Apple Board Wins Struggle Over iThrone Secrecy
Feb 23, 2011 2:34 PM PT
Apple's board appears to have fought off a call at its annual shareholders' meeting Wednesday to make its CEO succession plans more transparent. The meeting was held at company headquarters in Cupertino, Calif.
LIUNA wanted Apple to adopt and disclose a written CEO succession planning policy and develop selection criteria for potential candidates for that post.
In its definitive proxy statement, Apple urged shareholders to nix LIUNA's proposal.
Preliminary voting results from the shareholders' meeting indicated the proposal had been rejected.
The final voting results will be tallied by the inspector of election and published in Apple's Current Report on Form 8-K, which it has to file with the SEC within four business days after the annual meeting, the company's proxy statement states.
However, Apple hasn't won a decisive victory yet.
"There's going to be a follow up," vowed LIUNA spokesperson Jennifer O'Dell.
"At the end of the meeting, I asked Apple staff if they would give me the result of the vote and they refused," O'Dell told MacNewsWorld.
The union will keep an eagle eye on Apple and will demand the company revisit the issue next year, O'Dell said.
Apple did not respond to requests for comment by press time.
The Exec Who Would Be King
O'Dell said the question of how Apple will handle the process of appointing a successor to company CEO and Chairman Steve Jobs is "an issue of substance" over which she wants to "sit down and have a real discussion" with top Apple executives.
LIUNA isn't alone in its concern over the question, O'Dell said.
"I learned at the meeting that there were other large institutional shareholders, some of the biggest in the world, that supported our shareholder proposal, and that gives our union encouragement to continue with the fight," O'Dell elaborated.
ISS, which came out in support of LIUNA's proposal, did not respond to requests for comment by press time.
LIUNA may have enough muscle on its own to back up its demands. "We have 100 individual funds across the U.S. and Canada with [US]$34 billion in assets," O'Dell disclosed. "I don't know how many shares we hold of Apple stock, but I'm sure many of our funds do hold them, and we're talking about 100 funds."
Perhaps LIUNA is asking for a little too much transparency from Apple regarding its succession plans.
"It's absolutely essential that companies have succession plans, but publishing them is another matter," Rick Sturm, founder and CEO of Enterprise Management Associates (EMA), told MacNewsWorld. "IBM does not, for example."
Apple's objection to publicizing its succession plan was that this would disclose confidential information and hurt its ability to recruit and retain executives. Further, Apple said it already has a succession plan in place.
Loose Lips Can Sink iShips
However, Apple's assertion that a plan exists doesn't satisfy LIUNA.
"Apple told me that it has a succession plan, but we want to see it," O'Dell stated.
"I've asked Apple to reach out to me for the next shareholder meeting next year, and if they don't, we'll refile our proposal," she said.
"You have to figure out that there's probably a succession plan and probably also a three-year roadmap for new products in place at Apple," Laura DiDio, principal at ITIC, told MacNewsWorld.
"If Jobs is gone, it's reasonable for shareholders to demand a plan and know what's in it, but some of the requirements LIUNA has might be overkill for Apple," DiDio added.
Indeed, opening up the succession plan to public scrutiny may not be in Apple's best interests.
"Doing this just encourages executives to bail if they're not on the fast track," EMA's Sturm pointed out.
Further, whether or not Steve Jobs retires from Apple shouldn't have that big an impact on the company's performance.
"Look, a lot of people see Steve Jobs as the visionary and Tim Cook as the ops guy," ITIC's DiDio remarked.
"Apple is about more than just Steve Jobs," she added.
"I think perhaps the market overestimates how much Jobs has contributed to the success of Apple," EMA's Sturm suggested. "It's impossible for one person to have done it all."