Apple shareholders nix succession but OK board rule

CUPERTINO Wed Feb 23, 2011 3:18pm EST

Window washer Santo Pineda cleans the window at a Verizon store in Boston, Massachusetts February 10, 2011. REUTERS/Brian Snyder

Window washer Santo Pineda cleans the window at a Verizon store in Boston, Massachusetts February 10, 2011.

Credit: Reuters/Brian Snyder

Related Topics

CUPERTINO (Reuters) - Apple Inc shareholders rejected demands that the company disclose a succession plan for ailing CEO Steve Jobs but approved a proposal giving them a bigger say in the appointment of directors.

With co-founder and Chief Executive Jobs sidelined indefinitely with an undisclosed medical condition, increasingly restive investors have demanded more information about the company's future.

Shares edged 1 percent higher in mid-afternoon trade.

At Apple's annual meeting on Wednesday, shareholders voted down a proposal that world's most valuable technology company outline its plan for who will succeed Jobs. However, they passed a requirement that unopposed candidates for the company's board receive a majority in order to be appointed. It was a victory for shareholder Calpers, the largest U.S. pension fund.

Influential investor advisory firm Institutional Shareholder Services had thrown its weight behind a shareholder proposal to force Apple to disclose a succession plan.

The voting results were preliminary, and no details were yet available.

Tim Cook, Jobs' top lieutenant, took the spotlight as shareholders dug for answers not just about Jobs, but also the company's succession plan, what it might do with its $60 billion cash pile, and what devices may follow the iPad and the iPhone in coming years.

Investors have urged the company for years to make better use of its cash, whether through buybacks or dividends. Chief Financial Peter Oppenheimer told shareholders, without elaborating, that the company was retaining cash to pursue "future opportunities."

Calpers wanted Apple to garner a majority vote to elect unopposed candidates to its board, which it said would better protect investor interests.

The proposal, which quickly gained support, is part of a broader push by the $226 billion fund for majority-vote corporate board elections. Apple is one of 58 companies Calpers has urged to adopt majority rather than plurality voting, where unopposed directors can be elected easily.

COMPELLING DRAMA

Apple's annual meeting rarely yields financial forecasts or market projections, but is usually good for some drama from a company that has no shortage of compelling story lines. Last year, with Jobs at center stage and the iPad waiting in the wings, investors focused on the company's cash.

But Jobs was likely on the mind of most people this year. He announced in January he would step away from the company on medical leave, though he remains involved in strategic decision-making.

Jobs' absence comes at a crucial time for the company. Apple is engaged in a battle in the smartphone market with Google Inc, whose Android operating system was installed on more devices than Apple's for the first time in 2010.

In January, Apple posted blockbuster quarterly results on dazzling iPhone and iPad sales, and Wall Street has increasingly expressed confidence in the management bench.

But Apple's destiny has been closely tied to Jobs, the mercurial and charismatic leader who rescued the computer maker from near-death in 1996 after a 12-year absence from the company he co-founded.

Cook, an operations expert, is steering the company for the third time in seven years. He is considered the heir apparent at Apple. The company dominates the fledging tablet computer market it helped create with the iPad.

But it will confront a number of challenges this year.

Apple sent invitations to a special event on March 2. The company is widely expected to introduce a new thinner iPad at the event.

The company will also launch the fifth iteration of its ever-popular iPhone just as rivals from Motorola Mobility to Samsung begin to increase market share.

U.S. and European regulators are scrutinizing new Apple rules that give the company a cut of publishers' subscription revenue generated by applications for the iPhone and iPad.

(Editing by Edwin Chan, Kenneth Li, Derek Caney and Steve Orlofsky)

FILED UNDER: