Apple shareholder initiative most likely to fail

From Reuters' "ISS urges Apple shareholders to vote against CEO Cook's bonus" posted Wednesday:

Proxy advisory firm Institutional Shareholder Services (ISS) urged Apple Inc (AAPL.O) investors to vote against Chief Executive Officer Tim Cook's remuneration, citing concerns around the magnitude and structure of his equity award.

Apple will hold its annual shareholder meeting in the first week of March.

"There are significant concerns regarding the design and magnitude of the equity award made to CEO Cook in FY21... Half of the award lacks performance criteria," ISS said in a letter on Wednesday.

My take: I'd like to see performance criteria for ISS. From Wikipedia...

Institutional Shareholder Services Inc. (ISS) is a proxy advisory firm. Hedge funds, mutual funds and similar organizations that own shares of multiple companies pay ISS to advise (and often vote their shares) regarding share holder votes. It is the largest such firm, with over 61 percent of the business.

In response to ISS's recommendations to vote against fee-shifting provisions in the event of securities fraud litigation, corporate interests have criticized ISS and suggested that it needs to be regulated.

9 Comments

  1. Miguel Ancira said:
    I urge everybody to tell ISS to just shut up

    5
    February 16, 2022
  2. Kathy Corby said:
    Can’t wait to get my forms…. so that I can vote to pay the guy. He’s working for me! and doing a damn good job of it.

    8
    February 16, 2022
  3. Robert Paul Leitao said:
    Compared to what some professional athletes are paid? From a performance standpoint, Tim Cook is definitely having a better year!

    4
    February 16, 2022
  4. Jerry Doyle said:
    I’ve always advocated for corporate boards to reform CEO salaries and pay by tying them to the company’s share price. The share price often is considered the market’s best measure of the company’s value.

    Tim Cook has performed for Apple in such a successful way that it is difficult to criticize his pay package even when it is over 1,400 times more than the average Apple employee’s wage. The stock price under Tim’s leadership has increased 400% over the past five years vs. the broader market, which is up only 90% over the same time frame. Yet, I have these ambivalent feelings when executives can make as much in one hour as a worker on the front lines makes all year.

    The increasing growing inequality between Americans leaves the vast majority in the working class feeling and believing that something just isn’t right today. Much has been written on the subject of “who gets what in America.” The claim that income is distributed according to one’s contribution to productivity is difficult to embrace. If the wealthy or the rich make so dang much then it has to be because they are that much more productive members in the world-of-work; and therein lies the confusion.

    So, the elite who are no less the governing class (or should I say the influencers of the governing class) present us this theory to minimize public discussion, the same as we use it here on this blogged subject to minimize public discussion of what everyone knows is true: that those with the most income and wealth have the most political power, and that they use that power to perpetuate themselves.

    Please understand that my words are not targeted at Tim Cook, but at the system as it exists. It is a system contributing to the hardening of the class structure in American society resulting in an ever widening gap between those at the top who control the rest of the economy.

    3
    February 16, 2022
  5. Michael Goldfeder said:
    ISS is nothing more than a pimple with no skin in the game pontificating from their soapbox. They tell mutual funds how to vote shares? Really? These fund managers can buy and sell equities but cannot vote on shareholder proposals in the best interest of their own fund? What imbeciles!

    This symbiotic relationship reminds me of what a management company does in an HOA. They have no power of their own. Yet they tell the homeowners what to do while they are paid by the Homeowners Association (“HOA”). The Homeowner’s Board of Directors who are actually supposed to be in charge, yet they relinquish power to an outside company.

    The same situation is going on here. A big nothing burger IMO! Just more Apple grandstanding for the clickbait. Perhaps anyone who has shares in a mutual fund ought to email the manager and tell them to fire ISS right now as they’re stealing “our” money!

    It’s about as stupid as having the RNC, DNC, or The Coalition for App Fairness telling a mutual fund manager how to vote their shares on corporate proposals via proxies for the fund’s shareholders. Please!

    1
    February 16, 2022
  6. John Konopka said:
    I’ve already voted my shares. You should have gotten a notice about this already. I vote electronically at proxyvote.com.

    Has a shareholder initiative ever passed at an Apple shareholder meeting? Seems these are always long shots.

    My guess is if any initiative got more than some significant level (20%?) then the board would take some action along those lines.

    CEO pay is odd. I read a while back that CEO compensation used to be kind of secret. Then people wanted to make it public to shame them. It had the opposite effect as they started to one-up each other. Maybe that is apocryphal.

    For a company the size of Apple it seems worthwhile to reward the CEO if they are doing well as a means to keep them around. If you are the founder and own most of the shares then you have clearly earned it.

    In other cases, I find it hard to understand yearly pay over something like $10M. If they offered you a $1M bonus would you work that much harder? If you got that extra million would you even notice?

    CEO pay seems complicated. According to this site Tim only earned $14.8M, ranking him #56 among CEOs. Satya Nadella of Microsoft got just over $44M, ranking him #3.

    Larry Culp of GE was #1. He got $72.8M. Maybe that was a good year for him.

    https://www.equilar.com/reports/80-table-highest-paid-ceos-2021-equilar-100

    2
    February 16, 2022
  7. bas flik said:
    untill now Cook is heavily underpaid compared to other ceo’s. he has made 2 trillion for shareholders. he created millions of jobs in China. what he has accomplished in China is beyond normal. you can not compare an average Apple worker with Cook. without Cook Apple would not have existed and already bankrupt. he saved the company from Steve Jobs. Anyway why vote in shareholders meetings while you can sell or buy your shares.

    0
    February 17, 2022
  8. David Emery said:
    I’ve always voted No for Al Gore, but he’s still on the board 🙂

    1
    February 17, 2022

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