Mercury News, April 28, 2009 article

Beginning next year, the company will allow investors to have an annual advisory vote on its executive pay packages, Apple said Monday in a statement.

Apple had urged shareholders to vote against "say on pay" at its annual meeting in February. It argued that Congress is likely to impose a "say on pay" policy for all public companies and that Apple should wait to implement those new rules.

But Monday the company promised to allow investors an advisory vote on executive pay no matter what Congress does.

The decision followed an inquiry by the Mercury News last week into how Apple counted shareholder votes on the "say on pay" proposal.

Apple reported at its annual meeting and in its quarterly report filed last week that shareholders had voted down the proposal. But vote tallies released by Apple in its quarterly report showed that 52 percent of shareholders who took a stand on the measure supported "say on pay." That was a higher portion of the vote than "say on pay" got in 2008, when Apple reported that the measure passed.

The Mercury News reported the discrepancy on its SiliconBeat.com blog Friday.

In the statement, Apple acknowledged that it had miscalculated shareholder votes on the "say on pay" and other investor-backed proposals. Due to "human error," the company said it counted abstentions as "no" votes, and thus mistakenly reported the measure lost.

"Say on pay'' had gained the support of investors owning large numbers of shares at each of Apple's last three annual meetings. But until Monday, the company had generally declined to comment on the votes.

Giving shareholders a vote on executive compensation matters has been picking up steam nationwide in response to the massive growth in executive pay over the past 20 years and a number enormous pay packages at particular public companies.

At Apple, support for "say on pay'' gained momentum in the wake of the company's options scandal, in which the company admitted to backdating thousands of options grants earlier this decade.

Contact Troy Wolverton at twolverton@mercurynews.com or 408-920-5021.

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