Pensions Take Sides In Apple-Einhorn Dispute

Feb 14 2013 | 12:13pm ET

Major public pension funds—and major Apple Inc. investors—are taking sides in the company's fight with Greenlight Capital.

Greenlight has sued Apple to prevent the company from linking a proposal to do away with preferred share issuance with two other, more widely-supported, corporate governance moves. And the New Jersey Division of Investment seems to think that Greenlight founder David Einhorn, who fears the preferred-share rule could allow Apple to continue to hold on to its huge cash horde, is right about the basics.

The Garden State pension manager's chairman, Bob Grady of private-equity firm Cheyenne Capital, did not say where he or the pension stood on the proxy issue. But he told the New York Post, "Apple has over $130 billion in cash and we think more of that cash should be returned to shareholders."

Two even bigger pensions, however, are backing their home-state company. The California Public Employees' Retirement System and California State Teachers' Retirement System are both in favor of Apple's proposal. CalSTRS corporate governance chief Anne Sheehan told the Post that "blank check" preferred stock issuance "can be used as anti-takeover defenses and entrench a board." 

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