Apple's new chief executive to face shareholder revolt
Sunday 28 August 2011
Apple's new boss, Tim Cook, is expected to face a corporate governance revolt from the computer company's shareholders at his first annual meeting as chief executive.
Calpers, the influential US pension fund, opposes the system for electing directors and is expected to keep the pressure on the revamped board at February's meeting.
Mr Cook was promoted to run Apple last week when founder Steve Jobs resigned because of ill health. Mr Cook had been deputising for his absent boss since January.
Investors were critical of the company's failure to spell out its succession plans while Mr Jobs was absent and are concerned about the voting process.
Anne Simpson, the senior portfolio manager at Calpers, had already complained to the founder, who recommended Mr Cook as his successor at last week's board meeting.
Ms Simpson wants directors to be elected by a majority of investors, but Apple says that this could mean they could be rejected if too few shareholders vote.
The eight-man Apple board includes former US vice-president Al Gore. Mr Jobs will remain as chairman, splitting that role from the chief executive position. While this is regarded as good practice in Britain, it is unusual in the US. Some key investors claim Mr Jobs has had too much influence over the board.
Calpers – the $1.9bn California Public Employees' Retirement System – provides retirement and health services for more than 1.6 million people in Apple's home state. Other critics of the company's governance include the Laborers' International Union of North America and the esteemed Institutional Shareholder Services, which advises other major pension funds.
Jeffrey Sonnenfeld, a dean at Yale University's School of Management, blames the close-knit board for the non-disclosure about Mr Jobs' illness.
An attempt by Calpers before Mr Cook's appointment to change the voting system was opposed by the company, but a resolution is likely to be put to next February's investor meeting.
The pension fund declined to comment on Mr Cook's promotion, but Ms Simpson has previously said a company that thrives on innovation should have the best governance practices possible.
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