Apple's elephant in the room
Apple investors apparently aren't too concerned about who will follow in Steve Jobs' footsteps.
Investors of the Cupertino, Calif. technology company rejected a shareholder proposal from a union pension fund that would force Apple to unveil more details about its succession plan. And other than a brief comment from one investor wishing him well, the topic of Mr. Jobs' health and who would succeed him reportedly never came up at the company's annual meeting.
On the first issue, I'm not in the least bit surprised. As I've written before, forcing the company to share its future plans and risk losing executives--explicitly named or not--who might not be part of the plan puts the company at a sizable risk. Moreover, shareholder proposals brought by activist investors like labor unions commonly fail, particularly at a company performing as well as Apple.
But the fact that the issue of succession barely came up at all is more than a little perplexing. The company reportedly didn't raise the issue, for one. While again, I don't think Apple should be forced to reveal its succession plan--as long it has one in place--it could still choose to be more forthcoming on the status of one of its most critical assets. More transparency is always a good thing, especially when it comes to the health of a man who is so intimately tied to Apple's creative brilliance and phenomenal success. I guess I shouldn't be surprised--Jobs' six-sentence Jan. 17 memo seems to be about all it plans to say about the topic for now--but most companies, particularly those with leaders so central to their success, would have probably at least brought it up.
Apple shareholders barely raised the question of succession, either. With a stock increase of 379 percent over the last five years, perhaps this is a case of being so satisfied with the performance that they've been lulled into ambivalence. The more comforting explanation is that they're so confident in the leadership of Tim Cook, the company's detail-driven COO currently running the company day to day in Jobs' absence, that many aren't too worried about what would happen if Jobs were to disappear from the picture entirely.
That is surely true to some extent. But if they are so sure about Cook, why did Apple shares drop as much as 6 percent after the company announced Jobs' leave of absence? Another explanation for why the subject wasn't really addressed at Apple's annual shareholder meeting--one of the few times each year that most shareholders have the chance to interact with the company's management and board in person--is that the topic has become the elephant in the room that no one dares to talk about.
Granted, shareholders and company boards, no matter how good the relationship is between the two, don't always have the most open and free-flowing lines of communications. But it's probably not a good thing if an issue as central as this one isn't even addressed in such a key forum. As one investor told a Wall Street Journal reporter, "why ask a question that you aren't going to get an answer to?"
February 24, 2011; 10:35 AM ET |
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