UPDATE: Apple Succession Plan Defeated; Jobs Misses Annual Meeting
24 February 2011 - 7:47AM
Dow Jones News
A measure that would have required Apple Inc. (AAPL) to outline
succession plans doesn't appear to have passed at the company's
annual shareholder meeting on Wednesday, leaving unclear how Apple
will handle the continuing health issues of Chief Executive Steve
Jobs.
The succession-planning measure, brought by the Laborers'
International Union, would have required the Cupertino,
Calif.-based consumer-electronics giant to produce an annual report
on leadership change and develop criteria for candidates to the top
position. The company is continuing to tabulate results, but
initial indications suggest the measure failed.
Succession planning at Apple has taken on new urgency since
Jobs, who received a liver transplant as part of treatment for
pancreatic cancer, went on medical leave suddenly last month.
Although Apple directors criticized the measure, an LIU
representative said outlining policy for a change in leadership was
Apple's responsibility.
"Apple bears a responsibility to be upfront with shareholders
about how it would handle a CEO vacancy," Jennifer O'Dell,
spokeswoman for the LIU, told a crowded room of investors.
The shareholder meeting comes as Apple is expected to launch the
next iteration of its iPad tablet computer. Also on Wednesday, the
company invited reporters to a March 2 event that will outline
"what 2011 will be the year of." The invitation featured one of
Apple's mobile applications, or apps, peeled back to reveal a
device that resembled an iPad.
A new iPad would compete with a host of similar products that
are hitting the market following the success of Apple's original.
Motorola Mobility Holdings Inc.'s (MMI) Xoom tablet,
Hewlett-Packard Co.'s (HPQ) TouchPad and a clutch of other handheld
touchscreen computers are expected to hit the market in coming
months.
Jobs, who is credited with bringing the iPad to market, didn't
attend the shareholders' meeting, marking the second time in a
decade he has missed the annual event. Neither the company nor Jobs
has said what medical condition he is suffering from, nor indicated
his prognosis.
More so than other CEOs, Jobs is closely identified with his
company's success. A cross between a technology visionary and
salesman, Jobs is able to stir excitement in the technophiles who
throng to the company's retail stores to buy portable computers,
music players and smartphones. He also has the "chops" to cut deals
with music labels and movie studios that provide material to be
played on those devices.
Jobs went on medical leave on Jan. 17, handing day-to-day
operations to Chief Operating Officer Tim Cook. Jobs is still
involved in larger strategic planning, according to The Wall Street
Journal, and has continued to work on both the new iPad and
iPhone.
Investors asked about the company's strategic plans and its
competition with neighbor Google Inc. (GOOG) but didn't press
company officials about Jobs' health.
Peter Oppenheimer, Apple's chief financial officer, said the
company wanted to retain its cash reserves--currently worth about
$60 billion--to take advantage of any opportunities that might come
along. He didn't specify what type of opportunity the company might
be looking for.
"We're not letting it burn a hole in our pocket," Oppenheimer
said.
Some investors and commentators have called on the company to
issue a dividend or buy back shares with the money.
Oppenheimer, a trusted Jobs' lieutenant, did shed light on the
company's popular App and iTunes stores, saying that each operated
at "just a little over" break even.
Another measure, brought by the California Public Employees'
Retirement System, called for a majority vote to elect unopposed
candidates to the board and appears to have passed. The company's
current rules don't require a majority.
Investors re-elected all of the company's seven board members,
including Jobs, who has been a board member since 1997.
Also re-elected were former Vice-President Al Gore, Intuit Corp.
(INTU) Chairman Bill Campbell, J. Crew Group Inc. (JCG) Chairman
Millard Drexler, Avon Products Inc. (AVP) CEO Andrea Jung,
Genentech Chairman Arthur D. Levinson, and Northrop Grumman Corp.
(NOC) CEO Ronald D. Sugar.
In late trading, Apple shares rose 1.3% to $343.15.
-By Ian Sherr, Dow Jones Newswires; 415-439-6455;
ian.sherr@dowjones.com
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