Apple Holds to Its Cash Hoard, Green Policies

CUPERTINO, Calif. — Apple’s annual shareholder meeting remained a largely peaceful affair, marked by the attendance — if relative quiet — of CEO Steve Jobs, who had been notably absent last year while on a medical leave of absence.

But Jobs still managed to put his imprimatur on the day’s proceedings when shareholders sought answers or changes on a few key Apple policies.

One overarching sentiment from the event: A lot of Apple shareholders want to spend Apple’s money. The company is sitting on $40 billion in cash reserves — a huge amount by any measure. One shareholder noted that it was the equivalent of a year’s revenue.

There were requests for a cash dividend. Bigger acquisitions. More elaborate Apple stores. Investing in education. All were met pretty much with silence or a “thank you” from Jobs.

“Cash gives us the security and flexibility to take risks,” he elaborated at one point. “When you take risks, it’s like jumping up in the air. It’s nice to know the ground will be there when you come down.”

Additionally, he said, a cash dividend or buying back more Apple stock would not move its share price, so he argued it was best to hold on to all that cash.

However, he also may have given Apple rumor-mongers something to mull: whether the cash hoard portends an upcoming acquisition.

“When we want to make a big move, we like to be able to write a check for it and not have to go out and borrow a lot of money and put the company at risk,” he said.

From greenbacks to green tech

Money wasn’t the only “green” issue that seemed to animate Jobs, who held court during the shareholder question session along with Tim Cook, Apple’s chief operating officer, and Phil Schiller, senior vice president of worldwide marketing. Together, Apple’s execs and board of directors contended with a number of questions relating to environmental policies and sustainability.

One shareholder pointed to Apple’s leaving the Chamber of Commerce in October over the organization’s criticism of plans to reduce U.S. greenhouse-gas emissions, asking why the company had done so, “when there is no evidence of global warming.”

Jobs responded: “Well, I guess we have a difference of opinion.”

The Apple chief also said that his company had been the first electronics firm to ask its parts suppliers to find ways to eliminate mercury and other toxic chemicals from its products. He also talked about how Apple tries to reduce its packaging as its products have shrunk in size.

“We don’t trumpet it,” Jobs said. “We just do it because it’s the right thing to do and we let people notice it on their own. If you ask people about Apple’s reputation, they know we’re making an effort in sustainability.”

Added Cook, “We don’t do it for a credit or a check box. We do it because it’s the right thing to do.”

Shareholder meetings are usually formalities, but there was a complaint by one Silicon Valley gadfly named Shelton Ehrlich that served to stir up the proceedings.

Ehrlich, who has made appearances at other Valley shareholder meetings, spoke opposing the reappointment of former Vice President Al Gore to the Apple board of directors, calling him a liar and a “laughingstock.”

A group of environmentalists in the crowd — present to deliver their own proposals to the board — spoke out in defense of Gore, the key figure in the global warming documentary “An Inconvenient Truth,” and a longtime Apple board member.

In the end, Gore and the rest of the Apple board of directors were all re-elected.

But while Ehrlich was shouted down, two issues supported by environmentalists went down in defeat.

One proposal would have asked Apple to produce a detailed environmental sustainability report on its products and the firm’s operations, while the other called for a board of directors committee focused on sustainability.

Apple’s board recommended against both in the firm’s proxy statement (available hereas a PDF), stating the company had done more than enough to advance green causes and no other tech firm had a record close to what it has.

MacWorld and Google’s Eric Schmidt

Other than that, there was little real contention at the day’s shareholder meeting.

Bruce Sewell, Apple’s senior vice president and general counsel, oversaw the formal portions of the meeting, such as the vote-taking. Most shareholder votes were affirmative, such as various amendments to employee and director stock plans.

Page 2: Google’s Schmidt, product strategy, and what worries Jobs

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Meanwhile, Jobs, who turned 55 on Wednesday, received numerous birthday wishes and calls to take care of himself — a reminder that the Apple CEO had missed the previous year’s shareholder meeting while out on a six-month medical leave. Jobs had received a liver transplant last year during his leave, capping years of sporadic poor health following a 2004 surgery for pancreatic cancer.

During the day’s events, Jobs also received thanks from shareholders who have held the stock for a decade or more.

He also faced at least one question about whether Apple might return to MacWorld in some capacity. (“No,” Jobs responded quickly.) The company had walked away from the trade show last year, preferring instead to focus on its own launch events.

Shareholders also asked about former board member and Google CEO Eric Schmidt, wanting to know whether he had been privy to secret materials.

Jobs responded that Schmidt, who stepped down from Apple’s boardlast year, “conducted himself appropriately and recused himself when discussing things that might represent a conflict of interest.”

Another shareholder noted the lack of women in Apple’s corporate hierarchy and board of directors, and asked if “Al [Gore] thought of sharing his seat with Tipper,” his wife — to some laughs.

Jobs responded by saying that Apple is constantly on the lookout for more board members and that it promotes from within, both male and female. He did not mention by name Apple’s newest board member, Avon CEO Andrea Jung.

Jobs on Apple product strategy and his biggest worry

Apple’s CEO also broadly discussed product strategy, responding to a question about innovation at Apple that it would not become a maker of a wide variety of different products.

“Apple focuses on very few things and puts all of our wood behind those few things,” Jobs said.

One shareholder asked what might become of Apple’s desktop products, since Cook had made a comment at a recent Goldman Sachs conference that Apple is a “mobile device company.”

Jobs said that he is not declaring the company a mobile device company; instead, customers are “voting for it with their dollars.” MacBooks far outsell the iMac, Mac Mini and Mac Pro tower, for instance.

“They’re telling us what they think is important,” Jobs said.

When another shareholder asked Jobs what he fears the most — what keeps him up at night — he replied, “shareholder meetings.” Once the laughter quieted down, he said stability in the world is his largest concern.

“People won’t be looking to buy a laptop of they are worried about putting food on the table,” he said.

Andy Patrizio is a senior editor at, the news service of, the network for technology professionals.

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