Apple Looks to New SEC Guidance as Tool for Bypassing Some Shareholder Proposals

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$AAPL LogoApple is looking to new guidance from the U.S. Securities and Exchange Commission (SEC) as a tool for bypassing some shareholder proposals. Reuters reported that Apple has asked the SEC for permission to skip four shareholder proposals under the premise they’re part of Apple’s “ordinary business.”

If successful, Apple could be leading a new charge against activist shareholders keen on using shareholder meetings to advance pet projects. Apple argues it’s already working on these four particular issues, while shareholder groups worry that a favorable SEC ruling for Apple could make it easier for companies to ignore almost anything.

Corporate Father Knows Best

The SEC issued new guidance on November 1st saying that company boards are, “generally best positioned to decide if a resolution raises significant policy issues worth putting to a vote.”

Among the shareholder proposals put forth by $AAPL shareholders are four dealing with issues such as climate change and diversity. These are legitimately two areas that Apple does spend a lot of time on, but one proposal would require Apple to set up a “human rights committee.” Its purview would include global issues such as censorship. Apple has been criticized in some quarters for pulling VPN apps from the Chinese App Store because Chinese law didn’t allow them.

Another shareholder proposal would require Apple to report on its ability to cut greenhouse gas omissions. This is another area where Apple is a leader in the electronics industry

Neither proposal has a snowball’s chance in hell of passing. Shareholders in general usually don’t care about these issues, and Apple’s shareholders in particular have demonstrated time and time again that they trust Apple’s decisions in both areas. Some shareholders, of course, want Apple to do less.

And so Apple has said to the SEC that its board regularly takes up these issues, and that these shareholder proposals are therefore not needed.

The SEC hasn’t commented, nor has it issued a ruling yet. I suspect it will grant Apple’s request. What remains to be seen is what kind of repercussions that ruling would have on the corporate world.

*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.

One Comment Add a comment

  1. geoduck

    Mixed feelings.
    On one hand shareholder proposals are a good way to bring issues to the attention of the corporation.
    On the other hand so many of them are really really stupid.

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