CalPERS’ governance chief slammed Carl Icahn’s proposal for a bigger buyback at Apple Inc. (NASDAQ:AAPL), as it is happy with Apple’s already announced plan for its capital.
Anne Simpson, the head of corporate governance at California Public Employees’ Retirement System called Mr. Icahn a ‘raider’ and a ‘Johnny come lately’.
Carl Icahn’s $150 billion share buyback proposal
Last April, Apple Inc. (NASDAQ:AAPL) announced a plan to return $100 billion to shareholders in dividends and buybacks by the end of 2015.
For months now, Carl Icahn has been pushing Apple Inc. (NASDAQ:AAPL) to buyback $150 billion of its shares as soon as possible. Since he started that push, he has added billions of dollars to Apple Inc. (NASDAQ:AAPL)’s market capitalization as he pumped up the stock’s price, merely by publicizing his involvement in Apple Inc. (NASDAQ:AAPL) and his idea.
On November 26th, Carl Icahn filed a precatory proposal with Apple Inc. (NASDAQ:AAPL) just three days ahead of the deadline to file measures which shareholders would vote on at the next meeting. A precatory proposal is a non-binding proposal which is merely aimed at collecting shareholders’ opinions on a topic. Even if it passes, Apple Inc. (NASDAQ:AAPL) is not obligated to go along with it.
CalPERS is uncomfortable
During her interview with Bloomberg, Ms. Anne Simpson indicated CalPERS is uncomfortable with a raider coming into a company with a proposal to disgorge cash. She further added: “Carl Icahn is a Johnny come lately”.
Simpson further added: “We like what they’re doing. They (Apple management) have a significant program for returning money to shareholders. Carl Icahn is late to the party. This debate’s already been had. I’m not sure what Carl Icahn’s proposal adds”.
CalPERS, with over $270 billion in assets, owned 2.4 million Apple Inc. (NASDAQ:AAPL) shares as of September 30th.
CalPERS owns 0.3%, Icahn 0.5% of Apple stocks
Interestingly, CalPERS owns about $1.3 billion of Apple Inc. (NASDAQ:AAPL) stock translating to about 0.3%. However this is a smaller stake when compared to 0.5% Mr. Icahn has said he has.
David Benoit of The Wall Street Journal notes the comments from Ms. Simpson who has been vocal on shareholder rights issues, show that while activists are gaining some ground with institutional holders, there’s no blanket endorsement. Though corporate advisers and others in the activism world say the institutional funds are more comfortable supporting activities, they do judge situations on a case-by-case basis.