Apple: Corporate Governance and Stock Buyback: Company Overview

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W14736
APPLE: CORPORATE GOVERNANCE AND STOCK BUYBACK1
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Professor Won-Yong Oh and Seoyeon Park wrote this case solely to provide material for class discussion. The authors do not
intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names
and other identifying information to protect confidentiality.
This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the
permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights
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organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.
Copyright © 2015, Richard Ivey School of Business Foundation Version: 2015-03-27
At the end of 2013, Carl Icahn, an activist shareholder who had invested a significant amount in Apple’s
stock, proposed a more than US$50 billion2 share repurchase program during the 2014 fiscal year. If this
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proposal was approved at the annual shareholder’s meeting, Apple would be in a position to buy back a
significant portion of its own shares on the stock market, which would drive up the stock price. However,
Apple’s executives and board of directors opposed Icahn’s proposal and recommended that shareholders
vote against it.
As of the end of December 2013, there were 892,553,950 shares, held by 26,522 shareholders.3 Apple’s
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annual shareholder’s meeting was scheduled to be held on February 28, 2014. Shareholders could either
vote for Icahn’s proposal or follow the recommendation of Apple’s board.
COMPANY OVERVIEW4
Apple was incorporated in California in January 1977, with the original name of Apple Computer, Inc.
Apple’s business areas included mobile communication and media devices (e.g., iPhone, iPad), personal
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computers (e.g., Mac), portable digital music players (e.g., iPod), various related services, software (e.g.,
iOS, OS X, iTunes Store, App Store and iCloud) and peripherals (e.g., Apple TV). Apple’s key strength
lay in its unique computing ecosystem, iOS, rather than its superior hardware; iOS provided users with an
integrated and seamless experience across multiple devices.5 Apple sold its products and services
worldwide through its retail stores in 13 countries, as well as in online stores, through direct sales forces
and through third-party retail channels (e.g., cellular network carriers and other wholesalers and retailers).
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1
This case has been written on the basis of published sources only. Consequently, the interpretation and perspectives
presented in this case are not necessarily those of Apple Inc. or any of its employees.
2
All currency amounts are shown in U.S. dollars unless otherwise noted.
3
Company proxy statement (2014), p. 4.
4
Ibid., pp. 1-5.
5
RBC Capital Markets, “Apple, Inc.: Adjusting Estimates To Reflect Buyback and $12B Debt Raise,” Equity Report, May 5,
2014.
This document is authorized for educator review use only by RITA JULIANA, Universitas Pelita Harapan until May 2020. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
Page 2 9B14M165
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Apple’s strategy was well known for its strong emphasis on a positive user experience through innovative
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hardware, software and services, and its historical financial performance was well above the industry
average (see Exhibit 1).
The markets for Apple’s products and services were very competitive, characterized by the frequent
introduction of new products and by rapid technological advancement and innovation. The industry
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within which Apple had been competing included many large, well-funded and skilled competitors, such
as Samsung. Given that the industry was characterized by high competition based on technological
development, Apple’s future success relied heavily on the continuous introduction of competitive
products, services and technologies to the market. The company continued to invest in research and
development (R&D) in order to enhance its existing products and to expand its new product offerings.
Total R&D expenditure was $6.0 billion, $4.5 billion and $3.4 billion in 2013, 2012 and 2011,
respectively.6
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While Apple clearly possessed some key strengths, including strong market positions with innovative
products, a clear and simple marketing plan and a higher margin structure, analysts expressed some
concerns about its weaknesses. The iPhone was no longer considered a cutting-edge product, and the
strategy of targeting the premium market segments, rather than the mass market, limited the company’s
growth potential. Finally, a high dependence on a few core products (iPhone and iPad) and a relatively
weak position in the corporate sector represented some of Apple’s weaknesses as well (see Exhibit 2).
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Annual Meeting7
The annual meeting agenda contained 11 items for discussion, including four items initiated by a
shareholder’s proposal, which were listed on the company’s proxy statement (i.e., SEC form DEF 14A).
These items included the election of board members, the appointment of accounting firms, the approval of
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executive compensation and a decision on the stock buyback program proposed by major shareholders.
Also, the board members provided voting recommendations for these items, based on their judgment as to
whether each proposal aligned with the shareholder’s interest (recommend ‘for’) or not (recommend
‘against’). Icahn’s proposal of stock repurchase was item No. 10, entitled “Shareholder proposal of a non-
binding advisory resolution relating to the company’s capital return program,” and the board had
recommended that shareholders vote against this proposal.
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Shareholders could vote for or against Icahn’s proposal of the stock repurchase program. Their task, then,
was to judge whether Icahn’s proposal or the board’s recommendation (i.e., to vote against the proposal)
would be beneficial to shareholder interests. Looking at the existing corporate governance characteristics
constituted an initial and important step, one that shareholders could not take lightly.
APPLE’S CORPORATE GOVERNANCE
There were three important entities related to corporate governance: corporate executives, shareholders
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and the board of directors. In addition, setting an appropriate executive compensation represented an
important item for discussion at the annual meeting because it could affect the incentives of executives.
6
Company annual report, 2014, p. 7.
7
Company proxy statement, 2014, pp. 1-2.
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Corporate Executives: People Who Manage the Company
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Apple’s senior management team consisted of eight executives, including chief executive officer (CEO)
Tim Cook and seven senior vice-presidents. Since August 2011, Tim Cook had served as CEO, having
previously held the position of chief operating officer (COO) since October 2005. Cook had joined the
company in March 1998 and worked as executive vice-president, Worldwide Sales and Operations from
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2002 to 2005. Previously, Cook had served as senior vice-president, Worldwide Operations, Sales,
service and support (from 2000 to 2002) and as senior vice-president, Worldwide Operations (from 1998
to 2000). Outside of Apple, his previous appointments included serving as director of the National
Football Foundation & College Hall of Fame, Inc.8
Other senior executives from Apple included the following:9
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Eduardo Cue, senior vice-president, Internet Software and Services
 Peter Oppenheimer, senior vice-president and chief financial officer
 Craig Federighi, senior vice-president, Software Engineering
 Daniel Riccio, senior vice-president, Hardware Engineering
 Philip Schiller, senior vice-president, Worldwide Marketing
 Bruce Sewell, senior vice-president, General Counsel and Secretary
 Jeffrey Williams, senior vice-president, Operations
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Ownership Structure: People Who Own the Company
Apple had attracted a number of major institutional shareholders to its roster (see Exhibit 3). Executives
and directors also possessed shareholdings (see Exhibit 4), a situation that was referred to as “insider
ownership.” The total number of shares owned by 15 executive officers and directors as a group was
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567,949, which represented less than 1 per cent of outstanding shares of the company’s common stock.
In August 2013, Carl Icahn, who owned roughly $1 billion worth of Apple shares,10 approached Tim
Cook and discussed the stock repurchase program. According to Icahn, the pair “discussed my opinion
that a larger buyback should be done now. We plan to speak again shortly.” Icahn believed that Apple
was significantly undervalued.11
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However, even before Icahn’s proposal, Apple was engaged in a major stock buyback program. In March
2012, the board authorized a quarterly dividend and stock buyback program worth of $45 billion. In April
2013, the company announced that it would double the size of its planned stock repurchase program and
dividend payments to $100 billion by the end of 2015.12
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8
Company proxy statement, 2014, p.10.
9
Ibid., p.17.
10
David Benoit, “Icahn Ends Apple Push with Hefty Paper Profit,” The Wall Street Journal, February 10, 2014,
www.wsj.com/articles/SB10001424052702304558804579374720149630510, accessed September 10, 2014.
11
Aaron Pressman, The Exchange “Icahn’s Plans for Apple Unlikely to Help Long-Term Shareholders,” Yahoo Finance
August 19, 2013, http://finance.yahoo.com/blogs/the-exchange/icahn-plans-apple-unlikely-help-long-term-shareholders-
181943487.html, accessed September 10, 2014.
12
“Apple More than Doubles Capital Return Program,” Apple Press Info, www.apple.com/pr/library/2013/04/23Apple-More-
than-Doubles-Capital-Return-Program.html, accessed September 1, 2014.
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Board of Directors: People Who Oversee Executives
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The board of directors oversaw the top executives, including the CEO, in order to ensure that the firm’s
operations were competent, appropriate and ethical and that they aligned with the shareholders’ long-term
interests. Apple’s board of directors was composed of eight directors (see Exhibit 5) who were nominated
for re-election at the annual meeting each year (i.e., each one served a one-year term). The board
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comprised a diverse group of people, mostly from the world of business. Most of these individuals held
senior leadership positions at large companies, and many of the directors also had experience both as
directors of other companies and at highly regarded academic, research, nonprofit and philanthropic
organizations.
As the only director who was also an employee of Apple, CEO Tim Cook served as a member of the
board. Arthur Levinson, chairman of Genentech, Inc., served as the chairman of Apple’s board of
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directors. According to the company’s proxy statement, “The board also believes the current separation of
the chairman and CEO roles allows the CEO to focus his time and energy on operating and managing the
company and leverages the chairman’s experience and perspectives.”13
Apple’s board was composed of three committees: an audit committee (chaired by Dr. Ronald Sugar); a
nominating and corporate governance committee (chaired by William Campbell); and a compensation
committee (chaired by Andrea Jung). Each committee had three or four members, including a committee
chairperson, and they operated under written charters adopted by the board of directors.
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The audit committee had the responsibility of evaluating the financial performance and transactions,
appointing the public account firm, assessing the accounting policies and internal control system,
reviewing the services performed by public accounting firm, and overseeing enterprise risk management.
During 2013, the committee met 10 times.
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The nominating and corporate governance committee was responsible for evaluating potential nominees
(i.e., the director candidates proposed by shareholders) to the board, as well as for assessing the board’s
effectiveness in monitoring executives and making recommendations regarding the size, structure and
composition of the board and its committees. The committee met four times during 2013, and, at the
annual shareholders meeting, it recommended to the full board the re-election of each of the incumbent
directors.
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The compensation committee was involved in reviewing the executives’ compensation, arranging equity
compensation plans (e.g., stock options) and overseeing the review of all board members’ compensation.
The compensation committee met eight times during 2013.
Executive Compensation
The compensation committee had the responsibility of deciding the structure of executive compensation
(see Exhibit 6). Executives without a proper compensation scheme might not have the incentive to
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perform in the best interest of shareholders. To help determine the appropriate level and structure, the
compensation committee used a group of reference companies, such as AT&T, Amazon, Google, HP,
IBM and Microsoft, in order to use them as a peer comparison when deciding on executive compensation.
Therefore, the level of Apple executives’ compensation was equivalent to that of other major companies
in the United States. In 2013, neither a bonus nor a stock award was given to executives.
13
Company proxy statement, 2014, p. 12.
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Interestingly, Steve Jobs, Apple’s former CEO at the time, received only $1 per year as his compensation,
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but he owned 5.5 million shares of the company’s common stock (worth more than US$1.84 billion as of
January 2011).
ICAHN’S PROPOSAL: STOCK BUYBACK
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Due to its successful past performance, Apple was sitting on a huge cash stockpile of $147 billion. Some
investors such as Carl Icahn were dissatisfied with the excess-cash situation and wanted Apple to put the
cash to work for the company’s shareholders. Since much of Apple’s cash was trapped overseas because
of the company’s tax-saving policy, Icahn proposed that Apple should issue bonds and use the money to
repurchase shares on the public market. This stock repurchase program would drive up Apple’s stock
price, which would in turn increase the shareholders’ stock value, including Icahn’s holdings.
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On August 13, 2013, Icahn tweeted about his large stake in Apple. He claimed the company was
extremely undervalued and urged CEO Tim Cook to consider a stock buyback. Icahn’s action made a
significant impact on Apple’s stock price, which surged 5 per cent by close on August 13 and an
additional 1.82 per cent the next day. As a result, the stock price finally crossed a psychological threshold
of $500.
In an interview with CNBC on October 1, 2013, Icahn said, “I feel very strongly about this. I can’t
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promise you the stock will go up, and I can’t promise you they will do the buyback. But I can promise
you that I’m not going away until they hear a lot more from me concerning this [issue].”14
On October 24, 2013, Icahn reinstated his interest in the stock buyback program by disclosing a 4.7
million share position through a letter to Cook, which was made public. Later, Icahn recalled, “Cook’s
assistant initially tried to schedule at 5 a.m. Pacific Time. That’s usually when I go to bed! This guy’s
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tougher to get than the President,” laughed Icahn. Icahn said, “Tim Cook is doing a good job with the
business . . . . I think he’s good whether he does what I want or not.” After the conversation with Cook,
Icahn said, “We’ve discussed a lot of things, and he asked a lot of questions and really listened.”15
On November 26, 2013, three days before the deadline for measures to be voted on at Apple’s next annual
shareholders meeting, Icahn finally filed a $50 billion shareholder proposal, calling for Apple to pay out
some of its cash hoard to investors. Again, Icahn emphasized that he was not against the management of
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the company; however, in an interview with Time Magazine, he said that Apple simply had “too much
money on [its] balance sheet . . . . Apple is not a bank.”16
Why Vote for the Proposal?
By reducing the number of shares outstanding, the buyback would definitely make a positive impact on
Apple’s share price, at least in the short term. Icahn believed that Apple had sufficient borrowing ability
to spend $50 billion in a stock repurchase without causing any liquidity problems or compromising its
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capability to invest in innovation.
14
Connie Guglielmo, “Carl Icahn Wasn’t Joking about That $150 Billion Stock Buyback by Apple,” Forbes.com,
www.forbes.com/sites/connieguglielmo/2013/12/04/carl-icahn-wasnt-joking-about-that-150-billion-stock-buyback-by-apple/,
accessed September 15, 2014.
15
Rana Foroohar, “Icahn Files Apple Shareholder Proposal,” TIME Exclusive, http://business.time.com/2013/12/04/icahn-
apple/, accessed September 15, 2014.
16
Ibid.
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In addition, Ken Yook, a finance professor at the Johns Hopkins Carey Business School, mentioned that
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interest on bonds was tax deductible. Also, he pointed out that interest rates remained at a historically low
level, even though they had risen recently. Yook said, “Apple should easily be able to sell tens of billions
of dollars more bonds . . . . Apple can enjoy the tax shields of debt financing and lower cost of capital,
among other benefits, without facing any significant issues.”
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Icahn said his proposal would call for only slightly more stock repurchase than Apple had already
committed to. In an open letter to Apple shareholders, he wrote, “We see no reason to persist with our
nonbinding proposal, especially when the company is already so close to fulfilling our requested
repurchase target.”17
Why Vote Against the Proposal?
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Apple’s executives and board had recommended that shareholders vote against Icahn’s proposal. Some
other major shareholders, such as the California Public Employees’ Retirement System pension fund,
publicly backed this stance. Mark Moskowitz, an analyst at J.P. Morgan, commented:
Apple sits on an enviable cash pile, and some of that cash needs to be returned to shareholders
over time, which the company already has committed to. We are concerned, however, that
Apple’s accelerated stock buyback activity could be in response to some investors focusing too
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much on capital allocation. We would prefer to see Apple assert a more balanced use of cash,
across [mergers and acquisitions], stock buybacks and dividends.18
The problem with Icahn’s proposal was that sizable buyback programs could be a distraction for a high-
tech company that should be focusing on innovation in new products and services. Gerard Tellis, a
professor at the University of Southern California, Marshall School of Business, suggested that this was a
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matter of “outstanding innovation” versus “financial engineering,” stating that “the growth of Apple’s
stock price was driven by outstanding innovation, not financial engineering.” Dr. Arun Sundararajan,
professor of information sciences at New York University, echoed this view, saying, “This kind of
financial engineering isn’t in the long-term interest of Apple’s shareholders . . . . [Apple is] still a
tremendously valuable company, but stock price boosts from financial engineering shouldn’t distract from
the fact that [its] business model doesn’t look as solid and dominant as it did four years ago.” Further
Justin Pettit, vice-president at IHS Consulting, mentioned, “For a company like Apple, matters of
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financial policy are very much second-order concerns.”19
Apple had already made a significant effort to increase shareholder returns. In March 2012, the board
approved the stock repurchase program of $45 billion, in addition to a quarterly dividend. In April 2013,
Apple again authorized a significant increase in the size of the shareholder returns up to $100 billion,
raising the dividend and increasing the share buyback authorization to $60 billion.20
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17
David Benoit, “Icahn Ends Apple Push with Hefty Paper Profit,” The Wall Street Journal, February 10, 2014,
www.wsj.com/articles/SB10001424052702304558804579374720149630510, accessed September 10, 2014.
18
J.P. Morgan, “A Buyback Bonanza: Apple’s Two-Week Buyback Activity Is $14 Billion; We Have a Mixed View,” North
America Equity Research, February 7, 2014.
19
Aaron Pressman, The Exchange “Icahn’s Plans for Apple Unlikely to Help Long-Term Shareholders,” Yahoo Finance,
http://finance.yahoo.com/blogs/the-exchange/icahn-plans-apple-unlikely-help-long-term-shareholders-181943487.html,
accessed September 10, 2014.
20
Company proxy statement, 2014, p. 62.
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THE DECISION
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At the annual meeting in February 2014, Apple shareholders would vote to approve or reject Icahn’s
stock buyback proposal. Icahn would have the option of withdrawing his proposal if he and the company
could come to an agreement before the annual meeting.
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Tim Cook and the other senior executives could choose between the options of making an agreement with
Icahn or allowing shareholders to vote at the shareholder meeting. If no action was taken before the
shareholder meeting, each side could try to persuade shareholders to vote with them. The time had arrived
for Apple’s 26,522 shareholders to make a decision.
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EXHIBIT 1: APPLE’S FINANCIAL DATA
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2013 2012 2011 2010 2009
Net Sales 170,910 156,508 108,249 65,225 42,905
Net Income 37,037 41,733 25,922 14,013 8,235
Total cash, cash equivalents and marketable 146,761 121,251 81,570 51,011 33,992
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securities
Total assets 207,000 176,064 116,371 75,183 47,501
Long-term debt 16,960 0 0 0 0
Total liabilities 83,451 57,854 39,756 27,392 15,861
Total shareholders’ equity 123,549 118,210 76,615 47,791 31,640
Earnings per share:
Basic 40.03 44.64 28.05 15.41 9.22
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Diluted 39.75 44.15 27.68 15.15 9.08
Cash dividends declared per share 11.40 2.65 0 0 0
Note: Unit in millions, except earnings per share and cash dividends per share.
Source: Company annual report, 2014, p.23.
EXHIBIT 2: SWOT ANALYSIS

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Strengths Weaknesses
 Superior historical financial results  High prices and limited product range
- High sales growth and operating margins  Lack of innovation for future products offering
- Strong cash flows  High dependence on key products (iPhone and
 High focus on design iPad)
 Brand awareness and reputation  Relatively weak position in the corporate sector
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 Proprietary systems (e.g., OS)  Dependence on product upgrades

 Innovative products (MAC, iPad, iPhone, iPod)  Lack of product breadth (at different pricing
 Skilled manufacturing and distribution networks ranges)
 Higher margin structure (e.g., low R&D, economies
of scale)
Opportunities Threats
 Emerging markets (e.g., China)  Saturation in Smartphone market
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 Product upgrades, generating refresh purchases  Increased competition

 Increasing corporate demand - Android OS and Samsung dominate
 Wearable gadgets smartphone market.
 Synergies of products: complementary effects  Rapid product cycles
among products  Lawsuits over patent issues (e.g., Samsung)
Source: Created by authors.

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EXHIBIT 3: MAJOR SHAREHOLDERS PROFILE (AS OF JUNE. 30, 2014)
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Shares % Shares Value of Equity
Top 10 Major Shareholders % Shares
Change Change Assets
Vanguard Group, Inc. 5.40 323,102,515 -3,905,194 -1.19 1,561,890.55
State Street Global Advisors (US) 4.03 241,237,839 -7,604,496 -3.06 969,364.85
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BlackRock Institutional Trust
Company 3.77 225,989,756 -11,197,754 -4.72 1,286,241.24
Fidelity Management & Research 3.04 182,282,153 16,434,436 9.91 851,443.21

Invesco PowerShares Capital
Management LLC 1.05 62,768,833 -7,010,191 -10.05 78,692.18
TIAA-CREF 0.93 55,575,277 1,973,197 3.68 262,386.61

Icahn Associates Corporation 0.88 52,760,848 0 0.00 36,873.84
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T. Rowe Price Associates, Inc. 0.87 51,856,730 -6,934,058 -11.79 501,753.67
Northern Trust Investments, Inc. 0.86 51,566,318 -2,885,198 -5.30 202,671.20
Capital Research Global Investors 0.81 48,589,205 4,762,450 10.87 443,403.34
Note: Filing dates, June 30, 2014. The number of total outstanding shares is 892,553,950 and unit of Value of Equity Assets
is $MM.
Source: Thompson One Database, accessed October 12, 2014.
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EXHIBIT 4: SHARE OWNERSHIP BY EXECUTIVES AND DIRECTORS (AS OF DECEMBER 26, 2013)
Number of common
stock shared
Executives
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Timothy Cook 87,316

Eduardo Cue 3,120
Peter Oppenheimer 4,834
Daniel Riccio 12,258
Jeffrey Williams 317
Directors
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William Campbell 48,112

Millard Drexler 1,533
Al Gore 101,920
Robert Iger 5,616
Andrea Jung 22,980
Arthur Levinson 240,040
Ronald Sugar 1,718
Note: The number of total outstanding shares is 892,553,950.

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Source: Company proxy statement, 2014, p. 19.
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EXHIBIT 5: DIRECTOR PROFILES
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Director Profile
Timothy Cook  Apple’s CEO since August 2011
 Company’s Chief Operating Officer since October 2005
- age: 53  Served as Executive Vice-President, Worldwide Sales and Operations
- director since 2011 (2002-2005)
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 Joined Apple in March 1998
William Campbell  Chairman of Intuit Inc. (“Intuit “) since August 1998
 CEO and director of Intuit (1994-1998)
- age: 73  Director of GSV Capital Corp. (since October 2012) and the National
- director since 1997 Football Foundation & College Hall of Fame, Inc.
 Chair of the Board of Trustees of Columbia University
Millard Drexler  Chairman and CEO of J.Crew Group since January 2003
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 President and CEO of The Gap (1995-2002), director of The Gap
- age: 69 (1983-2002)
- director since 1999  Director of Warby Parker since 2013 and Teach for America since 2011
Al Gore  Chairman of Generation Investment Management since 2004
 Partner of Kleiner Perkins Caufield & Byers since 2007
- age: 65  Chairman of The Climate Reality Project
- director since 2003  U.S. House of Representatives (four times), U.S. Senate (two times),
Vice-President of the United States (served two terms)
 Executive Chairman of Current TV (2002-2013)
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Robert Iger  Chairman and Chief Executive Officer of The Walt Disney Company
(Disney) since March 2012
- age: 63  President and CEO, Disney (2005-2012)
- director since 2011  President and COO, Disney (2000-2005)
 Director of the National September 11 Memorial & Museum, the Lincoln
Center for the Performing Arts, and the U.S.-China Business Council

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Andrea Jung Senior advisor to the board of directors of Avon Products, Inc.
 Executive chairman, Avon (2012)
- age: 55  Chairman of the board of directors and CEO, Avon (2001-2012)
- director since 2008  Member of the supervisory board of Daimler AG since April 2013
 Director of General Electric Company since 1998
 Member of the New York Presbyterian Hospital Board of Trustees.
Arthur Levinson  Chairman of the board
 Chairman of Genentech, Inc. (“Genentech”) since September 1999,

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- age: 63 CEO of Genentech (1995-2009)

- director since 2000  Director of the Roche Holding Ltd. since March 2010
 Chairman of the board of Amyris and a director of NGM
Biopharmaceuticals, and the Broad Institute of Harvard and MIT.
Dr. Ronald Sugar  Retired chairman of the board and CEO of Northrop Grumman
Corporation (“Northrop Grumman”) (2003-2010)
- age: 65  President and chief operating officer, Northrop Grumman (2001-2003)
- director since 2010  Director of Air Lease Corporation since 2010, of Amgen Inc. since 2010,
and of Chevron Corporation since 2005.
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Source: Company proxy statement, 2014, pp. 10-12.
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EXHIBIT 6: EXECUTIVE AND DIRECTOR COMPENSATION (YEARS 2013, 2012, 2011)
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Executives
Year Salary Bonus Stock award Non-equity All other Total ($)
incentive plan comp.
Timothy Cook 2013 1,400,006 ‒ ‒ 2,800,000 52,721 4,252,727
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CEO 2012 1,357,718 ‒ ‒ 2,800,000 17,274 4,174,992
2011 900,017 ‒ 376,180,000 900,000 16,520 377,996,537
Peter Oppenheimer 2013 866,061 ‒ ‒ 1,750,000 16,791 2,632,852
Senior Vice-President 2012 805,400 ‒ 66,169,750 1,600,000 16,412 68,591,562
CFO 2011 700,014 ‒ ‒ 700,000 16,129 1,416,143
Eduardo Cue 2013 866,061 ‒ ‒ 1,750,000 31,044 2,647,105
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2011 607,704 ‒ 51,852,000 444,615 48,656 52,952,975
Daniel Riccio 2013 866,061 ‒ ‒ 1,750,000 16,791 2,632,852
Senior Vice-President
Jeffrey Williams 2013 866,061 ‒ ‒ 1,750,000 16,791 2,632,852

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Directors
Fees paid in Stock All other Total ($)
cash award compensation
William Campbell 65,000 249,848 823 315,671
Millard Drexler 50,000 249,848 5,969 305,817
Al Gore 50,000 249,848 3,918 303,766
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Robert Iger 50,000 249,848 5,341 305,189

Andrea Jung 70,000 249,848 6,444 326,292
Arthur Levinson 250,000 249,848 8,365 508,213
Ronald Sugar 75,000 249,848 1,984 326,832
Source: Company proxy statement, 2014, pp.16 and 33.

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APPLE: CORPORATE GOVERNANCE AND STOCK BUYBACK1

Copyright © 2015, Richard Ivey School of Business Foundation Version: 2015-03-27

APPLE’S CORPORATE GOVERNANCE

Other senior executives from Apple included the following:9

ICAHN’S PROPOSAL: STOCK BUYBACK

Why Vote for the Proposal?

capability to invest in innovation.

Why Vote Against the Proposal?

financial policy are very much second-order concerns.”19

EXHIBIT 2: SWOT ANALYSIS

 Proprietary systems (e.g., OS)  Dependence on product upgrades

 Product upgrades, generating refresh purchases  Increased competition

Source: Created by authors.

Fidelity Management & Research 3.04 182,282,153 16,434,436 9.91 851,443.21

TIAA-CREF 0.93 55,575,277 1,973,197 3.68 262,386.61

Timothy Cook 87,316

William Campbell 48,112

Note: The number of total outstanding shares is 892,553,950.

Source: Company proxy statement, 2014, p. 19.

- age: 63 CEO of Genentech (1995-2009)

Source: Company proxy statement, 2014, pp. 10-12.

Jeffrey Williams 2013 866,061 ‒ ‒ 1,750,000 16,791 2,632,852

Robert Iger 50,000 249,848 5,341 305,189

Source: Company proxy statement, 2014, pp.16 and 33.

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