Print 47 comment(s) - last by 91TTZ.. on Mar 4 at 10:07 AM

Unrest boils at annual shareholder meeting, but things remain civil

Apple, Inc. (AAPL) CEO Tim Cook won reelection to Apple's Board of Directors by a 99.1 percent vote.  Apple is enjoying record profitability and is rumored to be working on a new project -- a smart watch.

I. Cook Acknowledges Disappointing Share Prices Amid Lawsuit

And yet share prices have been on a downward slide, dipping as "low" as $435 USD per share in recent weeks.  Some investors are worried that future Apple products won't be as big hits as the iPhone and iPad; others are angry that Apple is sitting on $137B USD in cash and securities, yet is failing to grow share buyback and dividends at an equivalent pace.

At the annual shareholder meeting, Tim Cook tried to placate his critics, arguing he was as mad as the next guy about low share prices.  He comments, "I don't like it either. The board doesn't like it. The management team doesn't like it.  What we are focused on is the long term. This has always been a secret of Apple."

Tim Cook
Tim Cook claims he shares shareholders pain about dropping stock prices.
[Image Source: Bloomberg]

Such a frank acknowledgement still sounds strange coming from Apple.  Mr. Cook's predecessor, the late Steve Jobs typically would refuse to apologize for anything.  By contrast, since taking the reins, Mr. Cook has been "all apologies" as the Nirvana song goes.

In a way that makes sense.  Mr. Cook himself was awarded one million restricted stock units last year (worth around $450M USD at current share prices); that fortune is hurt by low share prices, but could be boosted if share prices go back on the uphill climb.

However, top shareholder David Einhorn, who manages Greenlight Capital Re., Ltd. (GLRE), made a powerful statement by refusing to show up at the meeting.  Last Friday his firm scored an injunction invalidating a shareholder vote to scrap a proposal for Apple to issue preferred stock at its discretion.

Mr. Einhorn is pressuring Apple to "share the love", so to speak, by issuing preferred stock shares that would yield a fixed 4 percent annual dividend.  He claims his so-called "iPref" proposal would reward Apple's investors with more profit sharing, while not diluting the primary pool of shares.

II. Shareholders Stay Civil, But Send a Message to Apple

Shareholders flexed their muscle on other issues as well.  The shareholders ratified a proposal that would force Apple executives to hold more stock, which could push them to share more profit.  They also passed a measure that will force the company to commit a board committee on human rights, which will investigate allegations of abuse at the factories that make Apple products in China.  Apple opposed both proposals.

On the same note, Apple many shareholders voted against a pay raise for top executives, including Tim Cook.

California Public Employees Retirement System (CPERS), a large institutional Apple investor, voiced support for Mr. Einhorn's iPrefs proposal -- also known among shareholders as "Proposal 2".  Senior Portfolio Manager Anne Simpson said it was unfortunate that the issue was not put to a vote at the meeting.  She is quoted as saying, "We know there is hot debate going on with cash.  We are willing and happy to wait."

David Einhorn
Top Apple shareholder David Einhorn (manager of Greenlight Capital) is leading a push to force Apple to open up its treasure chest. [Image Source: Value Walk]

Tim Cook acknowledged the measure was being considered, while arguing that Mr. Einhorn's lawsuit to force the issue was a "silly sideshow".

While the mood was tense during the meeting, it remained mostly civil and there were moments of levity.  One shareholder pointed out that the Santa Clara, California Apple store lacked a bathroom.  Tim Cook agreed that was a problem and promised to look into it.

Sources: Reuters, Forbes

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: Seriously
By Tony Swash on 3/3/2013 3:33:51 PM , Rating: -1
Agree if you had one person mention Apple your conversation was dominated with all Apple talk now its but a whisper and they are either in denial or you can hear the retreat in their voice as they know there are products on the market that rival them or are flat out better. The confidence that Apple was way ahead of everyone is gone to but a few fans. I just read an article that Apple tablet sales are starting to slide in market share which now you have iphone 5 sales warnings, tablet sales warnings, and now you have comparable products at nearly half the price of Apple in an economic recession. Im a huge fan of Microsoft but I use an Android tablet and like it. I especially love that I get all the functionality I want without the hefty price. This is why I think Microsoft failed with Surface RT because the price should have been $300 or less at $500 for RT its not smart. Im also not sure I need another tablet either I don't want to play crisis on my phone or tablet. I want to play words with friends or something along those lines if I was to play graphic intensive games and get serious I want to do it on my PC.

BTW Windows Phone is now 3.1% in the US. Doesn't sound like much but market share is increasing now even in the USA.

I personally believe Android has the best Tablet OS just have to get a good hardware manufacturer. I still believe Microsoft has the best Phone OS and to me personally again the Nokia 920 is a slightly better device than the Samsung Galaxy S3. But were about to go another round so hit the reset button. To me if your considering an iPhone your old and looking for an entry level smartphone if your more serious your looking for the next Samsung with android or the nokia pureview camera for windows phone.

You know just really, really wanting something to be true doesn't actually make it true. You may yearn with a deep intensity for Apple to fail or flounder or retreat but it isn't happening and it won't happen. Apple's most recent handset is the world's best selling handset. It's eighteen month old handset is the world's second best selling handset. The iPad is bigger than all the other tablets added together. Apple's iTunes Store is as big a business as Microsoft's entire Windows business. I could go on with many more metrics but I suspect it won't make much difference. Some people can only cope by thinking Apple is failing. They live in a reality distortion field.

By the way the pathetic drivel about Windows Phone market share makes you sound like the most delusional Mac fan around 1996. It doesn't matter how good Windows phone is: you have to be good and early, Microsoft were neither and now they will never catch up no matter how good their mobile OS is.

RE: Seriously
By bug77 on 3/3/2013 5:09:01 PM , Rating: 3
Right, so declining share price is not a sign of floundering. I guess I've just learnt something new today.

RE: Seriously
By Tony Swash on 3/4/13, Rating: -1
RE: Seriously
By 91TTZ on 3/4/13, Rating: 0
"If a man really wants to make a million dollars, the best way would be to start his own religion." -- Scientology founder L. Ron. Hubbard

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki