The Securities and Exchange Commission has rejected Apple’s petition to prevent three shareholder proposals from being put to the vote at its next annual meeting — a victory for activists who signal problems for other U.S. companies in the hopes the regulator will allow them to divert unwanted attention. keep out.
The resolutions call for detailed reports 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 report of the risks the iPhone maker could face from allegedly using making nondisclosure agreements in the context of harassment and discrimination at work.
The Financial Times reported in October that Apple had asked the SEC for approval to block six petitions from shareholders, the highest number of proposals the company has had since 2017. Apple’s reasoning was that it had “substantially implemented” what the petitioners were asking for. Of the remaining three proposals, one has been rejected and two are still open.
The SEC rejection letters to Apple, seen by the FT and expected to be released as early as Wednesday, say the company’s current policies and procedures “do not compare favorably” with the proposals.
Apple, which is expected to hold its annual meeting in the first quarter of 2022, declined to comment.
The SEC’s response to Apple could bode ill for other companies. Last month, the regulator changed its policy to make it more difficult for companies to get regulatory support to deny petitions from investors.
After the SEC changes, more companies seem to be responding to activists’ demands. A fourth Apple petition regarding the “right to repair” of its products has already been resolved after the company announced last month it would launch a program to help customers repair their devices. Goldman Sachs also released a report this week on forced arbitration after a proposal from investors demanded more information about the bank’s policies.
To counter the shareholder’s proposal to remove apps, Apple argued that its annual Transparency Report lists how many apps have been removed in China. But those reports were “sadly lacking,” said Joshua Brockwell, who filed the resolution on behalf of Azzad Asset Management.
“They love to collect numbers, but what does that mean?” he asked. “There’s not enough insight if you’re an investor motivated by human rights.”
He added that the names of removed apps were not disclosed, and that it might be “confused” why apps purportedly made to read the Bible or the Quran were removed from the App Store — the only mechanism in place. users have to get apps on an iPhone.
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