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. The fallacy is that you have to buy into climate change to support green. Let’s go green simply because it’s the right thing to do and quit trying to force me to accept global warming as a prerequisite.

    1. Barring an unforeseen new iconoclastic product, Cook’s days at  are hopefully numbered. A group representing legitimate shareholders asks the CEO for actual numbers of expenditures on “green fantasy” projects and then is rudely rebuffed under the guise of “it’s the right thing to do.” Perhaps Cook’s exit as CEO is actually “the right thing to do.”

      1. That proposal got the response it deserved. I was glad to see Tim Cook get mad about it. The idiots from that “I can’t think tank” represent 3% of the votes. They got more time than they deserved. Pick a topic worth discussing on that stage, and Tim and the BOD would have addressed it.

        1. uh. how investors’ money is spent in clandestine expenditures isn’t “a topic worth discussing” at a stockholder meeting of a publicly-held corporation? Especially clandestine, politically-driven expenditures? Hello?

      2. “Green fantasy projects”? Apparently you’re in the 3% crew of irresponsible numbnuts that have no clue what “green” means. Every major corporation has green initiatives and they know that in the long run, those policies will not only be good for the environment, but will be good for business.

      3. Rudely rebuffed under the sanctimonious self-righteousness of a typical green global crusader. Gee, what a surprise.

        The indignation and more importantly non-answer speaks volumes.

        Agreed. If nothing game changing or redux revolutionary is forthcoming Tim should step aside.

        Marginal to magical, depending on your point of view, improvements to existing product lines are not going to move the needle in a big way. That we have seen time and again.

        With all that idle cash Apple dipping its toes while competitors dominate is simply inexcusable. It is what it is …

    2. Exactly right. Sustainability of resources and not poisoning the Earth. Whether one believes in global warming or not, there’s some things that shouldn’t occur in business….Love Canal.

      The US federal regulations on environmental protection seem to many folks as a burden on business, when in fact, in years to come, those very same regulations will be the ones that help businesses survive in a world of shrinking resources.

      “I’m sick and tired of hearing things
      From uptight, short-sighted, narrow-minded hypocritics. All I want is the truth. Just gimme some truth”…John Lennon 1971

      1. Those legitimate investors were asking just that…truth. Truth being what are the numbers being spent within a publicly owned corporation on so-called “environmental concerns” and why are those expenditures not available to stockholders?

        I think you’re…
        “Walking on thin ice
        I’m paying the price
        For throwing the dice in the air
        Why must we learn it the hard way?”
        – John Lennon from “Double Green Fantasy” LP

  2. Another dipwad making another ridiculous comment. If you don’t like the way Apple manages itself, invest somewhere else, just like Tim Cook said. And nowhere did Tim Cook say he didn’t care about Apple’s bottom line and ROI.

  3. Just another idiotic ‘moral reprobate’ (his words) spewing sitting-in-his-mom’s-basement non-knowledge of running a company the size of Apple or with the social impact of a company the size of Apple. So Damodaran, please keep the noise level down before we call the cops on you for disturbing the peace – by yourself.

  4. The guy who wrote that seeking average piece is a ‘yard. it’s time all corporations were forced to exercise corporate and social responsibility. This obviously includes the banks. Governments are all bought out, so it’s kind of up to the people, and not investment analists.

  5. Doing the right thing has been part of Apple’s way of doing business all along. Tim gave the example of Apple’s awareness of the needs of blind people without considering the ROI on that effort.

    Those of you who bought Macs in the 1980’s may recall that the printed manual had a section in large print explaining how visually impaired people could enable the built-in accessibility features to suit their needs.

    I would never imagine that the cost of doing that was covered by the number of additional sales of Macs to visually impaired people, but Apple was correct in doing the right thing way back then and is even more correct in doing the right thing these days.

    I’ve no idea how Tim Cooks angry reaction to the NCPPR has been received in the US, but he certainly impressed a lot of non-Apple supporters in the UK.

    Here’s a link to a newspaper website – check out the comments –
    http://www.theguardian.com/environment/2014/mar/03/tim-cook-climate-change-sceptics-ditch-apple-shares

    What is particularly interesting about that link is that many of the people making comments on the Guardian web site tend to be very hostile to Apple. Look at any other Apple related story on their site and the comments are filled with anti-Apple hysteria.

  6. Tough situation to be in… if you are not green enough, you get protested and lambasted. Perceived as too green then the stockholders get irate.

    It is a balancing act for certain. It is one thing to be principled and to expend a lot of financial resources on green energy and sustainability when you are a privately held company like Sierra Nevada Brewing. Totally another thing when you report to stock holders and this “green campaign” is not specifically part of the company mission.

    1. That is the sad joke here, and for some reason, liberal toerags are blind to it.
      Explain to me how a consumer products company that is dedicated to selling more and more and more devices that last perhaps 3 years is ‘green’.
      The COMMUNIST country that produces Apple’s products imprisons its dissidents, has mandatory forced abortion for over one child *and* has 16 of the 20 most polluted cities in the world.
      Please, explain how *that* is ‘green’.
      Also explain why *every* person I know that says they’re ‘green’ drives a large automatic car or SUV, lives in a 3000sqft house and eats out every day.
      “Green campaign.”
      Hahahahahaha.

  7. Here’s what this asshat “journalist” (and so many like him) flat out doesn’t get:

    You CHOOSE to invest (or not) in a company. Part of that choice should be based on your opinion of the leadership and how they’re running the company. If at some pout, you no longer feel confident or no longer agree with said leadership, you can CHOOSE to SELL your holdings.

    All of that should be completely independent of the leadership and their decisions on how to best run the company.

    You buy/sell stock as an investment in the vision and leadership of a company in bringing the company’s products and services to market.

    If you don’t like how that’s being done, sell your stock and start your own company. Run it as you wish, and if people have faith in YIU, they might buy YOUR stock.

    At NO time should an investor (like Icahn) try to run the company. That’s what you “hired” the CEO to do when you bought the stock. Not doing the job as you’d like? “Fire” the CEO by selling the stock.

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