Most investors might cringe at the idea of their firm going to war with the US government.
But these being Silicon Valley investors and this company being Apple, those rules may not apply.
“It’s fantastic,” said Kamelia Cohen, a 26-year-old pre-med student who recently bought Apple shares. Chuck Savadelis, a 65-year-old photographer who has owned Apple stock for years, said, “I don’t think of it as an investor” but as a US citizen. “I admire the company,” said Lynda Gousha, a business consultant from San Jose.
Added the Rev Jesse Jackson, an Apple stock owner for 15 years: “Where we stand in controversy is a measure of our character.”
Apple investors large and small, including Jackson, gathered on the morning of 26 February for the company’s annual shareholder meeting. Normally, the agenda at these types of gathering is pretty dry: sales in emerging markets, executive compensation and stock buybacks.
But this year is different. America’s largest company is 10 days into a public standoff with the US Justice Department over whether a court can force it to rewrite iPhone code to make it easier for the government to crack the passcode of San Bernardino gunman Syed Farook.
Apple’s lawyers argue the federal court order violates the firm’s free speech rights and would set a precedent that allows the government to ask any tech firm to reengineer its products for any investigation. The government argues Apple is required to help the execution of US law if it is technically possible, which, Apple acknowledges, it is in this case.
During a chat with investors inside a black auditorium on Apple’s campus, chief executive Tim Cook, dressed in jeans and a denim shirt, tried to make light of the tensions while defending his position.
“We are a staunch advocate for our customers’ privacy and personal safety, and we’ve been in the news a bit about that,” Cook said to applause and laughter. “We do these [things] because these are the right things to do. Being hard doesn’t scare us.”
Nor does it scare investors, who instead raised questions about Apple’s enterprise sales, greenhouse gas emissions and how to use Apple Music.
“There may be some business implications, short-term hopefully,” said Gousha, the San Jose business consultant. “I’m a long-term investor.”
Karina Dundurs, 60 years old, of San Jose said: “Just because it’s a business doesn’t mean it doesn’t have an obligation to be ethical.”
Addressing Cook from the audience, Jackson, the famed civil rights leader, compared Apple’s current struggle to fights against McCarthyism in the 1950s or blowback against the Federal Bureau of Investigation for tapping Martin Luther King’s phone.
“We want to appeal to you in this critical hour to not grow weary of well doing,” Jackson said. “You are a man of integrity and character and we applaud your leadership.
Of course, not all was hunky dory at Apple’s annual retreat.
Jackson also was on hand to push a shareholder resolution that would require the board to adopt an “accelerated recruitment policy” to increase diversity among senior management and board of directors.
Shareholders, with the recommendation of Apple’s board, voted that proposal down 94.9% to 5.1%, according to an early tally. Cook afterward said, “there’s much more work to do on diversity across the company. I can commit to you we are working very hard on it.”
One investor also asked about repeated reports that Apple is working on an electric car as it gobbles up staff from established automakers. Many view it as an expensive, if tantalizing, moonshot.
Cook compared the status of that project, which he has never publicly confirmed nor denied, to the day before Christmas when kids are looking at unopened gifts under the tree.
“It’s going to be Christmas Eve for a while,” Cook said.