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Apple beats off move to reveal Jobs succession details

2011-02-24 12:28:00

By Maggie Shiels Technology reporter, BBC News, Silicon Valley

Apple has beaten off efforts to reveal succession plans for the time when Steve

Jobs is no longer in charge of the company.

The proposal was made by the Central Laborers' Fund during the company's annual

shareholder meeting.

Steve Jobs, who is on his third medical leave of absence, did not attend the

event at Apple's headquarters in California.

Apple, a notoriously secretive company, fought the proposal from the outset.

A preliminary proxy count on the controversial measure suggested the fund

proposal had been defeated.

It was a move that disappointed Jennifer O'Dell, who made the proposal on

behalf of the fund, which represents 500,000 construction workers across the US

and Canada.

'Transparency'

"We want Steve Jobs to come back to work yesterday," Ms O'Dell told BBC News.

"We want him to be here every day. We want him to live forever.

"That is not realistic and that is why they need to have a plan. And if they

have a plan, and I am sure they do, what is wrong with a little transparency?"

Apple until now has said such a revelation would give competitors an "unfair

advantage" by publicising the company's confidential objectives and plans.

'Internal candidates'

The first time Mr Jobs took time off work to take care of his health was in

2004 when he revealed he had been diagnosed with pancreatic cancer.

A second medical leave of absence came in 2009 following a liver transplant.

At the time investors voiced some concern about the future of the company,

given how central Mr Jobs is seen to its success.

The Illinois-based pension fund said it filed its proposal last year, months

ahead of Mr Jobs' most recent decision to take time off work for medical

reasons.

The measure had asked for Apple to develop a plan that would be reviewed every

year that specifically laid out the "criteria for the CEO position" and "

identifies and develops internal candidates" to potentially fill the position.

The fund also called for Apple's board of directors to begin non-emergency

planning for a new chief executive three years before an expected transition.

'Real discussion'

Despite the defeat, Ms O'Dell said this was not the end of their efforts.

The fund holds nearly 11,500 Apple shares, worth around $4m ( 2.4m).

"If the company doesn't want to reach out to us and have a real discussion

about this issue we will refile it again next year," she said.

"Thirty companies have adopted this [succession plans] including HP and Intel.

"There are a lot of things we can do with this proposal.

"If the board continues to not want to listen to long-term shareholders, to

talk about this issue seriously, we can take a second step and hold the board

of directors directly accountable and we could withhold our votes from the

members of the board. Do we want to do that? No."

She said while Apple provided hundreds of thousands of labourers with security

for retirement the firm could not be run by just one person dictating the role

of the company.

'Right decisions'

In Mr Jobs' absence, the company is being run by chief operating officer, Tim

Cook.

During the hour-long meeting, no shareholders asked questions about Mr Jobs'

health, although a number wished him well for the future.

Outside the firm's headquarters, most of the opinion backed Apple's decision to

keep its cards about succession close to its chest.

"I feel making such a plan public is unnecessary," said Pam Pallakoff, a

shareholder for 20 years.

"We feel the management in place is very good management and they will make the

right decisions at the time they need to."

Fellow shareholder Shelton Ehrlich, 76, said he was glad the proposal lost, and

that he had faith that the company knew what it was doing.

"Mr Jobs, whether he is here or not here... the company will complete his

vision. At least for the next five years everything is set on a good path."

Analysts have long agreed with this view, that Apple has a long pipeline of

products and a deep management bench with a wealth of experience.

Similarly confident of Apple's future was 29-year-old shareholder Melissa

Gutknecht, who has held the company's stock since 2008.

"I am respectful of the way Apple is thinking of this issue and understand a

lot is being done behind the scenes," she said.

"My thought is they already have a plan in place and are not going to

jeopardize the shareholder by any means. I just think they are trying to be

smart about how they disseminate that information to shareholders and the

public."

Bigger say

One proposal that was approved was a requirement that unopposed candidate's for

the company's board receive a majority in order to be appointed.

The move has been seen as a victory for Calpers, the largest pension fund in

the US, which, the meeting was told, holds 1.6m Apple shares worth just under

$1bn.

Apple had opposed this measure and said it would hinder its ability to keep

members on its board.

Analysts said the vote underlined the fact investors want a bigger say in

choosing board members and more power in overruling the wishes of Apple

management, which is seen as a very close-knit group.

IPad announcement?

The shareholders meeting also ignited rumours of an updated iPad, with an event

in San Francisco next week dubbed Come See What 2011 Will Be The Year Of.

The company has sold more than 15m of the devices since its launch last April.

Mr Cook would not talk about future products, but did say he thought the market

for tablet computers was "huge, huge".

Unlike last year when the iPad had the market virtually to itself, this year it

will face increased competition from a number of companies from Google to HP to

Research in Motion.

Motorola's much publicised Xoom tablet, running an operating system developed

by Google, goes on sale on Thursday.

The Xoom was crowned the best gadget at the giant Consumer electronics Show in

Las Vegas last month.

Research in Motion plans to release four versions of its PlayBook tablet this

year, largely aimed at the enterprise market.