ISS Recommends Against Icahn’s Apple Shares Buyback Proposal

Tim Cook, after Macworld Expo 2009 keynoteISS (Institutional Shareholder Services) has recommended to Apple shareholders to vote against a proposal by activist investor Carl Icahn for better management of liquid cash available with the company. The ISS said in its report:

“While the board has failed to articulate a strategy for addressing its long-term capital needs, it has returned the bulk of its U.S.-generated cash to shareholders via aggressive stock buybacks and dividends payouts. In light of these good-faith efforts and its past stewardship, the board’s latitude should not be constricted by a shareholder resolution that would micromanage the company’s capital allocation process.”

Icahn, has purchased Apple shares in the volume of billions of dollars  and has been vocally campaigning that Apple’s management has been “almost irrational” in the cash management. He has impressed upon the management to buyback $50 billion worth of its shares from the market during this fiscal year.

Perhaps fearing a negative vote, Apple has bought back $14 billion worth of its share during the last two weeks. CEO Tim Cook has also dropped hints that the company will review its cash-management policy in around March or April.

The proposal of Icahn will go for vote on the annual shareholder meeting of Apple which is scheduled to be held on February 28.

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