CalPERS filed a shareholder proposal calling for directors on Apple's board to be elected by a majority vote.
“Apple needs a governance upgrade,” Anne Simpson, senior portfolio manager who leads the corporate governance program at the $226.5 billion California Public Employees' Retirement System, Sacramento, said in a statement.
Some 73% of Apple shareowners last year supported a similar proposal, also sponsored by CalPERS, Ms. Simpson noted in the statement.
“Nearly 80% of the companies in the S&P 500 and 60% in the Russell 1000 have some form of majority voting standard, and for good reason,” Ms. Simpson said in the statement. “It's a hallmark of accountability.”
Apple's board opposes the proposal, saying in a statement, “The unusual mechanics of California law create the risk that directors who enjoy overwhelming shareholder support may fail to be elected because an insufficient number of shareholders voted in the election.”
State law in California, where Apple is incorporated, is no barrier to majority voting, the CalPERS statement said.
The Apple statement continued, “Shareholders have always had the ability to remove directors with or without cause for any reason,” as well as “nominate an alternative board candidate for shareholder consideration.”
The non-binding proposal would apply in uncontested director elections.
CalPERS owned 2.8 million shares of Apple stock as of Dec. 27, the CalPERS statement said.
Apple's annual meeting is Feb. 23.
