29th Aug 11
New Apple chief executive set for shareholder revolt
by Katie Naylor
Bite of the Apple: Shareholders concerned about Cook's appointment
Bite of the Apple: Shareholders concerned about Cook's appointment
Tim Cook, the new boss of Apple, is expected to have to face a shareholder’s revolt at his first annual meeting as the company’s chief executive.
US pension fund Calpers opposes the system used for electing directors and therefore is likely to heap pressure on to the revamped board at the meeting in February. Mr Cook was promoted to his new role last week when Steve Jobs, the computer company’s founder, resigned as a result of health problems. Mr Cook had been standing in for his boss since the beginning of the year.
Investors were extremely critical of the company’s decision not to reveal its succession plans when Mr Jobs was not able to work and have concerns over the voting process.
Calpers’ senior portfolio manager, Anne Simpson, had already lodged a complaint to Mr Jobs, who recommended Mr Cook to be his successor at a board meeting last week. Ms Simpson feels directors should be elected by a vote among investors, but Apple claims this could result in them being rejected if not enough shareholders vote.
Apple’s eight-man board includes Al Gore, the former vice-president of the US. Mr Jobs will stay on as chairman, splitting that position from the chief executive role. While this is generally looked upon as good practice in the UK, it is not so common in the US. Certain key investors are of the opinion that Mr Jobs has had too much influence on the board.
Calpers provides health and retirement services for over 1.6 million people in California, the home state of Apple. Other critics of how the company in governed include the Institutional Shareholders Services, which offers advice to other major pension funds, and the Laborors’ International Union of North America. Jeffrey Sonnenfeld from the School of Management at Yale University, lays the blame with the close-knit board for not revealing any information on Mr Jobs’ illness.
Calpers made an attempt to alter the voting system prior to Mr Cook’s appointment but it was opposed by Apple; however, a resolution is expected to be put to the investor meeting next February. The pension fund did not comment on the promotion, but Ms Simpson has said previously that a company which thrives on innovation must have the best possible governance practices.
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