Greenlight Capital has proposed the company issue perpetual preferred stock and devote a small portion of its cash flow to paying a high-yield dividend on the new shares. The shareholder estimates that Apple's existing cash pile is worth some USD 145 per share, and its existing dividend payments and share repurchase programme do not reward investors enough, especially given the recent decline in share price.
Apple agreed to consider the preferred stock proposal after Greenfield issued a letter calling on shareholders to vote against a proposal at Apple's AGM. The proposed amendment to the corporate charter would eliminate Apple's ability to issue preferred shares, Greenfield claims. It also questioned Apple's bundling of the proposal with two other corporate governance issues, making it difficult for shareholders to vote separately on the issues.
Apple denied Greenfield's claims, saying passage of the proposal would not stop it from issuing preferred stock or implementing Greenfield's capital proposal. Apple said the changes would mean shareholders would have to approve any issue of shares.
