January 10, 2011, 12:35 PM — Does Apple think co-founder and chief executive Steve Jobs will be around forever?
Probably not, but the company certainly is in no hurry to establish a formal -- or at least public -- CEO succession plan.
According to the International Business Times, Apple recommended to shareholders in a recent filing with the federal Securities and Exchange Commission that they vote against the "proposal entitled 'Amend the Company's Corporate Governance Guidelines to adopt and disclose a written CEO succession planning policy'" at next month's annual shareholders' meeting.
Apparently the Central Laborers' Pension Fund, which owns 11,484 shares of Apple (NASDAQ: AAPL), wants a formal plan in place for choosing a new chief executive. The CLPF also wants to see criteria developed for selecting a new CEO and for the company to begin identifying and grooming internal candidates.
Not only that, the fund thinks Apple's board of directors should begin "CEO succession planning at least 3 years before an expected transition" and to issue annual reports on where the succession strategy stands, according to the ITB article.
Planning ahead for major changes is always a good idea, but Apple sees some potential downside to the proposal, arguing that it "would give the Company's competitors an unfair advantage," ITB reports.
[Apple] further stated that proposal would "undermine the Company's efforts to recruit and retain executives. The Board believes that the Company's success depends on attracting and retaining a superior executive team, including the CEO. Proposal No. 5 requires a report identifying the candidates being considered for CEO, as well as the criteria used to evaluate each candidate. By publicly naming these potential successors, Proposal No. 5 invites competitors to recruit high-value executives away from Apple. Furthermore, executives who are not identified as potential successors may choose to voluntarily leave the Company."
Understandable concerns, but isn't there always a short list of internal candidates for any large corporation's corner office, names that industry watchers are familiar with?
Given the health history of Jobs -- a diagnosis of pancreatic cancer (resulting in a tumor removal in 2004) and a six-month leave of absence in 2009 for health reasons -- it would be ill-advised not to have a succession plan in place.