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February 16, 2011
Proxy Firms Back Majority Vote at Apple
    by Robert Kropp

Egan-Jones, Glass Lewis, and ISS Proxy Advisory Services announce their support for a shareowner resolution filed by CalPERS, requesting that Apple adopt a majority vote standard in unopposed director elections.

In a Shareowner Alert dated February 3rd, the California Public Employees' Retirement System (CalPERS) urged Apple shareowners to support its resolution calling on Apple "to amend the Company's articles of incorporation and/or bylaws to provide that director nominees shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders."

A majority vote standard, CalPERS stated, "Is a necessary provision to provide shareowners with the ability to hold corporate directors accountable for their performance." Furthermore, "Approximately 80% of the companies in the S&P 500 and 60% of the companies in the Russell 1000 have adopted some form of majority voting."

CalPERS recently announced that three major proxy advisory firms—Egan-Jones, Glass Lewis, and ISS Proxy Advisory Services—have indicated their support for the resolution. In its analysis of 46 majority vote proposals in 2009, Glass Lewis found that they received an average vote in favor of 59%, indicating "increased shareholder interest and support for the majority vote standard."

In response to Apple's contention that California law makes a majority vote standard difficult and complex, CalPERS pointed out that four of the seven California companies in the S&P 500 have adopted such a standard.

The resolution is part of the 2010 Majority Vote Initiative of CalPERS, in which it asked 58 of the top US companies in its portfolio to voluntarily adopt a majority vote standard in uncontested elections for corporate directors. By January, 20 of the 58 companies had implemented or committed to adopting a majority vote standard, according to a press release from the pension fund.

The Shareowner Alert requested that all shareowners "ensure every account, no matter how many or how few shares, supports this proposal."


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