What to Expect at the Apple Shareholder Meeting

Tuesday, 26 Feb 2013 | 5:06 PM ET
Source: Apple

Apple CEO Tim Cook will be under pressure to answer questions about what the tech giant plans to do with its $137 billion cash load while at the company's annual shareholder meeting Wednesday.

At the meeting last year, Apple could point to the rising stock price as a place for investors to find returns, but that strategy is unlikely to appease shareholders this year as pressure mounts about Apple's fallen stock price and the company's plans regarding what it has in store for its massive cash balance.

(Read More: AIG Replaces Apple as Hedge Funds' Most-Loved Stock)

Apple's stock traded higher Tuesday afternoon amid speculation that the company might announce plans to boost shareholder value at the meeting.

While Apple is now paying out a dividend and has a multiyear stock buyback plan in place, the iPhone maker is not doing enough for shareholders' return on investment, according to Greenlight Capital president David Einhorn.

(Read More: Court Rules in Favor of Einhorn in Apple Dispute )

Einhorn, who has publicly pressed Apple to distribute cash, sued Apple a few weeks ago and managed to get a court-ordered injunction to block Proposal No.2 on the proxy, a proposal he claims "bundled" three proposed amendments to the company's charter, which violates regulatory rules.

His lawsuit is part of a broader movement to get Apple to distribute more cash to shareholders.

(Read More: Apple Stock Is Still a 'Strong Buy'—Here's Why: Pro)

Einhorn hosted a public conference call last week where he shared his ideas on how Apple could boost its return to investors. He proposed Apple issue perpetual preferred stock, which he dubbed 'iPrefs,' that would carry a 50 cent dividend per quarter for every outstanding common share.

(Read More: Einhorn: My Plan Could Boost Apple Stock by $150)

Cook has said Apple would "thoroughly consider" Einhorn's proposal to return cash to shareholders, but has not revealed details about how the company plans to do so. The meeting gives the company the perfect opportunity to shed more light on its cash strategy.

As for other items on the agenda, shareholders will vote on the usual proposals — like executive compensation, election of directors, and choosing an accounting firm — but they will also be voting on two other proposals, both which the board recommends shareholders vote against.

(Read More: Einhorn Fires Back at Apple's Tim Cook)

The first, Proposal No. 5, is a proposition that would require Apple's top executives to hold at least a 33 percent of their shares until they reach the age of retirement.

The other proposal, Proposal No. 6, recommends that Apple create a board committee on Human Rights that would review the company's policies regarding human rights in the U.S. and internationally, as well as assess "impacts of company operations and supply."

Besides voting on measures, though, shareholders will also have the chance to ask Apple executives questions directly, which have in the past touched on some interesting topics including Apple's TV plans, company partnerships and new products in the works.

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