Amid Challenges, Apple Hosts Shareholder Meeting

By: Zain Nabi  |   February 27th, 2013   |   Apple, News

Surrounded by a number of challenges, technology giant Apple is going to host its annual shareholder meeting today, while the company’s chief Tim Cook is expected to answer some critical questions including Apple’s plans of utilising the cash it has in the store.

 

Apple has received negative publicity of late. It all started when the company released its fourth quarter report and the profit figure apparently did not please the investors. Adding to that, the company announced that the current quarter would witness relatively slower growth. This all led to a decline in the company’s stock value. Not to forget that the profit Apple had secured in the quarter was something many companies could only dream about. Still, the investors thought it was below their expectations and Apple’s standards.

 

While Apple was still dealing with this dilemma along with competition from its rivals, hedge-fund manager David Einhorn dragged the company into the court, asking it to dole out more cash for investors, and not to bring up the proposal about issuing preferred stock up for vote during the shareholder. The court granted the ruling in favour of the fund manager, preventing Apple from bringing the issue of preferred stock up for vote today.

 

Apple has over $100 billion in its account, but the company is blamed to have adopted a conservative approach by not doling out more cash for investors. Many analysts are of the view that the company must change this stance and address this issue during the shareholder meeting. Forbes quoted Larry Popelka, CEO of GameChanger, an innovation consulting firm in Alameda, California, as saying:

 

“They’ve got a cloud hanging over their head. They’re getting all this negative publicity…What they need to do is get back to doing good innovation. If I were Tim Cook, I would say what’s the most tax efficient way to give the money back to shareholders. What do you need to run the company? You don’t need that much. There’s no good reason for them to hold on to that much cash.”

 

During the meeting, the shareholders will get to vote on pay of executives, an idea that senior executives hold on to 33 per cent of their shares until they retire, a proposal that the company create a board committee on human rights and some other topics.

 

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