Apple shareholders reject sustainability, freedom of expression proposals
Apple (AAPL) investors on Wednesday rejected several shareholder proposals, including one that would have linked executive pay to environmental sustainability and another that would have required the tech giant to provide annual reports on its policies on freedom of expression.
The tech giant’s board — which includes former vice president Al Gore, BlackRock co-founder Susan Wagner, and Apple CEO Tim Cook — had recommended a vote against both proposals. The board also recommended voting against a third shareholder proposal that was rejected, which would have allowed shareholders to nominate two members of the board rather than just one.
Apple’s 2020 shareholder meeting comes as the ongoing coronavirus outbreak has roiled stock markets over the past few days, and is expected to put a significant dent in Apple’s Q2 2020 revenue following updated guidance from the tech giant.
‘Put your money where your mouth is’
Speaking after the shareholder vote on Wednesday, which was officially a preliminary vote, Cook stressed the Apple’s commitment to sustainability, noting that it’s “running the company with 100% renewable energy.”
Apple is also “working on recycling in a big way, and our ultimate objective is to be able to create and manufacture an Apple product without taking anything from the Earth. This is another thing that people say you can't do, but we're going to find a way to do it,” Cook said at the Steve Jobs Theater at Apple’s Cupertino headquarters.
In pushing shareholders to vote “yes” on the sustainability proposal, Pat Tomaino, director of socially responsible investing at Zevin Asset Management, said that tying executive pay to these efforts would help Apple reach even “greater sustainability.” As Tomaino put it, executives should “put your money where your mouth is.”
Apple would not have been the first company to tie pay to sustainability: Intel (INTC) has actually linked a portion of every employee’s pay to environmental sustainability metrics since 2008.
China exposure
The proposal on freedom of expression related to Apple removing apps from its App Store in China following requests by government authorities in the region. In opposing the measure, Apple said that it is required to abide by local laws wherever it operates.
A representative from the group Sum of Us, however, pointed out that Apple had deprived Chinese citizens of an essential tool by removing VPNs from its Chinese app store in 2017.
“How Apple manages its business in China will have a direct effect on the reputation of the company and so its value,” the representative said.
Apple has deep exposure to China, as evidenced by the recent coronavirus outbreak. Analysts have estimated that the virus could cost Apple between $4 billion and $7 billion in missed sales for Q2, though the company could compensate for those losses through increased demand for its highly anticipated iPhone 12, which is expected to launch in September and be the first 5G-enabled device from the tech giant.
Additional reporting by Erin Fuchs.
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