Apple’s Biggest Problem? Too Much Cash, Says CEO
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Technology giant Apple Inc currently has more money than it would need to run the company, said its CEO Tim Cook during an annual shareholders’ meeting in Cupertino, California on Thursday.
The company has long had a history of stockpiling its cash profits, claimed the Associated Press on Thursday, as former CEO and co-founder Steve Jobs had believed in saving as much as money as possible due to the deep financial problems that Apple had faced during the mid-1990s.
Technology giant Apple Inc currently has more money than it would need to run the company, said its CEO Tim Cook during an annual shareholders’ meeting in Cupertino, California on Thursday.
The company has long had a history of stockpiling its cash profits, claimed the Associated Press on Thursday, as former CEO and co-founder Steve Jobs had believed in saving as much as money as possible due to the deep financial problems that Apple had faced during the mid-1990s.
Back then, the company was in such a bad shape that it had little choice but to turn to rival Microsoft Corp for a $150 million loan just to stay afloat.
But today, not only is Apple the world’s most valuable company, but the tech giant also has nearly $98 billion in its cash reserves.
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“The board and management team are thinking about this (the cash) very deeply,” said Cook to investors at the meeting.
[quote]”Frankly speaking, it’s more than we need to run the company.”[/quote]Since succeeding Jobs as Apple’s CEO last August, Cook has been constantly dogged with questions from investors on whether he would change the company’s policy on cash.
On Thursday, Cook promised shareholders that the entire board at Apple were nearing a decision, particularly with many investors calling for a regular dividend payment or share buyback for investors. Apple last paid a dividend in 1995.
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Other analysts have also suggested that the company buy a film or television production business to help support its ambitions to break into the television industry. Critics on the other hand called for Apple to increase wages for its Chinese production workers.
“With all that money, maybe we could minimize the exploitation of some of the labour force. I’d kick in an extra dollar to buy an iPod or $5 to buy an iPad if it meant somebody somewhere down the road wasn’t being exploited,” said a shareholder to Reuters as he left the investor meeting.
A few protesters were also seen carrying signs outside the company’s headquarters, imploring the company to ensure that workers building its products in Chinese factories were paid more and treated humanely.
[quote]”Stop iSweatshop,” wrote one sign, while another stated: ‘iWant an ethical phone.”[/quote]The shareholders’ meeting though carried no mention of the situation in China, with the largest talking point being a motion to re-elect the board in the future. Apple has agreed to start electing its directors by majority votes rather than via a plurality.
