CalPERS Takes Other Side of Einhorn on Apple (AAPL) Proposal 2

February 7, 2013 3:01 PM EST
Amid news that David Einhorn of Greenlight Capital is urging Apple (Nasdaq: AAPL) shareholders to vote NO on proposal 2 in an effort to leave the door open to a preferred stock, massive California pension fund CalPERS is out in support of the measure.

"CalPERS fully supports Apple's proposal to implement majority voting for the election of directors and to require shareholder approval for the issuance of blank check preferred stock", said Anne Simpson, CalPERS Senior Portfolio Manager and Director of Corporate Governance. "Majority voting increases accountability, while shareholder approval for blank check stock is simply good governance. Proposal No. 2 significantly strengthens shareowner rights and deserves full support."

Einhorn, for his part, said the issuance of a preferred stock from Apple could unlock massive amounts of shareholder value.

"Apple could initially distribute to existing shareholders $50 billion of perpetual preferred stock, with a 4% annual cash dividend paid quarterly at preferential tax rates," Einhorn said. "With this conservative action, Greenlight believes the Board could unlock hundreds of billions of dollars of latent shareholder value."

Shares of Apple are up 0.6% to $457.60 in afternoon action.

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