The preliminary vote gave my “say on directors pay” less than 4%, so I guess putting that proposal up at the world’s largest most profitable company with so many happy shareowners may have been a mistake. However, I note that Apple cut the pay of a couple of directors from $1.2 million to about half that, so maybe my proposal did some good.
As the New York Times reported:
And what a profitable trip it has been. Mr. Cook took a quick survey of the many accomplishments of the company: the voice-recognition software in the new iPhone, Siri (“many people’s best friend”). Twenty-five billion apps downloaded (“It’s hard to even intellectually think about a number that big”). The iPod (“continues to be the top music player in the world”). Macs (“Arguably, we’re the only company innovating in the personal computer space”). Apple stores (a million people a day come through). And of course the amazing growth in revenue last year (“More growth than H.P., Nokia, HTC, Google” — and here Mr. Cook seemed to genuinely forget the name of a once-formidable competitor whose very survival is now being questioned — “and RIM put together”).
CalPERS was certainly happy about Apple’s decision to implement a majority vote standard for its Board of Directors, announced before Anne Simpson, CalPERS Senior Portfolio Manager in charge of Corporate Governance, presented their proposal at the meeting. In a press release, she said,
Apple has honored the wishes of its shareowners with this decision. We strongly commend the Board for adopting this good governance measure and for giving its shareowners a voice in the election process.
It helped to have support from ISS Proxy Advisory Services, Glass Lewis & Co. LLC and Egan-Jones Proxy Services. More than 73% of shareowners voting their shares approved a similar CalPERS-backed proposal at Apple’s 2011 annual meeting. This year it was 80%.Implementation will be delayed until next year because it will require a shareowner vote to ratify a change in the corporate bylaws.
It is great to see Apple joining the vast majority of the companies in the S&P 500 that already have a majority voting standard. CalPERS and and CalSTRS have done a lot to push the standard downstream but now having the largest company in the world adopt the standard should make it that much easier to get this good governance practice adopted at mid and small-caps.
To contact James McRitchie directly, please email jm@corpgov.net.
Christopher Bayer, Ph.D. says:
Apple Shareholder Happiness
Apple shareholders are delighted to own a “slice,” or two or three, of the world’s largest, most profitable company. In fact, I am sure many would like to own the whole pie, or the “back forty” of the orchard. They like the money, and they relish the products. The products are marvelous, artistic, and “ingenious.” The colors are rich and vibrant, and the Apple stores are styled brilliantly.
Happiness, from a shareholder psychological perspective, involves pride, sustainability, bragging rights (on occasion), image, well-being, creativity, safety, comfort, and market share. It also involves good corporate governance. The fact that Apple honored shareholder wishes with a decision to implement a majority vote standard for its Board of Directors speaks volumes. Giving a voice to shareholders in the corporate decision process can only enhance the company, and the partnership between shareholder and corporation. This is excellent Corporate Governance Psychology 101.
Arguing With “Excessive” Success
Money, lots of it, is a great leveler. And seducer. And soother. And persuader. Money tempts and attracts. Apple knows how to make money, and they know how to innovate and market beautiful products that their customer base embraces. Apple is a world changing company which has enhanced our culture and our economy. The 4% vote for “say on pay” was a way that shareholders confirmed that the “good times are here, and we just wanna let’em roll.” It’s very hard to argue with excessive success.