Apple Inc on Thursday adopted a measure long desired by investors and corporate governance activists, granting its shareholders a bigger say in the appointment of directors to the board of the world's most valuable technology company.
Chief Executive Tim Cook also repeated that he has been thinking very deeply about investors' demands that the consumer electronics company return some of its $98 billion in cash and securities to shareholders via a dividend.
Wall Street has bet on the rising likelihood that some of that enormous war chest could be doled out this year, since Cook told investors last week that discussions around that hoard had intensified.
We've been thinking about cash very deeply, he said, echoing previous comments. Frankly speaking, it's more than we need to run the company.
At its annual shareholders meeting in Cupertino, Apple finally acceded to demands from U.S. pension fund Calpers and other major investors that it require unopposed directors to secure a majority-share vote before getting elected to the board.
That move came after shareholders last year, in a rare show of activism for a group often content with the iPad and iPhone maker's sizzling growth and lofty share price, voted in favor of a similar proposal - despite Apple's recommendation they reject it.
Apple General Counsel Bruce Sewell said the company had previously resisted the change because it creates legal complications. But this is Apple and we don't let complexity get in our way, he said.
The proposal's adoption predictably pleased Calpers, the largest U.S. pension fund that has long sought support for such a measure to be adopted at scores of other U.S. corporations.
Speaking to shareholders and executives, Calpers portfolio manager Anne Simpson invoked the words of former British Prime Minister Winston Churchill.
We think Apple deserves the best, we want to keep Apple fresh, she said. Democracy is a wonderful thing. Despite its complexity and challenges, as Churchill said, it may be the worst of all systems until you consider the alternatives.
Apple said directors who do not manage to secure a majority vote will voluntarily resign their positions.
The meeting comes days after Apple touched a lifetime high of $526.29, cementing its ranking as the most valuable U.S. company with over $450 billion in market capitalization.
Some analysts say the stock may even scale new heights next month, when the company is expected to unveil a new version of its best-selling iPad.
FROM TVS TO CHINA
Apple's yearly powwows with shareholders at 1 Infinite Loop are generally contention-free affairs, with executives mostly deflecting questions about upcoming products - whose new features are guarded fiercely.
One shareholder nonetheless tried to find a way around executives' wall of silence about its pipeline, including an Apple TV rumored for 2012 that could mark its entree into a television business now dominated by Samsung Electronics.
I just bought a 55-inch LG TV for the Superbowl and I have 60 days to return it. Should I return it? one shareholder asked as laughter erupted. Cook declined to comment.
Away from its gadgets and bottom line, Cook continues to grapple with negative publicity surrounding accusations of inhumane working conditions at the company's manufacturing partners in China.
A handful of protesters gathered outside the meeting, holding up small placards urging Apple to make an ethical iPhone. The company has been trying to direct the spotlight on its efforts to urge partners to treat their employees better.
Recent moves include inviting independent scrutiny of conditions at its biggest production partner Foxconn in southern China, where a rash of worker suicides put Apple's supply chain under a microscope.
It also unveiled the results of labor audits at over 100 of its suppliers and allowed TV cameras onto Foxconn's closely guarded facilities.
No shareholder broached allegations of labor abuse in China at Thursday's meeting but some said afterward they wanted Apple to improve the treatment of workers in its supply chain.
With all that money, maybe we could minimize the exploitation of some of the labor force. I'd kick in an extra dollar to buy an iPod or $5 to buy an iPad if it meant somebody somewhere down the road wasn't being exploited, said retired airforce pilot Eric Schwalm as he left the meeting.
(Writing by Edwin Chan, editing by Gerald E. McCormick, Derek Caney, Richard Chang, Phil Berlowitz)