Tim Cook Tells Profit-Obsessed Investors To Sell Their Stock

No wonder he's always smiling.

Tim Cook lashed out at shortsighted, bottom line-driven investors during Friday’s annual shareholders meeting — telling them to “get out of [Apple] stock.”

The exchange concerned the conservative think tank National Center for Public Policy Research, which was pushing Apple to disclose the cost of its sustainability programs, and the impact this had on the company’s earning power.

Cook was asked about Apple’s plans to have 100 percent of its power come from green sources — and whether this was the case only because of government subsidies on green energy.

Asked to commit point-blank to only pursuing moves immediately profitable to Apple, Cook responded with anger — noting that Apple does many things because they are right and just, and not simply about making a return on investment (ROI).

“When we work on making our devices accessible by the blind, I don’t consider the bloody ROI,” he said.

The same, Cook noted, applied to other areas in which Apple is blazing a trail — such as environmental issues, and worker safety.

Cook then advized the NCPPR representative that, “If you want me to do things only for ROI reasons, you should get out of this stock.”

Unlike Steve Jobs, Cook is known for being calm and even-tempered. His response to this line of questioning — which included the word “bloody” and a notable change in body language — is one of the few times he has been reported as visibly angered.

During his tenure at Apple, Cook has been a driving force in making Apple’s image as a social and environmental “force for good” match the sterling reputation of its products. Having previously been labeled the “least green” tech company by Greenpeace due to its reliance on coal at data centers, Apple has made the conscious decision for its $5.5 billion Apple 2 “spaceship” headquarters to have 70% of its power provided on-site by photovoltaics and fuel cells, with the remaining power covered by sustainable “green sources” in California. The company has additionally teamed up with Nevada’s largest power utility company to build a solar farm, while its data center in Maiden, North Carolina is now powered by 100% renewable sources.

When it comes to worker rights, Cook has also been keen to improve Apple’s image — focusing on avoiding illegal overtime and the employment of underage workers in its overseas factories.

The NCPRR has posted its own account of the Tim Cook exchange under the headline: Tim Cook to Apple investors: Drop Dead. It includes remarks from general counsel Justin Danhof, who was the man who confronted Cook.

“Although the National Center’s proposal did not receive the required votes to pass, millions of Apple shareholders now know that the company is involved with organizations that don’t appear to have the best interest of Apple’s investors in mind,” said Danhof. “Too often investors look at short-term returns and are unaware of corporate policy decisions that may affect long-term financial prospects. After today’s meeting, investors can be certain that Apple is wasting untold amounts of shareholder money to combat so-called climate change. The only remaining question is: how much?”

Danhof is director of the NCPPR’s Free Enterprise Project, which describes its mission as “expos[ing] efforts by left-wing interest groups to divert businesses away from best practices and into left-wing advocacy.”

  • Source Fortune
  • flyover

    He will regret saying this. His obligation is to make as much money for shareholders as possible. You may like it, or not, but that is the law. When the liberals criminalized business in the early 2000’s this is one of the artifacts. He cannot use the company’s resources for personal objectives. I predict there are shareholder derivative lawyers typing up the suit as we speak and with the precipitous decline in the share price over the past few years, there won’t be any shortage of plaintiffs. He ought to learn to keep his mouth shut when he has his foot in it. A more correct response would have been, “we believe these measures actually improve our profit.” He may be utterly wrong in such a statement, but at least it doesn’t show his intent to ignore his fiduciary responsibility to the shareholders.

    • digitaldumdum

      “(Cook) will regret saying this.”

      You’re silly, and ignorant about the whole subject. Your assertion that “He cannot use the company’s resources for personal objectives” is a lousy bit of fiction in your own head.

      If anyone, “…ought to learn to keep his mouth shut when he has his foot in it”, it’s the author of that sentence.

      • flyover

        Let me know after you’ve been the CEO of a publicly traded company and have been sued by some shareholder in New Jersey with 10 shares. You might also want to just delete the digital part of your name. Then you’d have it right.

      • digitaldumdum

        And you have been that CEO? I doubt it. But if so, you ran your shop badly.

        And if you’re gonna be poking around at people’s handles here, be aware that “flyover” typically refers to a very fast, usually inaccurate assessment of a situation far below. Not much useful information to be gathered. Seems to fit.

      • flyover

        Wrong again, dum dum. I ran a very profitable company that as a public company would hardly qualify as a “shop,” I later sold to a competitor for a lot of money and retired at 50. Flyover refers to “flyoverland” which is the forgotten part of this country–forgotten by the media, politicians and the elites who rule your life. Whether you agree with Cook’s position, he was out of line alienating a major part of his customer base for his own gratuitous political agenda. I have been a long time user of many Apple products and have been a shareholder since the stock was $60. I didn’t appreciate his comments and according to many media reports I have seen today, a lot of people agree with me. Running the shareholder’s company does not give its employed CEO the right to use it as a personal toy. One of the reasons I decided to just cash in and go home was the criminalization of business post-Enron. Not that this is a criminal act, but there is a segment of the tort bar that will sue for anything. They can always find a willing shareholder to serve as the plaintiff. Watch and see. I own stock in a company that agreed to sell itself to a private equity firm recently for a 100% premium. They were sued before the end of the day of the announcement for not shopping it. Watch and learn.

      • fiftyplusgeek

        Standing at a window uttering the phrase, “Welcome to McDonald’s, may I take your order?” doesn’t count as running your own company.

      • flyover

        Then you should not make that claim

      • fiftyplusgeek

        Derp.

        Did you come up with that stroke of genius all by yourself or did you have help?

      • flyover

        You have the stones to ask me that after using the oldest line in the world?

      • give_me_a_break

        Silly and ignorant about the whole discussion….really ? It has been commented on by more than one financial talking head, that every time TC opens his mouth, the stock takes a dump. Are you defending Tims stewardship of apple or are you that invested in changing the weather ?

    • ♦[PharLeff]♦

      I think where Apple wins is in passion. I don’t think Cook will regret saying what was said cause it’s true to how Apple feels. When one is passionate about something, everything else will follow… including the money. When you lose focus of the ultimate goal of Apple and focus on money, you run into the money game which is trying to keep investors happy when the primary party are the consumers and the experiences the connection with Apple products creates. You do, however, have very valid points.

      “Stay hungry, stay foolish” -SJ

      • flyover

        What you are missing is it isn’t his company. He is an employee. It is our company (the shareholders). Try telling that to Carl Ichan, the iCarl.

    • http://www.tumblr.com/blog/his-divine-shadow His Shadow

      He will regret saying this

      He will not.

      His obligation is to make as much money for shareholders as possible.

      This is not even remotely true, and you need to get your head out of Gordon Gecko’s ass.

      You may like it, or not, but that is the law.

      Now we are just making up laws?

      When the liberals criminalized business in the early 2000’s this is one of the artifacts.

      Now we are just making up history?

      He cannot use the company’s resources for personal objectives.

      Environmental stewardship is not a personal objective.

      . I predict there are shareholder derivative lawyers typing up the suit as we speak and with the precipitous decline in the share price over the past few years, there won’t be any shortage of plaintiffs.

      I predict this will amount to exactly nothing.

      He ought to learn to keep his mouth shut when he has his foot in it.

      You ought to learn to respect people who are far more intelligent and accomplished than you will ever be.

      • flyover

        If the facts aren’t on your side, just start name calling. Please tell me how many companies you’ve run? Until you have done so, you really have no clue what you are talking about. I’m sure saying this made him feel food about himself, for a few minutes, at least until his General Counsel pulled him aside. Shareholder suits are filed in America daily. A CEO’s first responsibility is to his shareholders. It is his fiduciary duty. You may not like it, but that is a fact. You can position your strategy to do that in many ways. However, his comments were foolish because he is saying, “I don’t care about you and your business.” He just gave every shark lawyer in America an invitation to sue. I resent that with my money.

      • http://www.tumblr.com/blog/his-divine-shadow His Shadow

        he is saying, “I don’t care about you and your business.”

        No. He is saying “Take your delusional right wing ignorance and shove it up your a$$.” No CEO, never mind Tim Cook, is under any obligation to listen to propaganda shills for special interests who cannot even post a mission statement without exposing their conspiracy theory mindset. Tim Cook runs Apple with an eye to making money by selling hardware and services that people want to buy. In the course of achieving that, he has prioritised environmental stewardship, reliance on renewable energy resources and a myriad other aims and goals that won’t mesh with the greedy maggots convinced that Apple the company and Apple the stock are the exact same thing and that the mere fact that they bough a tiny piece of the company entitles them to some golden spigot of cash. That pile of cash Apple is sitting on? It doesn’t “belong” to stockholders any more than Apple’s patents belong to stockholders. Apple has that pile of cash because Apple hundreds of millions of paying customers. That’s it, That’s all. If kooks like the NCPPR and other shill organisations are unhappy with how Apple manages it’s operations, the onus is on them to sell their stock and shut up.

      • flyover

        Or, to change the CEO to someone who will keep his political views to himself. Or, if he is unwilling or unable to do that, to frame them in a way that at least sounds like he is doing it for the benefit of the shareholders. Again, he is not Apple. He is an employee. You keep forgetting that.

      • give_me_a_break

        I think he will regret it, because it’s so easy to look at the poor performance of the company under his leadership and hang it on his bizarre comments about the weather, In fact this statement invites one to look at the companies performance and Mr. Market is saying somethings a bit wrong. If Apple really cares about it’s carbon footprint, it should close down it’s business world wide, fire all it’s employees and Tim should commit to living in a cave and never strike a match again.

      • http://www.tumblr.com/blog/his-divine-shadow His Shadow

        the poor performance of the company under his leadership

        This is bvllsh!t, and a cursory glance at the data will prove conclusively that since Tim Cook officially took over the riens, Apple continues to have record breaking quarters, sells more devices year after year and provides more services to more customer quarter over quarter. The “poor performance” trope is nonsense perpetuated by the miserable half wits in the tech press and the stock shills paid to manipulate public opinion to move stock prices. Apple’s stock is currently 160 dollars above where it was when Jobs died. It’s cash pile has grown by 40 billion dollars.

        Anyone who imagines that that qualifies as “poor performance” is deluded or a shill.

    • normm

      Apple has the most valuable brand in the world, while spending a tiny fraction of what Samsung spends on advertising. If you can’t bear to see Apple be socially responsible, just chalk this up as a tiny cost for good PR.

      • flyover

        Please re-read all of my posts. Please then come back and say that I had a problem with the policy. Perhaps this is just too over your head in the way lawsuits work. The statement was gratuitous. The statement was unnecessary. I will cause some people to sell their stock. That will cause your stock to decline in value. that is all the trial lawyers need to file a suit. CEO’s are trained not to talk like this. I was once sitting in a major stock conference when the CEO of one of my suppliers, a real a hole anyway was asked why he had sold some of his own stock in the company. He told the analyst “that’s none of your f-ing business.” he was gone in two weeks. He had lost credibility with the street. Once you get the reputation as someone who just pops off, it is often impossible to get it back. If he wants to do that on his own, great, just quit and do it. Don’t do it with my money. I’ll bet if you asked him he would say he wished he hadn’t said it. I’m sure he heard from Carl Ichan who owns a lot more of Apple than he does. I’ve heard from Carl in my life. That’s not a call you usually want to take.

    • herbaled

      You obviously don’t see the big picture with Cook & Apple. Apple culture is a key factor in its extraordinary success. E.g., Things like Apple’s lack of concern regarding a direct profit from developing features for the blind makes many people … including me … want to be a part of that culture. Sure I want a great product, but I also want to support a company that does the right thing(s). Unfortunately Wall Street is too short sighted to see the big picture.

      • flyover

        Once you take your company public, Herb, you forfeit the right to do that. Read SEC case law. I’m sure it made him feel good to say it, but I’ll bet he would take it back if he had the chance. This is America and until we decide that tort reform is as good a thing as you feel fighting warming is, that is the way it will be. You will have to excuse me, but I have about ten inches of global warming to shovel off my driveway.

      • herbaled

        You missed my point. I’m saying that Cook’s/Apple’s altruistic business practices actually make more profits for Apple … albeit sometimes in the longer run. So, I’d say this is right in line with Apple’s fiduciary obligations to its shareholders … i.e., optimize profits. It doesn’t always have to be about the “next” quarter. I’m happy with my Apple shares making more money in the longer run, and, indeed, they surely have done that.

      • flyover

        I am not disagreeing with you that it might be a good strategy. I am disagreeing with him popping off like he did. He unnecessarily alienated half the country who do not agree with the global warming business. That is not good business. It was unprofessional and bad form and opens the company to lawsuits by lawyers who are in the business of pouncing on such mistakes. It is not his job to save the world. It is his job to maximize shareholder value. Trust me, I had the job for 17 years (not at Apple, but at a public company). The reason you have to pay these guys so much is the risk of being sued. It is never ending. You brought up a great point: next quarter. I once asked one of the top securities lawyers in the world “am I supposed to manage for the shareholders who have a short-term view, medium-term, or long-term?” His answer was “yes.” There is no pleasing everyone, so the best you can do is try to not irritate anyone in the process.

    • slgwva

      Stopped reading at “liberals criminalized business.” Not gonna waste my valuable time.

      • flyover

        Yeah, it is so valuable you are still reading articles from last week. Buzz off.

  • 2oh1

    Typical republicans, only caring about greed. The sad thing is, they don’t realize how, by doing the right thing rather than acting out of sheer greed, Apple ends up making more money in the long term because customers can feel good about the products and about the company.

    • give_me_a_break

      Nobody is more greedy than a liberal. Greedy businessmen just want to more money, Utopian, collectivists want your life. They care more about power and compelling everyone to conform to their haunted ideas. Have you ever herd a statist thug say, “you know, we’ve stolen enough from you, keep what you have”. No they never say that, they always want more and what they cant tax they borrow understanding that there will be no consequence for themselves.

  • give_me_a_break

    I did indeed sell most of my stock, not because I care at all about the climate, but because Apple, under TC has performed poorly. The stock peeked at 700+ and has declined by 25% since. Now. perhaps I understand why. Tim is more obsessed with changing the weather than he is with figuring our why Apple doesnt know how to write software or why it cant ship a new piece of hardware in less than 18 months, or why it’s cant seem to do more than one thing at once. Apple bought it’s current OS and tool stack 15 years ago and gives no indication that it will be able to develop it’s next generation toolset any more successfully than it did it’s previous (copeland, pink etc). Having recently been compelled to move to Mavericks it’s amazing how poor that OS is in simple terms like, usability, performance and stability. Mail and Finder are jokes. Is there noone who understands or cares about software at Apple ?

    • http://www.tumblr.com/blog/his-divine-shadow His Shadow

      but because Apple, under TC has performed poorly.

      Good bye, putz.

About the author

Luke DormehlLuke Dormehl is a UK-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Formula: How Algorithms Solve All Our Problems, And Create More and The Apple Revolution, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme, and other publications. He'd like you a lot if you followed him on Twitter.

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