A Quick Review Of The Apple VSM (We Were Pretty Happy Until We Realized We’d Been Snookered)

In keeping with our plans to tune in and review more VSMs this year we were happy to attend Apple’s nice (and early, for West-Coasters) Feb. 25th Meeting, held at 8:00 a.m. Pacific time; 11:00 Eastern.

Apple is one of our top-two investments – with an amazing 54,526.7% return, and we LOVE them – but with a sorta’ bad record for shareholder meetings, having mis-reported the voting results TWICE (once when they counted Abstentions as No Votes!!) – and where, before there were VSMs, they never booked near enough space to accommodate the thousands of investors who wanted to attend in person.

We tuned in way early – at 10:40 - so as not to miss a thing…but no luck. On a second try we got a message to tune in at 10:45 where we were greeted by a giant, amorphous “blob” that slowly changed its shape and its colors, and which we finally realized was meant to be an apple – all to the tune of hip-hop, tick-toc music with an all-girl rap vocal group. Oh. Then, at 8-Pacific time, a guy, dancing and flipping fake weights… to illustrate “Effortless Power.” Who was the creative director here, we wondered. Yuck! Then, a cartoon portrait of Tim Cook, as SVP, GC, and Secretary Kat Adams (no cartoon for her) led off the official business, noting that “polls will close after the presentations” – directing attention to the “Vote Here button” and noting that “additional questions can be asked using the Question Box.” Oh.

All of the proposals – the intros of the three usual management proposals and four shareholder proposals were pre-recorded and all moved quickly along, under two minutes each. And Apple, to my mind, did a good job of not protesting them too much but very succinctly pointing out that Apple was not guilty of any of the deeds that allegedly required corrective action.

At 11:13 Kat announced that the polls would be “Open for another minute” which, by my watch stretched close to two minutes, and good thing: There was barely time to finish voting – and without a touch-screen it would have been humanly impossible.

At 11:17 Tim Cook gave a brief review of 2024, citing “All-time EPS, All-time Record Revenue” and “A very optimistic outlook for 2025.” Yeay! – At 11:32 – a film, showing “New Hearing Aid Features,” tearjerker shots of kids opening presents, nuzzling a puppy and a girl with a guitar. Oh. Where DID they find that ‘creative director’?

At 11:34 the question period opened and there were some good ones - and good answers too, covering capital investments, the likelihood of a second-quarter increase in the dividend, noting that they’d doubled since 2012, benefits of health-innovation efforts and a good answer re D&I citing “no targets,” Apple’s “unique culture” and its “north star – dignity and respect for everyone” and a feeling of “belonging.” There was a question about “emerging markets” where Cook singled out India – and we had submitted a question too – about the outlook regarding Apple’s relationships with China – a hard one to answer, of course, but a very important one to address in some way, we thought. If you are Apple, it’s probably the most important question of all.

But oh – no – at 11:50 Cook opined there was “time for one more question” (where WE felt there should be time for quite a few more) but Cook decided to freewheel it with his thoughts on “innovation” where he said there “had been a lot of interest.”

So no China on the table for us that day. At 11:52 Cook said thanks and by 11:53 the Meeting was over – seven minutes early by our reckoning.
After we wrote this, however, we realized we’d been snookered: We are certain that they’d booked the airtime till noon – so there really was plenty of time to take our timely and highly germane question, rather than to unilaterally offer an unprompted “commercial” about innovation. (In fact, Cook could well have said “We plan to continue to out-innovate them.”)

No wonder that shareholders are concerned about companies “cherry-picking” questions and ditching those that don’t suit them. Had this been an in-person or hybrid meeting – and had we lined up at a microphone – they would HAVE TO HAVE ANSWERED OUR QUESTION. Apple, we still love you – but please clean up your act before your next AGM.