CalPERS, Apple Tangle Over Corporate Governance Issue
U.S. pension fund giant CalPERS, the California Public Employees' Retirement System, has submitted a shareholder proposal -- calling on Apple investors to approve a policy, requiring the computer company's directors to win at least a majority of votes to retain their board seat.
According to a Wall Street Journalreport, that policy could put Apple (AAPL) directors on edge if passed -- but the likelihood of their failing to generate a majority of votes may be slim-to-none.
Last year, according to a Securities and Exchange Commission filing, Apple's seven directors were easily re-elected by a comfortable margin. Nonetheless, CalPERS still wants Apple -- and the more than four dozen companies that comprise the largest holdings in its portfolio -- to adopt a majority vote policy.
Last March, CalPERS sent letters to those 58 companies making such a request. CalPERS spokesman Wayne Davis says 20 firms in that group have either instituted the policy or have publicly stated they plan to. Apple, however, is not one of them.
Apple, according to the Journal, is in a particular sticky situation -- since it's incorporated in California. The Golden State requires directors to resign if they fail to win a majority of votes at the annual shareholder's meeting, or if their company has a majority vote policy in place. But other states allow a company's board to ignore a director's request to submit their resignation.
Apple, which is scheduled to hold its annual shareholders meeting in February, will likely ask its investors to vote "no" on the CalPERS shareholder proposal.
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