Pension giant challenging Apple over corporate governance - Page 2

Originally Posted by Hellacool

Until then, anyone with a majority stake in the company has a say.

Originally Posted by AppleAddict2011

Yeah - that traditionally is what they do. They buy up huge amounts of stock in companies, elect directors who mismanage the cash and their investment becomes worthless.

Every time. You would think that they might learn eventually.

Originally Posted by sflocal

and now there are folks with big egos that think they can do better?

Originally Posted by LikesToRead

CalPERS is not a majority stakeholder. They (logically) invested part of their fund because they thought it was a well run company that showed signs they were going to be successful in the future. They should divest themselves of their holdings if they now have concerns about that company.

Originally Posted by GQB

Yeah, because AAPL stock performance has been SUCH a disaster to CALPERS.
But in general, more accountability of boards to stockholders tends to be a good thing, particularly since since board memberships tend to be a real racket.
I was trying to (but couldn't seem to) find the link to a great site that graphs out the insanely incestuous relationships between major boards of directors, and that 'good ole boys' network is truly staggering. Its a cozy little club.

Originally Posted by zoetmb

The headline is completely misleading as the article states that the California Public Employees' Retirement System is going after governance rules at 57 companies. The implication of the headline is that they're only going after Apple.

But insofar as Apple is concerned, you'd think they'd pick a better target. Show me one other U.S. public company that has performed as well as Apple in the last two years, during the worst recession since the depression. And the stock is now within a point or so of its all-time high. Considering that the Dow is still about 19% below its peak and the NASDAQ is at 52% of its all-time high, I'd say Apple is doing pretty well and therefore governed well, especially compared to other publicly traded tech companies. The last thing I'd like to see is executives of that retirement system serving on Apple's Board.

I have always felt that if one doesn't like a stock, get rid of it. I've never felt that minority shareholders should be able to tell a company how to run itself. Besides, one State pension fund, no matter how large, shouldn't be able to dictate corporate governance rules. That should be a national issue.

I'd like to know how well governed the California Public Employees' Retirement System is. I bet it's a mess.

I'm am certainly not anti-Union, but the pension deals signed with many unions, where employees can retire after 20 or 25 years at anywhere to 50 to 100% of salary (and frequently more than salary if they play the overtime game in their last years of working) was ludicrous...criminal, in my opinion. More than anything else, it's public employee pensions that are breaking government budgets across the country. I will be entitled to just one pension (since I didn't stay long enough at other companies I've worked for) and that pension's annual payout will be less than 10% of my last annual salary.

Originally Posted by esummers

I agree. If you don't like the board, sell your stock. Shareholders should vote with their money, not by trying to do the boards job.

Originally Posted by MacinTek

Ooooh... Apple posts a profit and here come the socialists to ensure social (in)justice. Every year, these pension commies and unions try to muscle their way into Apple. If they succeed, Apple will face the same future as GM and Chrysler... low profits stifling R&D which leads to crappy products and poor morale.

Unions, as collective entities, should be barred from investing in corporate stocks or, doing so, relinquish their right to vote in stockholder votes... it's an obvious conflict of interest.

Originally Posted by Banalltv


They see that huge pile of cash and they wants it, Precious. To hell with using it to place Apple strategically for the future, they want instant gratification now. In their minds it's really 'their' cash, not Apple's. .

Originally Posted by zoetmb

I have always felt that if one doesn't like a stock, get rid of it.
I've never felt that minority shareholders should be able to tell a company how to run itself. ... one State pension fund, no matter how large, shouldn't be able to dictate corporate governance rules. That should be a national issue.

I've never felt that minorities should be able to tell a country how to run itself. ... one State, no matter how large, shouldn't be able to dictate laws. That should be a national issue.

Originally Posted by ktappe

I hate to bring reality into your little fantasy, but:
1) $51Billion is plenty of "future strategy" for Apple.

Originally Posted by ktappe

2) As shareholders, it *IS* their money. They are part owners of the company and therefore part owners of the profits. That's what being a shareholder is.

Originally Posted by ktappe

3) As part owners, they DO get to say how the company is run.

Originally Posted by AppleAddict2011

They own a huge chunk of Apple. They want to protect the business that they own. They calculate that this strategy will yield bigger returns than selling their interest.

If indeed you want to buy 2.2 million shares of Apple, so you can too be a major owner, then do it. Today. I guarantee you that 2.2 million shares will magically appear for sale in various lots if you put in a market order. Right now.

Then you will too have a say in how management runs the company you own.

Originally Posted by MacinTek

Ooooh... Apple posts a profit and here come the socialists to ensure social (in)justice. Every year, these pension commies and unions try to muscle their way into Apple. If they succeed, Apple will face the same future as GM and Chrysler... low profits stifling R&D which leads to crappy products and poor morale.

Unions, as collective entities, should be barred from investing in corporate stocks or, doing so, relinquish their right to vote in stockholder votes... it's an obvious conflict of interest.

Originally Posted by ktappe

I hate to bring reality into your little fantasy, but:
1) $51Billion is plenty of "future strategy" for Apple.
2) As shareholders, it *IS* their money. They are part owners of the company and therefore part owners of the profits. That's what being a shareholder is.
3) As part owners, they DO get to say how the company is run. There is nothing going on here that is illegal or even immoral. In fact, it could be argued that it's actually Apple who, by obfuscating the board-selection process and withholding profits from its co-owners (again the shareholders), is being immoral.
You're attributing all greed-motive in this affair to CalPERS and none to Apple, and that's completely disingenuous.

By your dictum, minority voters should never have a say. The strong should always overpower the weak and repress their desires. Really? Might makes right? REALLY? Is that what you think this country is about?
Me, I always thought that everyone had a say. It was kind of the reason this country was founded; that each citizen (aka stockholder) would be allowed to speak and have a vote.

I've never felt that minority shareholders should be able to tell a company how to run itself.

Originally Posted by fecklesstechguy

Just to put this in perspective:

CalPERS holds a whopping 1% of shares held by institutional holders. WOW! Yep they are entitled to a 1% part in the decision-making process for Apple shareholders. But oh wait. That was just institutional shareholders - how do they compare to 917.31 million shares held in total? Lesseee - that's 0.0023%. In which case I am perfectly comfortable as an Apple shareholder with Apple giving CalPERS exactly the control they merit based on their holdings.

And what do you base the charge of "obfusticating the board-selection process" exactly? As a publically held corporate entity the board selection process is a matter of public record and outlined in their corporate reporting. Nothin immoral (and I would wonder which set of moral standards you would even bring to bear on this issue). Your corp-dislike is palpable in your postings, and allows you to make statements that are patently untrue.

Your further commentary bears this out - you attribute thusly:



That was not what was stated by zoetmb:


The statement, I believe, refers to minorities exerting UNDUE influence - in other words influence beyond their means. In this case CalPERS wants changes that they by themselves, based on their holdings can't drive. The best they can hope for is to build a coalition of institutional or private holders to leverage enough shares to actually influence - highly unlikely since Apple is not by any indication being mismanaged.

Your remaining statements about "what this country is about" reflect a very poor understanding of the history of the US, and how representation works. In a pure democracy, all votes are equal and required to make policy, etc. The US is not a pure democracy - it is a democratic republic - with representational governance. That is why popular vote may show one candidate as winning, but the actual results are determined by the electoral college vote. Further the founding fathers assumed that those most qualified to vote would be landholders (ie business men) not the rank and file regardless of status. That came later.

Originally Posted by magicj

With Apple now being the 3rd largest company in the world, and the 2nd largest in the US, it'll be difficult for Ms. Simpson to demonstrate this alleged risk. Especially since Apple's turnaround began by dissolving the old board of directors.

Originally Posted by LeCorsaire

Agree. If they don't like the way Apple is run, just sell their Apple stocks, I will buy.

Originally Posted by MacinTek

Ooooh... Apple posts a profit and here come the socialists to ensure social (in)justice. Every year, these pension commies and unions try to muscle their way into Apple. If they succeed, Apple will face the same future as GM and Chrysler... low profits stifling R&D which leads to crappy products and poor morale.

Unions, as collective entities, should be barred from investing in corporate stocks or, doing so, relinquish their right to vote in stockholder votes... it's an obvious conflict of interest.

Originally Posted by AppleInsider

The largest public pension in the U.S. is aggressively going after Apple with an advisory shareholder resolution that aims to change the company's board election policies.

The California Public Employees' Retirement System is seeking to change the policies of Apple and 57 other large companies that make up a portion of its nearly $200 billion U.S. portfolio. By lobbying for new rules requiring a majority vote for directors, CalPERS is hoping to bring about higher board member accountability to shareholders.

News of CalPERS' push for corporate governance reform was first reported in March by BusinessWeek. After Apple resisted CalPERS' initial request, the pension fund submitted an advisory shareholder resolution, The Wall Street Journal reports.

"There is systemic risk when directors are not accountable," Anne Simpson, CalPERS' head of corporate governance, told the Journal in an interview Tuesday. Apple's current policy allows its directors to keep their seats with just a single vote in uncontested elections.

As of March 2010, CalPERS owned 2.2 million shares of Apple stock. By comparison, Apple CEO and co-founder Steve Jobs owns an estimated 5 million shares.

Apple is the first company that CalPERS has targeted with a shareholder resolution in its push for changes in corporate governance. The resolution will come up for a vote at the Cupertino, Calif., company's annual meeting in February.

CalPERS has a history of using its clout as the nation's largest pension fund to lobby for corporate reform. In 2004, CalPERS' president of the board was removed from his position in response to criticism that he was participating in corporate governance activism. Also in 2004, CalPERS warned Apple that it would vote no on all three of its shareholder measures.

According to the report, 20 of the 58 companies lobbied have agreed to CalPERS' proposal.

Apple's reticence may also stem from the fact that California law forces directors to step down if a majority-vote policy is in place and they fail to win a majority. In other states, the rules aren't typically binding, with boards reserving the right to ignore losing directors' offers to resign, the report noted.

Originally Posted by ouragan

Hopefully, as common sense would dictate, all pension funds will rally behind CalPERS to force accountability from the Apple Board of directors.

***

For the life of me, I can't understand why Apple is not governed according to the laws of California.