Mikey Campbell
After a U.S. federal judge sided with David Einhorn's Greenlight Capital in a lawsuit seeking the injunction of proposal vote scheduled to be held at Apple's upcoming shareholders meeting, the Cupertino, Calif., company removed the contentious "Prop 2" item from the docket.
Apple announced in a statement on Friday that it will be pulling Prop 2 from its annual meeting slated to take place on Feb. 27, reports AllThingsD. Einhorn sought to block a vote on the proposal as it contained an article which revokes the ability of Apple's board members to issue preferred stock, instead putting that power into the hands of shareholders.
Apple's statement:
We are disappointed with the court’s ruling. Proposal #2 is part of our efforts to further enhance corporate governance and serve our shareholders’ best interests. Unfortunately, due to today’s decision, shareholders will not be able to vote on Proposal #2 at our annual meeting next week.
With the announcement, Apple is conforming to Judge Richard Sullivan's decision issued earlier today.
Einhorn wants Apple to issue so-called "iPrefs," or perpetual preferred stock that would pay out a quarterly 50 cents dividend equating to $2 per year. He suggests Apple could extend and enhance the program over time to ultimately offer five iPrefs per share of common stock, doubling the current dividend rate to return some $47 billion of company's swelling $137 billion cash hoard.
While Prop 2 has been removed from next week's annual meeting, Apple is not obligated to issue the iPrefs. It is unclear what the company plans to do regarding Einhorn's pressure, but thus far it has been loath to give in to the hedge fund manager's demands.
Andrew Orr
Amber Neely
William Gallagher
Christine McKee
AppleInsider Staff
62 Comments
This was really a clear loser argument for Apple. I think it is time for the general counsel to go, or at least the securities lawyer. Now they have to wait a year (or hold a special shareholder meeting) to split the initiative into three separate shareholder proposals.
[quote name="msuberly" url="/t/156130/apple-pulls-prop-2-from-upcoming-proxy-vote-says-disappointed-with-court-decision#post_2282802"]This was really a clear loser argument for Apple. I think it is time for the general counsel to go, or at least the securities lawyer. Now they have to wait a year (or hold a special shareholder meeting) to split the initiative into three separate shareholder proposals.[/quote] So they wait a year. No big deal. If iPrefs doesn't benefit ALL shareholders, vote it down.
[quote name="msuberly" url="/t/156130/apple-pulls-prop-2-from-upcoming-proxy-vote-says-disappointed-with-court-decision#post_2282802"]This was really a clear loser argument for Apple. I think it is time for the general counsel to go, or at least the securities lawyer. Now they have to wait a year (or hold a special shareholder meeting) to split the initiative into three separate shareholder proposals.[/quote] You forgot to call for Tim Cook's resignation and that it would never happen under Steve. /s
I now favor Einhorn's idea although I was against it before as long as all shareholders big and small benefit from some form of iShares.
Apple needs to give shareholders some more incentives with all the cash that they have. Apple share price should be around $800 now.
They don't need all that cash and the stock price is depressed right now.
Apple needs to be first class at maintaining share value.
The board should throw us a bone now. It does not have to be iShares as described but something.
Time will tell.
[quote name="AppleSauce007" url="/t/156130/apple-pulls-prop-2-from-upcoming-proxy-vote-says-disappointed-with-court-decision#post_2282823"]I now favor Einhorn's idea although I was against it before as long as all shareholders big and small benefit from iShares. Apple needs to give shareholders some more incentives with all the cash that they have. They don't need all that cash and the stock price is depressed right now. Time will tell. [/quote] It serves no useful purpose. If Apple wants to give more money back to the shareholders, they can do so simply by increasing the dividend. No need for preferred shares.