Apple shareholders nix CEO succession disclosure
Shareholders reject a proposal that would have forced the company to lay out a plan for replacing its CEO, in light of Steve Jobs' current medical leave.
CUPERTINO, Calif.--Apple shareholders today rejected a proposal that would have required the company to disclose its succession plan for senior management.
The proposal was one of two by shareholders aimed at adding transparency and a new voting standard to what is considered one of the most secretive technology companies. In its proxy materials ahead of the meeting, Apple's board had urged shareholders to vote against both proposals.
As expected, Jobs was not present during the meeting. In his place was Chief Operating Officer Tim Cook, who has filled in for Jobs since January when Jobs, a pancreatic cancer survivor who has received a liver transplant,.
A group of shareholders had asked the company to reveal its, a request Apple had rallied against, saying such a revelation would give competitors an "unfair advantage" by publicizing the company's confidential objectives and plans. Nonetheless, Institutional Shareholder Services endorsed the proposal, which was originally put forward by the Central Laborers' Pension Fund, a holder of about 11,500 shares of Apple stock.
The second proposal, which concerned majority voting of board members, passed, giving share owners the power to cast Nay votes against unopposed directors. Apple said its objection to the measure was based on differences in majority voting requirements by state, which, the company said, could add a "layer of complexity" to implementation.
During the question and answer session that followed, Cook was joined on stage by Phil Schiller, senior vice president of worldwide product marketing, and Peter Oppenheimer, senior vice president and CFO. Cook talked up Apple's services over the past year, including its opening of 44 new retail stores and shipping of 40 million iPhones, doubling unit sales from the previous year. Cook also said the company had made great advances in China, tripling revenue there since last year.
Cook paid special attention to iOS, including the iPhone and iPad, saying that the OS continued to be "years ahead" of competitors' platforms. Cook also brought up , saying that the invitation had provided some clues about what Apple planned to announce. Even so, audience members peppered the company about its strategic plans for iOS, including things like whether it would ever allow plug-ins, or how Apple could avoid the sort of hardware-specific software distribution limitations it experienced during the Mac versus PC era in the early '90s, which went Microsoft's way.
Schiller responded by saying that that had been "a different time," and that the iPhone was a "post-PC" product. Apple's senior vice president of iOS Software, Scott Forstall, jumped in on the third-party plug-ins question, saying that plug-ins had been kept off the platform for stability and security, citing some of the difficulties in moving from Mac OS 7 to 8 as being a leading factor in that decision.
One audience member also brought up thewhere Apple products were produced, as well as asking if Cook, Schiller, or Oppenheimer had seen the play "The Agony and Ecstasy of Steve Jobs," from Apple's campus, at the Berkeley Repertory Theatre. All three said they hadn't, with Schiller seeming visibly frustrated by the question.
Cook followed by offering details about Apple's considerable efforts to go through its supply chain to find problems that could be fixed, as well as noting that the company had helped reimburse close to $300 million in fees paid by workers. "I am really proud of the changes we've forced," Cook said.
Also of special interest was a question about whether Apple would ever offer a way for consumers to ditch their television sets to watch streaming TV shows on their computers instead. Schiller answered by saying that Apple was always adding "new types" of media. Even so, he said, counting out the TV at this point for live events would be a rash decision.
And speaking of entertainment devices, Cook fielded a question about whether Apple had plans to get more serious about gaming, particularly with a dedicated device, by saying that the company was already in the gaming business with the iPod Touch, and had great success with a large library of games on the App Store. "There's a segment who are using it as a primary gaming device," he said. "We think that's a good place to be, where we are right now."
One audience member also questioned what Apple was up to with its license of Liquidmetal, a query Cook politely shot down, saying the company does not discuss what it does with its investments short of saying that such investments were often for personnel, infrastructure, and intellectual property.
Correction, 1:18 p.m. PT: This story initially misstated the nature of one of the shareholder votes. Apple shareholders at the meeting today voted against requiring the company to make public its plans for CEO succession.