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Apple's annual shareholder meeting tackling conservative fears, China, equality, & AI

Shareholder meeting to be held on February 28

Apple's annual shareholder meeting is being held on February 28, with shareholder proposals pushing for transparency from Apple on AI and addressing concerns held by conservative politicians, but Apple advises voting "against."

The annual shareholder meeting exists so Apple and shareholders can discuss how the company is operating and meeting goals. It is being held on February 28 and topics include CEO Tim Cook's compensation and voting for new board members.

There's a third proposal from Apple — a vote to ratify the appointment of Ernst & Young as Apple's independent registered public accounting firm for 2024. The three management proposals, which include the board member vote and compensation vote, are all recommended for shareholders to vote "for."

There are five shareholder proposals, all of which Apple's board recommends voting against. These proposals run the gamut from requesting transparency regarding the use of AI to multiple concerns shared by conservative viewpoints.

The following is summarized from Apple's SEC filing.

Proposal No. 4: EEO Policy Risk Report

The National Center for Public Policy Research requests that Apple issue a public report detailing the potential risks associated with omitting "viewpoint" and "ideology" from its written equal employment opportunity (EEO) policy. It is feared that Apple doesn't explicitly prohibit discrimination based on viewpoint or ideology.

The proposal suggests that this lack of language from the EEO policy has led to "ample evidence that individuals with conservative viewpoints may face discrimination at Apple."

Apple recommends voting against Proposition No. 4 because such a report wouldn't provide material additional information. The company states it already nurtures a culture where every great idea can be heard and where everyone belongs.

Proposal No. 5: Report on Ensuring Respect for Civil Liberties

The American Family Association is "concerned at recent reports of Apple arbitrarily limiting content access within its online services." The proposal suggests Apple is aiding the Chinese Communist Party in limiting information by removing popular Quran and Bible applications from the App Store in China.

The Apple logo superimposed on a stock market chart showing price growth
Apple's annual shareholder meeting includes votes on a range of issues

In addition, the proposal suggests Apple's alleged threat to remove X was a "seemingly political swipe" characterized by conservative lawmakers as a "raw exercise of monopolistic power."

Apple's board advises voting against Proposal No. 5 since it must comply with local laws and mentions it works hard to prevent illegal content from ending up on a country's storefront. The company already details its standards and procedures to curate apps and details government orders to take down apps.

Proposal No. 6: Racial and Gender Pay Gaps

Arjuna Capital's Anmol Mehra requests Apple provide a report on median pay gaps across race and gender. It is believed that Apple's report on adjusted gaps, while ignoring unadjusted gaps, doesn't address structural bias for women and minorities regarding opportunity and pay.

Apple's board advises voting against Proposal No. 6 since it already provides a robust disclosure of employee makeup via the Inclusion and Diversity website. The company also asserts that it has achieved gender pay equity globally, as well as pay equity by race and ethnicity in the United States.

Proposal No. 7: Report on Use of AI

AFL-CIO Equity Index Funds requests that Apple prepare a transparency report on the company's use of Artificial Intelligence and disclose ethical guidelines regarding the technology. It is feared that the use of AI could lead to discrimination, mass layoffs, or dissemination of false information if left unchecked without guidelines.

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Apple is working on AI for iOS 18

Apple's board advises voting against Proposal No. 7 because it is too broad and could encompass disclosure of strategic plans and initiatives harmful to competitive position. Also, Apple states it already provides resources and transparency to using artificial intelligence and machine learning.

Proposal No. 8: Congruency Report on Privacy and Human Rights

The National Legal and Policy Center requests that Apple provide a report analyzing if Apple's privacy and human rights policy positions are being enforced universally. The proposal cites limiting AirDrop in China and ceasing the sale of products in Russia as measures that don't match Apple's policies.

Apple's board advises voting against Proposal No. 8 because it respects human rights and is transparent about its approach to complex situations like government requests. The requested report wouldn't provide additional material information.

Shareholders get a chance to vote on February 28, 2024, at 12 p.m. Eastern Time. To attend, vote, and submit questions during the meeting, visit Apple's meeting portal and enter the control number in your Notice of Internet Availability of Proxy Materials, voting instruction form, or proxy card.