Apple shareholder proposal for more executive compensation oversight coming to vote in 2017
An Apple shareholder has filed a request that Apple implement independent oversight of executive compensation, and Apple's bid to deny the filing has failed, forcing the company to put the proposal to a shareholder vote.
Shareholder Jing Zhao declared to the U.S. Securities and Exchange Commission (SEC) on June 13 that Apple lacked "fair, just and ethical compensation principles" due to the company's lack of independent oversight by a single firm. Zhao quotes from Thomas Piketty's controversial "Capital in the Twenty-First Century" analysis and claims that compensation packages like Apple's, and other companies like it, have led to "rising inequality in the United States" from the selection of compensation committees in a "rather incestuous manner."
Apple attorney Gene Levoff countered the claims with the SEC in early October, saying that Apple's oversight was sufficient, the proposal as written was vague, and that Apple's evaluation team was allowed, and fully in compliance with NASDAQ rules.
After a response a week later by the original filer, the SEC has denied Apple's request to put aside the shareholder request, forcing the company to take the matter to a vote during the 2017 general shareholder's meeting, barring legal challenge.
Zhao is the founder of the Comparative Policy Research Institute, a self-proclaimed "independent think tank focusing on comparative social, economical, political, and industrial policy issues" comprised mainly of Chinese researchers, scientists, economists, and engineers with experience in Japan that reside mainly in Silicon Valley. Zhao and has personally owned at least 30 shares of Apple stock since June 2014, according to memorandum attached to the SEC filing, making him eligible to make these requests of the company.
Publications by Zhao's group include "Prison Memoirs of an Anarchist," "Memoirs of a Revolutionary," "The Anarchist Lesson from the Spanish Civil War," and the "Chinese Anarchist Archives."
Additionally, Apple has a wide berth in how it may put the matter to a vote. The proposal does not specify who must comply with the proposal specifically, how abstention votes are counted, which class of shareholder may vote, nor does it put forth minimum parameters for compliance.
Shareholder Jing Zhao declared to the U.S. Securities and Exchange Commission (SEC) on June 13 that Apple lacked "fair, just and ethical compensation principles" due to the company's lack of independent oversight by a single firm. Zhao quotes from Thomas Piketty's controversial "Capital in the Twenty-First Century" analysis and claims that compensation packages like Apple's, and other companies like it, have led to "rising inequality in the United States" from the selection of compensation committees in a "rather incestuous manner."
Publications by Zhao's group include "Prison Memoirs of an Anarchist," "Memoirs of a Revolutionary," "The Anarchist Lesson from the Spanish Civil War," and the "Chinese Anarchist Archives."
Apple attorney Gene Levoff countered the claims with the SEC in early October, saying that Apple's oversight was sufficient, the proposal as written was vague, and that Apple's evaluation team was allowed, and fully in compliance with NASDAQ rules.
After a response a week later by the original filer, the SEC has denied Apple's request to put aside the shareholder request, forcing the company to take the matter to a vote during the 2017 general shareholder's meeting, barring legal challenge.
Background of the filing, and the filer
Piketty's treatise, quoted heavily in the filing, decries concentrated wealth persisting even after industrialization contributed to rising worker wages, and quality of life, with only disruptive world wars and the great depression disrupting the pattern.Zhao is the founder of the Comparative Policy Research Institute, a self-proclaimed "independent think tank focusing on comparative social, economical, political, and industrial policy issues" comprised mainly of Chinese researchers, scientists, economists, and engineers with experience in Japan that reside mainly in Silicon Valley. Zhao and has personally owned at least 30 shares of Apple stock since June 2014, according to memorandum attached to the SEC filing, making him eligible to make these requests of the company.
Publications by Zhao's group include "Prison Memoirs of an Anarchist," "Memoirs of a Revolutionary," "The Anarchist Lesson from the Spanish Civil War," and the "Chinese Anarchist Archives."
Apple's path forward
The shareholder's request won't necessarily be welcomed by the voters with open arms, however. The same individual requested Google form a wide-reaching "human rights" committee including evaluation of the same matter in 2010, and filed the same request using much the same wording with Goldman Sachs in 2013 which also ended in defeat.Additionally, Apple has a wide berth in how it may put the matter to a vote. The proposal does not specify who must comply with the proposal specifically, how abstention votes are counted, which class of shareholder may vote, nor does it put forth minimum parameters for compliance.
Comments
You uneducated plebeians are hilarious.
An Apple retail specialist makes $15/hr., which is about $32K per year (standard 40hr work week), which would put Cook at about $936k per year. Does that include stock options or just straight up salary?
Anyway, one could argue quite successfully that executive salaries are seriously out of whack. Does anyone seriously believe these dudes would quit Apple if their salaries and bonuses were halved? And if Eddie did leave, so what? Some other person would be champing at the bit for a tenth of what he gets. And they would be so keen to prove themselves we would probably get better product too. They have been able to get away with increasing their salaries to ludicrous levels only because of a happy conjunction of crony big business and crony government. Well happy for them anyway.
Edit: I think the 30x limit is gross, including stocks and bonuses (those are just another form of compensation anyways).
Maybe A solution is is to somehow change the role of big funds, part of the crony system of big business and big government that has developed these days, in shareholder votes. Do the investors in those funds get any say in how their share block is used? Otherwise grass roots shareholder initiatives like this don't get full consideration.
back to Zhao though. Quoting Picketty. Seriously? He has a credible case, why wreck it linking to that spreadsheet dilitante?
lkrupp said: Oh you Americans and your anti-Socialist rhetoric. You're the funny ones because you're clearly confusing Communism with Socialism.
If the latter, your level of ignorance about a rather impressive -- regardless of whether you agree with it or not -- piece of empirical economics (as is this blog post author's and Zhao's drivel) is rivaled only by your lack of ability to spell.