by James Hyatt
Apple Inc., requested by a shareholder to adopt a written CEO succession planning policy, is asking holders to reject the proposal.
Apple CEO Steve Jobs in June 2010
Apple’s successorship plans are particularly sensitive because Apple CEO Steve Jobs underwent a liver transplant operation in 2009.
The Central Laborers’ Pension Fund has proposed that the company “adopt and disclose a written and detailed succession planning policy.”
The plan, it declared, should include an annual review by directors, criteria for the CEO position, identification of internal candidates, “non-emergency CEO succession planning at least 3 years before an expected transition,” and an annual “report on its succession plan to shareholders.”
The shareholder proposal notes that a 2007 study by Hay Group found that “85% of the Most Admired Company boards have a well defined CEO succession plan” that includes long-term and emergency planning.
In Apple’s proxy materials for the Feb. 23 annual meeting, directors urged a NO vote, declaring that the board has already implemented “many of the proposed actions” and that the company “maintains a comprehensive succession plan throughout the organization.”
Adopting the proposal, the directors said, “would give the Company’s competitors an unfair advantage” by publicizing confidential objectives and plans. And, directors said, the proposal would undermine efforts to recruit and retain executives. Naming potential successors, it said, would invite competitors “to recruit high-value executives way from Apple,” and could cause executives not named as potential successors to voluntarily leave the company.
Apple did propose that shareholders be given an opportunity to consider an advisory “say-on-pay” vote on executive compensation on an annual basis.
Photo by Matt Yohe, courtesy Wikipedia
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