BLOOMBERG: SEC Rules that Apple Must Allow NLPC’s Proposal for Annual Meeting

When shareholders submit proposals to publicly traded companies to be put to a vote by investors at their annual meetings, corporate boards and executives don’t like it. They consider it a nuisance, and they don’t like being criticized by proponents about their management and oversight.

One tool companies have at their disposal is to get the Securities and Exchange Commission to allow them to keep the proposals from consideration at their meetings. Under the rules, the proposals are not allowed to address matters that have to do with companies’ everyday business decisions; be viewed as “micromanaging” the companies; address matters not significant enough to transcend “everyday business;” ask it to do something that it is already doing; and other technicalities that can trip up proponents.

With the proposal it submitted for Apple‘s 2024 annual meeting, National Legal and Policy Center asked for the company to compile a report that requires it to explain the incongruency between its policies and its actions as it pertains to privacy and human rights, especially in places like China and Russia. The tech giant’s lawyers asked the SEC to allow the company to exclude our proposal, claiming NLPC was meddling in ordinary day-to-day business, and that Apple had already implemented what the proposal requested.

But the SEC disagreed, and notified both Apple and NLPC that the proposal should be published on the company’s proxy statement and considered for a vote by shareholders. Bloomberg Law’s Clara Hudson reported on the decision today:

In letters posted late Tuesday, the Securities and Exchange Commission rejected Apple’s request to nix the proposals. One of those proposals, filed by the National Legal and Policy Center, a conservative advocacy group, asks that the company issue a report analyzing how its human rights policy lines up with its actions, “especially in such places as war zones and under oppressive regimes.” …

 

Paul Chesser, a director at the NLPC, said in an email: “Apple has faced several human rights-related proposals over the last several years, but has yet to be forced to answer for the inconsistencies between its stated policies versus its actions in places like China and Russia.” Apple faced a shareholder proposal from the center last year that did not pass asking the company to report on the extent to which its corporate operations depend on China.