If Tim Cook does not care about the ‘bloody ROI’, does he care about the bloody stock price?

“Tim Cook has got a lot of favorable press for confronting an investor group at the last Apple (AAPL) stockholder meeting and telling them that he does not check the ‘bloody ROI’ when he has to do the ‘right thing,'” Aswath Damodaran writes for Seeking Alpha.

“In fact, he went further and suggested that any investor that does not believe in Apple’s social mission should sell Apple stock. Since everyone else seems to have been selling Apple stock ever since Cook became CEO, I guess adding one more group to the mix will not make much of a difference,” Damodaran writes. “At the risk of sounding like a moral reprobate, I take issue with both what Cook said at the meeting, and how he said it… I am an Apple stockholder, I am not a member of the NCPPR, I am supportive of good environmental policies and find your response to be troubling, because it reveals a mindset that I would not want in the CEO of a company that I own stock in, for four reasons:”

1. Social responsibility comes with a price tag.
2. If you choose to be socially responsible, as a publicly traded company, you have to be transparent.
3. If you are transparent, and you truly respect your stockholders, you have to give them a say.
4. If you give stockholders a say in CSR spreading, and they tell you no, you have to listen.

“I want publicly traded companies to be socially responsible, but not at the expense of becoming basket cases, to bear costs being good corporate citizens, while being transparent about these costs, to trust their stockholders by giving them a say on whether they are okay with that mission, while taking no for an answer,” Damodaran writes. “I don’t want sanctimonious CEOs to define social responsibility for me, to be generous with my money and then refuse to let me know how much they have spent (let alone give me a say).”

“So, what should Tim Cook have done in response to the questions from the NCPPR reps? First, he should have responded with respect. After all, he is an employee, albeit a very highly paid and elevated one, and these are the owners of the business that he works at,” Damodaran writes. “Second, he should have conceded that Apple spends money doing the right thing and being socially responsible.”

Read more in the full article here.

Related articles:
Apple’s Tim Cook and his dilemma over sustainability and climate change – March 3, 2014
Tim Cook gets angry over shareholder proposal for environmental spending transparency, says those who disagree should get out of Apple stock – March 1, 2014

93 Comments

    1. Well said. I would appear that if the NCPPR don’t like Apple’s alpha boss, they should try to vote him out. See how well that flies.

      This is just more rhetoric from wall street who just want to be seen as the boys in control and don’t like being told what to do.

      1. What the NCPPR should do is just as Tim suggested. Take it’s money and go elsewhere…………….or shut with this underhanded attempt at gaining public attention. It didn’t work for Icahn. It won’t work for these guys either.

        1. And Aswath Damodaran should do the same, if he is concerned about Apples leadership. The “right thing” in Apple terms is skating to where the puck will be. That Aswath Damodaran and NCPPR are know-nothings with short planning horizons demonstrates their deficiencies, not Apples.

          Mr Cook was generous in his offer of advice for NCPPR. They should take his suggestion. Judging from the stockholder support for their proposal, they will be pretty lonely, but it is their choice.

    1. Be that as it may, Tim does not own enough Apple stock to unilaterally dictate what Apple does. I support the concept of corporations accepting social responsibility, though — not being an Apple stockholder — I haven’t looked at how much Apple is spending on what. But if Tim Cook does not believe that he is responsible to the owners of the company (i.e., the stockholders), even at one remove through the Board of Directors, then likely he is the one who should sell his stock and find something else to do. If he wants unfettered authority, he is free to do what he likes with his own money; if he wants to be the CEO of a public company, he should remove his foot from his mouth, apologize for his intemperate remarks, and get back to work improving the stock price and, yes, the bloody ROI.

      1. Well, that’s it folks! Emmayche says Timmy can’t focus Apple’s attention on making iPhones accessible to the blind because it ignores the ROI!

        Chasing ROI for its own sake is stupid and self-defeating. It leads to companies making bad decisions that hurt their long-term viability. You know the best way to improve the stock price and increase the ROI? Produce great products and adopt practices today that will be NECESSARY tomorrow.

        Apple doesn’t need to be the dog chasing its own tail, and the fact that Tim Cook has the foresight and the gumption to avoid that trap makes it clear he’s the best man for the job.

        1. What short memories these idiots have, Since when did SJ run that company based on what he was told to do by the stock holders? If he had then these morons would not now have had a fraction the value in ‘their’ company and living off the very nice profits thank you. Indeed Apples great rise was precisely because it WAS run by a man far more singular than Cook will ever be doing what he thought was right and living or dying on those decisions. Most companies die because they start to be run by committee and the stock holders all start to think they know whats best though rarely actually agreeing what that actually is. I feel rather reassured that Cook showed his mettle here because the last thing I want is the inmates from the asylum choosing another soft drink bozo running the business especially as we don’t have SJ there to come back and save it. I wonder at times how the human race ever managed to climb down from the trees.

      2. How about allowing us to vote on where they place their factories? That effects ROI. How about letting us vote on their product line? Who the hell is Tim Cook to decide what HE thinks will sell and what will not. This things affect MY money. Even the color of the phone, who the hell is he to decide with MY money. Every time he hires somebody he is hiring them with MY money! I deserve respect and not once has he ever asked for my approval for anything.

        Let’s start a revolt. I want access to his daily calendar and all of us share holders should vote.

        —or, I can invest in Apple Stock because I trust Tim Cook to do the right thing. Hmm.

        1. Let’s stick with your first paragraph. And I want to have a say in what he wears to work while representing the company that has my money………………..

      3. If Steve was still around we would not even be having this conversation. He cared about the company and its products and innovation and didn’t give a shit about stockholder value.

        1. No. That is not at all true, Damian. Steve Jobs understood that the way to increase shareholder value, grow a company, and hire people, was to design insanely great products and sell a huge quantity of them. Steve Jobs gave a “great shit” about stockholder value.

          A favorite pastime of MDN was to give a running tally of how many times more valuable Apple’s stock was than Dell’s.

          If you really believe what you just wrote, than you don’t have a complete understanding of how capitalism works.

      4. I agree with emmayche. CEOs answer to the board of directors. The board of directors represent the interests of the shareholders.

        The shareholders ultimately call shots in publicly traded corporations.

        Apple is a bit unlike most American corporations in that it is less focused on the next quarterly statement and is more focused on long-term prospects.

        What Tim Cook should have done is not lost his cool and provided a better answer to the question as to why going all “Earth Muffiney Green” is good for shareholders. I suspect there was some pre-existing bad blood we aren’t privy to.

        To those who say that corporations’ first responsibility is to the earth and the environment and to pay more taxes than tax law requires, and to ‘wash the feet of the orphans’ and all that, I say: Grow up, get a job, be successful, pay taxes, buy $50k of Apple stock (so you have a clue about what it’s all about), and annoy a liberal.

        1. I have considerably more than that in Apple stock and I believe every corporation’s first responsibilities are to act morally, operate responsibly, with the long term welfare of humanity in mind, and financially support the government that supplies it with required services, such as roads and bridges, defense against foreign aggression, and care for those who can’t care for themselves.

  1. Calm down, Asswart Damomoron… when you do the right thing, AND you only make really great products (that obviously a LOT of people are buying), ROI and stock price will fall into place.

  2. I wonder what “do the right thing” is? I think it is different for different people. Maybe Tim ought to start using that excess cash to start buying all the guns back. Some people think that’s the right thing to do.

    1. It’s a movie directed by a racist about racist who don’t really understand that racism has become more of a business than a national disgrace, which oddly enough, makes it a perpetual national disgrace.

      Fun for the whole family!!!

    2. Guns?? Huh? How about “do the right thing” by making software that isn’t garbage.
      Mail is amateurish and getting even more buggy – and STILL does not handle attachments well.
      Maps was a snipe at Google but is such a magnificent FAIL that people devote entire blogs to its awfulness.
      Finder is slow, clunky and bug ridden. No Cut command after all these years and Apple has not made even one attempt at window management yet. Path Finder kicks its butt.
      Preview, Image Capture, TextEdit, Stickies, etc, all hopelessly dated and in need of an overhaul.
      No creative pro uses any of Apple’s “pro” apps. Apple’s use of Aperture and Pixelmator benchmarks on the Mac Pro spec page is a sad joke. Apple should outright own the creative space but ceded it to Adobe, who now rents its apps. Thanks a bunch Cook. The Mac Pro is one bright spot but you can’t get peripherals.
      iWork is useless for serious office productivity. Go ahead, send your Office buddy a Numbers file or Pages doc and see what he says.
      iLife has passed its prime, any ‘updates’ just make it less appealing. Read the iMovie reviews.
      Apparently Apple builds the app and then guts the dev team, leaving a trail of outdated UIs and bugs. This while sitting on enough cash to buy several nations…

      1. No Cut command? Are you fscking blind?

        The rest of your puerile diatribe I leave for others to eviscerate.

        In short: don’t like it, fsck off back to Microshite!

        Jesus!

        =:~)

        1. How old are you? 12? A twat like you using big words is just ridiculous. Grow up and learn to debate facts.
          Look at the Finder, Cut is there but grayed out. Are YOU blind?
          Pages: 2 stars.
          Numbers 2.5 stars.
          Keynote: 3 stars.
          iLife apps are at 2 or 2.5 stars.
          Apple is the richest co. in the world and it’s churning out crap.
          I’m in the creative field, the Pro Apps are rated higher but do you know how many serious professionals use Final Cut after it got sodomized?? None that I know of.
          FCPX, Aperture etc, do ok, but only if you’ve never used competing products. Kia gets good reviews for its cars too, but only because the reviewers have never driven a 328i.
          I’ve used Apple products for 30 years, never owned a PC. Apple has never done this poorly.
          Cook’s Apple is fat and lazy and he needs to go.

  3. 1000% behind Tim on this one.

    Put the bigots of all flavors in their place! I have held my Apple investments for over 15 years in large part because of the high standards of the company and their consistent will to stand in the face of petty tyrants who always seem to think they know better.

    That has also proven to be a sound financial decision!

  4. The reason for the 2nd amendment is to protect against oppressive government. The ability to shoot criminals in the face is just a side benefit.

    The sooner you Libs figure that out, the better.

    BTW: The reason the psychos go to public schools to wreak destruction is because public schools are GUN FREE ZONES and they know everyone inside is unarmed and helpless.

  5. when will stockholders realize they don’t own the company. they only own stock. yes, they can influence a company’s board, but they don’t direct it. they don’t have a claim on company assets nor a claim corporate decision making.

    that is the responsibility in the executive team and the board of directors. if you don’t like it, either replace the board or sell the stock. you chose to buy stock – you were not forced.

      1. Shareholders do not own the company. They own stock which gives them certain rights in the company. That is pretty much the consensus of legal scholars.
        The concept is related to how voters do not own the country.

    1. ws, it appears that it is *you* who needs to realize something. Stock holders *do* own the company. That’s what stock is- a share of ownership in the company. Try looking it up sometime.

      1. Shareholders don’t get to loot the company, though. It isn’t as simple as “do what makes the current shareholders happiest” – it is supposed to be “do what is best for the long-term success of the company.”
        That might mean doing things the current batch of shareholders don’t like. If they care enough, they can replace the board.

      2. I have a degree in Finance and Economics. You are wrong. Stockholders own a share of stock. There are certain limited privileges attached to that share that may include voting for specifically constrained things. The ownership rights are limited. They are not even investors in the company per se as the money they paid for the stock did not go to the company directly, but went to the previous owner of the shares. It is a convoluted relationship involving what kind of stock, what other stock may exist, and priorities. . .

    2. And when will you realize that Tim Cook doesn’t own the company either. Nor did Steve Jobs. They are employees. Without the shareholder purchasing shares there would be no money thus there would be no company. There would be no insanely great products. The two Steve’s would have been working in their garage still. So keep things in perspective. And there would be no board of directors. Even if one of them did invent the Internet.

      1. No, that’s wrong, too. The money in Apple does not come from the shareholders. Only the original seed money when Apple went public or when Apple issued additional stock to raise more capital can that be said. The money in Apple came from the efforts of that initial investment, plus the work of Steve Jobs, Tim Cook, Jony Ive and the rest of Apple’s team. The current stockholders did not pay one thin dime into Apple. . .

  6. Sound of thundering barbarians approaching the gate growing louder. While Tim obsesses over the hoax of global warming, his company is disappearing in the rear view mirror. Go into ANY phone company store and look around. Go ahead. I dare you.

    1. Disappearing in the rear view mirror? They’re number one in every segment they’re focused on in the only thing that matters…the bottom line profit….the ROI. That’s why all of this discussion is numbnutical.

    2. That’s because most phone company stores are filled with dozens of identikit plastic featurephones, or base-level smartphones.
      Take those away, and they’d have maybe a dozen or so to sell.
      And just as a aside, there’s a photo in one of the UK’s daily newspapers of a young woman in the Crimea taking a ‘selfie’ in front of a Russian armoured vehicle. Guess what phone she’s using…
      Yup, an iPhone 5 or 5S, the Apple logo clearly visible.
      The only people who are disappearing in the rear-view mirror or those companies desperately producing more and more variations of a poor copy of the iPhone, struggling to grab a tiny piece of the bit of pie that Apple has left over from the iPhone feast.

    3. Don’t bother Jay. The leftist media has these sheeple already.
      A billion people living under a totalitarian regime is irrelevant, they’re building our gear for pennies, oooh but let’s make sure we’re carbon neutral and PVC free.

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