Apple Inc. (NASDAQ:AAPL) has just announced that a second investor has sued it over its large cash hoard. Reuters reports that this new case is similar in some ways to the lawsuit filed by hedge fund manager David Einhorn, which has become a topic of hot debate. CEO Tim Cook responded to that lawsuit publicly on Tuesday, calling it “a silly sideshow.”
The new lawsuit was filed by Pennsylvania shareholder Brian Gralnick, and like Einhorn’s suit, it attempts to prevent Apple Inc. (NASDAQ:AAPL) from going ahead with a shareholder vote on two of its proxy proposals. One of the two proposals being called into question is Proposal #2, the same one Einhorn takes issue with in his lawsuit.
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Einhorn believes that the proposal will block the issuance of preferred stock, which is what he has been trying to get Apple Inc. (NASDAQ:AAPL) to do in his attempt to get the company to return some of its cash hoard to investors. Apple denies that the proposal would do what Einhorn believes it will do.
The other proposal being questioned by the new lawsuit was not included in Einhorn’s suit. This proposal is about a “say-on-pay” vote for shareholders to give their opinions on compensation for Apple Inc. (NASDAQ:AAPL)’s executives.
Gralnick’s lawsuit says that Apple doesn’t disclose details of how executives’ compensation is determined, so shareholders can’t make a decision on that issue. It also claims that the tech giant violates a rule set forth by the Securities and Exchange Commission which bars companies from combining unrelated issues into a single proposal and then putting it up for a vote by shareholders.
Gralnick has owned shares of Apple Inc. (NASDAQ:AAPL) since 2007, although the suit doesn’t say how large his stake in the company is. His attorney said he would attempt to be heard at next week’s hearing in Einhorn’s case, which is set for Feb. 19.