In August, when Apple’s stock was still in a bit of a malaise, Carl Icahn announced he was buying Apple shares.

He also said he had plans for getting Apple’s stock cranking again.

Unsurprisingly, his plan centered on financial engineering rather than technological engineering.

After a lot of jibber jabber, Icahn finally put out a plan. He wanted Apple to do a $US50 billion buy back.

That plan is up for a vote at Apple’s shareholder meeting.

Today, Apple released the proxy materials for that meeting. In the proxy materials, Apple told shareholders it thinks Icahn’s plan is bad.

The full Apple explanation is below.

In short, Apple says we are already returning a lot of money to shareholders. We have essentially used all the cash we generate domestically to do so. It says it will continue to look at the best ways to return cash to investors, but it doesn’t think it should be bound by Icahn’s proposal to do return money.

Here’s the full explanation:

The Board recommends a vote AGAINST Proposal No. 10.

The Board and management team are thoughtfully considering options for returning additional cash to shareholders and are currently seeking input from shareholders as part of the Company’s regular review.

The Company’s success stems from the Company’s unique ability to combine world-class skills in hardware, software and services to deliver innovative products that create new markets and delight hundreds of millions of customers. This success has created tremendous value for the Company’s shareholders.

With breakthrough products and services such as the Mac, iPod, iPhone, iPad and App Store, the Company has created huge market opportunities, and the Board and management team believe the opportunities that lie ahead are just as exciting. Given such large and global markets, the Company competes with large companies around the world, many with their own significant technical capabilities and significant capital. This dynamic competitive landscape and the Company’s rapid pace of innovation require unprecedented investment, flexibility and access to resources. Successfully innovating and executing against these large opportunities also requires careful stewardship by the Board and management team, and the Company’s evaluation of capital return is conducted in the context of supporting the Company’s continued business success and desire to deliver attractive returns to long-term shareholders.

The Board and management team have demonstrated a strong commitment to returning capital to shareholders over the past two years. In March 2012, the Company announced a quarterly dividend and share repurchase program totaling $US45 billion. In April 2013, the Board authorised a dramatic increase, more than doubling the size of the program to $US100 billion, raising the dividend, and increasing the share buyback authorization to $US60 billion. As such, the Company is one of the largest dividend payers in the world and has the largest share repurchase authorization in history. The Company has executed aggressively against the capital return program, spending $US23 billion of the $US60 billion share repurchase authorization in fiscal 2013 alone. These share repurchases have been funded in part by a $US17 billion debt offering, the largest ever as of the time of issuance. In the first six quarters of the capital return program, dividend payments and share repurchases totaled over $US43 billion. Dividends and share repurchases must be funded by domestic cash, and the Company has returned to shareholders or invested all of the domestic cash generated by its business and raised through the issuance of debt since the beginning of the program.

While the Board and management oppose this shareholder proposal, they are fully committed to returning cash to shareholders. The Board and management team believe that capital should be returned to shareholders on an efficient and sustained basis, and that the evaluation of capital return should be performed regularly and carefully with the best long-term interest of the business and shareholders in mind.

The Company is updating perspectives on its capital return program for 2014 and beyond. The Company is collecting input from a very broad base of shareholders, believing that the input of all shareholders is important and should be considered holistically. The evaluation of the capital return program continues to be thoughtful, deliberate, and consistent with a conservative financial policy that supports risk-taking and innovation. Consistent with its pattern for the last two years, the Company is on track to complete its regular review and thorough analysis and to announce any changes to the current program by March or April of 2014.

The Board believes that the Company’s management team and Board are in the best position to determine what is in the best long-term interest of the Company’s business and recommends a vote AGAINST this proposal.

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