Ralph Nader once again assails Apple's stock buybacks

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in AAPL Investors
The longtime consumer advocate, in a new interview, says Apple could have spent its cash pile on hiring, on pensions, or on stepped-up recycling programs, rather than on stock buybacks.

Ralph Nader


Consumer advocate Ralph Nader, in a new interview over the weekend, reiterated some points from an open letter he sent to Apple CEO Tim Cook back in May.

In the interview with NPR's Weekend Edition Saturday, Nader suggested some other things Apple could have done with its excess cash.

Nader began by criticizing Apple for executing its $100 billion stock buyback in May without asking shareholders their opinion beforehand.

"It could have been used to increase employees," Nader said. "It could have been used to shore up the pension fund. It could have been used -- two percent of it to double the income of the serf laborers, 1.3 million Chinese laborers in the contractor that builds the iPhones.

"It could been two percent of the $100 billion to improve the recycling of used computers and phones, which are endangering both the environment and the workers," Nader continued. "It could have been put in productive investment, it could have been put in research and development. It could have been sent to cash dividends, back to the shareholders. But no."

When asked by interviewer Scott Simon what he thinks about Apple's comeback from "near-extinction" in the mid-1990s to its status today as the world's most valuable company, Nader was less impressed.

"There's no doubt, it's a remarkable turnaround," Nader said. "But under Steve Jobs, stock buybacks were prohibited. He paid himself very little. When Tim Cook came over, everything changed. And while they know how to make enormous money with their overpriced iPhones, they don't know how to productively use it. Marxists of many decades ago would have never dreamed that corporations would pile up all of this capital, and not know how to use it productively."

Nader, who is 84, went on to tell Simon that he does not own any Apple products. "One, I want to get a day's work done, so I'm not involved in email or any of that nonsense," adding that he still uses a typewriter.

Some of Nader's points about Apple are more defensible than others. There's certainly a legitimate debate to be had over whether stock buybacks are the best use of Apple's cash, and whether or not corporations are responsible when they distribute their profits in that manner. And it's certainly true that workers in China who make Apple's products deserve a better wage than they're been getting although, as Nader points out, they are employees of contractors, rather than Apple itself.

On the other hand, companies like Apple don't typically ask permission of shareholders before executing stock buybacks. Apple's spending priorities are far form an either/or, and most of things Nader wishes to see Apple spend money are things that it does spend a great deal of money on.

Apple spends an astronomical amount of money -- over $3 billion just in the second quarter of this year -- on R&D. They hire new employees all the time, and are opening new offices and facilities all around the country. Apple has also stepped up their recycling programs in a huge way, especially compared to the company's early years.

While Steve Jobs did pay himself $1 a year for much of his time at Apple, he also controlled a great deal of stock and was worth billions at the time of his death. And implying that Tim Cook hasn't delivered anything for Apple in his time at the top besides huge profits is grossly unfair to the CEO's many accomplishments since he took over in 2011.
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Comments

  • Reply 1 of 90
    markbyrnmarkbyrn Posts: 591member
    Must hurt Tim to see an iconic legend of left-wing ideology blasting him.  Does Mr. Nadar have a podcast that Apple can shut down?
    watto_cobrawilliamlondonairnerdjbdragonrazorpitmhaecki
  • Reply 2 of 90
    Hahahaha. Nader sure is generous with other people’s money. 

    And regarding his comment that that they didn’t ask the shareholders about the buyback, well who the hell
    does he think is selling their stock back to Apple? 

    Meanwhile, good ol’ Ralph is furiously typing away on his typewriter, pining for the good ol’ days before all this tech mumbo jumbo came along. Back when the environment really was a disaster, and the bulk of the third world was living in abject poverty. 
    JWSCmwhiteradarthekatracerhomie3watto_cobrafirelockmike1airnerdjbdragonbattiato1981
  • Reply 3 of 90
    jakebjakeb Posts: 557member
    Everybody seems to have a lot of ideas for how Apple should spend its money when it’s literally one of the few companies in the world that honestly tries to do things the right way. 100% clean energy goal, 100% recycling goal, no conflcit minerals, privacy protections, an inspection process for 3rd party manufacturers... 

    Don’t punish one of the only companies in the world that has figured out how to do capitalism without being straight up evil. 
    JWSCdanhmwhitecoolfactormejsricclaire1radarthekatmetrixYvLyMacPro
  • Reply 4 of 90
    I think he does have some points, although I would have balanced the whole amount between stock buybacks and among the employees with the hopes that they use that money to remind themselves how they got where they are and thru hard work and customer service they can continue to thrive and create more lifelong customers.
    Give bonuses for quashing bugs before the public finds them, or for speaking up when a new keyboard design might be rendered inoperable due to a breadcrumb. 

    But that isn't going to happen. 
    digital_guyjasenj1dysamoria
  • Reply 5 of 90

    Mr Nader is mostly correct as Stock buybacks are a very inefficient way to build shareholder value or return excess earnings to shareholders. A special dividend to shareholders, to name one example, would have been a more efficient option.


    Under Mr Cook, anything not iOS has been relegated to third class citizen status or left to twist in the wind. Ask yourself when have you seen a broad coordinated advertising campaign for the Macintosh in either the consumer or enterprise space? Look at the abysmal dumpster fire that is iTunes, or the lagging of Roku in the streaming HW space. Why cannot a company as big as Apple keep the wireless router line up to date and world class? Why are they still selling the trash can Mac or the outdated HW in the 2014 Mac mini?


    Why does an Apple that claims to be green seem determined to eliminate user removable batteries from every mobile device they sell? Why are all Macs currently sold sealed shut to make user upgrades or repairs improbable if not practically impossible?


    Finally, Apple does have a lot of new employees, but exactly what are they doing that is productive?

    digital_guywilliamlondonspice-boydysamoriafrankie
  • Reply 6 of 90
    coolfactorcoolfactor Posts: 1,268member
    I don't agree with half of what he suggests. I do agree that more should be paid towards those that are doing the hard labour every day to create the products. But even that is a no-win situation. As soon as you pay more, lifestyles change and then it's no longer enough. More is needed, and so the cycle continues.
    watto_cobra
  • Reply 7 of 90
    Rayz2016Rayz2016 Posts: 4,045member
    davgreg said:

    Mr Nader is mostly correct as Stock buybacks are a very inefficient way to build shareholder value or return excess earnings to shareholders. A special dividend to shareholders, to name one example, would have been a more efficient option.


    Under Mr Cook, anything not iOS has been relegated to third class citizen status or left to twist in the wind. Ask yourself when have you seen a broad coordinated advertising campaign for the Macintosh in either the consumer or enterprise space? Look at the abysmal dumpster fire that is iTunes, or the lagging of Roku in the streaming HW space. Why cannot a company as big as Apple keep the wireless router line up to date and world class? Why are they still selling the trash can Mac or the outdated HW in the 2014 Mac mini?


    Why does an Apple that claims to be green seem determined to eliminate user removable batteries from every mobile device they sell? Why are all Macs currently sold sealed shut to make user upgrades or repairs improbable if not practically impossible?


    Finally, Apple does have a lot of new employees, but exactly what are they doing that is productive?


    *Yawns. Scratches chin. Switches channel*

    mejsricclaire1radarthekatwatto_cobratmaywilliamlondonmike1steven n.lkruppanantksundaram
  • Reply 8 of 90
    Rayz2016Rayz2016 Posts: 4,045member

    I think he does have some points, although I would have balanced the whole amount between stock buybacks and among the employees with the hopes that they use that money to remind themselves how they got where they are and thru hard work and customer service they can continue to thrive and create more lifelong customers.
    Give bonuses for quashing bugs before the public finds them, or for speaking up when a new keyboard design might be rendered inoperable due to a breadcrumb. 

    But that isn't going to happen. 
    Nope.

    I think Apple’s management has a really big problem now, as shown by the fac5 they’re now getting the same level of advice from seasoned commentators and armchair CEOs. 

    When you’ve built a trillion dollar business in the face of what the Armchair CEOs have been telling you, where do you go for business advice?
    radarthekatwatto_cobratmaymike1StrangeDayslkruppJWSC
  • Reply 9 of 90
    Rayz2016Rayz2016 Posts: 4,045member

    markbyrn said:
    Must hurt Tim to see an iconic legend of left-wing ideology blasting him.  Does Mr. Nadar have a podcast that Apple can shut down?
    Tim Cook: “I have a thick skin.”

    Well, if Nadar insist that children who are victims of a school shooting either don’t exist or are liars then I’m sure Cook will close down his blog too. 
    watto_cobratmayp-dogStrangeDaysJWSCmacxpress
  • Reply 10 of 90
    carnegiecarnegie Posts: 381member

    "There's no doubt, it's a remarkable turnaround," Nader said. "But under Steve Jobs, stock buybacks were prohibited. He paid himself very little.
    Rubbish.

    Mr. Jobs received more in compensation for being CEO of Apple than Mr. Cook has thusfar received for being its CEO. It’s true that Mr. Jobs was Apple’s CEO for around twice as long as Mr. Cook has thusfar been. But it’s also true that Apple has made around five times as much in net income during the latter’s tenure as CEO than it did during the former’s. So if we’re looking at compensation relative to how much money the company made during a given period of time, Mr. Jobs was considerably better compensated (for being its CEO) than Mr. Cook has been.

    And to be clear: I’m not referring to how much the value of Mr. Jobs’ Apple shares appreciated while he was CEO of Apple or since. I’m referring to the value of the shares he was given, as compensation for being CEO, at the time those shares vested. He received more than $600 million worth of Apple stock (minus tax withholding) more than a decade ago. Those shares today would be worth more than $14 billion.

    rezwitsradarthekatwatto_cobraRayz2016
  • Reply 11 of 90
    I'd like to see them spend more money on their Apple Store employees. I get that you CAN get retail employees cheap, but that doesn't mean you should. They're some of the highest selling retail employees in history and while their wage is better than some, it's not in line with the amount of product they move. Just because their job could be done by other people doesn't mean that they shouldn't be invested in more. There should also be some quality of life improvements for employees. Standing around all day on concrete floors isn't good for anyone.
    claire1jasenj1
  • Reply 12 of 90
    rezwitsrezwits Posts: 588member
    A... let me see.  Invest with us, and you WILL GET PAID.  Great idea.  The goal of every company, or should be.  Freaking BLAST all those (na)y(d)say(er)s, that say Apple is doomed, and will go out of business, or can't do it again, Apple is so there, and MAN WOW, am I seeing a GRIZNIP of Watches.  I can't WAIT to get my Gen 4 watch man!  In the business world, having a stock that you KNOW you can buy and you will make money, is almost priceless in stocks.  That's why the evaluation is so high.  And as far as tech stocks?   There are quite a few technologies coming still...  But where I see Apple KEY.  Is a secure platform, and I don't mean from hackers I mean from good ole crashing.  In addition Apple specializes in 100% globalization via Language support.  Siri is a 20+ year project btw, not even counting speech recognition from the 90s.  Plenty of life.  I'll say this again, invest in us and you be rewarded.  Oh and as far as the environment? PLEASEx!!!
    watto_cobra
  • Reply 13 of 90
    neutrino23neutrino23 Posts: 1,512member
    It’s fine for Ralph to comment on Apple. It does seem that he is out of touch with Apple’s business. 
  • Reply 14 of 90
    rezwits said:
     Apple is so there, and MAN WOW, am I seeing a GRIZNIP of Watches. 
    So far, I've yet to see even one Apple Watch outside of an Apple Store. Yeah Man, right on, they are taking over the world... MEH

    I see a number of things that could be really great but get released in a half hearted, half completed state or as in the new MacPro, delayed and delayed.
    They are just not delivering on their promises. 

    To put it bluntly, some asses need kicking inside Apple.
  • Reply 15 of 90

    Did you ever meet Steve Jobs? No.

    I’d have thought he might have been a fellow traveler. Yes, but if I had under contract 900,000 serfs in China, I wouldn’t want to meet me.

     Okay, but does the entrepreneurial ethos appeal to you? I like the ethos, but I don’t like the priorities. Because what’s going on is that it’s shifting the rewards for the economy away from necessities to whims.

    David A. Kaplan, “Ralph Nader: The Fortune Interview,” Fortune, February 24, 2014, (http://fortune.com/2014/02/06/ralph-nader-the-fortune-interview/).

    dysamoria
  • Reply 16 of 90
    SpamSandwichSpamSandwich Posts: 29,770member
    Nader cites Marxists of the past as a positive influence? Screw him!
    radarthekatdarelrexfirelockmike1lkrupp
  • Reply 17 of 90
    lukeilukei Posts: 325member
    rezwits said:
     Apple is so there, and MAN WOW, am I seeing a GRIZNIP of Watches. 
    So far, I've yet to see even one Apple Watch outside of an Apple Store. Yeah Man, right on, they are taking over the world... MEH

    I see a number of things that could be really great but get released in a half hearted, half completed state or as in the new MacPro, delayed and delayed.
    They are just not delivering on their promises. 

    To put it bluntly, some asses need kicking inside Apple.
    You aren’t looking very closely then. I can see two right now and I see them regularly on wrists in client meetings and on the underground system in London . They are the smart watch of choice. 
    radarthekatStrangeDayspscooter63
  • Reply 18 of 90
    So a total luddite, who doesn’t own a single Apple product, thinks himself uniquely qualified to instruct the most valuable tech company on earth where to spend its cash? What an arrogant putz. Get a life, Ralph!
    radarthekatMacPromike1pscooter63docno42
  • Reply 19 of 90
    claire1claire1 Posts: 357unconfirmed, member
    He thinks iPhone is overpriced and Apple owns Foxconn.

    He needs to go back to his typewriter.

    rezwits said:
     Apple is so there, and MAN WOW, am I seeing a GRIZNIP of Watches. 
    So far, I've yet to see even one Apple Watch outside of an Apple Store. Yeah Man, right on, they are taking over the world... MEH

    Where the f*** do you live?!?! When people make these comments I feel they're either lying to live in an amish paradise.



    Nader is that you?
    edited August 13 radarthekatrezwitsdocno42
  • Reply 20 of 90
    sflocalsflocal Posts: 4,202member
    If Nader were smart with his own money instead of telling people like me how to spend it, he would have invested in Apple way back when he was still relevant (?) and too the crazy profits and do as he saw fit.

    Screw people like him.  I do believe that the government should take care of their citizens, but what he is proposing is just wrong on every level.
    radarthekatdarelrexpscooter63claire1
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