Apple investors rejected an outside shareholder proposal to end the iPhone maker’s diversity, equity and inclusion efforts, though chief executive Tim Cook said that the company may make some adjustments to the program.
The company conducted the vote as part of its annual meeting, held virtually on Thursday, with Cook and General Counsel Kate Adams leading the proceedings. In line with Apple’s recommendations, investors also spurned requests for reports on artificial intelligence risks and decisions related to child sex abuse material, or CSAM. They also rejected a measure about charitable giving practices.
Shareholders reelected Apple’s board of directors, ratified its outside accounting firm and approved the company’s executive compensation. Last year, Cook received an 18 per cent pay bump to $74.6 million, including a $3 million base salary, $58.1 million in stock, and roughly $13.5 million in additional compensation.
As they have most years, shareholders voted in line with Apple’s recommendations. The last time investors veered away from the company’s advice was in 2022, when shareholders voted for proposals related to concealment clauses in employment agreements and civil rights audits.
The proposal to abolish DEI efforts came after many companies, including Meta and Alphabet’s Google, have started winding down such programs.
The measure, backed by the National Center for Public Policy Research, said that Apple maintaining its DEI push wasn’t prudent. The group describes itself as a independent conservative think tank.
“It’s clear that DEI poses litigation, reputational and financial risks to companies, and therefore financial risks to their shareholders, and therefore further risks to companies for not abiding by their fiduciary duties,” the proposal said.
Apple responded by saying the proposal aims to interfere with its business practices and that it “does not discriminate in recruiting, hiring, training or promoting on any basis protected by law.”
During the meeting, Cook said that Apple never had quotas or targets. But he did suggest that the company may make some adjustments to its policies.
“Our unique culture enables us to create the best products and services in the world,” he said. “As the legal landscape around these issues evolves, we may need to make some changes to comply. We’ll continue to work together to create a culture of belonging and we’ll remain committed to the values that have always made us who we are.”
The AI proposal sought to ensure that data isn’t collected in an unethical way and cited concerns with the work of OpenAI, one of Apple’s partners.
Apple told shareholders that it already publishes the requested information in its privacy practices and that it has a “strong track record” on protecting user privacy. It shot down the CSAM and charitable giving related proposals by saying it already has features or policies in place to address what the shareholders are seeking.
Apple has been playing catch-up in AI, with its technology lagging behind rival offerings. It’s also still rolling out the features – called Apple Intelligence – to many parts of the world. That includes China, where the company has had to revamp the software to comply with government restrictions.
Apple is contending with tariffs from US President Donald Trump as well. As part of an attempt to show that it’s committed to the US, the company announced plans Monday to invest $500 billion in its home country and hire 20,000 new workers over the next four years.
More broadly, tech stocks like Apple are facing a retreat. The shares are down 1 per cent this year, following major gains in 2023 and 2024. – Bloomberg
