Scott M. Stringer will urge investors to vote
against a potential $50 billion buyback of Apple stock
Carl C. Icahn presses
Apple for a $50 billion stock buyback,
some other major shareholders plan to push back.
Scott M. Stringer, plans to urge other
investors on Monday to vote against Mr. Icahn’s proposal, arguing that the
plan puts handcuffs on the iPhone maker’s management. He says Apple’s
executive team is better positioned to decide the company’s financial path.
believe this proposal is unnecessary, risky and shortsighted,” Mr. Stringer
said in a telephone interview Sunday. “It’s easy to get a quick financial
hit off a large company, but I think it’s a lot harder to plan for the
emergence of Mr. Stringer, who oversees five pension funds that together own
$1.3 billion worth of Apple shares, is the latest sign of a brewing battle
ahead of the company’s annual investor meeting on Feb. 28. On one side is
Mr. Icahn, who has used television appearances and
Twitter posts to push the company into
returning more of its $159 billion cash hoard to investors.
He has said
that he owns about $4 billion worth of Apple stock since building up his
stake in August, and has argued that his proposal, aimed for completion by
late September, is nonbinding.
Icahn is not the first to demand that Apple give out more of its cash to its
investors — his fellow hedge fund manager David Einhorn publicly fought with
the technology giant early last year — he has become the most vocal and
persistent critic of its financial practices.
On the other
side of the fight are institutions like the New York City comptroller’s
office, which has argued that Mr. Icahn has overstepped his bounds and is
pushing Apple into riskier territory. These financial decisions, Mr.
Stringer said, “shouldn’t be on one investor’s terms.”
has already committed to returning $100 billion to investors through both
share buybacks and dividends, which Mr. Stringer praised as a more balanced
Tim Cook, Apple’s chief executive, told
The Wall Street Journal last week that as part of the company’s existing
plan, it has repurchased $14 billion of its own shares in the previous two
is joining the likes of
Calpers, the giant California public
pension fund that owns $1.6 billion worth of Apple shares and has spoken out
publicly against the proposal. In an interview on CNBC last week, Anne
Simpson, the head of the pension fund’s corporate governance unit,
criticized Mr. Icahn’s approach as unproductive in light of Apple’s own
outside and lobbing a brick through a window really is not a sensible way to
engage in the conversation,” Ms. Simpson told CNBC, accusing Mr. Icahn of
pursuing a short-term agenda.
and Calpers received support for their position on Sunday night when
Institutional Shareholder Services, an influential investor advisory firm,
recommended that shareholders vote against Mr. Icahn’s proposal.
latitude should not be constricted by a shareholder resolution that would
micromanage the company’s capital allocation process,” I.S.S. wrote in a
note to clients.
letter sent to investors, Mr. Stringer argues that Apple’s board is better
positioned than Mr. Icahn to determine how much cash the company will need.
Combining Apple’s existing $100 billion program with the new proposal could
force the company to either retrieve some of its overseas cash holdings —
and pay out taxes of about 30 percent — or to borrow more money.
pointed to a warning from
Moody’s Investors Service in December,
which suggested that the credit rating agency would downgrade Apple’s debt
rating if it borrowed more money to “accommodate calls to boost shareholder
important that we give this company some financial cushion as they put new
products on the market and continue to innovate,” Mr. Stringer said.
A version of this article appears in print on 02/10/2014, on page B4 of the
NewYork edition with the headline: New York City Comptroller Resists
Investor’s Calls for Apple Buyback.
This Forum program is open, free of charge,
to anyone concerned with investor interests in the
development of marketplace standards for expanded access to
information for securities valuation and shareholder voting
decisions. As stated
in the posted
Conditions of Participation, the
Forum's purpose is to provide decision-makers with access to
information and a free exchange of views on the issues
presented in the program's Forum
participant is expected to make independent use of
information obtained through the Forum, subject to the
privacy rights of other participants. It is a Forum
rule that participants will not be identified or quoted
without their explicit permission.
This Forum program was initiated to address
issues and objectives defined by participants in the 2010 "E-Meetings"
program relevant to broad public interests in marketplace
practices, rather than investor decisions relating to only a
single company. The Forum may therefore invite program
support of several companies that can provide both expertise
and examples of leadership relating to the issues being
The information provided to
Forum participants is intended for their private reference,
and permission has not been granted for the republishing of
any copyrighted material. The material presented on this web
site is the responsibility of
Gary Lutin, as chairman of the Shareholder Forum.
is a trademark owned by The Shareholder Forum, Inc., for the
programs conducted since 1999 to support investor access to
decision-making information. It should be noted that we have
no responsibility for the services that Broadridge Financial
Solutions, Inc., introduced for review in the Forum's
2010 "E-Meetings" program and has since been offering
with the “Shareholder Forum” name, and we have asked
Broadridge to use a different name that does not suggest our
support or endorsement.