Apple adopts proxy access, lowers bar for shareholder nominations to board of directors

Posted:
in AAPL Investors edited December 2015
Apple on Tuesday issued amended corporate bylaws that affords a shareholder, or group of shareholders, with sufficient standing the opportunity to nominate a representative to the company's board of directors, a mechanism referred to as "proxy access."




According to a Securities and Exchange Commission "http://investor.apple.com/secfiling.cfm?filingID=1193125-15-410853&CIK=320193">filing, Apple's newly adopted amendments implement proxy access to permit a shareholder, or a group of up to 20 shareholders, who own at least 3 percent of Apple shares for at least three years to nominate directors to the board.

As noted by The Wall Street Journal, the stipulation allows shareholders to nominate 20 percent of Apple's eight-person board, which translates to one director. The report goes on to say a proposal to enact proxy access brought forth at Apple's annual shareholder meeting in March gained support from 39 percent of shareholders.

The change bodes well for high-profile shareholders like activist investor Carl Icahn and hedge fund manager David Einhorn, who have in the past sought to sway Apple's board over share buyback and cash management policies. Both Icahn and Einhorn meet the proxy access time requirement, but fall well short in terms of share ownership.

While 3 percent ownership rule, which equates to a minimum stake of more than 167.4 million shares, precludes individual shareholders from nominating a director, it leaves the door open for coalitions or large funds like Vanguard Group, State Street and FMR, each of which own stakes of 3 percent or more. Further, Apple recognizes two or more funds under common management and investment control, funded primarily by the same employer, or a "group of investment companies," as one shareholder or beneficial owner, the filing reads.

Proxy access has become a valuable tool for investors seeking meaningful influence in company dealings. Apple joins other big-name corporations that have adopted proxy access amendments, including McDonald's and Coca-Cola.

Comments

  • Reply 1 of 5
    Hhmmm - 167 mm shares. I guess I'm short. Dang !
  • Reply 2 of 5
    radarthekatradarthekat Posts: 2,969moderator
    I've held about 7000 of my 9000 shares for more than three years.  Now I just need 19 more shareholders who can make up the 167.393 million additional shares needed and maybe we can boot either Andrea or Al from the board.  
    IanMC2
  • Reply 3 of 5
    Side note: just read a Jim Cramer commentary about AAPL in 2016. He says Apple should take $25B and buy Verifone, Harman, Pandora and Fitbit. He thinks these companies represent recurring revenues and/or will deepen their presence in each of the markets. Cramer usually has an agenda when he says something but he does have some level of insight into how investors think.
    My thoughts are that it if they did do something big like this it can change the conversation in terms of iphone rev %, cash being held, next big product. 
    It can be said that none of this matters and they will organically grow their way further into Car Play, Apple Pay, Apple Music and Apple Watch.
    How it relates to the stock and the perception is interesting as people love to talk about Apple and the conversation shifts hard one way or the other. It could either get people claiming desperation or get people to stop with the tires talking points of late.
    Just want to get others thoughts on this.
  • Reply 4 of 5
    steviestevie Posts: 956member
    Apple is the most manipulated stock on Wall Street.  The big ones are easy to manipulate.

    Apple is worth a lot more than they think!
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