The Wall Street Journal report stated that the tech behemoth, Apple Inc. (NASDAQ:AAPL) has amended its regulations and now allows long-term shareholders to participate in the nomination of its board members. The by-law only applies to the shareholders who, in the past three years, hold at least 3% of the company’s total outstanding shares. This means that Apple Inc. being valued at $600 billion, 3% of the stake will be $18 billion.
Following Apple’s regulatory filing, shareholders can only nominate a fifth of the total board members, which is made up of eight members, including Walt Disney Co (NYSE:DIS)’s CEO, Bob Iger, and Tim Cook, Apple’s Chief Executive.
A recent report by a proxy-advisory company, the Institutional Shareholder Services stated that Apple has now joined Staples, Inc. (NASDAQ:SPLS), Whiting Petroleum Corp (NYSE:WLL), Microsoft Corporation (NASDAQ:MSFT) and Big Lots Inc. (NYSE:BIG) amongst others who have either already provided or are committed o provide their shareholders proxy access.
The report further states that the proxy access trend has had more traction as most of the Standard & Poor’s 500 Index entities have adopted it. These include, McDonald’s Corporation (NYSE:MCD), The Goldman Sachs Group Inc. (NYSE:GS) and Coca-Cola Co (NYSE:KO). This list is growing each day as the companies are realizing the value of according the proxy access benefit to their external investors.
Proxy access is viewed as a cost-effective strategy of equally giving investors a chance to compete for a board seat by use of the materials during the companies’ annual meetings. Further it enhances equality by reducing bias and conflict of interests in decision making during the board meetings. During Apple’s annual General meeting in March, this proxy access proposal gained 39% support from the shareholders. Through this new incentive, Mr. Cook seeks to incorporate the external shareholders into Apple Inc. (NASDAQ:AAPL)’s corporate governance and improve the company’s general transparency on its operations and undertakings.
As proxy access is gaining momentum in different companies worldwide, the pension fund entities, Calpers and New York City Employees’ Retirement System, have put up over 100 resolutions in the U.S in demand of the proxy access during the shareholders meetings. This will see the adoption of the board members nomination strategy grow tremendously in the near future.
Sources: reuters
