Apple shareholders voted down a proposal to force management to adopt a written succession plan for the company, according to a report from Venturebeat.
Pension funds and shareholder groups had backed a proposal for a concrete succession plan at Apple's annual shareholder meeting today. The company's board of directors opposed it. The shareholder resolution called for Apple to develop internal CEO candidates, plan for succession at least three years in advance, and adopt specific criteria for new CEOs.
The first reports from the meeting, which started at 1 p.m. Eastern time, seem to show the proposal hasn't received enough votes.
The idea for the succession plan came from the Central Laborer's Pension Fund. It 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 pension fund holds some 11,484 shares, or $3.8 million at Tuesday's closing price. The California Public Employees' Retirement System, one of the largest pension funds in the country, also said it would vote in favor. CalPERS owns 2.6 million shares, or about $881 million of Apple stock.
Institutional Shareholder Services, one of the most influential advisory firms, came 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.
If the pension funds' move were successful, Apple would have had to produce a report to shareholders and review the plan every year. The company said 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.
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 was 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 noted 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.
Jobs is often seen as the face of Apple, but it wasn't always so. The company originally replaced him in 1984, but he later returned in 1996 when Apple bought a company he had founded, NeXT. Jobs again became CEO in 1997, and one reason was that Apple had been in a fallow period in the 1990s, culminating with the ouster of Gil Amelio as CEO in favor of Jobs.
Since then, he has been a key influence on Apple's designs, and his vision has shaped many of the decisions that put Apple ahead of other electronics companies. Dispensing with native support for flash on mobile devices, or doing away with optical drives on Apple's laptops, are two examples.
Jobs has had a bout with pancreatic cancer in 2004, and in 2009 had a liver transplant. Recently he has been seen in the area prompting even more speculation about his health. While Jobs was able to attend a dinner with Obama, and been spotted around the Apple campus, the sightings so far have shown him looking gaunt. In addition, pancreatic cancer is one that has low rates of remission and low survival rates - usually about 5 percent -- after five years.
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