This week, Apple finally released the full
vote results from its annual meeting in May. The results show that
shareholders withheld between 23 and 36.8 percent of their votes from six
directors in an apparent protest over the computer company’s past
Cornish Hitchcock, an attorney for the Amalgamated Bank’s LongView fund,
which filed an options reform proposal at Apple, said the significant
withhold votes were a “surprise” because institutional investors didn’t
wage a public “vote no” campaign.
"The vote is a wake-up call to the board to do its job," Hitchcock told
The significant withhold vote also is notable because the Cupertino,
California-based company’s shares have soared 95 percent in the past three
years. In 2006, every board member was elected with more than 97 percent
Apple is one of more than 220 companies that have disclosed internal or
federal probes in the timing of past option grants. A 2006 special board
committee investigation concluded that more than 42,000 grants between
1997 and 2002, including a grant of 7.5 million options to CEO Steve Jobs,
were backdated. In December, the company announced a $105 million
restatement to account for those options.
According to an Aug. 8 regulatory filing, compensation committee chairman
William V. Campbell, former compensation committee member Arthur Levinson,
and Jerome B. York, who helped conduct the special investigation, received
33.6 percent, 33.8 percent, and 36.8 percent opposition, respectively.
The special committee consisted of York, Eric Schmidt, and former U.S.
Vice President Al Gore. Schmidt received a 23 percent negative vote, while
Gore had 28 percent opposition.
York also served on the compensation committee in 2001 when Jobs’ options
grants were approved. While York said he recused himself during the
special committee discussions of the 2001 grants, his service on both
committees may have contributed to the greater opposition that he
Investors withheld 23.9 percent of their votes from pay committee member
Millard Drexler, while Jobs had 2.4 percent opposition.
Shareholders also expressed their concern over Apple’s compensation
practices by giving significant support to three pay-related proposals.
The LongView proposal, which asked the company to fix grant dates at the
start of each fiscal year, received a 47.4 percent vote, even though the
company plans to no longer issue options. A proposal asking for an annual
advisory vote on executive pay won 46.7 percent support, and a resolution
requesting a pay-performance link earned a 38.4 percent vote.