Apple shareholders approve Cook's pay and defy company on civil rights audit

Nearly 34% of votes cast supported a resolution demanding greater transparency in the iPhone maker's efforts to protect supply chain workers from forced labour

Apple chief executive Tim Cook last year received a compensation package with a total value of $98.7m. AFP
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Apple shareholders approved chief executive Tim Cook's annual compensation and voted in favour of a proposal urging Apple to oversee a third-party civil rights audit of its policies and practices.

By approving Mr Cook's pay package with 64.4 per cent of votes cast in favour, investors rejected some concerns, including from proxy advisory firm Institutional Shareholder Services, over the magnitude and structure of his equity award. ISS had urged shareholders to vote against the pay package.

Mr Cook, who took charge in 2011, last year received a compensation package with a total value of $98.7 million, a sum 1,447 times that of the average employee, as the result of a stock grant as part of a long-term equity plan.

He earned $14.8m a year earlier.

Mr Cook received 333,987 restricted stock units in 2021 in his first stock grant since 2011 as part of the long-term equity plan. He will be eligible for additional units in 2023.

Apple said in its latest proxy filing that Mr Cook's stock award was aligned with the interest of the company's shareholders.

Mr Cook succeeded co-founder Steve Jobs. Apple stock has risen by more than 1,100 per cent since he took the job.

SOC Investment Group executive director Dieter Waizenegger, a proponent of the civil rights proposal that passed with 53.6 per cent of votes cast in support, said this outcome should push Apple to combat inequality and address harm to marginalised groups.

"I think the patience of investors has run out," Mr Waizenegger said. "It's time for Apple to take a serious step, including a third-party independent review of its measures."

A shareholder proposal urging Apple to report on its use of concealment clauses also passed by a narrow margin, with 50 per cent of votes cast in favour of it.

Shareholders voted against proposals calling on Apple to increase transparency in the company's efforts to protect workers in its supply chain from forced labour and another on gender and racial pay gaps.

Apple had opposed these transparency proposals, while ISS had urged shareholders to support them.

Nearly 34 per cent of votes cast supported a resolution demanding greater transparency in the iPhone maker's efforts to protect workers in its supply chain from forced labour.

Traditionally, shareholder proposals that receive more than about 25 per cent support of votes cast tend to spur management to make changes, corporate governance analysts said.

Directors who fail to resolve shareholder concerns can face negative votes themselves the following year.

A group of shareholders had asked Apple's board to prepare a report on how the company protects supply chain workers from forced labour. Apple and independent third parties audited the company's global suppliers in 2020 and found no evidence of forced labour, its latest proxy filing said.

Quote
I think the patience of investors has run out. It's time for Apple to take a serious step, including a third-party independent review of its measures
Dieter Waizenegger, executive director of SOC Investment Group

Also voted down was a proposal requesting that Apple report on its gender and racial pay gaps, with 66.4 per cent of votes cast against it.

"We will continue to press Apple to do better and think different about how they can create a more diverse, equitable organisation," said Natasha Lamb, a managing partner at investment firm Arjuna Capital, a proponent of the proposal.

More than 31 per cent of votes cast supported a shareholder proposal that asks Apple to disclose the number and categories of apps removed from the App Store at the request of governments.

Shareholders also approved Apple's board of directors and the retention of Ernst & Young as its accounting firm.

Apple outlined on Tuesday its actions in response to the Russian military offensive in Ukraine, including pausing all product sales in Russia. The company also said it has stopped all exports into its sales channels in the country and limited Apple Pay and other services in Russia.

Updated: March 05, 2022, 2:30 PM
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