Apple Inc. Chief Executive Officer Tim Cook, who yesterday toldinvestors they would get more say in picking board members,signaled greater willingness than his predecessor to heed theconcerns of his company's shareholders.

Apple said at its annual shareholder meeting that it would adopta policy that says a majority — rather than only a plurality — ofshareholders is needed to elect directors. Cook also reiteratedthat the company is exploring how to use its $97.6 billion in cashin investments, responding to investors' criticism that its balancesheet holds too big a hoard.

The shifts, following last month's decision to open supplierfactories to inspections by an independent labor organization, mayindicate a new era in Apple's interaction with investors. AnneSimpson, head of corporate governance for the California PublicEmployees' Retirement System, said the changes are befitting of theworld's most valuable company.

“This is setting the stage for a much more open dialogue withinvestors,” said Simpson, who led a more than two-year effort topersuade Apple to change its stance on board elections. “Apple isentering a new phase. Rethinking capital distribution, its globalfootprint and corporate governance is something 10 years ago thatit wouldn't have had to consider.”

The meeting was the first since the death of Jobs, who sometimeseschewed interaction with shareholders. Apple's evolution isnatural because Cook's previous role as chief operating officermade him more involved with investors, said Brian Marshall, ananalyst at ISI Group.

“It's not a 180-degree turn,” Marshall said. “This is more aslow, steady progression. No two people are created alike, andthat's the case with Steve and Tim. He's putting his own mark onthe company, slowly but surely.”

Cook said Apple was holding “active discussions” about what todo with its cash and investments, saying the stockpile was “morethan we need to run a company.”

“The board and management team are thinking about this verydeeply,” said Cook, reiterating earlier comments. As CEO, Jobs hadresisted calls for a dividend.

The money pile, which includes short- and long-term investments,has risen more than 63 percent since last year's annual meeting ofshareholders.

“If they want to deploy the cash for the benefit ofshareholders, that's a good thing,” said Charles Elson, director ofthe Weinberg Center for Corporate Governance at the University ofDelaware. “At least they're talking about doing something with thecash now.”

Majority Required

Investors at yesterday's meeting passed a nonbinding measure infavor of the board-election change. A similar initiative wasapproved at the gathering last year, though it wasn't adopted byApple. The company changed its stance after previously saying thatthe change would cause board members to lose their seats in caseswhere too few shareholders cast votes.

The new approach requires that directors win the approval of amajority of voting shareholders, not simply a plurality — or thelargest grouping of those casting ballots.

More than 80 percent of companies in the Standard & Poor's500 Index already have majority-voting measures, said Robert J.Jackson Jr., an associate professor at Columbia Law School.

“Apple's move is really just catching up with the bestgovernance practices of other companies of its size and scope,”said Jackson, who studies corporate governance issues.

All of the board members on the slate were elected by a widemajority: Genentech Inc. veteran executive Art Levinson, who servesas Apple's chairman; Intuit Inc. Chairman Bill Campbell; formerU.S. Vice President Al Gore; Walt Disney Co. CEO and Chairman BobIger; former head of Northrop Grumman Corp. Ron Sugar; J. CrewGroup Inc. CEO and Chairman Mickey Drexler; Avon Products Inc.Chairwoman Andrea Jung; and Cook.

Apple said it's not considering a stock split, though it didn'telaborate on how it might spend cash.

One option is to return part of the amount to shareholders inthe form of a dividend. Apple last paid a dividend in 1995, beforeco-founder Jobs returned as CEO and revived the struggling company.Dividends provide a recurring payment to shareholders, typicallyeach quarter.

The move would provide a long-term boost to Apple's stock priceby bringing in a new class of investors who only buy shares incompanies with a dividend, according to Toni Sacconaghi, an analystat Sanford C. Bernstein & Co.

Cash Machine

In the years since Apple last offered a dividend, theintroduction of the iPod, iPhone and iPad have turned the companyinto a profit engine, letting it accumulate a stockpile of cash andinvestments that exceeds the market value of Citigroup Inc. Jobshad long rebuffed calls to return the money to investors.

Shares of Cupertino, California-based Apple rose less than 1percent to $516.39 yesterday in New York. The shares have climbed28 percent this year.

Investors also voted down a proposal calling for Apple torelease a “conflict of interest report” that outlines how boardmembers may financially benefit from company decisions. Anotherrejected measure would have asked Apple to release a report on itspolitical contributions and expenditures. The company opposed thoseinitiatives.

Responding to a question from a shareholder, Cook said FacebookInc., the world's largest social-networking company, is more of a“friend” than a competitor. Apple and Facebook “could do a lot moretogether,” he said.

Cook also said Apple was working on new products that will “blowyour mind.”

Turning the conversation back to cash, an investor asked whetherApple would consider using its cash to buy Greece, which faces adebt crisis.

“We've looked into many things,” but not that, Cook said.

Bloomberg News

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