updated 10:30 am EST, Mon February 10, 2014
Report could sway critical vote happening later this month
Proxy advisory firm Institutional Shareholder Services has released a new report, recommending Apple shareholders vote against investor Carl Icahn's proposal for an extended share buyback, which would cost the company an extra $50 billion in 2014. "Shareholders may wish to support the current proposal, at least in part, to signal to the board their sense of urgency about the lack of resolution on this issue of excess cash," the report reads. "At the same time, however, the board has taken clear and strong measures in the past two years - including establishing (and then increasing) a significant dividend, authorizing (and then increasing) a sizable share buyback, and creating a cadence of annual communication to investors about additional measures it will take."
The statement may help the Apple board of directors, which is also opposed to Icahn. The proposal in question is scheduled to be voted on later this month at Apple's annual shareholders meeting. Even if it does pass, though, the measure will still be non-binding.
Apple now has over $159 billion in cash reserves, which has prompted people like Icahn to demand that some or most of it be given back to investors. While it has responded to a degree, the company has also maintained that it wants to keep money handy for things like corporate acquisitions, supply deals, and future hard times. Paying for Icahn's idea would also involve taking up more debt, since just a small portion of the company's cash is held in the US, and Apple has refused to pay the normal tax rate to repatriate its foreign cash.