SEC rejects Apple proposal to block three shareholder proposals

The Securities and Exchange Commission has rejected Apple’s motion to block three shareholder proposals from voting at its next annual meeting – a win for activists that signals trouble for other US companies, hoping the regulator will let them fend off unwanted attention.

The resolutions call for detailed reporting regarding allegations of forced labor in Apple’s supply chain, explanations for why certain apps have been removed from the App Store in China, and a public account of what risks the iPhone maker could face by allegedly using non-disclosure agreements in this context. harassment and discrimination in the workplace.

In October, the Financial Times reported that Apple had asked the SEC for permission to block six shareholder petitions, the most proposals the company had since 2017. Apple argued that it “substantially accomplished”what the petitioners asked for. Of the remaining three proposals, one was rejected and two remain outstanding.

The SEC rejection letters to Apple, reviewed by the FT and expected to be published as early as Wednesday, said the company’s current policies and procedures “do not compare”to the proposals.

Apple, which is expected to hold its annual meeting in the first quarter of 2022, declined to comment.

The SEC’s reaction to Apple could be bad for other companies. Last month, the regulator changed its policy to make it harder for companies to gain regulatory support to reject investor petitions.

Since the SEC changes, more companies seem to be acquiescing to the activists’ demands. Apple’s fourth petition for a “right to repair”its products has already been granted after the company announced last month that it would launch a program to help customers get their devices repaired. Goldman Sachs also released a report on forced arbitration this week after an investor proposal requested more information about the bank’s policies.

To counter a shareholder proposal to take down apps, Apple claimed that its annual transparency report details how many apps have been taken down in China. But those reports were “terribly lacking,” said Joshua Brockwell, who filed the resolution on behalf of Azzad Asset Management.

“They love to add numbers, but what does that mean?”he asked. “Insight is not enough if you are an investor driven by human rights values.”

He added that the names of the removed apps were not made public, and it could be “confusing”why apps purportedly made for reading the Bible or the Quran were removed from the App Store, the only mechanism users have to download apps on the iPhone.