Apple Can Block Proposal on Tying Diversity to Executive Pay

Photographer: Misha Friedman/Bloomberg

Apple Inc. can keep off its ballot next year an investor request to consider linking executive pay to the company’s performance on diversity and other sustainability metrics.

The Securities and Exchange Commission’s staff is letting the iPhone maker block the proposal from going to a shareholder vote because it’s repetitive of previous calls by Zevin Asset Management for more diverse executives and board members.
Those past proposals on diversity didn’t get enough shareholder support for Zevin to submit another one, the SEC said in a Dec. 15 letter, made public this week.

Diversity Concerns

“It was disappointing to see the company reduce our proposal to ‘diversity concerns’ and then say those were duplicative and ultimately not worthy of a shareholder vote,” Pat Tomaino, who leads Zevin’s efforts to analyze portfolio companies and push them on environmental, social, and governance (ESG) issues, told Bloomberg Law.

Zevin’s proposal had asked Apple to consider adding diversity among senior executives and other ESG metrics to the performance measures for Chief Executive Officer Tim Cook’s pay. The most recent diversity data reported by the company show its leadership team is mostly white and male, with only a few top executives from groups that are historically underrepresented in the tech sector.

Apple, which didn’t immediately return a request for comment, has also asked the SEC if it can keep three more proposals, including one on human rights, from getting voted on at its next annual meeting. A spokeswoman for the commission declined to comment beyond the staff letter.