Apple Improves Governance

The preliminary vote gave my “say on directors pay” less than 4%, so I guess putting that proposal up at the world’s largest most profitable company with so many happy shareowners may have been a mistake. However, I note that Apple cut the pay of a couple of directors from $1.2 million to about half that, so maybe my proposal did some good.

As the New York Times reported:

And what a profitable trip it has been. Mr. Cook took a quick survey of the many accomplishments of the company: the voice-recognition software in the new iPhone, Siri (“many people’s best friend”). Twenty-five billion apps downloaded (“It’s hard to even intellectually think about a number that big”). The iPod (“continues to be the top music player in the world”). Macs (“Arguably, we’re the only company innovating in the personal computer space”). Apple stores (a million people a day come through). And of course the amazing growth in revenue last year (“More growth than H.P., Nokia, HTC, Google” — and here Mr. Cook seemed to genuinely forget the name of a once-formidable competitor whose very survival is now being questioned — “and RIM put together”).

CalPERS was certainly happy about Apple’s decision to implement a majority vote standard for its Board of Directors, announced before Anne Simpson, CalPERS Senior Portfolio Manager in charge of Corporate Governance, presented their proposal at the meeting. In a press release, she said,

Apple has honored the wishes of its shareowners with this decision. We strongly commend the Board for adopting this good governance measure and for giving its shareowners a voice in the election process.

It helped to have support from ISS Proxy Advisory Services, Glass Lewis & Co. LLC and Egan-Jones Proxy Services. More than 73% of shareowners voting their shares approved a similar CalPERS-backed proposal at Apple’s 2011 annual meeting. This year it was 80%.

Implementation will be delayed until next year because it will require a shareowner vote to ratify a change in the corporate bylaws.

It is great to see Apple joining the vast majority of the companies in the S&P 500 that already have a majority voting standard. CalPERS and and CalSTRS have done a lot to push the standard downstream but now having the largest company in the world adopt the standard should make it that much easier to get this good governance practice adopted at mid and small-caps.

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