Although Apple’s shareholder meeting Thursday ought to be celebratory after a record-setting quarter and Jobs general placation of its environmental adversaries, a group of activist shareholders is threatening to spoil the party with a proposal on the company’s proxy statement relating to the stock options backdating scandal that just won’t go away.
According to MarketWatch, the proposal is sponsored by New York’s Amalgamated Bank LongView Collective Investment Fund and the Connecticut Retirement Plans and Trust Funds (which own about 796,000 shares of Apple’s stock between them). It calls for the company to set grant dates for stock options during a given fiscal year ahead of time. It also requires that options granted to senior executives be given an exercise price equal to the average opening and closing prices of Apple stock on the day the options are given.
“In our view, corporate efforts to game the timing of options can distort a core purpose of options, which is to motivate executives to improve long-term performance for the benefit of all shareholders.”
But Apple calls the measure unnecessary, because the company hasn’t granted any options to senior management since 2003.
“Even if Apple decides to grant stock options to senior executives in the future, the Board believes that the proponent’s restrictive approach is not necessary to protect the interests of Apple shareholders.”
So we’ve heard from the activist shareholders and we’ve heard from Apple. What about an impartial third party? Well, proxy advisory firm Proxy Governance Inc. is also against the proposal.
“No number of controls and process improvements can prevent every instance of willing and intentional fraud.”
But what about unwilling and unintentional fraud?
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