Apple, Inc. Corporate Governance Paper
Your assignment is to research the corporate governance of Apple Inc. There are many aspects of corporate governance, but you should do the analysis from the perspective of a potential investor. All information for the project can be obtained from your Apple’s proxy statement. In addition to illustrating corporate governance practiced by corporations, this assignment will familiarize you with proxy statements, the SEC website, and EDGAR.
1. Obtain Apple Inc.’s most recent proxy statement (officially called a ‘DEF 14A’). Go to www.sec.gov. Click on “More Search Options” in the top right corner. Enter Apple Inc. (it is often easier to enter the ticker symbol rather than the company name) and click “find companies.” Find the most recent DEF 14A form (NOT ‘DEFA 14A’) and click on “documents”. Click on the link under “Document” which has a description of “DEFINITIVE PROXY STATEMENT” or contains “DEF 14A”.
2. Address each of the 8 governance items listed below. State how Apple deals with each issue and if this is a positive or negative based on your own research and lectures. Description of the Apple’s governance should be in your own words. Copying and pasting from the proxy statement is not acceptable.
A. Board elections – Does the board have annual or staggered elections? Are board members individually up for election?
Lets define first staggered, this are made annually and by different kind of directors and lenths of powe
B. Board compensation – Are board members paid partially in stock and/or stock options? How does board member total compensation compare to average board compensation?
C. Board perks – What non-salary benefits do board members receive?
D. Board size – How many board members are there?
E. Board independence – Are a majority of the board members independent? Is there evidence that the board ever meets without the CEO present?
F. Board over commitment – How many times does the entire board meet per year? Did all board members attend at least 90% of the board meetings? How many board members have more than 3 outside positions? How many have more than 5 outside positions?
G. Succession planning – Does Apple have a succession plan to replace the CEO if necessary? What details are provided about the succession plan?
H. Executive pay – Are executives paid with a mix of cash, bonus, stock, and stock options? Does the structure appear to provide incentives for executives focus on long-term firm performance? Is there evidence the executives were given bonuses without meeting performance benchmarks?
3. Your write-up should include Apple’s name and brief description of the company’s business (2-3 sentences are fine) and 8 sections corresponding to each of the governance items listed in point #2 above. Give each section a heading.