USA: Apple pushes back on shareholder proposals related to human rights & climate issues

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Article
8 January 2018

Apple cannot omit shareholder proposal concerning human rights, SEC says

Author: US Securities & Exchange Commission

"Division of Corporation Finance 2017 No-Action Letters Issued Under Exchange Act Rule 14a-8", 21 Dec 2017

...The Proposal recommends that the Company establish a human rights committee to review, assess, disclose and make recommendations to enhance the Company’s policy and practice on human rights.

We are unable to concur in your view that the Company may exclude the Proposal under rule 14a-8(i)(7). We are unable to conclude, based on the information presented in your correspondence, including the discussion of the board’s analysis on this matter, that this particular proposal is not sufficiently significant to the Company’s business operations such that exclusion would be appropriate. As your letter states, “the Board and management firmly believe that human rights are an integral component of the Company’s business operations.” Further, the board’s analysis does not explain why this particular proposal would not raise a significant issue for the Company. Accordingly, we do not believe that the Company may omit the Proposal from its proxy materials in reliance on rule 14a-8(i)(7)...

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Article
8 January 2018

SEC sides with Apple regarding exclusion of shareholder proposal on greenhouse gas emissions

Author: US Securities & Exchange Commission

"Division of Corporation Finance 2017 no-action letters Issued Under Exchange Act Rule 14a-8", 21 Dec 2017

...The Proposal requests that the board prepare a report that evaluates the potential for the Company to achieve, by a fixed date, “net-zero” emissions of greenhouse gases relative to operations directly owned by the Company and major suppliers.

Based on our review of your submission, including the description of how your board of directors has analyzed this matter, there appears to be some basis for your view that the Company may exclude the Proposal under rule 14a-8(i)(7), as relating to the Company’s ordinary business operations. In our view, the Proposal seeks to micromanage the company by probing too deeply into matters of a complex nature upon which shareholders, as a group, would not be in a position to make an informed judgment. Accordingly, we will not recommend enforcement action to the Commission if the Company omits the Proposal from its proxy materials in reliance on rule 14a-8(i)(7). In reaching this position, we have not found it necessary to address the alternative basis for omission upon which the Company relies...

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Article
3 January 2018

SEC mixes message on Apple shareholder proposals, activists say

Author: Ross Kerber, Reuters

Apple…was allowed to disregard one activist shareholder proposal on greenhouse gas emissions but told to hold a vote on another concerning human rights issues, in closely watched securities rulings that tested new guidance from U.S regulators…“It’s confusing to shareholders,” said Christine Jantz, president of a Boston asset management firm, of the SEC’s reasoning. Jantz submitted the unsuccessful proposal on emissions and said it was similar to one the SEC allowed elsewhere last year.

SEC staff…gave companies potentially more room to disregard shareholder proposals related to “ordinary business,” so that investors are not micro-managing executives. Apple quickly cited the new guidance...An SEC spokeswoman declined to comment on the Apple decisions...Apple representatives did not immediately comment...

…Apple…cited the new guidance in seeking to exclude a proposal by investor Jing Zhao calling for the creation of a “human rights committee” to address topics like censorship…Apple said its board and management “firmly believe that human rights are an integral component” of its operations… The SEC turned down’s Apple’s request in a separate…letter…[saying] Apple’s board analysis “does not explain why this particular proposal would not raise a significant issue for the Company”…

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Article
11 December 2017

Apple aims to block climate rights proposals with quick use of SEC guidance

Author: Ross Kerber, Reuters

Apple...is pushing back on shareholder proposals on climate issue and human rights concerns, an effort activists worry could sharply restrict investor rights...In letters to the U.S. Securities and Exchange Commission...an attorney for the California computer maker argued at least four shareholder proposals relate to “ordinary business” and therefore can be left off the proxy Apple is expected to publish early next year, ahead of its annual meeting...The attorney...cited guidance issued by the SEC...saying that company boards are generally best positioned to decide if a resolution raises significant policy issues worth putting to a vote...

While companies routinely seek permission to skip shareholder proposals, Apple’s application of the new SEC guidance shows how it could be used to ignore many investor proposals by claiming boards routinely review those areas...An Apple spokesman declined to comment beyond its letters to the SEC...An SEC spokeswoman declined to comment...

...[S]hareholder measures have taken on new significance as big asset managers increasingly back those on areas like climate change or board diversity...In the case of the measure on greenhouse gas emissions, filed by Jantz Management of Boston...Apple argues it already has taken many steps to improve the sustainability of its operations...

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