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Apple asks SEC if it can ignore shareholder diversity request

Apple has posted flat profit for 1Q14, year on year

Apple has written to the SEC to ask to exclude a shareholder proposal which would essentially hardwire positive discrimination into the DNA of the business.

Put forward by various institutional investors including Zevin Asset Management, Friends Fiduciary Corporation, Nathan Cummings Foundation, the Employees’ Retirement System of Rhode Island and the SEIU Fund, the proposal is to tie diversity metrics of the senior management team to the ‘company’s compensation incentive plans’. In short, CEO Tim Cook would not get his bonus is he continues to hire white males.

In writing to the SEC, Apple VP of Corporate Law Gene Levoff is asking permission to ignore the proposal and to exclude it from an upcoming shareholder meeting. The argument here is current initiatives for diversity should be deemed sufficient, and writing in strictly defined parameters to the foundation of the business would have a negative impact.

The team also argues it is making progress as well. 54% of recent hires are ethnic minorities, but 56% of current employees are male and 68% are white. When you look at senior executives and management, 73 of the 107 positions are white male. You can check out the rest of the numbers here.

Apple is one of numerous organizations which has been singing the praises of diversity, but having a quick look through the company’s leadership team on the website, this focus doesn’t seem to be making its way up the ladder. Currently there are 19 executives listed. 14 are white and male. The company has not however committed the PR disaster of appointing a white male to the ‘Inclusion and Diversity’ VP role.

On the surface, the shareholders might have a point. Most people will stick with the status quo when performance is successful, and Apple is a successful business. We don’t necessarily agree with the idea of cementing positive discrimination in the foundations of a business’ constitution, but you could argue not enough has been done to ensure diversity in the Apple boardroom.

Zevin Asset Management is leading the charge for the small club of investors, which has been a long-time critic of the diversity achievements of Apple. Alongside Antonio Avian Maldonado, an individual investor, Zevin Asset Management has been particularly vocal in pressuring the iLeader to up its diversity game, seemingly falling on deaf ears for the moment.

Although we were not able to figure out how much financial clout each investor holds, together all those in support of the proposal reportedly hold $9.4 billion in assets. Considering Apple currently has a market capitalization of roughly $813 billion, this is a relatively small percentage. That said, Apple investors are likely to be incredibly varied and diluted; it might be a notable number.

In short, we should not be surprised Apple does not want to be held accountable to claims it has made in the press. Most large organizations scream about social trends such as inclusion and diversity as it is a good means to attract positive PR, but ask them to commit in any real sense to objective and ambitions and it will squirm and wriggle all over the place. Especially when it threatens the bonuses of the big boys.

Inclusion and diversity is a great thing to shout about, but that is likely the sum of it; posturing and reinforcing the brand reputation, with no substance to actually commit to any change. Sadly, this is the world we live in: shallow and superficial.


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