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

As Apple Inc. Chief Executive Officer Tim Cook takes the stage at this year’s shareholder meeting, he may not get the reception he received in 2012, when investors lauded the company’s performance and rising shares.

The annual event, where holders will vote on re-electing board members, takes place tomorrow at Apple’s headquarters in Cupertino, California. In this year’s run-up, the company has been enmeshed in a public spat over distribution of its $137.1 billion in cash and investments with hedge-fund manager David Einhorn, who advocates a bigger payout, using preferred shares.

After a five-year rally following the iPhone’s 2007 debut, the stock has fallen 37 percent from a September peak and 14 percent since last year’s gathering. Slowing sales and profit gains have increased pressure on the company to introduce new products that can reignite growth, setting the stage for a higher degree of confrontation this time.

“Investors over the past few years have seen the stock only going up during a series of very successful product introductions,” said Michael Obuchowski, a portfolio manager at North Shore Asset Management LLC, which owns Apple shares. “Now there are a lot of questions being raised about Apple’s future, and with good reason.”

A central criticism among shareholders is the money accumulated by Apple, the world’s most valuable company by market capitalization. Investors want a bigger slice of the cash hoard that has grown over a half decade amid surging sales of iPhones and iPads.

Jobs Contrast

Shareholders have found a more receptive audience in Cook, who took over as CEO in 2011 from co-founder Steve Jobs. While Jobs long dismissed investors’ cash demands, Cook reinstated the company’s quarterly dividend and unveiled a $10 billion stock buyback program last year.

That wasn’t enough for some shareholders. The tension has built in the weeks leading up to the investor meeting, after Greenlight Capital Inc. founder Einhorn sued Apple as part of a push to get the company to create a new class of dividend-paying preferred stock. A judge sided with Einhorn in a ruling last week, prompting Apple to scrap a proxy proposal that would have required the computer maker to get shareholder approval before issuing such a new category of shares.

Jonathan Gasthalter, an outside spokesman for Greenlight, didn’t immediately return a call seeking comment on Einhorn and whether he plans to attend the meeting.

Steve Dowling, a spokesman for Apple, declined to comment on expectations for the meeting.

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