Can Apple Shareholders Demand to Know CEO Succession Plan?
What will happen if Steve Jobs cannot continue to serve as Apple's (AAPL) CEO? Institutional Shareholder Services, a proxy solicitation firm, has said it supports a call by Apple stockholders for the board to disclose a plan.
"The Laborers' International Union of North America announced that a shareholder proposal to require Apple to disclose a CEO succession plan, submitted by the Central Laborers' Pension Fund, had won the support of Institutional Shareholder Services, the country's largest proxy voting service," the union said in a press release. It added, "Apple shareholders will have the opportunity to support the CEO succession proposal at the Feb. 23 shareholders' meeting."
As the board of a public company, Apple's directors have no obligation to reveal a plan, if there is one. The Securities and Exchange Commission has no regulation that forces the issue. It's also unlikely that shareholders will have enough votes to make the demand anyway. ISS often supports movements for better corporate disclosure. But that hasn't necessarily pressed boards of large companies to change their disclosure decisions.
Why does Apple need to reveal what the company would do if Jobs could not return to his position? He has taken leaves twice and COO Tim Cook has stepped in to run Apple both times. That makes it extremely likely Cook will become CEO if necessary. If the board plans to look outside Apple, they are unlikely to let Cook know by a public announcement.
Apple's board has a history of saying little or nothing about its future. That has angered shareholders more than once. But if the board has held its cards close to its chest before, modest pressure from the ISS is not going to alter that.