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 author of this ridiculous attack on Tim Cook has missed one salient point.

    It is physically impossible to magically increase the Rate On Investment when you have several Pirates screwing with the stock price almost daily.

  2. I suspect that Apple’s typical customer is far more likely to be concerned about issues like climate change, equality for all sexualities and accessibility for disabled people than, say Samsung’s. Apple’s image is extremely important for goodwill and to remain a market leader. Bad publicity, for example surrounding working conditions in Asia, or from groups like Greenpeace, does have an impact on sales. Apple could make more profit by making a bigger phone, a cheaper phone, or by ignoring the impact its devices have on the environment, or by forcing factory workers to work longer hours for less pay… but I’m glad they don’t and that’s why I am a loyal customer.

  3. Unfortunately, Tim didn’t mention that Apple’s accessibility API yielded additional technical advantages that have paid for themselves many times over. The Cocoa scripting API is built on the work that Apple did for accessibility.

    -jcr

  4. SJ built up a $150bn war chest to free Apple from ever worrying about was other anal-ists or stockholders believe.
    If you produce great products the share price takes care of itself. And Apple could produce a decades’ worth of crap without giving a rats-ass. Just look at Microsoft !

    SJ presumeably left his stock to his wife and therefore I think Cook is safe to discount all the useless mutterings from “off stage” for as long as he likes.

  5. Stock holders are becoming less the investors and more the dictators. If you don’t like what the company is doing then sell your shares and buy into one that does.. Here is another clue.. if your an investor.. how about researching the corporate culture of the company your are about to invest billions in and see if it lines up with your own!! If not .. then find one that does.. but now days its all about being a greedy bastard and killing the golden gooses.. I asks them.. WHY DID YOU BUY APPLE IF YOU DONT AGREE WITH THEIR PHILOSOPHIES AND CULTURE?? Probably only for the money… not for the products or the social responsibility that has always been a part of Apple.

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