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Apple CEO on shareholder lawsuit: 'It's a silly sideshow'

February 12, 2013|By Chris O'Brien
  • Apple CEO Tim Cook spoke Tuesday at a Goldman Sachs technology conference.
Apple CEO Tim Cook spoke Tuesday at a Goldman Sachs technology conference. (Kevork Djansezian/Getty…)

(This story has been updated)

Apple chief executive Tim Cook criticized a rebellious shareholder for creating a "silly sideshow" by filing a lawsuit a few weeks before the company's annual shareholder conference.

"Frankly, I find it bizarre that we find ourselves being sued for doing something that’s good for shareholders," Cook said. "It’s a silly sideshow, honestly. My preference would be that everyone take the money they are spending on this and donate it to a worthy cause."

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Cook made his remarks during an interview at a Goldman Sachs technology conference Tuesday morning. The early-morning appearance began with a series of questions about Apple's $120 billion in cash on its balance sheet. 

Last week, dissident shareholder David Einhorn of Greenlight Capital went public with his request that Apple issue a special class of stock to shareholders. He also filed a lawsuit to block a proposition that Apple had placed on its annual proxy ballot that would require a shareholder vote before issuing such a stock. 

Cook did attempt to extend an olive branch of sorts to Einhorn, saying of his proposal: 

"I think it’s creative. We are going to thoroughly evaulate their current proposal. We welcome all ideas from all our shareholders."

But from there, Cook fired back against some of the criticisms leveled by Einhorn, including his remarks that Apple has a "Depression-era mentality" because it's hoarding cash.

Cook listed the wide range of areas where Apple is investing money, including infrastructure, talent and new products, in addition to announcing last year it would return $45 billion to shareholders  

"Apple doesn’t have a Depression-era mentality," Cook said. "I don’t’ know how a company with a Depression mindset would have done all of those things."

Cook said the company is not going to launch a huge shareholder campaign to get the proposition passed, in part because he believes its pro-shareholder nature should be self-evident to investors. 

"You're not going to see a "Yes on 2" sign in my yard," Cook said. "It's a distraction. And it's not a seminal issue for Apple."

Apple plans to file its response to Einhorn's lawsuit by the end of Wednesday. And a hearing on the matter is set for next week in a New York U.S. District Court. 

The annual shareholder meeting is scheduled for Feb. 27. 

Cook repeated that the dispute aside, that Apple is continuing to consider whether and how it might return more cash to shareholders. 

"It’s a privilege to be in a position where we can seriously consider returning additional cash to shareholders," Cook said.  

Update:In a statement Tuesday afternoon to CNBC, a Greenlight spokesman suggested that if Apple wanted to end the litigation, it should allow shareholders to vote on the stock issue separately from other shareholder reforms. Currently, Apple is asking shareholders to vote on three issues as part of a package.

"If Apple thinks the lawsuit is a waste of resources it could simply end the matter by complying with existing law and filing a new proxy that unbundles the proposed changes to the charter so that shareholders can express their views on each matter separately," a Greenlight spokesperson told CNBC.


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