On Dec. 27 Apple's Board issued a preliminary proxy statement with
the Securities & Exchange Commission (SEC) regarding its
upcoming shareholder meeting in February. Among the proposals that
are to be addressed in this shareholder meeting is Guru,
's, buyback proposal. The guru, known for his activist investing,
is not afraid of getting his hands a little dirty as we saw earlier
this year with the Dell (
But in regards to Apple (
requested that the company buy back
than $50 billion of its shares during the fiscal year ending in
September. It is this proposal that Apple's board is trying to
deter its other shareholders from voting for.
Icahn has been tampering with Apple and pressuring the company to
increase its present buyback plan by borrowing against foreign cash
holdings, and in turn, settling on the amount of $50 billion in
immediate share repurchases.
The following is Apple's disapproval of Icahn's proposal and the
Board's advice against it:
This vote will be finalized and decided upon at Apple's February 28
annual shareholder meeting at its headquarters in Cupertino,
Along with the Board's distaste for Icahn's plan, the company also
discussed some payment changes for the Apple CEO Tim Cook. The CEO
will continue to receive $1.4 million per year in his cash-based
salary, which is the same as when he started in 2011. It was also
noted that the CEO must own shares of the company's stock worth at
least ten times what his base salary is within a five year period.
As of Dec. 26, Cook owns at least 35 times his base salary, or
approximately $49 million in AAPL shares.
With the stock seriously trailing the S&P 500 this year, Cook
was able to forfeit some of his restricted stock units (RSUs) based
on the performance of the stock. Along with forfeiting about
100,000 of the restricted shares, the CEO also asked that more of
his RSUs be considered as "at risk" based on the stock performance:
With this request, time is all that matters for 40,000 RSUs of
Cook's that will be based on how the stock does by next August. As
of now, Apple is slightly above the S&P 500 since the close of
August, with its rise being slightly over 11%.
Apple's historical revenue and earnings growth:
Apple has a market cap of $504.45 billion. Its shares are currently
trading at around $560.66 with a P/E ratio of 14.20, a P/S ratio of
3.00 and a P/B ratio of 4.10. The company had an annual average
earnings growth of 60% over the past ten years.
GuruFocus rated Apple the business predictability rank of 4.5-star.
You can read more information on Apple and its guru activity
and CEO insider trading here.
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