The battle over Proposal No. 2 on Apple’s proxy statement may be “a silly sideshow” to CEO Tim Cook, but Apple has been defeated anyway. On Friday, a federal judge granted an injunction that will block an Apple shareholder vote scheduled for Wednesday, the Wall Street Journal reported.
The proposal included three amendments to the company’s charter, concerning language describing directors’ terms of office, eliminating Apple’s ability to issue “blank check” preferred stock, and setting par value company stock. The judge granted Einhorn’s request on a technicality: the proposal “impermissibly bundles ‘separate matters’ for shareholder consideration.” But the preferred stock issue is the one Einhorn is after.
Apple did not immediately respond to a request for comment.
As a quick refresher of how we got here: Greenlight Capital CEO David Einhorn, whose firm owns more than a million shares of Apple stock, two weeks ago went public with a conversation he’d been having with Apple’s executives since last year. He had pressed them on a scheme for offering preferred stock as a way of boosting investor confidence in Apple and as a way to keep its cash from piling up even more rapidly. When Apple proposed eliminating its ability to issue preferred stock, he sued the company.
The ruling comes a day after Einhorn garnered a bunch of publicity for what he’s really after: that Apple issue a new class of preferred stock he’s dubbed “iPrefs” that would pay a 50 cent quarterly dividend forever. Apple has yet to publicly respond to the specifics of the proposal other than a promise to consider it.
The company’s annual shareholder meeting is scheduled for Feb. 27.
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