Monday, April 27, 2009, 08:00 am
Apple investors to have more say on executive compensationApple said Monday that a proposal to give investors a greater say over compensation for top executives was approved during its recent shareholders meeting, correcting an earlier filing from the company which reported that the motion had failed.
The Cupertino-based company said it incorrectly reported the voting percentages for all four of the shareholder-submitted proposals during the February 25th meeting because it accidently counted all abstentions as "No" votes.
"Very shortly after the original filing, the company learned that these votes had been incorrectly tallied and an internal investigation confirmed the mistake was due to human error, which Apple regrets," the company said in a statement. "Todays amendment correctly reports the voting results."
As a result of the corrected vote count, Shareholder Proposal No. 5 Regarding Advisory Vote on Compensation, known as Say on Pay, was approved with approximately 51.63% of the shares present or represented and voting.
Proposed this year by the AFSCME Employees Pension Plan, a public health union which holds over 21,000 Apple shares, the resolution will give all company shareholders an advisory vote on executive pay packages.
Apple's directors has long recommended investors vote down the proposal, which has failed in years' past, arguing that setting executive compensation is the job of the board itself, and that limitations imposed by shareholder voting could have an adverse impact on the company's ability to recruit and retain top talent.
For their part, many investors have maintained that existing U.S. corporate governance arrangements, including SEC rules and stock exchange listing standards, do not provide shareholders with enough mechanisms for providing input to boards on senior executive compensation.
This is contrary to practices over in the United Kingdom, where public companies allow shareholders to cast an advisory vote on the directors remuneration report, which discloses executive compensation. Such a vote is not binding but gives shareholders a clear voice that could help shape senior executive compensation.
"The Compensation Committee of Apples Board of Directors has been closely following the Say on Pay issue, and anticipates that new laws or regulations will require some form of Say on Pay vote at all public companies in the near future," Apple said. "Even if that does not occur, Apple is committed to implementing an advisory Say on Pay vote next year."
The outcome of the the other four proposals raised during the recent Apple shareholders meeting were not affected by the incorrect vote tallies.