Apple shareholders bury their heads in the sand

Rejection of proposed CEO succession plan ignores common sense, reality

The proposal that Apple shareholders approve the adoption and disclosure of a CEO succession plan hardly could be described as radical or reckless. Rather, it's the epitome of responsible organizational behavior -- planning ahead for major change. (Also see: Growing concerns about Steve Jobs) Yet Apple shareholders, swayed by the company's opposition, voted Wednesday to defeat the proposal brought by the Central Laborers' Pension Fund. This, even though Apple CEO Steve Jobs 1) had pancreatic cancer in 2004 plus had a liver transplant in 2009, and 2) last month announced he was taking an indefinite medical leave of absence to focus on his health. Jobs also took a medical leave last year, but returned to work. It's inarguable that Jobs doesn't look healthy, which hardly is surprising. After all, he took the indefinite medical leave for a reason. So why is it out of line to develop a plan to replace him that includes reporting to shareholders? Corporations constantly defend their actions by invoking their "responsibility to shareholders." Wouldn't letting them know you have an actual CEO succession plan in place be a responsible thing to do? The arguments I've read against the succession-plan proposal range from the specious (it will tip off competitors which Apple executives are worth stealing) to the stupid (the proposal was presented by a union, so therefore it must be a bad idea). Mainly, though, this appears to be a case of emotion clouding judgment. Here's a quote from the Wall Street Journal that I think says a lot: "I thought it was inappropriate and jumping the gun," said Marjorie Banko, an 81-year-old long-time Apple shareholder, who attended the meeting with her husband from Santa Clara, Calif. She said she trusted the board to make the right decisions when it was necessary. I'm glad Marjorie is so confident in Apple's board, but placing blind trust in the directors to "make the right decision" doesn't always work out so well. HP shareholders could tell her a little bit about that. A spokeswoman for the Laborers' International Union, which represented the pension fund pushing the succession plan, said the proposal would be resubmitted for next year's shareholders meeting. I hope it is. And I hope Steve Jobs -- who turns 56 today -- is there to urge shareholders to approve a succession plan. Because it makes sense and it's the responsible thing to do.

Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.

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