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Tim Cook: If You Don't Like Our Energy Policies, Don't Buy Apple Stock 348

Posted by timothy
from the quantifiable-vs-unquantifiable dept.
Hugh Pickens DOT Com writes "Nick Statt reports at Cnet that at Apple's annual shareholder meeting Friday, Apple CEO Tim Cook shot down the suggestion from a conservative, Washington, DC-based think tank that Apple give up on environmental initiatives that don't contribute to the company's bottom line. The National Center for Public Policy Research (NCPPR), hasn't taken kindly to Apple's increasing reliance on green energy and said so in a statement issued to Apple ahead of the meeting. 'We object to increased government control over company products and operations, and likewise mandatory environmental standards,' said NCPPR General Counsel Justin Danhof demanding that the pledge be voted on at the meeting. 'This is something [Apple] should be actively fighting, not preparing surrender.' Cook responded that there are many things Apple does because they are right and just, and that a return on investment (ROI) was not the primary consideration on such issues. 'When we work on making our devices accessible by the blind. I don't consider the bloody ROI,' said Cook. 'We do a lot of things for reasons besides profit motive, We want to leave the world better than we found it.' Danhof's proposal was voted down and to any who found the company's environmental dedication either ideologically or economically distasteful, Cook advised 'if you want me to do things only for ROI reasons, you should get out of this stock.'"
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Tim Cook: If You Don't Like Our Energy Policies, Don't Buy Apple Stock

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  • Cook is right (Score:5, Insightful)

    by Anonymous Coward on Saturday March 01, 2014 @09:33AM (#46375071)

    Surely energy policies are about creating a feel-good aspect to the brand. Plus if you learn something along the way by trying perhaps you can commercialize it and it takes you off on another wild ride, like the iPhone did.

    Just because they don't understand it, doesn't mean they can run the company better.

    • by raymorris (2726007) on Saturday March 01, 2014 @09:44AM (#46375135)

      Even if his policies are bad, 97.5% of stockholders voted to do it his way. The owners want to be green, so green it is.

    • by Ungrounded Lightning (62228) on Saturday March 01, 2014 @02:37PM (#46376801) Journal

      Surely energy policies are about creating a feel-good aspect to the brand. Plus if you learn something along the way by trying perhaps you can commercialize it and it takes you off on another wild ride, like the iPhone did.

      Directors and officers of a corporation have a fiduciary duty to the stockholders to run the company in their interest.

      This USUALLY means trying to maximize return on investment. But the sotckholders may want other things, in addition to or in place of, financial gain. When this is the case, the duty requires them to set their own target appropriately.

      This is not uncommon: Think "green energy company" or "church" for two examples. The Bell Telephone company, started by Alexander G. out of his research into hearing aids, has always done work on assisting the hearing impaired. Hershey's, at the direction of its founder, is owned by a trust and 30% of its profits go to support a school for orphans.

      One typical strategy is to "satisfice", rather than maximize, financial gain, while pursuing other interests. This produces a sound financial base for pursuing those interests. (i.e. Hershey's, churches, "green companies"...) Another is to do things that are win-win with respect to the business (i.e. Bell Telephone, doing things like designing phones to work well with hearing aids, make ringing sounds that are auddible to the partially deaf and light-flashing ringer devices, and otherwise making the phone system accessable to hearing impaired.)

      As you point out, these approaches may also lead to financial benefits that typical businesses and business-school graduate executives miss in their pursuit of the short-term bottom line. Good will, new inventions, synergies, etc.

      Another example: Hershey's, not constrained or incentivized by short-term bottom-line, doesn't use typical industrial-food ingredients such as corn syrup, or follow other food-processing fads. It sticks with basic, high quality, time-proven, ingredients and recipies. This produces a consistent product (which also forms the base for consumer recipies) and a loyal customer base. (No "New Coke" debacle or gradual deterioration of product quality over decades with this company.)

  • by aitikin (909209) on Saturday March 01, 2014 @09:44AM (#46375131)

    So far there aren't many comments here, but all of them are sitting here flaming Tim Cook. No where in the articles linked did it say that shareholders (as a group) wanted this. In fact, if you RTA (the last linked one), you'll see that it received less than 3% of the vote. But people who are too afraid to post under a user name are also apparently all too happy to post that Cook is doing a disservice to his shareholders, even though the overwhelming majority of said shareholders agree with him.

    So what should those that don't do? Buy something else. I don't get why people who are seemingly for the free market are up in arms about a company doing something their way and telling people that if they don't like it, they can go somewhere else. Just because the ROI in one company might not be as high as possible (according to a think tank, not a court of public opinion by any stretch, which is where Apple exceeds), doesn't mean that the company is doing a disservice to its shareholders, unless those shareholders are in it for the shortest term possible.

    • by TWX (665546) on Saturday March 01, 2014 @09:55AM (#46375183)
      It's also wise to remember how Apple has fared over the years when it attempted to follow mainstream practices. Those years were usually when Steve Jobs wasn't involved and the management attempted to follow the business practices of others. On ended up with a company that tried to be SGI and Packard Bell at the same time, with predicable results.

      Cook appears to have learned at least a bit of the lessons of those eras. He doesn't have to do what the alleged professionals in the business community claim to be best practices; Apple has made a lot more money over the last fifteen or so years by bucking the trend and continually changing. Don't get me wrong, my ownership of Apple products is limited to a few castoff keyboards and I'm certainly no fanboi, but they've managed to build a successful, profitable company by doing what their customers, not necessarily the business community, wants.

      It's kind of like how Costco is doing well, by paying employees actual living wages so those employees work at the stores until retirement as opposed to being bled dry by corporate interest. Costco still makes money, Costco is popular among customers, employees are happy, owners are happy, and things will continue to be long-term stable for them.

      If Cook manages to keep Apple going strong in the wake of Jobs' demise then this will be interesting to watch.
      • by davester666 (731373) on Saturday March 01, 2014 @04:37PM (#46377539) Journal

        That's what is so funny. Ever since Jobs came back, every quarter, so-called "analysts" keep announcing that Apple must stop doing what they are doing and do what the competition is.

        -make netbooks
        -make cheap computers
        -make cheap phones
        -make cheap tablets [extra ridiculous when the rumors before it was announced were that it would be around $1000 for the cheapest, and the analysts said it would be dead unless it was in the $500 range, then when it was released for $500, they said it was dead unless it was prices $300-$350]
        -give in to carrier demands, so more carriers will sell the iPhone
        -zillions more

        They also announce products are a failure, like the iPhone 5C, which was only the 3rd best selling phone between when it was released and the beginning of Dec [which I could readily find numbers]. So only 1 model [out of hundreds] from a competitor sold better than the 5c in the US and it's a failure.

    • by ganjadude (952775)
      to me it isnt that he said no, its the way he did it. In typical apple fashion "if you dont like it, fuck off" He could have been more diplomatic about it, explaining his reasoning without going off the deep end and telling him he should sell, no class if you ask me
      • by Soulskill (1459) Works for Slashdot on Saturday March 01, 2014 @10:48AM (#46375413) Homepage

        I prefer the lack of diplomacy, personally. It stands in stark contrast to most of the public statements Tim Cook makes about the company, which are usually run through the PR/Marketing polisher within an inch of their lives.

        Of course, the skeptical part of me wonders if this response was planned, to some extent. Not necessarily word-for-word, but the result of some foresight: "What's a good response if somebody says this isn't helping our profitability?" The line about ROI for accessibility struck me as a bit too pat.

      • by Daniel Dvorkin (106857) on Saturday March 01, 2014 @12:28PM (#46375965) Homepage Journal

        Sweet reason, or even simple politeness, doesn't work with the kind of self-righteous ideological nutballs who make up NCPPR. "Fuck off" is the only kind of response that will get through to them.

        • Re: NCPPR (Score:4, Interesting)

          by rnturn (11092) on Saturday March 01, 2014 @12:55PM (#46376105)

          I will likely never buy an Apple product, I would like to shake Cook's hand for the way he pushed back against the NCPPR. It's about time these "Profits Uber Alles!" twits got their behinds handed to them.

          Of course, who wants to bet on how long it is before the NCPPR begins pushing for a shareholder proposal to have Cook removed as CEO? "How dare he waste money that we could be squirreling away in our offshore accounts on that dirty, hippie stuff like Green Initiatives?"

      • The National Center for Public Policy Research are right-wing activist assholes, who's opinions have previously been rejected by the overwhelming majority of Apple shareholders. They are trying to use an Apple shareholder meeting, not for the benefit of the company or it's shareholders, but to expound their political beliefs.

        Why should Tim Cook treat them with a respect they don't deserve?

    • by DarkOx (621550) on Saturday March 01, 2014 @10:32AM (#46375343) Journal

      The problem is the Think Tank guys have left the reservation. Conservatives used to believe that most people were basically good and when given choices they will do the right thing. They also used to believe it was wrong to force people to do things and because of that first belief it was also unnecessary to force people to do things. Let the market work, let people become more affluent, which leads to more choices and they will make good choices. They also at one point thought people rational.

      Rational people understand money is not the only form of wealth. Its also good to have clean air to breath, safe water to drink, and quality food to eat. In that sense environmentalism is actually a conservative issue. These things are of course a matter of degree. Its much easier to decide to spend more on the same amount of energy because its at least ostensibly "greener" when you are having most of your other needs thoroughly satisfied. Affluence should make us better people; something I still believe. Which is why as a conservative or libertarian or whatever you want to call me I am thrilled to see companies like Apple doing this stuff of there own will.

      It validates my beliefs. They are making choices freely that can benefit not just their future but potentially the future of others. They are doing so against a back drop of wild success, in one of the least regulated industries (tech).

  • If you don't like Apple's energy policy, buy majority shares.
  • In an economy where market failures such as negative externalities are corrected, Apple is already doing the sort of thing that any company would do to maximize ROI. The problem is that conservative organizations such as the NCPPR tend not to believe in externalities [blogspot.com], probably because it conflicts with their ideology that the Earth is not warming or that humans are not the cause of it.

    It's ironic that the NCPPR bring up ROI when they bash [juneauempire.com] a $68.4 billion train project that would provide the same transportat

  • by Anonymous Coward

    This is all about raising money for the think tank. They get to tell their supporters that they stood up to the hated Al Gore, who is on Apple's board. Watch the donations flow in over this.

  • You best believe that if Apple was limping along financially then they wouldn't have splurged on such green energy ventures. Don't misunderstand me. Apple has the cash and they can spend it as they wish. But Cook is making a moral argument and it's only the success of the iPhone/iPad that allows him to do so.

    • Heaven forbid that companies should act morally.

  • this is a, if not the major problem that ROI = $'s ** x is the only measure how things are followed, the more the better, and not what would be adequate on a global scale. That's where currently all systems fail flat.

    I am not really an Apple fan but this is a good one!

  • by SpankiMonki (3493987) on Saturday March 01, 2014 @11:33AM (#46375639)

    Funny how the good folks at the NCPPR didn't demand that Apple stop their philanthropic activities, which by NCPPR logic would also hurt shareholder value. For some reason, they only objected to Apple's "green" initiatives...I wonder why?

    Either way, those "think tank" guys should go back to school and learn how capital assets are actually priced. [wikipedia.org] If the NCPPR had gotten their way, it's likely that Apple's stock price would have gone down, not up.

  • by Rambo Tribble (1273454) on Saturday March 01, 2014 @11:45AM (#46375699)
    ... could the ethical operation of a company be characterized as irresponsible.
  • by IgnorantMotherFucker (3394481) on Saturday March 01, 2014 @12:13PM (#46375883) Homepage

    The CEO of a company - whether public or not - is expected to make certain decisions completely on his or her own.

    Like the captain of a ship. Consider that all the captains of the US missile submarine fleet have the authority to nuke President Putin back to the stone ages should the sub ever lose communications with their commanders in the Pentagon.

    Like the captain of a ship, the CEO of a company can be relieved of command, should - NOT the stockholders but THE BOARD OF DIRECTORS - feel he or she is doing a bad job.

    Like say, when the Apple board tossed Steve Jobs out on his ear, put Woz out to pasture, scouted around for a more multinational kinda brand-oriented guy, brought in John Scully, who proceeded to lay off four thousand of my coworkers back when I was doing MacTCP QA for Apple, because he'd never actually used a computer in his entire life before hiring on at the Cupertino Fruit Company.

    Rly. I still have my Apple Employee Loan-to-Own PowerMac 8500. That tradition got started specifically because of Scully not knowing how to use a computer. That was actually a common problem back in the day. Actually it still is; I know of some guy whose computer was running real slow, because he hide NINE Internet Explorer toolbars. But I digress.

    Now suppose Timmy-baby really wasn't doing his job, but the board backed him. Then the job of the shareholders would be to elect a new board. That's one of the things they often do at these shareholder meetings. It would be up to a vote of the board to replace the CEO.

    As for those who object to Apple's green policies. Consider how many citizens of the People's Republic of China work for Apple, or for one of Apple's suppliers such as FoxConn. I expect that - indirectly - far more people work for Apple in the PRC than do in the whole rest of the world put together.

    The air in China used to be pretty clean because the people lived in a very simple manner, they didn't own many consumer products, they all dressed in olive drab and rode bicycles to work and school. Even Ambassador George Herbert Walker Bush rode his bike to the embassy in Peking!

    While nominally still Communist, actually it is quite likely the closest to unfettered capitalism of anywhere on the planet. Without the slightest thought towards urban planning, there are factories everywhere, everyone who has a good job has a nice car, and a nice place to live. Thus they had that one hundred mile long traffic jam that lasted a week.

    China gets most of its energy from coal. It is plentiful there. They import coal as well; there is a controversial proposal to build a coal terminal where I now live in Vancouver, Washington, so coal mined in Montana can be loaded onto cargo ships then transported to China.

    This had the eventual result that I recently saw the most amazing photograph. I don't have a link but maybe I can dig it up then post it in a reply.

    The smog is so thick in many Chinese cities that one cannot see the sky, certainly not the sunrise.

    So along the busy streets, in the early mornings, they have installed very large video screens that show the rising Sun.

    The photo I saw, the video on that screen was so beautiful, but the smog was so thick that the people couldn't see more than maybe thirty feet. That's why the life expectancy in Beijing has gone down by fifteen years.

    I don't know that Tim Cook is worrying about his Chinese employees, or those of his Chinese vendors, but if he wants FoxConn to keep assembling iDevices, they can't all be dropping dead of emphysema can they? Grandpa Crawford died of that, he spent his last five years on a portable oxygen tank. It's a nasty way to go.

  • by dtjohnson (102237) on Saturday March 01, 2014 @01:28PM (#46376335)
    Those 'conservatives' at the meeting were really agitating for Apple to make decisions based on their short-term ROI rather than their long-term ROI. Short-term decisions are necessary but a healthy company rarely does them. For example, many companies, including Apple, spend a lot of money on research. Research costs a lot of money, has an uncertain return on the expenditure, and a lot of time passes before that return is ever realized. From a short-term perspective, companies should never spend money on research but should instead just pass all of the money on to their shareholders. Yet, if companies operated in that way, they would go out of business fairly quickly. So...that is the beauty of the free enterprise system. It leaves companies free to operate in what they see as their overall best long-term interests and often, those are as Apple's Tim Cook presented them rather than as the 'conservative' shareholders wanted. When shareholders gain too much influence over the daily operations and decisions of the company, it usually leads to the company's demise as shareholders seek to transfer cash assets to their pockets and leave the company limping along and struggling to continue. However, that just means that the company's competitors pick up the business that the wounded company can no longer compete for. Ultimately, it's a self-correcting system, as long as there is a competitive marketplace with no one company grown so large as to monopolize all of the business.

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