CUPERTINO, Calif.--Apple's first annual shareholder meeting in more than 10 years without founder and CEO Steve Jobs was largely uneventful, as COO Tim Cook and board members stepped in to handle questions regarding Apple's disclosure of Jobs' health.
Five shareholder proposals were considered, and only the one approving the re-election of Apple's eight existing board members was approved in preliminary voting. As in past years, the informal question-and-answer section was by far more interesting, although without Jobs' usual acerbic replies to institutional shareholders on soapboxes, a little duller.
For the record, Apple shareholders rejected proposals that the company adopt a so-called "say on pay" resolution, publicly commit to tough sustainability goals, adopt resolutions calling for health care reform, and publish a detailed list of its political contributions. The results are only preliminary, but are expected to stand following the tabulation of those votes submitted in person Wednesday.
Apple COO Tim Cook fielded several questions during Wednesday's annual shareholders meeting.
(Credit: Apple)Some of the more interesting highlights from the meeting:
Jobs' health
The first question posed to Cook and the six Apple directors present (Jobs and Google CEO Eric Schmidt were the no-shows) concerned Jobs' health, and Apple's role in disclosing the status of his health in January. Apple first said in early January that Jobs was suffering from a hormonal imbalance but that recovery was considered relatively straightforward, only to turn around the following week and admit that Jobs' health problems had grown "more complex" and would require a six-month leave of absence from the company.
Brandon Rees, representing the AFL-CIO, asked that oft-repeated question "What did the company know and when did it know it?" regarding the state of Jobs' health, and also called on the board to disclose Apple's succession plan.
Art Levinson, co-lead director and chairman and CEO of Genentech, fielded the questions regarding Jobs' health. He said that the company believes it has satisfied all the legal requirements regarding the disclosure of material information, and that the board has discussed succession at Apple for years.
Levinson declined, however, to make any succession plan public, which some corporate governance experts have called on Apple to do in the wake of investor concern over the way the disclosures were handled.
Jobs "remains deeply involved" in major strategic decisions at Apple, and if that changes the board will inform shareholders, he said.
Happy birthday
The next person to approach the microphone was the last to address Jobs' health, and he did so just to wish Jobs "a full and speedy recovery," and lead the room in a chorus of "Happy Birthday." Jobs' 54th birthday was Tuesday.
Macworld
One original Apple shareholder dating back to the company's 1980 initial public offering used his turn at the microphone to ask Apple to considering returning to Macworld, which it plans to abandon next year. Cook answered that Apple "has very fond memories of Macworld" but repeated the company's belief that with its retail store network it believes it can reach far more people on a weekly basis in those stores.
In a new tack, Cook noted that Apple also has the rare ability in the tech industry to call a press conference and know that the entire tech media world will show up on its doorstep. That wasn't always the case when Apple was showing up at Macworld in the late 1990s and early 2000s, but these days "we have so many other ways to reach our customers."
Executive compensation
Scott Adams, who represented the AFSCME Employees Pension plan, asked the board if a Jobs-less Apple would be more willing to meet with shareholders, stating his belief that "Mr. Jobs has always been known as someone who hid directors from shareholders." Adams, who presented the shareholder proposal on executive compensation, noted that a similar non-binding proposal was approved last year by shareholders but Apple took no action on the matter.
Director Bill Campbell, chairman of Intuit and the head of Apple's compensation committee, told Adams that Apple's board considers executive compensation very carefully but prefers to make the decisions regarding the actual dollar amounts themselves, in order to "retain the flexibility to compensate our senior offices as we see fit," noting the role of those officers in generating the strong financial performance Apple has recorded over the past several years.
Al Gore, socialism, and TV ads
No shareholder meeting would be complete without a little comic relief, provided this year by a individual shareholder and a representative of the Parents' Television Council.
One shareholder used the comment period during the official presentation of shareholder proposals to urge a vote against the re-election of director Al Gore, citing Gore's ties to President Obama's choice for Commerce Secretary, Gary Locke, through John Huang, a player in a 1996 campaign scandal involving the then-Vice President, contributions obtained at a Buddhist temple, and the phrase "no controlling legal authority." No Apple representative responded to that comment.
Later, the same shareholder railed against shareholder proposals such as the health-care reform measure "that have nothing to do with Apple," deriding the institutional representatives as "socialists." That quickly turned into a running joke among Cook and shareholders posing questions following that outburst, assuring one another that they weren't socialists.
And finally, a representative from the Parents Television Council complained that Apple chooses to advertise during television shows it feels contain inappropriate comments, singling out an episode of CBS's "Two and a Half Men" that contained a stripper and quoting one of the main characters uttering the immortal phrase, "Ooh, ooh, yeah, yeah, yeah," or something like that. (CBS also publishes CNET News, as most of you know.)
Cook claimed not to have seen the show in question, saying "if it's not on ESPN, I probably didn't see it." But he promised to look into the matter and used the opportunity to talk up Apple's work on parental-control technology in the Mac.
Apple CEO Steve Jobs is sitting out Wednesday's annual shareholder meeting.
(Credit: James Martin/CNET Networks)Apple has confirmed that CEO Steve Jobs will miss Wednesday's annual shareholder meeting for the first time since he returned in 1997 to the company he co-founded, Bloomberg has reported.
Jobs is currently on a medical leave of absence until the end of June to deal with unspecified health issues that have caused him to lose a significant amount of weight over the last year, so his absence is not a total surprise.
Chief Operating Officer Tim Cook is running the show in Jobs' absence and will likely serve as master of ceremonies for the meeting Wednesday morning at Apple's headquarters in Cupertino, Calif. In the past, a large part of the meeting--once the official business is done--has centered on Jobs fielding questions from shareholders on any number of topics, flanked by Cook and Phil Schiller, senior vice president of worldwide marketing. Cook will likely handle those inquiries this year.
It will be interesting to see if shareholders pose questions about Jobs' absence and the way Apple has handled the disclosures related to his health. Apple has addressed succession planning in oblique terms at shareholder meetings in the past, but in the wake of Jobs' medical leave, corporate governance experts have called for Apple to make its plan for a post-Jobs Apple known to the public.
No significant shareholder measures are on the ballot this year, and all eight directors are up for re-election, as usual. Apple does not provide a feed of the meeting, but reporters are allowed to watch on closed-circuit television in an overflow room, and we'll be there.
Apple CEO Steve Jobs fielded several wide-ranging questions from Apple shareholders Tuesday at the company's annual meeting, covering ground from the iPhone to the plans for a post-Jobs Apple.
Apple CEO Steve Jobs, seen here at Macworld, fielded a wide range of questions from shareholders Tuesday.
(Credit: Corinne Schulze/CNET Networks)For the most part, Apple's shareholder meeting is just as boring as anyone's. This year was a little more interesting, as a non-binding shareholder proposal was approved advocating that the board of directors give shareholders input into executive compensation. But the most compelling part of the meeting was the hour or so in which Jobs, COO Tim Cook, and CFO Peter Oppenheimer fielded questions from a wide range of shareholders inside Apple's headquarters in Cupertino, Calif.
A quick runthrough:
Jobs answered a question from an Apple developer about the iPhone promising,"You'll see a lot of apps out there this summer." Apple plans to hold another event in Cupertino this week, as it reveals some of the details behind the iPhone software development kit.
It's been unclear whether Apple is actually planning to release the kit on Thursday, or just explain how iPhone application development will work. Jobs' statements seem to suggest there will be some time between the formal release of the SDK and the arrival of applications, giving some credence to a report that Apple plans to serve as a clearinghouse for iPhone applications created using the SDK.
It's been an open question for years: what will Apple do if Jobs decides to retire or falls ill? It's hard to imagine another company--at least in the tech industry--whose image is tied so closely to that of its CEO.
Jobs avoided directly answering a question about Apple's succession plan. However, "we talk about it a lot," he said, and noted that it's the board of directors job to "make sure everybody is a potential successor to me," referring to Apple's senior management. Cook generally operates as the No. 2 at Apple, running the company's logistics, answering questions during earnings calls, and speaking on its behalf at investor conferences. But he lacks Jobs' stage presence, and it's difficult to envision him keynoting Macworld with anything like Jobs' penchant for the spotlight.
Turning back to the iPhone, don't expect support for Adobe's Flash technology anytime soon. The full-blown PC Flash version "performs too slow to be useful" on the iPhone, and a mobile version called Flash Lite "is not capable of being used with the Web," Jobs said. Without an option that falls in between, it sounds like Flash is not going to be supported on the iPhone until the performance of the underlying hardware improves.
And in other iPhone items, Cook fielded questions about Apple's negotiations with China Mobile, which he said consisted thus far of just "one conversation." Several reports have emerged about talks between Apple and China Mobile, especially as we've learned just how many unlocked iPhones are running in China. "I'm certain we will be in China one day" with official iPhone sales, Cook said, but declined to give an update on that schedule.
Jobs tersely turned aside a question regarding whether Apple was planning to develop a product based on Xserve for consumers, sort of like what Microsoft and HP are doing with the Windows Home Server product. "We don't comment on unannounced products," he said.
Apple, of course, never comments directly on unannounced products, but sometimes Jobs will expound on the virtues or pitfalls of a particular market, or usage case, or product concept as he sees it. This time, he just shut down on the topic, which will automatically get the buzz going as to whether or not this is something Apple is actually considering putting together. For years, Jobs dismissed such topics as video-player iPods and Apple-designed mobile phones, and we see where the company has taken those ideas.
A question somewhat tangentially related to the MacHeads movie asked Jobs whether the company's runaway success of the past several years has broken the bonds between the company and the longtime Mac community, and whether Apple "still cares" about these people. Some of these folks see Apple as the local rock band that made it big, losing some of its innocence and humility along the way.
Jobs acknowledged, "We have a lot more customers now." There has been some angst among longtime Apple users that the company is getting away from its Mac roots with projects like the iPod and the iPhone, which manifested itself during some early problems with Leopard, the latest version of Mac OS X.
But "we do care...We drop the ball sometimes, when some of those customers have a problem, but the vast majority do well" with their Apple experience," he said, citing high customer satisfaction ratings.
Finally, Oppenheimer responded to a question about Apple's exposure to the tanking market for auction-rate securities, which has hurt companies outside the financial sector such as JetBlue who invested some of their current assets into those types of securities. Apple has no exposure to that kind of problem, he said, but admitted "these are concerning times we're in."
Oppenheimer avoided giving a forecast on the economy in January during Apple's earnings presentation, saying "we'll leave the economic forecasting for others," but his comments Tuesday are indicative of the gloom that seems to be settling over the business community.
I was surprised that there weren't more questions about the drop in Apple's stock price since the beginning of the year. The past two years, Jobs has been able to avoid prolonged criticism over the company's stock-options backdating scandal at the shareholder meetings because so many shareholders were delighted with the company's performance.
Only one question was posed about the recent swoon, from an investor who wanted to know why Jobs didn't release a letter to shareholders like the one he did to employees, urging them to keep their heads up in the face of a sharp decline in Apple's stock. Jobs said he believed his management team's job was to focus on managing the company's employees, not its shareholders.
And truth be told, the drop in Apple's stock price seems to have more to do with the health of the overall economy than anything Apple is doing, other than some recent concern over iPhone sales. Jobs may be one of the most powerful executives in technology, but there's not much he could have done about the effects of subprime mortgage crisis that are causing much of the current concern.
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