Apple’s annual shareholders’ meeting was held virtually on March 10th. It was spectacular. Apple executives appeared as Memojis during the meeting. Shareholders who submitted proposals spoke via prerecorded messages. Apple also showcased a handful of videos highlighting its current lineup of products.
Coming to vote, despite controversies, Apple won support for all of the positions it held on every proposal. This is because management agreed on two shareholder proposals, negociated ahead of the meeting. A major difference with last year, when Apple faced 6 dissident resolutions out of 10 total, and a strong shareholder request to pull Al Gore out of Boardroom. This dissident resolution failed to get shareholder approval 2022, but Apple needed to secure 2023 vote outcome.
The first shareholder request this year was an audit of its labor practices ahead of this meeting. Apple had been accused of undergoing anti-union tactics as employees at Apple stores push unionization efforts.
Under pressure from his investors, Apple had also reduced CEO Tim Cook maximum salary for 2023 by $50m, from $99m to $49m, with only $3m fixed.
This being negociated, Apple obtained shareholder approval for all board members, when the National Legal and Policy Center (NLPC) activist association had proposed to remove Al Gore and CEO Tim Cook from the board of directors. The NLPC also sponsored a shareholder proposal that asks Apple to fully disclose the risks of doing business in China and the full extent of its supply chain there.
General business practices
The first two proposals, all by Apple, were regular business requirements and were even perfunctory. They were regarding the election of directors, and all nine nominated were already on Apple’s board.
Similarly, Apple has previously used Ernst & Young as its auditor, and it successfully proposed retaining the company once more.
Compensation
The third and fourth proposals were both made by Apple, and both regarded pay. Apple asked shareholders to approve its Executive Compensation plan. Ahead of the meeting, Apple had announced a cut of $50 millions for 2023 maximum compensation of Tim Cook, going down from $99 millions to $49 millions.
Potentially a little more controversial was the frequency of Say on Pay Votes. Some shareholders requested to debate every pay raise or stock change during the year. Instead, it was previously done as an annual overall vote, and Apple successfully got it to stay like that.
Civil rights
The fifth proposal discussed was the first to be posed by shareholders. All of the follIt is a Civil Rights and Non-Discrimination Audit Proposal, and some shareholders wanted an annual examination of Apple’s impact on these issues.
Apple’s view had been that there was no need for such an annual audit, given the company’s existing approach to pay and diversity. A majority of the shareholders’ meeting was persuaded, and there will be no such audit.
Communist China Audit
A sixth proposal was also tabled by shareholders, supported by the NLPC, and this one related to Apple’s connections with China. Specifically, they wanted an annual audit that specifically reported on how much — and in what ways — Apple remains dependent on China.
Apple is unlikely to ever entirely cease working with China. But Apple successfully argued that it already provides exactly this information in its voluntary reporting, as well as its Securities & Exchange Commission filings.
Greater communication with shareholders
The seventh proposal saw shareholders seeking a change in Board Policy. It regarded how and how often Apple board members may communicate with shareholders.
Apple wanted this proposal rejected because it would place too prescribed limitations, and therefore potentially detract from the Board’s functioning. A majority of shareholders followed Apple recommendation.
Pay gaps
Separately to the executive compensation issues, shareholders also tabled a proposal regarding Racial and Gender Pay Gaps. Shareholder and activist investor Arjuna Capital claims that Apple’s reporting ignores “structural bias” against women and minorities.
Apple persuaded a majority of shareholders at the meeting that it already reports sufficiently adequately on pay, inclusion, and diversity.
Proxy access
The final proposal in the meeting regarded Shareholder Proxy Access Amendments. Proxy access concerns the right for shareholders of a company to propose candidates for board director, and in this case the proposal was that they should be able to nominate more than one candidate.
Apple pointed out ahead of the meeting that no shareholders sought changes to the existing rules last year, and so it wanted to reject the proposal.
Finally, this 2023 shareholder meeting went smoothly. Apple had negociated in advance with main shareholders, paving the way for most corporates this year.