and doesn’t donate to political parties, the audience erupted in applause.
But there’s a broader point here. Activist shareholders on the left and right have tried to pull Apple as a company more towards their way of thinking. But Apple is successful. Fabulously so. And that success comes with implicit permission for management to manage.
Many conservatives hate that Apple is so green, and they probably hate even more that Apple is both green and profitable. It is the ultimate fly in the ointment to those who argue being green costs too much. And if Apple wasn’t making more money than everyone else in history, conservative activist shareholders would find lots of cranky shareholders clamoring for Apple to quit wasting its money being green. The same thing is probably true about left-leaning shareholder proposals like the one from the AFL-CIO a few years back that would have forced Apple to take a stand on healthcare issues.
Heck, even activist shareholder proposals designed to force Apple to give shareholders more of a voice in the company’s management get short shrift from those shareholders because [DON’T MESS WITH A GOOD THING!]. Shareholder Proposal 4 on this year’s ballot would have forced Apple to give two board seats to shareholder nominees. This is something shareholders should probably want, but they rejected it with 70.5% of the vote. Past proposals have met the same fate at Apple.
Why? Because Apple makes tons of money. Literally, tons of money.
While that remains the case, Apple’s management team will continue to get free rein from the company’s shareholders to keep doing what’s apparently working.