Apple 2023

Apple 2023 Proxy Access, Pay Gaps, Engagement

Apple 2023 annual meeting is March 10, 2023, at 9:00 A.M. Pacific Time. To attend, vote, and submit questions during the Annual Meeting, visit here. You will need your voter control number. Of course, I recommend voting in advance. To enhance corporate governance and long-term value, vote Against Gore, Jung, Levinson, Auditor, Exec Pay, and the first two shareholder proposals. Vote FOR the lasthree 3 shareholder proposals, including Proxy Access Amendments

Apple designs, manufactures and markets smartphones, personal computers, tablets, wearables, and accessories worldwide. It also sells various related services. How I voted and why to enhance corporate governance and long-term value.

I voted with the Board’s recommendations 53% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A).  Read Warnings.

Apple 2023: ISS Rating

From the Yahoo Finance profile page: Apple Inc.’s ISS Governance QualityScore as of February 1, 2023, is 2. The pillar scores are Audit: 3; Board: 1; Shareholder Rights: 1; Compensation: 10. Corporate governance scores courtesy of Institutional Shareholder Services (ISS). Scores indicate decile rank relative to index or region. A decile score of 1 indicates lower governance risk, while a 10 indicates higher governance risk.

Apple 2023: CorpGov Recommendations

ItemOther Recommendations (when available)CorpGov.net Recommendation
1 – DirectorsEgan-Jones, same as meFOR, except comp com & those with more than 12 yrs tenure: Gore, Jung, Levinson, & Sugar  Tough because I love Al Gore but Apple is a model for other companies. We are paying CEOs far more than we should and we are hollowing out the middle class that drives our economy and democracy.
2 – Ratify AuditorsEgan-Jones, same as meAGAINST Ernst & Young LLP (14 years questionable independence)
3 – Approve Executive CompensationE-J AgainstAGAINST  $99M/yr too much, so is 60% that. A pay ratio of 1,177 to 1 overweights CEO’s contribution. When I was a kid, that ratio was more like 20:1 and I grew up thinking those CEOs were out of touch with real people, the economy, and what is necessary for democracy. This is a tough one. I am sure Cook is doing a great job, but I doubt he works more or harder for any pay above about $10 million a year…. which would still be overly generous. These aren’t lifetime earnings; these are yearly. See also: Apple Inc. Allegedly Paid Tim Cook, Other Executives Too Much
4 – Frequency of Say on Pay VotesOne YearOne Year
5 – Civil Rights and Non-Discrimination AuditE-J ForAGAINST. National Center for Public Policy Research thinks pay is awarded on the basis of race, sex, orientation, and ethnic categories not merit. I don’t think so. I prefer an audit that looks at pay and discrimination more objectively.
6 – Communist China AuditE-J ForAGAINST. Apple is trying to move some assembly to India. There’s also Apple’s opposition statement and the danger of adding fuel to the fire on China (who we do have to work with on many issues). Frankly, given their track record, I’m not sure I want the National Legal and Policy Center (proponent) to be the ones representing the public on this issue. I try to vote by issue rather than proponent, and maybe I will in the future with them but not yet.
7 – Board PolicyE-J Against. Doing enoughFOR I agree with Nia Impact Capital’s exempt solicitation
8 – Racial and Gender Pay GapsE-J FORFOR I agree with Arjuna Capital’s exempt solicitation
9 – Shareholder Proxy Access AmendmentsE-J FORFOR I agree with my exempt solicitation

Apple 2023: Proxy Voting Notes

I am mostly relying on the automated voting I set for my portfolio at Iconikapp.com. However, before announcing my votes, I also check with Egan-Jones and several funds that announce their votes in advance. You may want to check those fund votes, especially funds like Calvert, Norges, and Trillium that also post reasons why they voted as they did. Their reasons sometimes lead me to change my votes.
The company CEO-worker pay ratio was 1,177 to 1. The CEO’s total compensation is greater than the median of its direct peers. When I vote against pay, I also vote against the compensation committee members. Additionally, I voted against Ron Sugar, whose independence is questionable after serving on the board for 13 years. Similarly, Ernst & Young has been Apple’s auditor for 14 years, so I also question their independence.
The last three shareholder proposals offer substantive benefits to shareholders and the larger society.

Apple 2023: Shareholder Proxy Access Amendments

Twenty years ago, few conceived that any company adopting proxy access would limit shareholder nominees to one person when everyone knows it takes two to move a motion at a Board meeting.

Yet, that’s what three companies have done: Arch Resources (previously known as Arch Coal), EOG Resources (formerly known as Enron), and Apple (formerly known as Apple Computer).

The Board didn’t like that comparison. In a request to the SEC, Apple previously alleged a similar proposal “falsely” described the Company as a “distinct outlier” and “laggard” regarding its proxy access bylaw.

The SEC flatly rejected Apple’s contention that my description was false.

Apple is generally at the forefront. However, Apple is a laggard, a distinct outlier in providing shareholders a voice on the Board.

Don’t let the company Apple keeps be associated with mountain top removal or accounting fraud.

Other Recommendations

In looking up a few funds in our Shareowner Action Handbook, I see several funds have reported their votes.

Apple 2023: Update on Voting Results

3 Advisory Vote on Executive Compensation 89.1%
5 Shareholder Proposal Regarding Civil Rights Audit  1.4%
6 Shareholder Proposal Regarding Report on Corporate Operations with China  4.4%
7 Shareholder Proposal Regarding Shareholder Engagement with the Board  6.5%
8 Shareholder Proposal Regarding Median Gender and Racial Pay Equity Report 33.8%
9 Shareholder Proposal Regarding Proxy Access Bylaw Amendment 31.0%

Apple 2023: Issues for Future Proposals

Looking at insightia for anti-shareholder provisions:

  • Apple’s proxy access continues as an outlier, allowing the election of only one director
  • No requirement to separate the CEO and Chair
  • The average tenure of directors is more than 11 years.

Apple 2024: Mark Your Calendar

Matters for inclusion in the proxy materials for the 2024 annual meeting of shareholders, other than nominations of directors, must be received on or before the close of business on September 14, 2023. All proposals must comply with Rule 14a-8 under the Exchange Act.

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