Pension funds and shareholder groups will back the proposal for a succession plan at Apple's shareholder meeting on Wednesday.
The proposal, from the Central Laborer's Pension Fund, was filed in August, before Chief Executive Officer Steve Jobs' current health problems caused him to take a leave from his duties as chief executive last month.
The shareholders are calling for the company to develop internal CEO candidates, plan for succession at least three years in advance, and adopt specific criteria for new CEOs. The pension fund holds some 11,484 shares, or $4.02 million at Friday's closing price.
Institutional Shareholder Services, one of the most influential advisory firms, has come out in favor of the succession proposal. In a report, ISS said that although the company has put Chief Operating Officer Timothy Cook in charge of the day-to-day duties managing, even a shareholder who believes Apple would be in good hands under Cook could be justifiably concerned about the company's plans for handling future succession events.
Apple would have to produce a report to shareholders and review the plan every year. The company says it already conducts annual reviews and has a formal process for internal candidates and disclosing the candidates would put Apple at a disadvantage. On top of that, people not identified as potential CEOs may decide to leave. Apple has asked that shareholders vote against the plan.
Apple had originally replaced him as CEO in 1984, but he later returned in 1996 when Apple bought a company he had founded, NeXT. Jobs has been CEO of Apple since 1997. He has been a strong influence on the company's designs, and has been the public face of Apple computer for many years.
Jennifer O'Dell, assistant director of corporate affairs at the Laborers International Union of America, said management had misconstrued the proposal, and that the union didn't want the names of candidates. But O'Dell noted that another reason for floating the idea is that many companies hire outsiders to be CEO, and they often have to lure them in with big bonuses or large compensation packages.
The ISS report also notes that disclosing who a potential CEO might be isn't necessary - Apple could simply say whether succession issues were discussed at a given meeting, for example.
The California Public Employees' Retirement System, one of the largest pension funds in the country, says it will vote in favor. CalPERS owns 2.6 million shares, or about $911.1 million of Apple stock.
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