Apple Stockholders Reject Changes to Proxy Access Bylaw

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By Che Odom

Feb. 29 — Apple Inc. stockholders rejected a shareholder proposal that would have amended the company's proxy access bylaw, despite several large public pension funds voting for it.

The proposal, submitted by publisher James McRitchie, received 32.6 percent of votes cast at the company's Feb. 26 annual shareholder meeting. Support came from the California Public Employees' Retirement System, the California State Teachers' Retirement System, the Florida State Board of Administration and the Texas Teachers Retirement System.

“I thought it would be a lot closer,” McRitchie said in an e-mail to Bloomberg BNA Feb. 29.

Apple already allows a shareholder, or a group of up to 20 shareholders, owning at least 3 percent of Apple’s outstanding shares of common stock continuously for at least three years, to make nominations for up to 20 percent of the board.

More Detailed Provisions

McRitchie's resolution called for greater access to the proxy by, among other things, allowing shareholders to count “recallable loaned stock” in the determination of shares owned and requiring Apple to assume liability stemming from any legal or regulatory violations arising out of the nominator's communications with the company.

“The real danger here isn’t so much with Apple, at least for the foreseeable future, since it is a well-run company,” McRitchie said. “The real danger is that companies where shareholders really need proxy access will point to Apple and say, ‘I’ll have what they’re having.' ”

The Private Funds

McRitchie said that although large pension funds voted for his resolution, other institutional investors such as BlackRock Inc. may be happy with proxy access along the same basic terms that were in the Securities and Exchange Commission's invalidated federal rule, i.e., allowing shareholders holding at least 3 percent of company stock for three years to nominate directors.

Attempts to reach BlackRock for comment weren't immediately successful Feb. 29.

The SEC has granted a number of companies no-action relief in recent weeks on shareholder proxy access resolutions that call for terms that go beyond the basics, when the company has proposed or adopted policies allowing access to shareholders owning 3 percent of outstanding stock for three years .

“The SEC's no-action decisions did a great disservice to shareholders,” McRitchie said.

Next Year

Companies can “game the system” by adopting their own proxy access bylaws and avoid putting the shareholder proposal to a vote, McRitchie said.

Investors, including himself, will return next year to push for greater access to the proxy, he added. “Hopefully by then we can change industry ‘best practices’ to more closely conform with shareholder best practices in the area of proxy access.”

A review of data by Bloomberg BNA shows that more than 160 companies have adopted some form of proxy access.

To contact the reporter on this story: Che Odom in Washington at

To contact the editor responsible for this story: Yin Wilczek at