Apple Investors Back Board, Reject Measures Company Opposed

Apple Inc. investors reelected its board, approved its compensation plan and rejected the shareholder proposals that the company opposed, giving the iPhone maker a clean sweep during its annual meeting.

| Updated on: Mar 12 2023, 07:28 IST
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Apple Inc. investors reelected its board, approved its compensation plan and rejected the shareholder proposals. (REUTERS)

Apple Inc. investors reelected its board, approved its compensation plan and rejected the shareholder proposals that the company opposed, giving the iPhone maker a clean sweep during its annual meeting.

A preliminary tally of the votes showed that the four measures Apple supported, including its board slate and compensation, were approved Friday. The five shareholder measures that it asked investors to reject failed to gain enough votes to pass.

The company had sought to stave off investor concerns about compensation in the run-up to the shareholder meeting. Apple said in January that Cook's pay package for 2023 would decline more than 40%, going from over $99 million in 2022 to a target of $49 million this year. The CEO's pay will also be more closely tied to overall company performance. The reduction came after institutional shareholders and advisers criticized his compensation.

Cook's pay for 2023 will include a $3 million base salary, a $6 million cash bonus and stock awards worth about $40 million. Apple's other top executives, which include the chief operating officer, finance chief, general counsel and head of retail, will each receive compensation of about $27 million apiece this year. Shareholders also approved a proposal to vote on compensation annually.

A “civil rights” measure sought to commission a company audit on Apple's impact in that area, including its inclusion and diversity efforts. Last year, shareholders defied Apple's recommendation and voted for another civil rights proposal. Apple advised shareholders to vote against the measure this year, arguing that the audit from last year was already in progress.

A measure also sought to make Apple report annually on its reliance on China, which a shareholder group called a “serial human rights violator, a geopolitical threat and an adversary to the United States. ” Apple pushed back on the proposal, saying it is committed to human rights and that it already provides information about its business with China in filings with the US Securities and Exchange Commission. The measure failed.

The other rejected proposals included one about board director engagement with shareholders, the reporting of racial and gender pay gaps at the company, and a bylaw amendment that would call for more shareholder representation on the board.

Apple's entire board, which includes Cook, Chairman Arthur Levinson, former US Vice President Al Gore and BlackRock Inc. co-founder Susan Wagner, was reelected. An Apple shareholder had called for the removal of both Gore and Cook, an effort that didn't gain momentum.

The Cupertino, California-based company has held the meeting virtually since 2021, when the Covid pandemic prompted the change. During Friday's gathering, Cook made the introductory remarks and took questions. Kate Adams, the company's general counsel, handled the formal portion of the meeting and the voting process.

The executives took the form of memojis — the virtual characters Apple offers in iMessage — and shareholders who submitted proposals spoke via prerecorded messages. Before the meeting began, Apple showed videos of its latest devices, including the new AirPods Pro and Apple Watch Ultra, in addition to billboards globally highlighting the iPhone 14 Pro. The company also played a commercial for the new yellow iPhone 14 color.

Apple shares have climbed about 15% this year, far outpacing the S&P 500 Index. The stock slipped 1.1% to $148.93 as of 1:15 p.m. in New York on Friday.

Shareholders voted on nine proposals in all: four from Apple and five from outside investors. While shareholders typically abide by the company's advice, they have broken with management on a few issues in recent years. That includes voting last year in favor of a public report on using concealment clauses in employee contracts.

At Friday's meeting, Cook said that Apple has adapted to the long-term effects of the pandemic, as well as the war in Europe and economic tumult. He also talked up the company's latest Apple Watch, TV set-top box, iPad, iPhone, HomePod and AirPods features. And Cook touted the latest shows on its TV+ streaming service and services like Apple Music, Pay and Fitness+.

Cook said he sees an “incredible amount of opportunity” in India and reiterated plans to soon open the company's first store in the nation. Apple also is breaking India out into its own sales region, further signaling the country's importance, Bloomberg News reported earlier this week. Cook talked up growth in Brazil, Indonesia and Mexico as well.

The CEO said Apple continues to plan for annual dividend increases in the future. Asked about the economy, Cook said that it's as “complex” as it's ever been and that the company is being very deliberate on hiring and spending. Cook also said that Apple will continue working on streamlining its supply chain.

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First Published Date: 12 Mar, 07:27 IST