Apple Shareholders Reject Sustainability and Freedom of Expression Proposals

On Wednesday, Feb. 26, 2020, major investors of Apple (AAPL) did not consent to a number of shareholder proposals. One of the proposals sought executive pay to environmental sustainability and the other expected Apple to give annual reports on its freedom of expression policies.  Apple’s shareholders' meeting comes at a time when the deadly coronavirus keeps spreading globally and having a negative effect on the stock market. Apple believes that the outbreak of the virus would have some negative effect on its second-quarter earnings for the year. This, however, is based on the second-quarter updated guidance released by the company.

Members of the board comprising the CEO, Tim Cook; the former vice president, Al Gore; and co-founder, Susan Wagner, recommended a vote against both proposals, as well as another proposal that would have given shareholders an opportunity two nominate two board members, instead of one.

 The shareholders converged at the Steve Jobs Theatre, headquartered at Apple’s Cupertino. Cook spoke after the vote, reiterating Apple's commitment to renewable and sustainable energy. ”Apple is also “working on recycling in a big way, and our ultimate objective is to be able to create and manufacture an Apple product without taking anything from the Earth. This is another thing that people say you can't do, but we're going to find a way to do it,” Cook said.

Director of socially responsible investing of Zevin Asset Management, Pat Tomaino urged investors to give their consent to the sustainability proposal adding that the payment of executives for the sustainability agenda will help Apple achieve greater sustainability. In his words, Tamaino said to investors, “put your money where your mouth is.”

Some companies, Intel (INTC) for instance have tied pay to sustainability since 2008 by linking a certain percentage of employee’s pay to the environmental sustainability metrics.

The freedom of expression proposal

The freedom of expression proposal borders on Apple removing apps from its App Store in China, as requested by the Chinese government. Apple opposed this measure saying it is necessary to abide by local laws wherever it operates. Some individuals expressed displeasure, saying that Chinese citizens were deprived following the removal of VPNs from Apple’s Chinese app store in 2017.

According to analysts, this recent outbreak could lead to Apple losing between $4 billion and $7billion in its second-quarter sales.

Apple stock has been down from $327 high to $252 today and the stock continues to drop due to the fear of coronavirus.