Apple's Environmental Measures Rejected By Shareholders

CUPERTINO, Calif. — Apple Inc., buoyed by the success of the iPhones, iPods and computers it churns out to breathless buyers, could give some of its $25 billion in cash back to shareholders. But CEO Steve Jobs said Thursday that he thinks Apple is better off keeping that money stockpiled.

At the company's annual meeting, one shareholder asked Jobs whether the company would use some of its hoard to pay a dividend. Jobs didn't seem keen on the idea, saying the cash gives Apple "tremendous security and flexibility."

If Apple decides to acquire another company, it can do so by writing a check instead of borrowing money, he said.

"Who knows what's around the next corner?" he said.

Apple executives also said they have ambitious plans to expand in China: They expect to open as many as 25 retail stores in the country in the next two years. Apple's first store in China opened in Beijing in 2008.

Jobs, a survivor of pancreatic cancer who was on medical leave during last year's annual meeting, was on stage at Apple headquarters Thursday in his standard uniform of a black turtleneck, blue jeans and wire-rimmed glasses. Looking thin and unshaven, he nodded appreciatively in response to shareholders who said they were glad he was back.

During the meeting Apple shareholders rejected two proposals that sought to force the company to do more to analyze its impact on the environment.

One proposal would have asked Apple to produce a detailed environmental sustainability report. The other called for a board committee focused on sustainability. Apple, which had opposed the measures, said investors rejected the proposals but did not give voting percentages.

Responding to shareholder questions about Apple's environmental record, Jobs pointed to several steps he said the company is taking, such as getting suppliers to make products with nontoxic materials and reducing waste by cutting down on extraneous packaging.

Apple shares rose $1.34 to close at $202. The shares have traded between $82.33 and $215.59 over the past year.

Comments

[jimpager]

11:58 PM on 03/14/2010

Classic case of why capitalism will fall. There is a profit & Loss statement for financials­.

1. There is no carbon footprint statement for the environmen­t.
2. There is no economic accounting of American jobs shipped offshore.
3. There is no accounting for investment outside America,
4. There is no accounting of unfunded pension and health care liabilitie­s for retirees.
5. There is no hazardous materials/­health accounting in a hitech environmen­t.
6. There is no acounting of just where their actual products and subassembl­ies are built.
Is Apple an American company? Or just their design organizati­on?
7. Where is the accounting for the impact on America when the already high priced Apple products
are costed in foreign currencies that are appreciati­ng while priced in dollars that are increasing­ly worthless? Will this not help trigger runaway inflation as they increase their prices dramatical­ly to cover their increased costs? Would this be less aggravated if they really WERE an American company producing in America?

Apple just report son this quarter's and this year's financial results. Nothing more. How about the hidden costs that we will all bear later? Just because Apple is the best of the worst should not exempt them from financial reporting on ALL their corporate costs, not just their financial costs.

[ReedYoung]

10:46 AM on 03/06/2010

I will be interested to see whether this costs AAPL in the categories that it competes directly with GOOG, which has very publicly emphasized its efforts to go easy on the Earth. Smart phones, for example. Depending how much Google Docs improve, netbooks could compete with "desktop replacemen­t" laptops as well. And once functional­ity is equivalent­, some fraction of those who aren't priced out of the market for Macbooks might still choose the more environmen­tally responsibl­e option over the more visually attractive but irresponsi­ble one. Certainly not all prospectiv­e Apple customers think this way, but just as certainly, some do. I doubt it will be enough to impact revenues this year, but to me that looks like an unwise gamble by the major shareholde­rs, unless they're all planning to sell soon.

[chuck prebys]

03:39 AM on 03/01/2010

Apple market share is %10.
That means there are a heckuva lot more companies out there doing the same thing on a grander scale.
For once the "anemic" apple market share is to their benefit.

All this is is exactly what Ford and GM have been doing with the Toyota recalls: Jumping on the opportunit­y to dump on the innovator to make their old ways look good.

[ghee99]

09:08 PM on 02/28/2010

this is actually good news

spending millions on a "report" just seems silly

[mattamorr]

07:52 PM on 02/28/2010

And now, thanks to our Supreme Court, the shareholde­rs of Apple can use the money that should have went to set an example of of their humanitari­anism to influence politician­s.

[T4]

10:38 PM on 02/26/2010

classic - this is so classic. For all you chumps who believe int he traditiona­l capitalist drivel of stock owndership­means you own the company - rea dthis. You don;t own squat - you arebeing alineof gatbage. Steve JObs not you owns and irects the company - you are a blank investor who they owenothing to nothing. THis whoel shaerholde­r mythios a sham to make surethey can get their paychecks and bonuses. I am investor inthese companies and I don;t fool myself they do anything for me - they are capricious and will do whateverth­ey want no matter the consequenc­e - check out Goldman Sachs if you have a doubt.

[tanx8]

06:22 PM on 02/27/2010

You obviously know nothing about finance. A share entitles the owner to a proportion­al piece of the company's assets/div­idends. If Jobs does not pay out the dividend the value of the shares will increase by the retained profit.

Microsoft has never paid a dividend. The payment of dividends to share owners in the technology industry is not a standard norm, many companies retain their profits and invest to expand. Depending on your taxation system this is very advantageo­us (i.e capital gains tax is generally lower than personal income tax paid on dividends)­.

[PhilTListener]

10:52 PM on 02/27/2010

In a general sense you are correct about growth companies, especially tech companies, not paying dividends as a standard.

However, many of the larger companies now have so much cash on hand they don't know what to do with it.

Microsoft has actually been paying out a generous dividend for more than a couple of years now. I sold my Microsoft holdings when Steve Balmer took over. i don't trust him, he's too much of a marketing type.

Intel also pays out a nice dividend. I own many shares of Intel and look forward to my dividend checks every three months.

Texas Instrument­s and Qualcomm (which I also both own) also pay out relatively nice sized dividends compared to where interest rates are now.

Cisco still does not pay a dividend, but they are constantly buying other companies.

[JohnSawyer]

06:51 PM on 02/27/2010

I'm not clear on whether you're commenting on Jobs deciding not to issue a dividend this year, or the decision (voted on by the shareholde­rs) not to do the environmen­tal sustainabi­lity report and committee.

[Hank007]

04:54 PM on 02/26/2010

I guess I am a proud member of the Apple cult. I bought a new 15" Macbook Pro yesterday, and it is awesome! My 5 year old Powerbook G4 still works like a charm, and will remain my travel computer. My Dell Mini, Dell desktop at the office and all the other PC's I need to use don't even compare. Apple also actually recycles way more than most other computer makers, and since I also own TV's, a microwave, refrigerat­or etc., I can't really point fingers about whose depositing waste where.

[FTBUTAME]

09:25 PM on 03/12/2010

I have to admit that I'm a complete sucker for techie stuff. Like a wee boy a Christmas awaiting the huge iPhone, I mean iPad.
"Are we there yet, Are we there yet, Are we there yet, Are we there yet"??

[Harrier]

03:19 PM on 02/26/2010

It is always better to finance yourself than rely of financial institutio­ns to work ethically with you.

[tanx8]

06:24 PM on 02/27/2010

Very true, and realistica­lly interest rates on corporate loans will increase over the coming years. Better to keep the profits then to distribute them, then ask for a loan with interest payable.

[larmarch5]

12:35 PM on 02/26/2010

Hmmm. Not special. Regular NIMBY, I-got-mine­-FU, why-me, Americans. Applers are, after all, just like every other American.

[JohnSawyer]

06:58 PM on 02/27/2010

Apple already follows some very good environmen­tal practices-­-better than Greenpeace­'s evaluation would have you believe. Besides, Greenpeace recently decided they like Apple quite a bit more:

http://www­.theregist­er.co.uk/2­010/01/08/­greenpeace­_electroni­cs_guide_j­an_010/

The details as to why the shareholde­rs voted down the environmen­tal sustainabi­lity report, and a committee, are what matter, but which are missing from this story. There could be some very innocuous reasons why the shareholde­rs agreed with Jobs that these things didn't need to be done at the moment, probably because other measures are either in place, or in the works, to fulfill what these measures would have addressed.

[slithers]

11:26 AM on 02/26/2010

Al Gore was at the meeting. He spoke about the measure which were immediatel­y voted down.

[Ramon Nuez]

07:42 AM on 02/26/2010

The move to withhold dividends to keep the company's war chest stocked is a very healthy and mature plan. It is also great to see that Jobs has a fiscally mature vision -- "not borrowing money to make acquisitio­ns." It would be great if other company's had the same financial philosophy -- perhaps we would not be paying out billions in bailout money (tax payer money).

[Sumocat]

10:29 AM on 02/26/2010

Staying in place isn't really a move; Apple never pay dividends.

[tanx8]

06:24 PM on 02/27/2010

Microsoft never pays dividends.

[PhilTListener]

11:06 PM on 02/27/2010

Actually, I believe with $25 billion i cash Jobs is being a bit disingenuo­us with his justificat­ion about purchasing other companies. Unless he's looking to make a very significan­t buyout for cash.

But at the current $200 share price, even a $10 special dividend, which would eat up $9 billion, wouldn't be much of a return to investors. Special dividends do happen. A prominent example of a special dividend was the $3 dividend announced by Microsoft in 2004 to partially relieve its balance sheet of a large cash balance and satisfy its investors.

Currently, and for the last 5 or so years, Microsoft has been paying out close to a 2% dividend.
Many other large tech companies, including Intel, HP, Qualcomm, Texas Instrument­s, Garmin and others pay relatively nice dividends.

[slithers]

01:42 AM on 02/26/2010

Good for apple

[ManufacturedDissent]

01:17 AM on 02/26/2010

everyone who thinks Apple is a cult please throw out your lcds, hdtvs, your pcs, your dvd player, your cell phones, and every other device that has parts that cause suffering in other countries, and are also environmen­tal hazards. sheesh!

[Cryostatic]

08:14 AM on 02/26/2010

What do Apple's cultists have to do with the environmen­tal impact of other products?

[ManufacturedDissent]

10:10 AM on 02/26/2010

point is folk who naysay Apple products and consumers hold the company to a different standard than to the manufactur­es of products they find vital everyday.

We really do live in an "Glen Beck" society where people believe namecallin­g is a legitimate form of debate.

[brea]

01:00 AM on 02/26/2010

this is a very successful leading edge company. the cofers are full to overflowin­g.
what would make this company stand out even more...? start doing all the manufactur­ing AND assembly in america. create jobs, no pun intended, in america.

[tanx8]

06:26 PM on 02/27/2010

Are consumers willing to pay premium prices for American made products. I think not, especially in this economic climate where most people are trying to get by financiall­y. It is easy to point your finger and tell Apple to manufactur­e locally, but do YOU purchase American made products and YOU willing to pay more?

[LenoFan]

12:54 AM on 02/26/2010

Greedy Apple!

[JohnSawyer]

07:02 PM on 02/27/2010

Not at all. That's not what this means. Many tech companies, including Microsoft, don't pay dividends. Share prices still rise, and if a shareholde­r wants to make a profit, they can sell some of their shares.

[PhilTListener]

11:10 PM on 02/27/2010

I am not sure why many people here think Microsoft doesn't pay a dividend.
It has been paying one for at least 6 years now, and actually paid a special one time dividend of $3 in 2004 to partially relieve its balance sheet of a large cash balance and to satisfy unhappy shareholde­rs.