Sunday, 7 February 2016
Last updated 1 day ago
Jan 2 2014 | 1:21pm ET
Apple Inc. has quietly but firmly told Carl Icahn what it thinks about his proposal for the company to nearly double its share buyback program—and it could make the veteran investor's next meal with Apple CEO Tim Cook a good deal frostier than their first.
Icahn last year began pushing for a $150 billion buyback program and last month filed a non-binding shareholder proposal for a $50 billion buyback on top of Apple's current $60 billion program. But despite the more modest demands, Apple appears ready to challenge Icahn's claim that he thinks Cook is "good whether he does what I want or not."
Apple made clear in its preliminary proxy statement for the Feb. 28 annual meeting that it plans on the latter.
After telling shareholders that it recommends a vote against Icahn's proposal, Apple's board wrote that it is "thoughtfully considering options for returning additional cash to shareholders and are currently seeking input from shareholders as part of the company's regular review." Then it appended a lengthy caveat.
"The company's success stems from the company's unique ability to combine world-class skills in hardware, software and services to deliver innovative products that create new markets and delight hundreds of millions of customers. This success has created tremendous value for the company's shareholders."
"Given such large and global markets, the company competes with large companies around the world, many with their own significant technical capabilities and significant capital," Apple continued. "This dynamic competitive landscape and the company's rapid pace of innovation require unprecedented investment, flexibility and access to resources," namely Apple's enormous cash horde.
Icahn and Cook met in September to discuss the former's buyback plan. Icahn has recently increased the pressure, adding to his stake in the company and launching the proxy contest. Last month, he pointedly told Time magazine, "Apple is not a bank."