The Shareholder ForumTM


"Say on Pay" Proposals

Forum Home Page

"Say on Pay" Home Page

Program Reference


San Jose Mercury News, February 25, 2009 article


Apple shareholders vote down 'say on pay,' criticize handling of Jobs' health disclosure

Apple shareholders generally approve of the way its board and executives are running the company, but that doesn't mean they wouldn't improve a few things.

That was the message Wednesday at the iPhone maker's annual shareholder meeting. At the gathering, the first in years without CEO Steve Jobs, who is out on medical leave, investors re-elected all of Apple's sitting directors and voted down four different shareholder proposals.

Among those voted down was a proposal that urged Apple to give shareholders an advisory vote every year on the pay packages the company provides top executives. The same "say on pay" proposal passed last year with a majority vote.

Still, underneath the amity of the voting results were some signs of discord. Given the chance to speak at the meeting, individual investors and shareholder activists criticized the company's leaders for Apple's environmental policies, the way they handled disclosures about Jobs' health and for the company's decision to pull out of the Macworld trade conference.

Al Gore, the former vice president and current Apple board member, drew particular scrutiny. Gore, a Nobel Prize laureate for his activism on climate change, drew particular criticism for not forcing Apple to make a stronger stand on the issue.

There's a disconnect between Apple having on its board one of the world's foremost authorities on global warming and the company's lack of commitment to reduce greenhouse gasses, noted Conrad MacKerron, director of the Corporate Social Responsibility Program at As You Sow, an activist group.

"It is a disappointment," said MacKerron

Gore did not respond to the criticism. Despite not having a specific policy on global warming, Apple has increased its disclosure in recent years of the environmental impact of its products and made commitments to reduce its use of certain toxic chemicals.

Still, without Jobs present, the meeting had something of a different tone than previous ones. Most notably, while Gore didn't speak, other members of Apple's board did, addressing questions raised by shareholders. That was a stark contrast with previous meetings.

Two years ago, shareholders upset about the company's backdating scandal tried repeatedly to question company directors about the scandal and Apple's investigation into it. But Jobs refused to let directors answer the questions and none of them stood up to him.

"It's a new era," said Scott Adams, an investment analyst at the American Federation of State, County and Municipal Employees, a union that sponsored the "say on pay" proposal. Noting the majority vote on that proposal last year and the board's new openness, he added, "I'm hoping that "... will allow for meaningful dialog over compensation issues."

Not that shareholders likely gleaned a lot from the directors' responses to questions on Wednesday. Brandon Rees, who works in the AFL-CIO's investment office, criticized the board for not disclosing more sooner about the state of Jobs' health.

Rees asked directors what the board knew about Jobs' health problems and when it found out that information. Rees also asked that directors disclose the company's succession plans, should Jobs not return as CEO.

In response, Art Levinson, CEO of Genentech and co-lead director of Apple's board, declined to say what Apple's board has known about Jobs' health. He said that while the board has discussed succession plans ever since he has been a member, it wouldn't disclose them until or unless there's some reason to believe that Jobs won't return to head the company.

Similarly, when asked whether the board would consult with shareholders about compensation issues in the future, given the support investors showed last year for "say on pay," co-lead director Bill Campbell was non-committal. The vote last year indicated that shareholders want more information about how Apple pays executives, he said.

The information in Apple's regulatory filings about how it pays executives "couldn't be more clear," Campbell said.

Still, the meeting wasn't overly contentious. Shareholders praised the company for its performance. And one shareholder, noting that yesterday was Jobs' birthday, wished him well and led the crowd in singing "Happy Birthday" to the CEO.

The meeting "was one of the best I've seen," said Edward Montenegro, a longtime Apple investor. "It covered so many issues."

Apple did not release the preliminary vote totals. Company officials said the company would release the final votes with its second quarter earnings report, which will be filed later this year.

Contact Troy Wolverton at or (408) 920-5021.


Copyright 2009 - San Jose Mercury News





This Forum program is open, free of charge, to anyone concerned with investor interests relating to shareholder advisory voting on executive compensation, referred to by activists as "Say on Pay." 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 Summary. Each 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.

The organization of this Forum program was supported by Sibson Consulting to address issues 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 performance leadership relating to the issues being addressed.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to

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.