Apple shareholder proposal to force reveal of Steve Jobs succession plan gains support
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An Apple shareholder proposal to force the tech giant to publicly release a succession plan for Chief Executive Steve Jobs has been backed by Institutional Shareholder Services, a company considered to be one of the most highly influential of investor advisors.
The proposal was submitted by the Central Laborers Pension Fund in August, before Jobs announced his indefinite medical leave last month. Jobs handed most of his daily responsibilities over to Apple’s Chief Operating Officer Tim Cook but retained his CEO title.
The Central Laborers Pension Fund fund owns about 11,500 shares in Apple, or about a thousandth of 1% of the Cupertino company’s outstanding shares, according to the Associated Press.
ISS, a company that consults institutional investors on how to vote on such shareholder measures, also called for Apple’s board to release such a plan to shareholders annually.
In a statement on the Central Laborers proposal, the ISS said, ‘All companies should have succession planning policies and succession plans in place, and boards should periodically review and update them.’
The measure will go up for an Apple shareholder vote at the company’s annual meeting on Feb. 23.
In its 2011 Investor Proxy Statement, released on Jan. 7, Apple asked shareholders to vote against the measure.
‘Not just the CEO, is critical to Apple’s success,’ Apple’s board of directors said in the proxy statement. ‘Accordingly, the Board already implements many of the proposed actions and maintains a comprehensive succession plan throughout the organization.’
In the proxy statement, Apple said it commits an annual review of succession planning for its senior management, including its chief executive.
‘As part of this annual review, the Board has a formal evaluation process in which it identifies and recommends development of internal candidates for succession based on criteria that reflect Apple’s business strategy,’ Apple’s proxy statement said.
Such a move would ‘undermine the Company’s efforts to recruit and retain executives’ and ‘invites competitors to recruit high-value executives away from Apple. Furthermore, executives who are not identified as potential successors may choose to voluntarily leave the Company,’ Apple said.
Aside from ISS, the Central Laborers proposition is also supported by the Laborers International Union of North America.
In a statement, Laborers International said: ‘We’re concerned to hear the news about Steve Jobs’ health and hope to see him return to full duties soon. However, this news demonstrates the need for Apple to do well by its shareholders, including our members’ pension funds.’
The group said it has successfully proposed similar CEO succession proposals to companies such as Hewlett-Packard, Verizon and American Express.
Laborers International also said Apple had misconstrued its proposal.
‘We do not expect them to provide specific names of future executives, but merely demonstrate they have a plan in place for naming one,’ the group said. ‘This proposal would not only benefit our members’ retirement savings, but also would give reassurance to other Apple shareholders and help the company.’
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-- Nathan Olivarez-Giles