Apple Computer, Inc. | Interfaith Center on Corporate Responsibility

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<strong>Company:</strong>
<p>Apple Computer, Inc.</p>
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<strong>Year:</strong>
<p>2026 </p>
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<strong>Issue Area:</strong>
<p>Environment, Sustainability </p>
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<strong>Focus Area:</strong>
<p>Right to Repair / eWaste </p>
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<strong>Status:</strong>
<p>Withdrawn for Agreement</p>
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<p><strong>WHEREAS</strong>: Electronic waste, or waste from electrical and electronic equipment (e-waste), totaled over 62 billion kg in 2022 and is one of the fastest growing solid waste streams in the world.1 E-waste contains hazardous materials such as mercury, lead and brominated flame retardants, and reports suggest that only 22.3% of e-waste is recycled.2<br><br>The World Economic Forum states that extending the life of electronics is the single most important way to combat e-waste.3 An effective method for increasing the life of electronics and reducing e-waste is by making it easier for consumers to get them repaired to increase products’ usable lifespan.<br><br>In many ways, Apple Inc. is a leader in reducing the environmental impact of its products. However, some of its products cannot be easily repaired. For example, Apple’s AirPods receive a 0 out of 10 repair score from online repair community iFixit because they are almost impossible to repair.4,5 This gap exposes the company to regulatory risk because, under the European Union’s Batteries Regulation law, either consumers and/or independent repair shops will have to be able to remove batteries from electronic products by 2027.6 <br><br>Right to Repair laws also increase regulatory risk for Apple. Eight US states have passed Right to Repair laws for consumer electronics, including California’s Right to Repair Act, which requires manufacturers of electronics to provide consumers and independent repair shops with the parts, tools and documentation needed to fix their own electronics.7, 8<br><br>Failure to make some of its products repairable is also inconsistent with Apple’s brand image as a responsible company, exposing it to reputational risks and risk of market access loss. Research indicates that consumers increasingly want to be able to repair their electronics and support giving independent repair shops the ability to do so rather than restricting repair to the original manufacturer or approved providers.9 If Apple does not redesign products that are not easily repairable, customers may shift purchasing preferences to more easily repairable alternatives.10,11,12<br><br>RESOLVED: Shareholders request that the Board prepare a report, at reasonable cost and omitting proprietary information, on whether any of its products have an outsized contribution to e-waste or related financial risks, including regulatory and/or reputational risks for the company and, if so, to recommend steps the company can take to reduce these impacts or risks.</p>
<p>1 https://www.who.int/news-room/fact-sheets/detail/electronic-waste-(e-waste)<br>2https://api.globalewaste.org/publications/file/297/Global-E-waste-Monitor-2024.pdf<br>3https://www.weforum.org/agenda/2021/07/repair-not-recycle-tackle-ewaste-circular-economy-smartphones<br>4 https://www.ifixit.com/Device/AirPods_4<br>5 https://www.vox.com/2023/9/16/23875582/apple-airpod-repair-battery-right-to-repair-act<br>6 https://environment.ec.europa.eu/news/new-law-more-sustainable-circular-and-safe-batteries-enters-force-2023-08-17_en<br>7 https://pirg.org/media-center/release-right-to-repair-passes-overwhelmingly-in-texas/<br>8 https://pirg.org/updates/right-to-repair-now-law-in-texas/<br>9 https://www.themanufacturer.com/articles/high-repair-costs-contributing-to-global-e-waste-crisis-new-report-finds/<br>10 https://www.ifixit.com/News/35377/which-wireless-earbuds-are-the-least-evil<br>11 https://www.theguardian.com/technology/2024/apr/11/fairphone-fairbuds-review-ethically-made-earbuds-with-replaceable-batteries<br>12 https://www.soundguys.com/how-long-do-airpods-last-55442/</p>

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<div class=”views-field views-field-nothing”><span class=”field-content”> Giovanna Eichner</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Green Century Capital Management, Inc.</span></div>
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<strong>Company:</strong>
<p>Apple Computer, Inc.</p>
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<strong>Year:</strong>
<p>2025 </p>
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<strong>Issue Area:</strong>
<p>Corporate Governance </p>
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<strong>Focus Area:</strong>
<p>Shareholder Rights </p>
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<strong>Status:</strong>
<p>Withdrawn for Agreement</p>
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<div class=”views-field views-field-nothing”><span class=”field-content”> James McRitchie</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Corporate Governance</span></div>
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<strong>Company:</strong>
<p>Apple Computer, Inc.</p>
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<strong>Year:</strong>
<p>2025 </p>
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<strong>Issue Area:</strong>
<p>Lobbying & Political Contributions </p>
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<strong>Focus Area:</strong>
<p>Lobbying </p>
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<strong>Status:</strong>
<p>Withdrawn for Agreement</p>
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<p><strong>Resolved, </strong>shareholders of Apple request the preparation of a report, updated annually, disclosing: </p>
<p>1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications. </p>
<p>2. Payments by Apple used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient. </p>
<p>3. Apple’s membership in and payments to any tax-exempt organization that writes and endorses model legislation. </p>
<p>4. Description of management and the Board’s decision-making process and oversight for making payments described in sections 2 and 3 above. </p>
<p>For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Apple is a member. </p>
<p>Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels. </p>
<p>The report shall be presented to the Audit and Finance Committee and posted on Apple’s website.</p>
<p><strong>Supporting Statement </strong></p>
<p>Full disclosure of Apple’s lobbying activities and expenditures is needed to assess whether its lobbying is consistent with Apple’s expressed goals and shareholders’ best interests. Apple spent $76,120,000 on federal lobbying from 2010 – 2023. This does not include state lobbying, where Apple lobbied in at least 48 states in 2023. Apple also lobbies abroad, spending between €6,500,000 – 6,999,999 on lobbying in Europe for 2023. </p>
<p>Companies can give unlimited amounts to third party groups that spend millions on lobbying and undisclosed grassroots activity.1 Apple lists support of 42 trade associations for 2022, yet fails to disclose its payments, or the amounts used for lobbying, and fails to disclose social welfare groups (SWGs) it supports. Apple belongs to the Business Roundtable, which has spent over $400 million on lobbying since 1998, and lists memberships in the Center for Global Regulatory Cooperation, Chamber of Progress and TechNet. Apples additionally supports SWGs that lobby like the Bay Area Council, California Taxpayers Association and Future of Privacy Forum. </p>
<p>Apple’s lack of disclosure presents reputational risks when its lobbying contradicts company public positions. On company positions, Apple believes in addressing climate change, yet the Business Roundtable filed an amicus brief opposing the Securities and Exchange Commission climate risk disclosure rules.2 The Chamber of Progress has drawn attention as a “dark money” group opposing antitrust regulation.3 While Apple left the US Chamber of Commerce over its stance on climate change, it belongs to Center for Global Regulatory Cooperation, which is run by the Chamber of Commerce. And while Apple does not belong to the controversial American Legislative Exchange Council, it is represented by NetChoice,4 which sits on its Private Enterprise Advisory Council. </p>
<p>Apple should expand its lobbying spending disclosure. </p>
<p>1https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/. 2https://www.eenews.net/articles/investors-question-business-roundtables-climate-rule-battle/. 3https://www.opensecrets.org/news/2021/06/dark-money-groups-battle-efforts-to-limit-big-tech/. 4https://readsludge.com/2023/10/03/alec-gala-will-face-protest-from-pro-democracy-groups/.</p>

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<div class=”views-field views-field-nothing”><span class=”field-content”> Marcela Pinilla</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Zevin Asset Management</span></div>
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Resolution Details

Company:

Apple Computer, Inc.

Year:

2024

Issue Area:

Human Rights & Worker Rights

Focus Area:

AI / Artificial Intelligence, Plant Closings, Privacy

Status:

On Proxy

Resolution Text

RESOLVED: Shareholders request that Apple Inc. prepare a transparency report on the company’s use of Artificial Intelligence (“AI”) in its business operations and disclose any ethical guidelines that the company has adopted regarding the company’s use of AI technology. This report shall be made publicly available to the company’s shareholders on the company’s website, be prepared at a reasonable cost, and omit any information that is proprietary, privileged, or violative of contractual obligations.

Supporting Statement: If adopted, this proposal asks our company to issue a transparency report on the company’s use of AI technology and to disclose any ethical guidelines that the company has adopted regarding AI technology. We believe that adopting an ethical framework for the use of AI technology will
strengthen our company’s position as a responsible and sustainable leader in its industry. By addressing the ethical considerations of AI in a transparent manner, we can build trust among our company’s stakeholders and contribute positively to society.

The adoption of AI technology into business raises a number of significant social policy issues. For example, the use of AI in human resources decisions may raise concerns about discrimination or bias against employees. The use of AI to automate jobs may result in mass layoffs and the closing of entire facilities. AI may be used in ways that violate the privacy of customers and members of the public. AI technology may be used to generate “deep fake” media content that may result in the dissemination of false information in political elections.

The White House Office of Science and Technology Policy has developed a set of ethical guidelines to help guide the design, use, and deployment of AI. These five principles for an AI Bill of Rights are 1) safe and effective systems, 2) algorithmic discrimination protections, 3) data privacy, 4) notice and explanation, and 5) human alternatives, consideration, and fallback. (White House Office of Science and Technology Policy, “Blueprint for an AI Bill of Rights: Making Automated Systems Work for the American People,” October 2022, available at https://www.whitehouse.gov/ostp/ai-bill-of-rights).

We believe that the adoption of ethical guidelines for the use of AI can help improve our company’s bottom line by avoiding costly labor disruptions. In 2023, writers and performers went on strike against the Alliance of Motion Picture and Television Producers in part over concerns that the use of AI technology to create media content will infringe on the intellectual property and publicity rights of writers and performers and potentially displace human creators. (Wall Street Journal, “Hollywood’s Fight: How Much AI Is Too Much?,” July 31, 2023, available at https://www.wsj.com/articles/at-the-core-of-hollywoods-ai-fight-how-far-is-too-far-f57630df).

In our view, AI systems should not be trained on copyrighted works, or the voices, likenesses and performances of professional performers, without transparency, consent and compensation to creators and rights holders. We also believe that AI should not be used to create literary material, to replace or supplant the creative work of professional writers.

For these reasons, we urge you to vote FOR this shareholder proposal.

Resolution Details

Company:

Apple Computer, Inc.

Year:

2024

Issue Area:

Inclusiveness

Focus Area:

Equal Employment Opportunity (EEO)

Status:

Filed

Resolution Text

WHEREAS: Pay inequities persist across race and gender and pose substantial risk to companies and society at large. Black workers’ hourly median earnings represent 81 percent of white wages. The median income for women working full time is 83 percent that of men. Intersecting race, Black women earn 64 percent, Native women 51 percent, and Latina women 54 percent. At the current rate, women will not reach pay equity until 2059, Black women until 2130, and Latina women until 2224.1

Citigroup estimates closing minority and gender wage gaps 20 years ago could have generated 12 trillion dollars in additional income. PwC estimates closing the gender pay gap could boost Organization for Economic Cooperation and Development countries’ economies by 2 trillion dollars annually.2

Actively managing pay equity is associated with improved representation, and diversity is linked to superior stock performance and return on equity.3 Minorities represent 58 percent of Apple’s workforce and 45 percent of leadership. Women represent 35 percent of Apple’s workforce and 32 percent of leadership.4

Best practice pay equity reporting consists of two parts:

1. unadjusted median pay gaps, assessing equal opportunity to high paying roles,

2. statistically adjusted gaps, assessing pay between minorities and non-minorities, men and women, performing similar roles.

Apple reports only statistically adjusted gaps but ignores unadjusted gaps, which address structural bias women and minorities face regarding job opportunity and pay, particularly when men hold most higher paying jobs. Median pay gaps show, quite literally, how Apple assigns value to employees through the roles they inhabit and pay they receive. Median gap reporting also provides a digestible and comparable data point to determine progress over time.

Racial and gender median pay gaps are accepted as the valid way of measuring pay inequity by the United States Census Bureau, Department of Labor, Organization for Economic Cooperation and Development, and International Labor Organization. The United Kingdom and Ireland mandate disclosure of median gender pay gaps. For its United Kingdom employees, Apple reports a median hourly and bonus gender pay gap of 13 percent.5

RESOLVED: Shareholders request Apple report on median pay gaps across race and gender, including associated policy, reputational, competitive, and operational risks, and risks related to recruiting and retaining diverse talent. The report should be prepared at reasonable cost, omitting proprietary information, litigation strategy and legal compliance information.

Racial/gender pay gaps are defined as the difference between non-minority and minority/male and female median earnings expressed as a percentage of non-minority/male earnings (Wikipedia/OECD, respectively).

SUPPORTING STATEMENT: An annual report adequate for investors to assess performance could, with board discretion, integrate base, bonus and equity compensation to calculate:

· percentage median gender pay gap, globally and/or by country, where appropriate

· percentage median racial/minority/ethnicity pay gap, US and/or by country, where appropriate

1https://static1.squarespace.com/static/5bc65db67d0c9102cca54b74/t/622f4567fae4ea772ae60492/1647265128087/Racial+Gender+Pay+Scorecard+2022+-+Arjuna+Capital.pdf

2 Ibid.

3 Ibid.

4 https://www.apple.com/diversity/

5 https://images.apple.com/legal/more-resources/docs/uk-gender-pay-gap-report-2022.pdf

Resolution Details

Company:

Apple Computer, Inc.

Year:

2024

Issue Area:

Human Rights & Worker Rights

Focus Area:

Children, Human Rights Due Diligence, Human Trafficking/Exploitation, Risk Management, Sex Trafficking, Transparency

Status:

Withdrawn for Agreement

Resolution Text

Whereas: Online sexual exploitation of children poses material business risks to Information, Communication and Technology (ICT) companies and investors. In addition to reputational and legal risks, emerging legislation, including the United States’ STOP CSAM Act and Kids On-line Safety Act, the European Union’s Digital Services Act, the United Kingdom’s Online Safety Bill, and Australia’s ‘Online Safety Act’ aims to hold tech companies responsible for keeping children safe online, and imposes penalties that present financial risks for failing to adequately address the problem.

Each year, millions of images and videos of child sexual abuse material (CSAM) circulate online with reports having increased 15,000 percent over the last 15 years.[i] In 2022, the National Center for Missing and Exploited Children (NCMEC) received 31 million reports of alleged child sex abuse material.[ii] NCMEC noted that prepubescent children are at the greatest risk of being depicted in CSAM.[iii] Artificial intelligence is now being used to produce CSAM, magnify existing sextortion schemes, and target potential victims at previously unseen rates.[iv]

Apple is the world’s most valuable company and a major influencer in the ICT space with over 1.65 billion devices in active use. Its consumer electronics, software, operating systems and platforms for music, film, and internet portals are accessed by hundreds of millions of young people every day.

Apple does not proactively attempt to detect CSAM stored in its iCloud services despite widely available PhotoDNA detection technology used by other major tech firms, including Facebook,[v] Google,[vi] Adobe,[vii] Reddit,[viii] Discord,[ix] and Verizon.[x] Nor does Apple attempt to detect when its products and services are used to live-stream child sexual abuse.[xi] Former Apple Executive Eric Friedman stated that due to the company’s privacy protections, Apple is the “greatest platform for distributing child porn.”[xii]

Apple has developed “communication safety” tools to warn users about the dangers of sexual exploitation. Apple does not disclose data regarding the effectiveness of the tools in preventing the exploitation of children, claiming that doing so could raise privacy concerns. However, this information is financially material and will shed light on risks to investors.

The Tech Coalition, where Apple sits on the Board, emphasizes the importance of transparency in addressing CSAM. ICT peers, including Meta,[xiii] Amazon/Twitch,[xiv] AT&T[xv] and Verizon,[xvi] have reported results from human rights and child rights impact assessments to understand and address risks to children across their business units. However, Apple discloses little information on how it assesses the risk of its products facilitating child sexual exploitation, leaving investors in the dark.

RESOLVED: Shareholders request that Apple publish a report by March 2025, assessing risks of its products and services being used to facilitate online sexual exploitation of children, including metrics on the effectiveness of Apple’s efforts such as the amount of CSAM transmission prevented annually, prepared at reasonable expense, excluding proprietary information.

[i] https://www.thorn.org/

[ii] https://www.missingkids.org/ourwork/impact

[iii] https://www.missingkids.org/theissues/csam

[iv] https://cyber.fsi.stanford.edu/io/news/ml-csam-report#:~:text=June%2024%2C%202023-,New%20report%20finds%20generative%20machine%20learning%20exacerbates%20online%20sexual%20exploitation,is%20facilitating%20child%20sexual%20exploitation.

[v] https://about.fb.com/news/2020/06/fighting-child-exploitation-online/#:~:text=We%20have%20also%20taken%20steps,housed%20elsewhere%20on%20the%20internet.

[vi] https://blog.google/technology/safety-security/how-we-detect-remove-and-report-child-sexual-abuse-material/

[vii]https://www.adobe.com/legal/lawenforcementrequests/childsafety.html#:~:text=We%20utilize%20scanning%20technologies%20such,databases%20of%20known%20CSAM%20hashes.

[viii]https://www.reddit.com/r/RedditEng/comments/13bvo5b/reddits_p0_media_safety_detection/?rdt=56222#:~:text=Since%202016%2C%20Reddit%20has%20used,image%20uploaded%20to%20our%20platform.

[ix] https://discord.com/safety/360043700632-discords-commitment-to-a-safe-and-trusted-experience#:~:text=For%20example%2C%20we%20use%20PhotoDNA,our%20policies%20in%20their%20communities.

[x] https://www.verizon.com/about/our-company/company-policies/verizons-efforts-combat-online-child-exploitation-faqs

[xi] https://www.esafety.gov.au/newsroom/media-releases/world-first-report-shows-leading-tech-companies-are-not-doing-enough-tackle-online-child-abuse

[xii] https://www.forbes.com/sites/johnkoetsier/2021/08/19/apple-exec-we-are-the-greatest-platform-for-distributing-child-porn/?sh=32a7217b3c20; https://s3.documentcloud.org/documents/21044004/2020-february-fear-friedman-admits-in-feb-2020-that-app-store-greatest-platform-for-child-porn-predator-grooming.pdf

[xiii] https://www.bsr.org/reports/bsr-meta-human-rights-impact-assessment-e2ee-report.pdf

[xiv] https://www.bsr.org/reports/BSR-Twitch-Human-Rights-Impact-Assessment-Report_2.pdf

[xv] https://sustainability.att.com/priority-topics/human-rights

[xvi]https://www.verizon.com/about/sites/default/files/CRIA-Executive-Summary-June-2022.pdf

Resolution Details

Company:

Apple Computer, Inc.

Year:

2023

Issue Area:

Lobbying & Political Contributions

Focus Area:

Lobbying

Status:

Filed

Vote Percentage:

Resolution Text

Whereas, full disclosure of Apple’s lobbying activities and expenditures to assess whether its lobbying is consistent with Apple’s expressed goals and shareholder interests.

Resolved, shareholders request the preparation of a report, updated annually, disclosing:

Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.

Payments by Apple used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.

Apple’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.

Description of management’s decision-making process and the Board’s and oversight for making payments described above.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Apple is a member.

Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.

The report shall be presented to the Audit Committee and posted on Apple’s website.

Supporting Statement

Apple spent $56,900,000 from 2010 – 2021 on federal lobbying. This does not include state lobbying expenditures, where Apple lobbied in at least 46 states in 2021 and spent over $1.5 million on lobbying in California from 2010 – 2021. Apple’s state lobbying against privacy laws through groups like the State Privacy and Security Coalition and TechNet has attracted scrutiny.2 Apple also lobbies abroad, spending between €6,500,000 – 6,999,999 on lobbying in Europe for 2021.

Apple fails to disclose its third-party payments to trade associations and social welfare organizations, or the amounts used for lobbying, to shareholders. Companies can give unlimited amounts to third party groups that spend millions on lobbying and undisclosed grassroots activity. These groups may be spending “at least double what’s publicly reported.”3 Apple belongs to the Business Roundtable (BRT), CTIA – the Wireless Association and NetChoice, which together spent $41,730,000 on federal lobbying for 2021.

We are concerned Apple’s lack of disclosure presents reputational risks when its lobbying contradicts company public positions. For example, Apple publicly supports addressing climate change, yet the BRT opposed the Inflation Reduction Act and its historic investments in climate action.4 And while Apple has attracted scrutiny for avoiding federal income taxes,5 the BRT has lobbied against raising corporate taxes to fund health care, education and safety net programs.6 And while Apple does not belong to the controversial American Legislative Exchange Council (ALEC), it is represented by its trade associations, as CTIA has attracted scrutiny for working with ALEC7 and NetChoice supported its 2022 annual meeting8 and sits on its Private Enterprise Advisory Council.

We urge Apple to expand its lobbying disclosure.

2 https://www.axios.com/2022/03/14/techs-state-privacy-law-lobbying.

3 https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double- whats-publicly-reported/.

4 https://www.theguardian.com/environment/2022/aug/19/top-us-business-lobby-group-climate-action-business- roundtable.

5 https://www.nytimes.com/2017/11/06/world/apple-taxes-jersey.html; https://itep.org/fact-sheet-apple-and- tax-avoidance/.

6 https://www.washingtonpost.com/us-policy/2021/08/31/business-lobbying-democrats-reconciliation/.

7 https://www.fastcompany.com/90283913/how-the-wireless-industry-and-conservative-dark-money-groups- teamed-up-to-fight-net-neutrality.

8 https://documented.net/investigations/heres-who-bankrolling-alec-2022-annual-meeting.

Resolution Details

Company:

Apple Computer, Inc.

Year:

2023

Issue Area:

Corporate Governance

Focus Area:

Shareholder Rights

Status:

Vote

Vote Percentage:

31.00%

Resolution Text

RESOLVED: Shareholders of Apple, Inc. (the “Company” or “Apple”) ask the board of directors (the “Board”) to amend its “Proxy Access for Director Nominations” bylaw, and any other associated documents, to include the following changes or their equivalent for the purpose of increasing the potential number of nominees:

The number of “Shareholder Nominees” eligible to appear in proxy materials shall be 20% of the directors then serving or 2, whichever is greater.

Supporting Statement: Current proxy access bylaws restrict Shareholder Nominees to 20% of directors rounded down to the nearest whole number. Apple has only nine directors. 20% of 9, rounding down to the nearest whole number is 1. Therefore, Apple allows shareholders to nominate only one director, given the current board size.

The Council of Institutional Investors notes: “It is important that shareholder nominees have meaningful representation on the board, and in many or most cases, one director is insufficient to achieve that goal. Having at least two nominees helps ensure such nominees, if elected, can serve on multiple committees and have greater opportunities to bring an independent perspective into board decisions.” (Proxy Access: Best Practices 2017, https://corpgov.law.harvard.edu/2017/08/28/proxy-access-best-practices-2017/)

Sidley Austin reported that 86% of companies with proxy access allow a minimum of 2 directors to be nominated or 25% of the board. Only 14% have the same standard as Apple – 20% of the board with no minimum. (Proxy Access: A Five-Year Review, https://www.sidley.com/-/media/update-pdfs/2020/01/proxy-access/proxy-access_-a-fiveyear-review-jan-2020–w-appendices.pdf?la=en

Apple wrote of a similar proposal, “Our proxy access bylaws overall are well within the mainstream of public company practices and share similar features with the proxy access bylaws of many other companies.” However, most companies with a similar standard, 20% of the board with no minimum, have boards of 10 or more, so 20% still yields at least two nominees.

In a request to the SEC, our Company previously alleged a similar proposal “falsely” described the Company as a “distinct outlier” and “laggard” in regards to its access bylaw.

The SEC flatly rejected Apple’s contention. “We are unable to conclude that you have demonstrated objectively that the Proposal is materially false and misleading.” (https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2018/mcritchieapple112118-14a8.pdf)

Apple has proxy access but is out of step with industry best practices, which allow shareholders to nominate up to 20% of the board or 2, whichever is greater. I could only identify only two other companies that limit proxy access candidates to 1 — Arch Resources (previously Arch Coal) and EOG Resources (formerly Enron Oil & Gas Company). Should these distinct outliers really be our peer group? Are these laggards really “mainstream” companies Apple should emulate? Apple should be better.

Resolution Details

Company:

Apple Computer, Inc.

Year:

2023

Issue Area:

Corporate Governance

Focus Area:

Majority Vote, Shareholder Rights

Status:

Vote

Vote Percentage:

6.50%

Resolution Text

Whereas:

In 1947, the Court of Appeals for the Third Circuit upheld the right of a shareholder to submit a proposal on shareholder approval of the auditor, stating that “A corporation is run for the benefit of its stockholders and not for that of its managers.”1 The SEC’s Staff has made clear that “a cornerstone of shareholder engagement on important matters”2 is the shareholder resolution process.

In our view, a high vote for a shareholder proposal indicates that investors believe insufficient attention has been paid by the company’s management or Board to the issue at hand.

Apple’s Corporate Governance Guidelines state that the Board of Directors oversees the CEO and senior management and “seeks to ensure that the long-term interests of shareholders are being served.” The Guidelines also state that “The Board believes that management speaks for the Corporation” and that it is only in “unusual circumstances” that individual directors will to be authorized to speak with investors or other stakeholders.

If Apple’s Board members are restricted in when they speak with stakeholders, this may undermine the Board’s ability to, per the Corporate Governance Guidelines, proactively “ensure that the Corporation is committed to business success through the maintenance of high standards of responsibility and ethics.”3

For example, in 2022, Nia Impact Capital (“Nia”) submitted a resolution requesting that the Board review Apple’s use of concealment clauses in the context of harassment, discrimination and other unlawful acts. The resolution received support from 50.4% of all shares voted “For” and “Against.”

Apple’s management had stated that it was “not aware” of the use of concealment clauses and that “Apple does not limit employees’ and contractors’ ability to speak freely about harassment, discrimination, and other unlawful acts in the workplace.”4 However, shortly after this statement a former Apple employee went public with a severance agreement that Apple had asked her to sign which included non-disclosure and non-disparagement clauses related to workplace conditions.5

This discrepancy undermined Nia’s confidence in management’s representation of Apple’s use of concealment clauses. Despite the high vote showing that other investors shared these concerns and an explicit request made by Nia and other investors for a meeting, no Board member has agreed to a meeting.

Resolved:

Apple shareholders urge the Board to adopt a policy that, should holders of a majority of non-insider shares voted support a shareholder proposal (calculated by dividing (i) “For” votes by (ii) the sum of votes cast “For” and “Against”, minus the shares held by current executive officers and Board members as reported in the proxy statement), a Board member or members, identified by the Nominating Committee Chair, will be made available for a discussion with the proposal’s proponents within three months of Apple filing its Report on Form 8-K containing the voting results.

Supporting statement:
Neither the Board nor Apple or the resolution’s proponents would be obligated to take any action as a result of this discussion.

1.https://casetext.com/case/securities-exch-comn-v-transamerica-corp

2.https://www.sec.gov/corpfin/staff-legal-bulletin-14l-shareholder-proposals

3.https://s2.q4cdn.com/470004039/files/doc_downloads/gov_docs/Corporate-Governance-Guidelines.pdf

4.https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2021/niaapple122021-14a8.pdf

5.https://www.businessinsider.com/apple-sec-response-under-scrutiny-after-whistleblower-comes-forward?r=US&IR=T

Resolution Details

Company:

Apple Computer, Inc.

Year:

2023

Issue Area:

Human Rights & Worker Rights

Focus Area:

Living Wage, Race Discrimination

Status:

Vote

Vote Percentage:

33.80%

Resolution Text

WHEREAS: Pay inequities persist across race and gender and pose substantial risk to companies and society at large. Black workers’ hourly median earnings represent 64 percent of white wages. The median income for women working full time is 83 percent that of men. Intersecting race, Black women earn 63 cents, Native women 60 cents, and Latina women 55 cents. At the current rate, women will not reach pay equity until 2059, Black women until 2130, and Latina women until 2224.

Actively managing pay equity is associated with improved representation, and diversity is linked to superior stock performance and return on equity. Minorities represent 56 percent of Apple’s workforce, but only 43 percent of leadership. Women represent 35 percent of Apple’s workforce and 31 percent of leadership.

Best practice pay equity reporting consists of two parts:

unadjusted median pay gaps, assessing equal opportunity to high paying roles,
statistically adjusted gaps, assessing pay between minorities and non-minorities, men and women, performing similar roles.

Racial and gender median pay gaps are accepted as the valid way of measuring pay inequity by the United States Census Bureau, Department of Labor, Organization for Economic Cooperation and Development, and International Labor Organization. The United Kingdom and Ireland mandate disclosure of median gender pay gaps. Apple discloses data for United Kingdom employees, reporting a median hourly gender pay gap of 9 percent and median bonus gap of 35 percent.

SUPPORTING STATEMENT: An annual report adequate for investors to assess performance could, with board discretion, integrate base, bonus and equity compensation to calculate:

percentage median gender pay gap, globally and/or by country, where appropriate
percentage median racial/minority/ethnicity pay gap, US and/or by country, where appropriate