CalPERS to help tech giant lobby shareholders for approval of rule clarifying votes for board members
Apple has turned to California pension fund CalPERS, which is worth $250 bn and is one of the tech company’s main critics, to help it pass proposed changes to shareholder voting rights by lobbying other shareholders at its annual shareholder meeting in February.
Apple has traditionally fought against a proposal by CalPERS to change the rules that allow shareholders only to withhold votes against directors rather than actively voting against them. This has made it possible for a board member to be elected with even a single vote in favor and multiple votes withheld.
Ahead of this year’s annual shareholders’ meeting, Apple says it aims to change the rules and has asked CalPERS to help pass the new rule, as more than half of its shareholder base must approve it, according to a report in the Financial Times.
The change is one of a series sponsored under Tim Cook, the new chief executive, including intensifying audits at suppliers, providing more details of sales at a national level, and more, according to the newspaper. The FT says Apple refused to comment on its agreement with CalPERS.
CalPERS, with broad shareholder support, has been pressuring Apple to make the change for at least two years and, ahead of the company’s 2012 shareholder meeting on February 27, states in a press release that ‘Apple needs a governance update.’
‘An overwhelming 73 percent of shareowners supported this same proposal a year ago, and we’re once again calling on Apple to listen to its shareowners and adopt a voting standard that is widely considered a basic mark of good governance,’ Anne Simpson, head of CalPERS’ corporate governance program, said in a news release last year.
‘Nearly 80 percent of the companies in the S&P 500 and 60 percent in the Russell 1000 have some form of majority voting standard, and for good reason. It’s a hallmark of accountability.’
Last week, according to the FT, Simpson said CalPERS would file a statement with regulators on February 4 to indicate its support of the regulation change and announce that it will lobby the 200 largest shareholders in the tech company to help it approve the adjustment.
Apple has said it has maintained its regulations due to a California state law, although CalPERS says the state law that does not require majority voting for directors does not hamper other companies from the state from adopting more democratic shareholder voting rules.
‘A growing number of California-based companies, including Cisco Systems, Edison International, PG&E and Sempra Energy, have adopted some form of majority voting, which shows state law is no barrier to good practice as Apple has claimed,’ CalPERS said in its press release ahead of Apple’s shareholder meeting last year.