Shareholders Push Hard For Apple Succession Plan

eldavojohn writes "Apple has been a couple weeks now sans their iconic fearless leader and the shareholders are getting restless without a succession plan. Essentially the Institutional Shareholder Services (ISS) is saying that there hasn't been enough disclosure in why exactly Steve is absent and they'd like an annual succession plan delivered to shareholders. Apple is recommending that on February 23 at its annual company meeting, its shareholders vote against the proposal for a succession plan. Apple may have a plan for life after Steve Jobs but if they do they are not sharing it with anyone — not even their financiers!"

Comments

Stock Price

[Enderandrew]

Publicly saying you're concerned and don't have confidence in your company is a sure-fire way to drive your stock price through the roof.

Re:Stock Price

[arth1]

It could be interesting to see the volume of short sales for the last week or so.

Re:Stock Price

[bluefoxlucid]

Most companies are run by the guy who invented the damn thing. Microsoft was driven by Bill Gates; when Gates went away, so did Microsoft. Ballmer's Microsoft is living on the Microsoft Monopoly, but Ballmer is running the company into the ground; the cunning, foresight, and business sense that made Microsoft what it was is partially Bill Gates' leadership. When the CEO becomes a check-collector or just gets replaced by someone else, the company loses his insight and falls apart.

Apple without Steve Jobs will be Apple without Steve Jobs. It'll be run by a board-elected CEO who has some ideas on improvements to be made, which is just as well because he won't have Jobs' wit with the market. He might have other wit, and might be able to make Apple live; it won't be like today's Apple, the company direction will be at least a little off true and aligning to a new heading, but it might not be a huge change. On the other hand, it's likely he won't be able to make Apple run like Apple, and then Apple will fall apart.

Juche Idea

[MrEricSir]

Even in death, Steve Jobs will always be Apple's Eternal Leader. He can appoint his son as the Dear Leader.

Re:Here's your plan

[WrongSizeGlass]

Oh please. Enough with this "Steve's Ego" stuff. We all know he's using Disney's animatronics labs to give him the closest thing to immortality he can get until the revamped iLive is released in 2017.

What they'll do...

[vell0cet]

If Jobs dies, they'll just string him up and move him around "Weekend at Bernie's" like

Re:What they'll do...

[markass530]

Why is the parent modd'd funny. Oh because there isn't a "sad but true" mod....

Owning stock - so?

[dazedNconfuzed]

I'm puzzled by the market cap of Apple being ~$0.3T ... when the company never issues dividends. What's the point of owning stock then? it's like owning shares of the moon: yeah, it's there, and you may be legal owner of a miniscule fraction thereof, but you don't get anything from it and those doing anything with it won't consult you.

Re:Owning stock - so?

[Jane Q. Public]

What, you've never heard of "trading"? Buy low, sell high?

Re:Owning stock - so?

[jfengel]

The company does make revenue, and you own a share of it. In principle, it could be handed out as dividends, but the shareholders collectively decide to reinvest it instead.

They could, in theory, divide it all up and hand it out. They don't ever actually have to do it; the company is worth more alive than dead. But that they could is the fundamental source of value.

The price of Apple's share's isn't completely out of line with its revenues. Even after its run-up, its price is only 18 times the revenues for the last 12 months. They could in theory be distributed, and if they were (and continued to do so for 18 years) you'd double your money. That corresponds to around 4% interest; not a huge win, but way better than the miserly .05% I'm getting in my bank account (or the .8% I could get by moving it to a CD).

As a whole, the company is very valuable, but illiquid. The stock market provides liquidity. It's a bit of a consensual hallucination; in theory, the other buyers could all dry up. But in practice, as long as the company holds underlying value, there will always be people willing to bid against each other to take your shares off your hands. And because they bid against each other, the price corresponds (roughly) to the amount of money the company expects to take in over time.

Re:Owning stock - so?

[Antisyzygy]

This is something I actually agree with. Stock was supposed to be that you actually own a portion of a company. Whats the point in owning a portion of the company if you don't share some of the profits from the company? I suppose the counter-argument would be you should share some of the losses, however you are essentially giving money to the company so if the stock tanks then its like the company defaulting on a loan. I realize that if a company makes more money the stock goes up in value, but frankly a non-dividend stock seems as imaginary as derivatives. Speculation for the sake of speculation is all it is.

Re:Owning stock - so?

[alexander_686]

The value of a stock is all future cash flows [i.e. dividends] discounted [i.e. interest rate + risk of owing a stock] back to today.

Apple has not paid any dividends because it believes that it can grow future profits and the current cash faster then if the owners were to take there money and invest in something else. That being said, Apple is sitting on a LOT of cash, so I have a hard time believing them – but your mileage may very.

And because Apple is a growing, profitable concern – i.e. the value of the company is growing – it makes sense that the stock is worth something. Once again I am not sure I would agree with the current stock market value – but there are people who do. It’s not a ponzi scheme which requires new investors to support the old.

Re:Owning stock - so?

[vux984]

Itâ(TM)s not a ponzi scheme which requires new investors to support the old.

Except it actually does.

Your shares pay you nothing ever unless you cash them out (and your only ahead if you get more than you paid after commissions), meaning a new investor has to buy your shares for more than you paid for them for you to realize any profit.

Because the company never returns money back to the investors, the only money existing investors get out, is from new investors buying in.

That is starting to look like a ponzi scheme.

A classic ponzi scheme has the returns of the old investors paid for directly by the new investors, and for the returns to continue, ever more new investors have to buy in.

Now Apple isn't a true ponzi... there is a real company under there, with real value, and holding apple stock represents real wealth in terms of it being a fractional part of the real company. What that value is is debatable, but its definitely way above zero.

However its day to day valuation does actually behave pretty much exactly like a ponzi scheme. Any money made by owning apple shares is funded by new investors buying in at a higher price. Any money they make is made from new investors buying in even at a higher price. And so on... that is fundamentally not sustainable.

Apple has not paid any dividends because it believes that it can grow future profits and the current cash faster then if the owners were to take there money and invest in something else.

And that's a fair rationale... we need this cash to make the company better, and you the investor will hold a larger more valuable company as a result. However, that only works in the short / medium term... when that becomes a perpetual promise, then it never pays.

It would be like loaning your brother a $1, on the promise of getting $1.20 at the end of the week. At the end of the week, he says... hold up another week and I'll get you $1.50... and you say sure... 25 years later go by and you still haven't been paid. Sure, your brothers made good use of the money and is a rich bastard who owes you millions... but you'll die before he evers pays up... or maybe he finally screws up goes broke and you'll be lucky to get your original $1 out.

That's investing in apple... although at least you can get out whenever you want, as long as you can find someone else who believes more in your brother (Apple) than you do.

Speculation

[Ensign_Expendable]

Rumor mill says Eric Schmidt.

NO!!

[gbrandt]

No corporation is required to have a succession plan. Why should Apple?

You are going to say that Steve is so important to Apples success and continued success that a plan should be required.

I'm going to say that Steve is one man that relies on many people to come up with a successful product.

If there is no law that requires a succession plan, then Apple should not be made to make a plan.

Re:NO!!

[SydShamino]

If there is no law that requires a succession plan, then Apple should not be made to make a plan.

So you're saying that the shareholders - the owners of the company - cannot direct any actions of their company? Only the government can direct action via law?

Re:NO!!

[Lev13than]

No corporation is required to have a succession plan. Why should Apple

Because shareholders own the company. If the company's owners want a succession plan then Apple had better well get cracking.

Regardless, your assertion is false - most large companies will have succession plans for key staff. Many willl go so far as to take out hefty life insurance policies to cover short-term risk if their CEO, chief product designer, star analyst etc... gets hit by a bus.

Re:NO!!

[tres]

Fine. get 51% of the "owners" to agree to the course of action. Once you've crossed that threshold, then you've got a point.

Jobs knows best?

[stimpleton]

"saying that there hasn't been enough disclosure in why exactly Steve is absent"

Friggin' boards and share holders. I hate them. I am biased obviously. I am in the trenches, so they probably look at me with equal distain.

This is the generic problem, boards and shareholders poke their governance noses in, not trusting senior operational to make the best decisions. Steve Jobs, and I suspect those around him, would go to their graves doing the best for Apples long term goals.

Jobs himself will be well aware of consequences of his absence but I am guessing is managing the fact his return is best. I am not a Jobs fanboy, but shareholder boards fuck off and count pennies somewhere else.

succession plan = competitive disadvantage

[BearRanger]

Why would Apple want to publish a plan if they have one? The top executives who aren't in line to move up will become dissatisfied and will look for opportunities elsewhere. The executives who are tapped won't have a timetable to move up, and will be sniped at and sabotaged by the executives who aren't in line in the hopes of improving their positions. It's a recipe for internal dissent and distraction.

Apple is right and should resist this call to appoint a successor. If the shareholders don't like it they always have the option of selling their shares.

Re:succession plan = competitive disadvantage

[catmistake]

Because the shareholders -- THE PEOPLE WHO ACTUALLY OWN THE COMPANY

What company lets shareholders RUN the company?

Why are there more here chiming in that obviously could care less than those that actually have interesting and inciteful things to say? C'mon Slashdot posters... I come here for the comments, (and to troll) and lately, you've really been sucking. Please stop sucking.

It hasn't been revised for a few years...

[Jeremiah Cornelius]

The succession plan reads:
"Gil Amelio".

Re:It hasn't been revised for a few years...

[tlhIngan]

haha, but in all seriousness, it actually reads "Tim Cook".

I would agree. It's no secret that the last time Tim took over while Steve was having his operation. I would no doubt believe Steve has groomed Tim to actually take over.

And then there's the other Steve who while not officially on the Apple payroll (I don't think - maybe he gets a token amount?), is also as much a part of Apple as Jobs is. I'm talking about Wozniak, and while I'm sure the two Steves disagree on a lot of things, Woz would probably be hired as the public figurehead (Tim is a bit more private and reserved) to replace Jobs at keynotes and such.

Tim has handled a lot of products already, and may not be as explosive as Jobs or as public, but I'm sure Woz would fit right in.

I'm surprised that the shareholders are demanding it when the next in line is so plainly obvious. And I'm sure Jobs has also been grooming others for marketing purposes - a lot of keynotes feature more than just Jobs, especially during the demos.

Wait, what?

[Rossman]

"No corporation is required to have a succession plan. Why should Apple?"

Because their shareholders want one, and the shareholders pay the bills.

Re:Apple treats its shareholders like garbage..

[Caerdwyn]

In at approx. 75. Currently 340-ish. Yeah, they're treating me like garbage. I need more people to treat me like garbage like that.

He has a serious illness. That's all the info I need on his health. Seriously, does anyone on Planet Earth NOT know he's living on borrowed time (and livers)?

Succession plan? Tim Cook. Done. Again, does anyone with any interest in who leads Apple not know this?

Steve Jobs could only approve of Steve Jobs

[erroneus]

I was going to say that Steve Jobs had better start cloning himself to take over, but then I remembered what happened the last time there was an Apple clone -- they were sued out of existence and then Apple took the clone and called it "Apple IIe" So I'm guessing a Steve Jobs clone wouldn't last long either.

Re:Here's your plan

[Daniel Dvorkin]

until the revamped iLive is released in 2017

At that point I suspect it will be called iEatBrains.

Re:Here's your plan

[al0ha]

Actually, Steve has an undeniable right to his massive ego. Apple tanked without him and almost died. In the late 90s I heard he was coming back and purchased plenty of AAPL - now AAPL market cap exceeds MS. Steve is not God, but there are plenty of people that will forgive his ego.