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Pension giant challenging Apple over corporate governance - Page 2

post #41 of 65
Quote:
Originally Posted by Hellacool View Post

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

1. You don't need a majority stake to have a say in the US governance system.

2. CalPERS does NOT have a majority stake in any company. They cannot, by law, have one.

3. You should educate yourself a bit more before pontificating.
post #42 of 65
apple's subtle reply to calpers should just be, "kiss my ass."

when calpers can manage half as well as apple then they should still be forced into the toilet as a quality operation. they screw their investors consistently without any guilt.
post #43 of 65
Quote:
Originally Posted by AppleAddict2011 View Post

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.

And since "they" own the company, that's their option. If shareholders own & control the company, then management and the BOD work for them. If the shareholders want to run the thing into the ground and sell off the pieces, so be it.

That model gets very frustrating when an entity (CalPERS) gets big enough to go around buying up controlling stakes in companies and dissolving them for short-term profits. But them's the rules of a public company. Don't like it? Go private.

- Jasen.

P.S. This happens with private companies with investors, too. I know instances where the investors have run the company into the ground - not paying suppliers until company can't buy supplies anymore - with not a care for the employees or the business' reputation and customers.
post #44 of 65
Actually, corporate governance is a sham in the U.S. So anything Calpers can do to give shareholders more rights is welcome, except unfortunately, they really won't have any significant effect.
post #45 of 65
Quote:
Originally Posted by sflocal View Post

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

You mean like the tech "experts" in this forum who constantly pontificate about what features and hardware Apple should be producing in order to survive?
post #46 of 65
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.
post #47 of 65
Quote:
Originally Posted by LikesToRead View Post

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.

You can bet your arse if they thought things were going bad, lose money, they would sell. That's not what this is about. It's just about how directors are put on the board. Geeesh
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post #48 of 65
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.
post #49 of 65
Quote:
Originally Posted by GQB View Post

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.

Very very true! All CalPers is trying to do is ensure better rules. Then wow, the idiot flood gates open, your a socialist etc etc... Wow.
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post #50 of 65
Quote:
Originally Posted by zoetmb View Post

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.

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.
post #51 of 65

deleted


Edited by MacRulez - 5/4/12 at 12:52pm
post #52 of 65
Quote:
Originally Posted by esummers View Post

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.

Please remember, there are many other large institutions, like all the mutual funds etc, you dont think they speak up? Calpers just got the news headline thats all. They have a right to 'vote' not dictate about corperate goverance through resolutions, just like any shareholder. Most resolutions are shot down, but if they pass, that means many other large institutions and large voting block shareholders agree.
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post #53 of 65
Quote:
Originally Posted by MacinTek View Post

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.

you're completely delusional.

gm and chrysler went under because they have a crap product and didn't give a shit about quality. all they cared about was their profit. all their shareholders care(d) about was their check at the end of the month. this is why at&t doesn't build their infrastructuremy opinion. the height of capitalism, not socialism.
post #54 of 65
Quote:
Originally Posted by Banalltv View Post

Quote:
...demand dividends...

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. .

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.
post #55 of 65
Quote:
Originally Posted by zoetmb View Post

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.

Let's play word substitution:
Quote:
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.

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.
post #56 of 65
Quote:
Originally Posted by ktappe View Post

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

I know.
Quote:
Originally Posted by ktappe View Post

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.

I know.
Quote:
Originally Posted by ktappe View Post

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

I know. But who would you like to see running Apple? Pension-fund plants? Ballmer when he gets fired from Microsoft? I don't think so.
post #57 of 65
Quote:
Originally Posted by AppleAddict2011 View Post

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.

If you actually look at the positions in Apple stock, you will see that you comment is in error:

According to Daily Finance, the top ten institutional shareholders are:
Fidelity Management & Research 53.07M
Vanguard Group, Inc. 33.86M
State Street Global Advisors (US) 31.54M
BlackRock Institutional Trust Company, N.A. 30.28M
T. Rowe Price Associates, Inc. 23.25M
Invesco PowerShares Capital Management LLC 16.09M
Janus Capital Management LLC 12.48M
Wellington Management Company, LLP 11.12M
AllianceBernstein L.P. 10.95M
Capital World Investors 10.57M

The top ten mutual fund shareholders are:
Fidelity Contrafund 16.44M
PowerShares QQQ Trust - Series 1 15.19M
Vanguard Total Stock Market Index Fund 9.57M
Vanguard 500 Index Fund 8.31M
American Funds Growth Fund of America 8.2M
Fidelity Growth Company Fund 6.33M
Vanguard Institutional Index Fund 6.53M
T. Rowe Price Growth Stock Fund 5.77M
SPDR S&P 500 ETF 6.61M
Statens Pensjonsfond Utland 6.48M

The top ten individual shareholders are:
Jobs (Steven P) 5.55M
Levinson (Arthur D) 225,015
Mansfield (Robert) 40,831
York (Jerome B) 50,000
Drexler (Millard S) 40,000
Cook (Timothy D) 13,659
Oppenheimer (Peter) 8,105
Forstall (Scott) 2,830
Gore (Albert A Jr) 1,000
Johnson (Ronald B) 288

So by any measure CalPERS DO NOT hold a "huge chunk" of Apple, and don't even show up in the listings as such. You need to square the facts with what is known to speculate accurately. they have no effective leverage when it comes to it - looking at the ownership above, holding less than half of what Jobs himself holds and les than a third of the lowest mutual or institutional holders. This is just grandstanding and posturing by CalPERS. No experienced fund manager looking at Apple performance is going to recommend interfering in board process unless the company is either being mismanaged and losing money or has demonstrated malfeasance.
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post #58 of 65
Quote:
Originally Posted by MacinTek View Post

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.

Keep your capitalist political comments to yourself. Unions had nothing to do with GM failing it was management. Sports has it right, whenever the team (union workers/players) fails management gets the heave ho and new managers bought in that usually get better results with the same set of employees. GM was busy building HUMMERS while Toyota was making Pruis'. How is that error the fault of a union employee? But I do totally agree that these pension people leave Apple alone.

In Germany the Union president sits on the BOD and has a say on how the company is run. Its worked out quite well for both company and employees. BTW Apple's beloved ATT is the only wireless company with unionized employees.
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post #59 of 65
Quote:
Originally Posted by ktappe View Post

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.

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:

Quote:
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.

That was not what was stated by zoetmb:
Quote:
I've never felt that minority shareholders should be able to tell a company how to run itself.

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.
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post #60 of 65
Quote:
Originally Posted by fecklesstechguy View Post

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.

best, clearest and most truthful post of the day sir!!
post #61 of 65
Quote:
Originally Posted by magicj View Post

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.

To be fair, that reasoning makes "risk" only demonstrable after the fact. To go a little vulgar, it's like saying that condoms aren't necessary for anyone who hasn't yet caught a STD.

As a happy Apple shareholder and someone pretty impressed with management the past decade or so, my inclination is to say "if this were a good idea, Jobs et al would be supporting it." However, it's not really fair to dismiss CalPERS' concerns just because lightning hasn't struck yet.
post #62 of 65
Quote:
Originally Posted by LeCorsaire View Post

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

Or they could buy up all available Apple stocks.
post #63 of 65
I doubt you even know what a socialist means. By the way, how do you enjoy the publicly funded roads, your likely public education, and the publicly subsidized Universities?

You like one of those people who like to defeat arguments by attaching labels to the people making them. Another form of McCarthyism. The reality is some of the better parts of government are socialist in nature and some of the finer things in our society are only enjoyed because of public tax dollars.

Moreover, the pension fund owns 2 Millions shares of Apple. If it wants to raise an issue for a vote, that is essentially how democracy works. Perhaps you have problem with that as well.

Quote:
Originally Posted by MacinTek View Post

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.
post #64 of 65
Quote:
Originally Posted by AppleInsider View Post

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.



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

If I understand well, at present, the directors are voted in office as a slate, meaning that there is no individual vote for each director, but directors are elected as a group labeled "Steve Jobs for President of the Board and his team of directors".

Also implied by the article, reflecting current practice, there is no opposition, no opposing slate of candidates and no formal vote to elect the Apple Board of directors in spite of the fact that Apple is now the second largest American company for its stock market value.

If I am right, directors will have to be elected individually and retire if they don't gain a majority vote from shareholders.

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


post #65 of 65
Quote:
Originally Posted by ouragan View Post

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.

As a shareholder, I believe that the Apple board is plenty accountable ... they're accountable for making me rich, and insofar as they influence the company's activities, they're doing a fine job for me.

Apple is incorporated in the state of California, so it is governed by the California Corporations Code. What do you fail to understand about the state corporation law, or Apple's compliance?

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