“The folks at Apple could learn a lot from Progressive Corp., the auto insurance company made famous by the ubiquitous Flo, star of its endless flow of ads,” Allan Sloan writes for Fortune. “Apple doesn’t need help from Progressive when it comes to selling products. But Apple could really profit by studying how Progressive deals with the companies’ common problem, one that most firms would be thrilled to have: more cash flow than it needs.”

“Progressive has an intelligent, rational, and transparent way to deal with the surplus cash that its operations generate. Apple doesn’t. It has fumbled around, trying half-heartedly to make Wall Street and good governance types happy, but in the process managing to ensnare itself in a nasty debate about whether it’s shortchanging its shareholders by hoarding cash,” Sloan writes. “As a result, what should have been a normal, boring Apple shareholder meeting next week has become a confrontation between Apple and some sharp-elbowed Wall Street types who want Apple to goose its stock price by giving $50 billion (or more) worth of new preferred stock to its common shareholders.”

Sloan writes, “Apple is likely to ultimately prevail in a shareholder vote to eliminate its board’s right to issue preferred stock. But its Street image has taken a whack, because it has come out looking clueless about how to handle its cash. Progressive has no such problems. It pays its shareholders (who include me) an ultra-rational dividend: a variable, once-a-year payment based on the success of its business.”

Read more in the full article here.