Calpers won a victory for shareholder rights at the Apple annual meeting as the California pension fund succeeded with a resolution in favour of majority voting for director elections.
However, investors, in voting that attracted a high turnout for a shareholder meeting on Wednesday, also appear to have been swayed by arguments in favour of board discretion at the high tech company and rejected calls for a detailed succession plan.
The results are based on preliminary votes collected before the meeting and a final tally, including ballots collected at the meeting, will be published in a future regulatory filing.
The California Public Employees’ Retirement System had targeted Apple as part of a campaign by the three largest US pension funds to press for majority voting, asking 58 big US companies to adopt majority voting.
Two-thirds of S&P 500 companies have adopted the measure, but the US is the only developed country not to enforce majority voting for directors.
Measures to press companies to adopt improved voting practices are the most common resolution proposed by shareholders this proxy season, according to proxy advisory company Institutional Shareholder Services.
The Apple vote points to further success for corporate governance activists. So far 28 companies contacted by Calpers have adopted the measure or are committed to doing so.
Anne Simpson, senior portfolio manager in charge of corporate governance at Calpers, said: “The shareowners have spoken – time now for the directors to act.
“Apple is all about innovation – time for a governance reboot. Transparency and accountability will only strengthen long term performance.”
Apple currently elects directors under a “plurality” voting system, which allows directors in unopposed elections to be elected by a single “yes” vote.
The company fought the proposal, arguing California law meant it would lose discretionary powers to ignore a vote where a director has shareholder support but not enough votes to hit the required quorum level – just over 25 per cent of a company’s shares.
While it lost the argument, shareholder relations were warm in a good humoured meeting at Apple’s headquarters in Cupertino, California, with most questions preceded by praise for the company’s performance.
Such success helped the company to persuade investors not to force it to give details of how it eventually planned to replace Steve Jobs, the chief executive credited with driving the company’s growth.
Mr Jobs’ replacement has topped the list of shareholder concerns since he took a six-month leave of absence in 2009, which later turned out to have been for a liver transplant. Last month it was announced that he would take a further indefinite leave of absence because of undisclosed health problems.
However, some governance activists prefer to avoid such a prescriptive approach to relations with a board, in favour of greater and more regular communication with shareholders.
A spokesman for the Central Laborers’ Pension Fund, which proposed the resolution, vowed to keep up pressure on the company.