Earlier, we posted about how Apple’s hiding Steve Jobs’ medical condition may be securities fraud. Some shareholders had the same thinking, but decided not to test their theory in court. Instead, the Central Laborers’ pension fund decided to submit a “shareholder proposal” that shareholders vote to require the Apple board to “adopt and disclose” a CEO succession plan. Citing a corporate governance report, the pension fund supported its proposal by arguing that:
[B]oards of companies with successful CEO transitions are more likely to have well-developed succession plans that are put in place well before a transition, are focused on developing internal candidates and include clear candidate criteria and a formal assessment process. Our proposal is intended to have the board adopt a written policy containing several specific best practices in order to ensure a smooth transition in the event of the CEO’s departure.
The board of directors recommended that shareholders vote against the proposal. The shareholders lost.
I’m a little befuddled as to why 1) the board refused to recommend voting for the proposal; and 2) shareholders voted against it. I’m wondering if some institutional shareholders were worried about losing clout with the board and/or Jobs.
Hat tip to the NY Times Dealbook.
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