Apple CEO to face investors seeking more of $137.1 billion hoard

Message Sent

Even investors who don’t support Einhorn’s plan for the new type of stock applaud his tactics, saying they have sent a message to Apple’s management about returning money to shareholders.

“It took a pretty extreme action to get the company’s attention,” said Keith Goddard, president of Capital Advisors Inc., which owns Apple shares. Goddard said he supported the lawsuit, and that he prefers buybacks and higher dividends.

The tussle between Apple and its shareholders heralds a new era for Apple, in which investors who have seen the stock drop in recent months won’t be as patient with the company as they were when it was performing well.

“Apple could get away with saying very little to investors when it had the mystique of Steve Jobs and it was coming out with great products,” said Kathleen M. Wailes, a senior vice president at Levick, an investor-relations firm in Washington. “But with the stock falling, more are going to want cash if they are going to maintain their positions.”

Investors’ Questions

Cook and other executives will take questions from investors at the meeting. The CEO has defended the company’s policies, saying that it is handling cash responsibly to invest in operations, while acknowledging the company has money to spare. The board is exploring different options, including boosting dividends and buybacks and issuing preferred shares.

At the shareholder meeting, investors will vote to reelect the company’s slate of directors. It includes Cook; Chairman Art Levinson; former Avon Products Inc. CEO Andrea Jung; former U.S. Vice President Al Gore; J. Crew Group Inc. CEO Mickey Drexler; former Intuit Inc. CEO Bill Campbell; former Northrop Grumman Corp. CEO Ron Sugar; and Walt Disney Co. CEO Bob Iger. All the board members are scheduled to attend the meeting.

Apple also has asked shareholders to make an “advisory vote” on the company’s executive compensation. The measure is non-binding, so even if majority of shareholders vote against the pay structure, Apple wouldn’t be required to change it.

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