We learned yesterday that the Securities and Exchange Commission (SEC) had ruled that one embarrassing AAPL shareholder proposal must be put to a vote, and it turns out that the company will have to allow two more.
Yesterday’s news related to a proposal for a civil rights audit following employee complaints, and concerns about slow progress in diversifying the workforce …
Apple had attempted to block the proposal on the grounds that it was already working on these issues, but the SEC ruled that it be allowed to proceed.
The shareholder groups that filed the proposal say the company reportedly shut down employee-run surveys on pay equity, and also mentioned the hiring (and subsequent firing after employee protests) of a manager who had “a history of misogynistic and racist commentary.” In addition, the alliance of three shareholders says that for all of Apple’s publicly stated commitments to racial justice and equity — including $100 million for a racial justice initiative after the Black Lives Matter protests in 2020 — the company’s progress in diversifying its own ranks has been negligible.
“It is unclear how Apple plans to address racial inequality in its workforce,” the proposal, shared exclusively with MarketWatch, says. “Apple currently has no Hispanics and only one Black member on its executive team.”
Two more AAPL shareholder proposals must be allowed
ArsTechnica reports that the SEC made the same ruling on two further proposals the company attempted to exclude.
Apple has faced a continuing series of allegations about the use of forced labor in its supply chain. While there is of course no suggestion that the company is in any way actively complicit in this, those behind the resolution say that Apple isn’t being sufficiently proactive in addressing the problem with its suppliers.
The Securities and Exchange Commission has rejected Apple’s petition to block three shareholder proposals from going to a vote at its next annual meeting—a win for activists that signals trouble for other US companies hoping the regulator will allow them to fend off unwanted attention.
The resolutions call for detailed reports regarding allegations of forced labor in Apple’s supply chain, explanations of why certain apps are deleted from the App Store in China, and a public report of what risks the iPhone maker could face by allegedly using nondisclosure agreements in the context of workplace harassment and discrimination.
In China, Apple has removed thousands of apps from its local app store at the request or demand of the Chinese government. Banned apps span VPN, secure chat, news, religion, and more. The company has no choice but to comply with local laws, but the shareholder resolution says that Apple needs to explicitly list the banned apps rather than just report the numbers.
The call for the civil rights audit is summarized above.
Apple argued that it was aware of these issues, and already had policies in place to address them, therefore the proposals were redundant. The SEC rejected this argument.
In other words, the company isn’t doing as much as some shareholders would like, and therefore it makes sense for all shareholders to consider the proposals and then vote on them. This should happen at the company’s next annual general meeting, expected to take place in the first quarter of next year.
The SEC’s rejection letters to Apple […] said the company’s current policies and procedures “do not compare favorably” with the proposals.
Apple already acted on a 4th shareholder proposal
Apple had originally faced a fourth proposal, calling for it to be more supportive of the right to repair. In this case, the company gave in and changed its stance after facing mounting pressure (including from Apple cofounder Steve Wozniak), and those behind the proposal declared themselves satisfied, withdrawing it.
