Apple Shareholder Meeting Highlights: No Special Dividend, Health Care Opportunity, and No Apple Park Tours

CUPERTINO – Apple’s annual shareholder meeting took place Tuesday morning at Apple Park, and it was by and large a love fest for management of the world’s most valuable company. The biggest news from the event was an indication Apple would not give shareholders a special dividend. CEO Tim Cook also described what he sees as Apple’s unique opportunity in health care.

And sadly, I’ve got some bad news for folks interested in Apple’s amazing “destination architecture” headquarters, Apple Park: there will be no Apple Park tours for you.

Apple Park Augmented Reality Experience is as close as you’ll get to Apple Park

Apple’s Cash

Dividends came up during the informal part of the shareholder meeting, when Tim Cook was asked about it in relation to the money the company just repatriated. There were a couple of questions about that money, which came as a result of the Trump tax bill signed into law at the end of December, but each question were quite different.

One shareholder asked if Apple would do a special dividend or double the current dividend. Mr. Cook didn’t commit to a particular course of action, and instead said that Apple would announce its next dividend plan in April, when it always does.

But, Mr. Cook did say, “Special dividends, I’m really not a fan of.” He went on to say he didn’t think special dividends were good for companies or shareholders alike, though he didn’t go into why.

Tim Cook Stood Up

An earlier question went in a much different direction. Mr. Cook was asked why Apple—the world’s most profitable company—supported the Trump tax plan. It was a very political question positioned as why a rich company like Apple was supporting “corporate welfare” and a massively regressive tax system like what’s in this law.

Mr. Cook got quite animated (for Tim Cook), standing up and pacing during his response. He first made the case that the Trump tax plan had two elements, the first being personal tax cuts, and the second being corporate tax cuts and an overhaul of the corporate tax system.

Apple, according to Mr. Cook, did not get involved in the debate over personal taxes because, he said, it was political. Mr. Cook supports many progressive causes, including equality and green energy, and a big part of this answer to me was intended to say, “Look, what I may feel about tax cuts for the rich is immaterial to Apple’s operations. What is material is the corporate tax system.”

He went on to say he felt Apple had a lot to contribute to that conversation, and he described the old system as one that kept money out of the U.S. and effectively incentivized U.S. multinationals to invest overseas profits overseas. He said that more and more U.S. companies will see more of their income from other countries, and that the Trump tax plan better incentivized investing that money in the U.S.

He further added that Apple was planning to do just that, and that Apple—the world’s biggest taxpayer—was going to pay US$38 billion more in taxes as a result of the new tax law. He went so far as to say claims that Apple was paying less in taxes was “rhetoric,” and that it was untrue.

“We would not have supported something if we thought it was bad for America,” he said.

One more note: Mr. Cook joked that Apple had also proposed that there be zero corporate deductions. “That [proposal] wasn’t accepted,” he said to audience laughter. The Trump tax plan is rife with corporate deductions, loop holes, and structures designed to minimize corporate taxes.

Next: Health Care, Apple Park Tours, and Other Notes from the Apple Shareholder Meeting

page 2 – Health Care, Apple Park Tours, and Other Notes from the Apple Shareholder Meeting

Health Care Opportunity

Tim Cook was also asked about previous comments he’s made about medical reimbursements being an opportunity for Apple. A lot of what he said echoed past comments, but he really focused on what he said was dysfunction in the current system.

According to Mr. Cook, the medical industry incentivizes the wrong thing. He said companies sit around trying to think of products and services where they can get reimbursed by government mechanisms (like Medicare or Medicaid). That’s not really the full story, as getting reimbursed by insurance companies is the flip side of that same coin.

Apple, said Mr. Cook, had the unique opportunity of being able to make products and services where they get paid directly by the customer. Think the activity rings on your Apple Watch, or the much-rumored non-invasive glucose monitoring the company is working on.

He said the current system often doesn’t incentivize companies to make things that are good for consumers, while Apple can.

Mr. Cook also used this opportunity to talk about mobile payments, Apple Pay, and Apple Pay Cash. He said mobile payments have grown slower than he thought they would, and noted that China and Russia lead the world on adopting these technologies. Apple Pay and Apple Pay Cash, he said, are well positioned to do the same in the developed world.

No Tour For You!

Make no mistake about it: Apple Park is Destination Architecture. That means it’s the kind of building tourists will travel to see. Like the Empire State Building or the Sydney Opera House. One shareholder asked when he’d be able to get a tour.

What followed was a light-hearted response about how the Apple Park Visitor Center was specifically designed to let people visit without getting in the way. Mr. Cook was a little nicer than that about it, but he said to much laughter that keeping secrets was already one of the hardest parts of his job. The implication was that having tourists running around all over the place wasn’t going to make that any easier.

Looking at Apple Park from the Visitor Center’s Observation Deck

Other Notes from the Apple Shareholder Meeting

Apple’s board of directors won overwhelming support from shareholders. Even Al Gore, the punching bag of conservative activist shareholders in the past, won shareholder approval with more than 96% of shareholders approval. That said, his was the second lowest vote. Andrea Jung won reelection with just over 95% of the vote.

Two progressive activist shareholder proposals—one calling for shareholder-chosen members of the board, and the other calling for the creation of a Human Rights Committee—were defeated. The first received 32.2% of shareholder votes, while the second received just 5.56% of votes in support.

In general, it was a love fest for management and the board of directors in the meeting, with calls for a standing ovation and numerous compliments offered.

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.

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