Carl Icahn stock proposal on ballot for Apple shareholder meeting
Investor activist Carl Icahn has submitted an advisory proposal asking Apple to increase the size of its stock buyback program in 2014 to $50 billion.
The details of the proposal were included in a proxy statement that Apple filed Friday afternoon with the U.S. Securities and Exchange Commission. The proxy revealed that Apple’s annual shareholder meeting will be held Feb. 28, and it contains details of 11 proposals that investors will be asked to vote on.
Most of the proposals are mundane, such as reappointing board members or an auditing firm. However, Icahn’s proposal (No. 10) probably will stir discussion about how much money Apple should return to shareholders.
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This year, Apple increased the size of its dividend and stock buyback program to $100 billion. But over the summer, Icahn revealed he had bought shares in Apple and later discussed with Apple Chief Executive Tim Cook his desire to see the size of the buyback increased.
Icahn’s proposal would be nonbinding on the company and is labeled an “advisory” vote.
In the proxy, the Apple board recommends a vote against Icahn’s proposal, saying:
“In March 2012, the company announced a quarterly dividend and share repurchase program totaling $45 billion. In April 2013, the board authorized a dramatic increase, more than doubling the size of the program to $100 billion, raising the dividend, and increasing the share buyback authorization to $60 billion. As such, the company is one of the largest dividend payers in the world and has the largest share repurchase authorization in history. The company has executed aggressively against the capital return program, spending $23 billion of the $60-billion share repurchase authorization in fiscal 2013 alone.”
Apple has not officially said how much it will spend buying back its stock in the 2014 fiscal year, which ends in September. However, based on the $23 billion spent in fiscal 2013, Icahn’s proposal would roughly double the pace of the buyback.
Still, given the size of the technology opportunities the company sees and the heightened level of competition, Apple’s board says it’s important to continue taking a measured approach to returning any cash to shareholders.
In the proxy, the board says:
“Consistent with its pattern for the last two years, the company is on track to complete its regular review and thorough analysis and to announce any changes to the current program by March or April of 2014. The board believes that the company’s management team and board are in the best position to determine what is in the best long-term interest of the company’s business and recommends a vote AGAINST this proposal.”
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