Apple CEO Sheds Little Light on Cash or Product Plans - Wall Street Journal

By IAN SHERR And JESSICA E. LESSIN CUPERTINO, Calif.—Apple Inc. shareholders Wednesday strongly endorsed the company's board and management despite a recent flare-up and pair of lawsuits over its cash hoard. At Apple's annual shareholder meeting held in its headquarters here, the company said preliminary votes showed strong support for the company's directors, with Chief Executive Tim Cook receiving support from more than 90% of votes tallied before the meeting. Shareholders also voted in favor of the company's proposed appointment of Ernst & Young LLP as its independent auditor, as well as an advisory vote on executive's compensation. Shareholders voted down two shareholder proposals however, which attempted to direct how much stock the company's leadership must retain, and another proposal to create a director-level committee on human rights. Apple's directors opposed both proposals as well. The shareholder meeting was rather tame compared with what it could have been. Last week, a U.S. District Judge sided with hedge-fund manager David Einhorn, who argued that the way Apple was bundling several shareholder proposals into one item was illegal. The argument was seen as a proxy by Mr. Einhorn, who used the attention of the fight as a pulpit to discuss his proposal for the company to distribute more of its $137 billion cash hoard through a set of preferred shares. Ultimately, Apple withdrew the proposal, which if approved would have given shareholders the right to vote on issuing preferred shares. Currently, only Apple's board can issue such shares. Apple general counsel Bruce Sewell said Wednesday it was "committed" to reviving the proposal that bundled several corporate governance measures. Mr. Einhorn sued Apple to block the vote because he believed it could hamper Apple from adopting his proposal for a new type of preferred dividend-yielding stock to return more cash to shareholders. A representative from the public pension fund Calpers said it had "great regret" the proposal was taken off the table and that it believed the proposal would have passed. Another shareholder encouraged Apple to address the corporate governance matters as separate items in the future so shareholders could vote on them individually. In midday trading in New York, Apple's shares were down 1.3% to $443. The shares have fallen about 35% from their all-time highs near $705 per share. Mr. Cook said he wasn't pleased with the company's stock price, but urged patience. "What we're focused on us the long term," he said, while also talking up the company's accomplishments over the past year. There was little discussion about what to do about Apple's cash, beyond one remark from Mr. Cook who volunteered that the company was in "very very active discussions" about what to do on the matter. Apple didn't mention any plan to split the company's stock following rumors that the company would announce such a move, which world be first in eight years. Apple's shares have risen to more than 10 times the price they were back then, though it dramatically ebbed following protracted complaints about a new mapping application for the company's iPhones and iPads released in September of last year. During a question-and-answer session, shareholders attempted to gain insight into the company's product road map, asking questions about how the company was investing in its research and development and how it can expand market share. "We invest in things we think are great to do," Mr. Cook said, noting the company only releases new products "deliberately and thoughtfully." "Winning for us is not making the most," he said. "We want to make the best." The questions mirror Wall Street's continuing anxiety over Apple's next new product line, and whether that can help to jump-start the company's profit growth yet again. In its holiday quarter, Apple disappointed investors by showing little growth in its earnings despite an 18% jump in revenue. Numerous industry analysts expect the tablet maker to unveil a television set and cheaper priced iPhone this year, though Apple executives have largely avoided laying out the company's plans. In response to a shareholder question, Mr. Cook said he was unconcerned about whether the new iPad Mini would hurt iPad sales, repeating his earlier statement that Apple prefers to cannibalize its own product's sales before competitors do. "I strongly believe it's a great product. It was precisely the right thing to do, it's great for customers and if it's great for customers it's great for Apple," Mr. Cook said. Write to Ian Sherr at ian.sherr@dowjones.com and Jessica E. Lessin at jessica.lessin@wsj.com via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHAnzvV1XC1x0CqVyDMiZOllJdF5Q&url=http://online.wsj.com/article/SB10001424127887323478304578330281330865040.html

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