Apple touts its commitment to diversity, but its shareholders dont seem to care all that much about it.
On Tuesday, Apple investors overwhelmingly rejected a proposal that would have urged the company to ramp up its efforts to hire African-Americans, Latinos and other people of color for its board of directors and senior management positions. As is the case at many tech companies, members of such groups have been underrepresented at Apple compared with the general population.
The vote marked the second year in a row shareholders have rejected the proposal, which called for Apple to have an accelerated recruitment policy to diversity its leadership ranks. Because it received less than 6 percent of shareholder votes this year, Apple can block it from appearing on its proxy ballot next year, supporters noted.
Apple successfully duped investors and the public into believing that diversity is not something that should be a priority, said Tony Maldonado, the Apple investor who submitted the proposal. As a shareholder, Im disappointed because I know that Apples shocking lack of diversity leads to a weaker return on my investment.
Added Pat Tomaino, an associate director at Zevin Asset Management, which co-sponsored the proposal: Were at a critical juncture in the life of Apple where it needs to pivot from the iPhone and the Mac to captivate consumers again. How can Apple be sure it knows its customers well enough to build the smartest web services and AI assistants when its executive ranks still dont reflect the diversity of key markets?
Only 4.91 percent of shares were voted in favor of the diversity proposal, according to Zevin and Maldonado. Investors representing some 95.09 percent of Apple shares voted against it.
Apple representatives did not immediately respond to an emailed request for comment. But in the proxy statement the company sent to investors in January, it urged shareholders to reject the proposal, arguing that it was already taking significant steps to diversity its workforce and help train women and minority workers for jobs in tech. It also argued that it already releases detailed information about the diversity of its workforce.
The accelerated recruiting policy called for by this proposal is not necessary or appropriate because we have already demonstrated our commitment to a holistic view of inclusion and diversity, the company said in its proxy statement.
It also noted that shareholders had rejected the same proposal last year, but argued that showed investors were satisfied with its efforts.
We believe that the low level of support for this proposal last year reflects the positive recognition by our shareholders of Apples significant commitment to inclusion and diversity, the company said.
Shareholders may have had different motives for rejecting the proposal. With Apple shares trading near an all-time high, following confidence-building investments from Warren Buffett earlier this month, they may be simply trying to avoid rocking the boat.
Apples latest diversity report, which includes data current through the end of July, showed that only three of its 107 executives and senior managers were African-American, just two were Hispanic and none were of Native American ancestry. Overall, 9.2 percent of Apple employees were black, 12.3 percent were Hispanic and 0.35 percent were Native American.
The companys workforce was more diverse than it had been a year earlier, if only modestly. At the beginning of August 2015, blacks made up 8.7 percent of Apple employees, Hispanics 11.8 percent and Native Americans some 0.37 percent.
But if you exclude sales workers, which comprise some 28 percent of Apples employee base and primarily staff the companys retail stores, the iPhone makers diversity looks even worse. Among non-sales workers, blacks comprised just 7.3 percent of Apples workforce in July, Hispanics only 10 percent and Native Americans some 0.33 percent.