Apple tasted defeat at its annual meeting yesterday when Calpers, the California pension fund, saw its resolution in favour of majority voting for directors passed by shareholders.
The technology company had fought the proposal, arguing that it would be hard to operate a majority system under Californian law, but conceded at the AGM that it had lost the vote.
Apple did succeed, however, in blocking a resolution that asked the company to produce a detailed succession plan. The future leadership of Apple is of keen interest to investors given chief executive Steve Jobs’ ongoing health issues.
Calpers, along with other US pension funds, is targeting companies that continue to use a plurality voting system for uncontested elections, where directors can be voted in with a single ‘yes’ vote.
‘As a company that thrives on innovation, Apple should have the best governance practices possible,’ says Anne Simpson, Calpers’ senior portfolio manager, in a statement following Apple’s AGM.
‘Good boards have nothing to fear in acknowledging a fundamental right of shareowner democracy to elect directors by a majority vote.’
Around 80 per cent of the S&P 500 and 60 per cent of the Russell 1000 have adopted some form of majority voting, which is ‘an indication of the current direction of good corporate governance,’ said Calpers in a shareholder alert at the beginning of February.
Calpers is the largest public pension fund in the US, with roughly $230 bn in assets under management.