Investor advisory firm calls for Apple to disclose CEO succession plan
Concerns over the health of Apple Chief Executive Steve jobs has prompted Institutional Shareholder Services to support a shareholder proposal to require Apple to disclose a CEO succession plan.
According to Reuters, the influential advisory firm has thrown its weight behind a shareholder-proposed succession plan in the event that Jobs can no longer fulfill his duties as CEO. The proposal was submitted by the Central Laborers' Pension Fund.
The ISS has reportedly argued that shareholders would benefit if Apple put together a report on the company's succession plans. The organization's proposal would have Apple disclose those plans on an annual basis.
"Such a report would enable shareholders to judge the board on its readiness and willingness to meet the demands of succession planning based on the circumstances at the time."
The shareholder proposal was first revealed in January, when Apple declared in its 2011 Proxy Statement that it was opposed to the plan. The company's board of directors already "maintains a comprehensive succession plan" and views the publishing of it as giving Apple's competitors "an unfair advantage."
The company's board also believes that the proposal would "undermine (Apple's) efforts to recruit and retain executives," as rival companies might attempt to hire away executives listed on the list, while executives not listed might choose to leave the company. The proposal was also dismissed as an attempt to "micromanage and constrain" the board.
The proposal will be in the hands of shareholders at Apple's annual meeting on Feb. 23. Apple, in its filing with the U.S. Securities and Exchange Commission, has recommended that shareholders vote against it.
According to Reuters, the influential advisory firm has thrown its weight behind a shareholder-proposed succession plan in the event that Jobs can no longer fulfill his duties as CEO. The proposal was submitted by the Central Laborers' Pension Fund.
The ISS has reportedly argued that shareholders would benefit if Apple put together a report on the company's succession plans. The organization's proposal would have Apple disclose those plans on an annual basis.
"Such a report would enable shareholders to judge the board on its readiness and willingness to meet the demands of succession planning based on the circumstances at the time."
The shareholder proposal was first revealed in January, when Apple declared in its 2011 Proxy Statement that it was opposed to the plan. The company's board of directors already "maintains a comprehensive succession plan" and views the publishing of it as giving Apple's competitors "an unfair advantage."
The company's board also believes that the proposal would "undermine (Apple's) efforts to recruit and retain executives," as rival companies might attempt to hire away executives listed on the list, while executives not listed might choose to leave the company. The proposal was also dismissed as an attempt to "micromanage and constrain" the board.
The proposal will be in the hands of shareholders at Apple's annual meeting on Feb. 23. Apple, in its filing with the U.S. Securities and Exchange Commission, has recommended that shareholders vote against it.
Comments
And that's a good thing.
Not.
Apple management has consistently made great decisions - so I say we should let them make these decisions regarding revealing management succession planning too.
Hopefully, they won't have to implement a succession plan for a very long time!
I don't want the competition even getting a breath of a hint as to what that succession may be. It's irresponsible.
The question is whether Apple will use this time to show that they don't rely on just 1 person or Steve Jobs. I'm fully confident that Apple will succeed with or without Jobs, the question that arises is: Will Apple rely on 1 person again?
With the launch of the Verizon iPhone (Yes, Steve Jobs was around, but it clearly showed the move towards using multiple people) and then News Corp's the Daily, Apple used different people.
With the rumor of the iPad 2 launch next week, we'll have to wait and see if Cook or Cue reappear or if it's someone else.
Will Apple make the same mistake again? My guess is they won't, so give them a little room, at least until they prove they don't deserve it.
Calling all Apple investors to oppose this motion as well. Does anyone really think that Apple doesn't have a good plan in place? If they must out the plan, it should just state the obvious "Tim Cook" and that's it. No need to get into details.
It says something, if Apple gives Tim Cook control every time Jobs leaves. Clearly, he can lead Apple, but give it time, see how Apple handles this absence of Jobs.
On the other side, Steve Jobs IS Apple. He has been criticized over his autocratic ruling of the company. But it has proven to work. Apple is the second largest company in terms of capitalization (only behind Exxon) in the world. Apple has revolutionized mobile computing and revolutionized the way people listen to music. Steve Jobs is a genius, no doubt. His accolade from the press are extensive. Therein lies the problem. Without Steve Jobs, Apple could (not would) flounder and plumet. Right along with the stock price. Apple was doing fine when Jobs and Woz started it. Then Jobs was forced out and the company almost failed. Microsoft bailed them out. But Jobs return brought the company to its current glory. As a shareholder, I would like to know who is going to run the company if Jobs is unable to return. I want to be assured that my investment is sound.
It is my opinion that Steve does have a very sound succession plan. He has hired very good people to run the company. The company has done quite well during his semi-absences, though he still kept significant involvement.
I wish Steve Jobs only the very best. When I receive my ballot, I will vote with Apple recommendation and hope that I didn't make a mistake. But Steve Jobs and Apple know this company better than anyone else, especially me. Steve's salary is $1. He and his family make more money if the stock price goes up. His recommendation to vote against the proposal is not, IMO, based upon personal greed, but rather for the good of the company.
What a foolish idea!
. Will Apple rely on 1 person again?
They don't now. And ever since the pricing shorting a couple of years ago Jobs has been involving several folks in the announcements just to drive home that he is not the only person at Apple.
As an APPL investor, I think this idea is beyond moronic.
Apple has said they wouldn't release that info for strategic reasons and that's good enough for me. They're not morons. Steve does not want his company to crash and burn when he passes... This is his legacy!
As an investor for 5+ years, they have earned my trust.
A proposal like this makes me think they: Just. Don't. Get. Apple.
Well said.
No matter who follows Jobs, he won't be Jobs. A Steve Jobs comes along maybe once in a lifetime. Whoever follows him will be less.
Companies' fortunes rise and fall. Once Sony ruled the world. Now they don't. Once Edison, DIsney and Ford strode the world like giants. When they passed, their companies' fortunes gradually ebbed. It happens.
Deal with it.
With Apple so far, the less internal info we get the better!
I will vote my shares for this proposal. I think Apple's defense is silly, a very weak excuse for creating as many impediments to understanding the inner workings of the company as possible. It is not the case that Apple will need to disclose the names successors in the plan -- they can be far more general than that. Some also apparently believe it's unusual for companies to have disclosed succession plans. It is not. What's unusual is Apple's handling of this issue, which is why they are facing shareholder proposals like this.
Please, don't be insane.
Let's go through some ideas: How about Steve Wozniak?
I will vote my shares for this proposal. I think Apple's defense is silly, a very weak excuse for creating as many impediments to understanding the inner workings of the company as possible. It is not the case that Apple will need to disclose the names successors in the plan -- they can be far more general than that. Some also apparently believe it's unusual for companies to have disclosed succession plans. It is not. What's unusual is Apple's handling of this issue, which is why they are facing shareholder proposals like this.
...at what point do shareholders get to make decisions for the executive team running the company? How do you balance shareholder "need to know" with executive need to protect critical strategic information in order to stay competitive?
Apple has disclosed that there is a succession plan in place, what more do shareholders need to know? While it is not unusual to publish a succession plan for a company, it is also a discretionary decision by the BOD to publish that and the level of detail published. Apple is not a co-operative company - they are a publicly held company with an active and informed BOD, producing revenue and stock performance well above the market trends.
What if Apple bowed to self-interested shareholder demands and the result tanked the stock and devalued Apple - who would be to blame? Certainly not the shareholders, the BOD would be on the line for such a decision and it's impact. No one would think to hold the shareholders accountable for such a decision, ill-advised though it may be, no matter how strident the demands to do it. But then maybe the interests of the shareholders in question was not to maintain the stock performance but to deliberately tank the stock and leverage that to purchase more shares. No one has a higher vested interest in the well-being and performance of the company than the BOD and the executive team, regardless of how many shares a pension fund holds. Shareholders have conflicting and sometimes competing interests where the company is concerned - and those interests are in no way consistently in the interests of the company and usually only in the best interest of the shareholders making the demands.
DISCLAIMER: I hold shares in Apple, Inc.