Apple: Corporate Governance and Stock Buyback

Name: Apple: Corporate Governance and Stock Buyback (English version)
SKU: 9B14M165

Won-Yong Oh; Seoyeon Park

Product #:9B14M165

Supplier:Ivey/Haskayne

Discipline:General Management

Setting:United States, 2014

Details:Case (PDF) • 11 pages • 2015-03-27

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An activist shareholder who invested a significant amount in Apple’s stock proposed a share repurchase program. If this proposal were approved at the annual shareholder’s meeting, Apple would be in a position to buy back a significant number of its shares on the stock market, which would drive up the stock price. However, the executives and board of directors opposed the proposal and recommended that the shareholders vote against it. Apple’s subsequent annual meeting of shareholders was scheduled to be held on Friday, February 28, 2014. Shareholders could either vote for the proposal or follow the recommendation of Apple’s board.

Learning Objectives

By understanding the following objectives, students can think about how to effectively design corporate governance structures in order to maximize shareholders’ wealth:

The fundamental structure of a modern corporation (i.e., separation of ownership and control).
Governance mechanisms, including effective monitoring, incentive alignment and resource provisions.
The monitoring roles played by large shareholders (i.e., blockholders) and the board of directors.
Incentive alignment by executive equity ownership and compensation.
The role of shareholder activism in corporate governance.
The conflicting interests in governance entities.

Apple: Corporate Governance and Stock Buyback

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Learning Objectives