Dive Brief:
- Apple shareholders emphatically voted down a shareholder proposal looking to slash the tech giant’s diversity, equity and inclusion initiatives at its annual meeting Tuesday. Over 97% of shareholders voted against the proposal asking Apple to “cease DEI efforts,” according to a Feb. 25 securities filing.
- The shareholder proposal was submitted by conservative think tank the National Center for Public Policy Research, which also submitted a similar proposal to the board of Costco. This proposal was shot down by 98% of the big box store’s shareholders at its board meeting last month.
- Apple’s management advised shareholders to vote against the anti-DEI proposal in the company’s annual proxy materials. The company said at the time that the proposal “inappropriately attempts to restrict Apple’s ability to manage its own ordinary business operations, people and teams, and business strategies.”
Dive Insight:
The overwhelming rejection of NCPPR’s anti-DEI proposals at Apple and Costco come as public and private companies alike have rolled back or altered diversity, equity and inclusion practices to comply with executive orders from President Donald Trump. After reversing a broad range of federal DEI policies on his first day in office, Trump ordered federal agencies to investigate private sector practices as well.
According to Apple’s Tuesday submission to the Securities and Exchange Commission, over 8.84 billion shareholders opposed the proposal, with just 2.1 million shareholders in support. Around 87.8 million shareholders abstained.
“The board at Apple and its investors have today made it clear that the company’s DEI programs are valuable for its staff and the business,” Kohinoor Choudhury, DEI campaign manager for responsible investing nonprofit ShareAction, said in an emailed statement Tuesday.
NCPPR’s proposal was short, requesting that Apple stop its DEI efforts. The think tank cited the Supreme Court’s decision striking down race-conscious admissions in higher education, as well as subsequent lawsuits that companies have faced over their DEI programs as a reason the tech giant should abandon its own policies.
The think tank’s supporting statement in the proxy materials also cited the wave of program rollbacks that followed last summer, including Tractor Supply, Lowes, Ford and the maker of Jack Daniel’s.
Trump’s executive order set off a number of announced policy changes, as companies look to make sure their DEI programs comply. A number of major banks have adjusted their filing language on such efforts, and companies including Meta, Target, McDonald’s and more, have rolled back DEI programs.
Choudhury said the rejection of the anti-DEI proposal at Apple “makes good business sense,” and DEI policies “help businesses attract and keep talent and encourage innovation.”
“We hope to see shareholders continue to step up [at annual board meetings] and use their influence to uphold responsible investment standards on critical issues such as tackling workplace inequalities,” Choudhury noted in her statement.
Costco’s management similarly advised its shareholders to reject NCPPR’s proposal, and said in its proxy materials that “it is the proponent and others that are responsible for inflicting burdens on companies with their challenges to longstanding diversity programs.”
While an increasing number of ESG-related shareholder proposals have reached a vote in recent years, the 2024 proxy season was the first time that an increase in anti-ESG proposal filings was responsible for the overall rise, according to Morningstar Sustainalytics. However the increase in filings has not corresponded with an increase in shareholder support for such measures, according to The Conference Board.
