Apple Inc. shareholders on Feb. 23 will vote on proposals from CalPERS proposal calling for a majority vote to elect unopposed directors and from the Central Laborers’ Pension Fund calling for the company to identify candidates for CEO.
“Apple’s current plurality vote rule gives no voice to shareowners who oppose a candidate, since directors can be elected by a single ‘for’ vote,” according to a statement Thursday from the $228.5 billion California Public Employees’ Retirement System, Sacramento.
The CalPERS proposal “urges company adoption of a majority-vote threshold where there is only one candidate for a board seat and the resignation of any candidate or incumbent who fails to win an affirmative vote of most shares represented.”
A majority-vote endorsement by shareholders would provide better accountability to shareholders, the statement said.
Apple, in a separate statement, urges shareholders to vote against the CalPERS proposal. “California law (creates) the risk that directors who enjoy overwhelming shareholder support may fail to be elected because an insufficient number of shareholders voted in the election,” the Apple statement said.
Applying a majority-vote standard “would mean that even if there were no ‘withheld’ votes with respect to a director, and thus no indication of any shareholder disapproval, that director would still fail to be elected if he or she did not obtain the affirmative vote of more than 25% of the outstanding shares,” the Apple statement said.
The $814.5 million Central Laborers’ fund, Jacksonville, Ill., in its proposal calls for the company to “disclose a written and detailed succession planning policy,” to eventually replace current CEO Steven P. Jobs and subsequent CEOs, including identifying internal candidates. The proposal doesn’t mention Mr. Jobs.
Apple also asked shareholders to vote against the Central Laborers’ fund proposal. Apple “already fulfills several of the requests proposed,” the company said in a statement. Adopting the proposal “would give the company’s competitors an unfair advantage” by publicizing “the company’s confidential objectives and plans,” revelations “not in the best interest of the company or its shareholders.”
Adoption of the Central Laborer’s fund proposal “would also undermine the company’s efforts to recruit and retain executives,” the Apple statement said. “By publicly naming these potential successors, (the proposal) invites competitors to recruit high-value executives away from Apple. Furthermore, executives who are not identified as potential successors may choose to voluntarily leave the company.”