‘Company Has More Cash Than It Needs,’ Says Apple CEO Tim Cook

Apple’s directors dodged the question of what the company is to do with $98 billion in cash and investments that’s waiting to be used.

The company’s CEO Tim Cook didn’t answer the question how the company would spent extra money. Photo: AdMove2010/Flickr

Apple CEO Tim Cook reported that the world’s most valuable company has more money than it needs. His next challenge is to find out whether Apple should dip into its $98 billion bank account to pay shareholders a dividend this year, says ABC News.

“We’ve been thinking about cash very deeply,” Cook said, echoing previous comments. “Frankly speaking, it’s more than we need to run the company.”

At its annual shareholders meeting in Cupertino, Apple finally accepted demands from U.S. pension fund Calpers and other major investors that required unopposed directors to secure a majority-share vote before getting elected to the board, writes Reuters.

That move came after shareholders last year voted for a similar proposal – despite Apple’s recommendation they reject it.

Apple General Counsel Bruce Sewell said the company had previously resisted the change because it creates legal complications. “But this is Apple and we don’t let complexity get in our way,” he said.

Speaking to shareholders and executives, Calpers portfolio manager Anne Simpson said: “We think Apple deserves the best, we want to keep Apple fresh.”

“Democracy is a wonderful thing. Despite its complexity and challenges, as Churchill said, it may be the worst of all systems until you consider the alternatives.”

Apple reported “directors who do not manage to secure a majority vote will voluntarily resign their positions.”

The meeting was held after Apple touched a lifetime high of $526.29, cementing its ranking as the most valuable U.S. company with over $450 billion in market capitalization.

Some analysts say the stock may even scale new heights next month, when the company is expected to unveil a new version of its best-selling iPad.

An investor asked whether Apple would consider using its cash to buy Greece, which faces a debt crisis. “We’ve looked into many things,” but not that, Cook responded.

Meanwhile, The International Business Times counted that Apple could buy Walt Disney, which has a market capitalization of $74.3 billion, keep the movie and TV production companies and divest theme parks like Disneyland and Disneyworld.

Disney CEO Robert Iger is Apple’s newest director. Late Apple head Steve Jobs was Disney’s largest individual shareholder. His estate still owns the shares.

So, if Apple wants to launch a major service through Apple TV, it might want more content. One more profitable Apple’s purchase could become Sony Studios, the former Columbia Pictures, whose entire value is $21.3 billion.

One more option for the company is to buy a chipmaker like ARM Holdings, the chip design company that is responsible for the success of the iPod, iPhone and iPad. ARM’s market capitalization is around $12.3 billion.

ARM would bring intellectual property company and would help Apple to eclipse its rivals, such as Google and Microsoft, which are entering the smartphone and tablet sector.

Or maybe the best option for Apple is to purchase Foxconn?  Hon Hai Precision Industries is Taiwanese company and Apple’s principal contract manufacturer, with as many as 700,000 people working in China.

Apple has already faced problems with Foxconn. It even asked the Fair Labor Association, an industry group, to probe Foxconn’s working conditions.

However, at the meeting no shareholder spoke of allegations of labor abuse in China but some noted afterward they wanted Apple to improve the treatment of workers in its supply chain.

“With all that money, maybe we could minimize the exploitation of some of the labor 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 retired airforce pilot Eric Schwalm as he left the meeting.

Share this article

We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language, all capital letters or appear to be spam, and we review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Coinspeaker Ltd.