Original URL: http://www.theregister.co.uk/2013/02/12/apple_ceo_tim_cook_speaks_at_goldman_sachs/

Apple CEO Cook: 'Bizarre' shareholder lawsuit a 'silly sideshow'

Visiting an Apple retail store is 'like Prozac'

By Rik Myslewski

Posted in Business, 12th February 2013 19:53 GMT

Apple CEO Tim Cook has a low opinion of a lawsuit filed by Greenlight Capital hedge-fund honcho David Einhorn that seeks to prevent Apple from amending its charter to allow the issuance of preferred stock without the approval of its shareholders.

"I find it bizarre we find ourselves being sued for doing something that's good for shareholders," Cook said during his Tuesday presentation at the Goldman Sachs Technology and Internet conference. "It's a silly sideshow, honestly."

The case against Apple was filed by David Einhorn, whom Reuters identifies as "a well-known short-seller and Apple gadget fan."

The issue at the core of the suit is, of course, money – namely Apple's Brobdingnagian pile o' cash, which totalled over $137bn as of the company's most recent quarterly financial report.

Einhorn wants Apple to issue perpetual preferred shares to existing shareholders, a move that would return dividends to those investors, giving them a bigger chunk of that $137bn-plus hoard. Cook called that suggestion "creative," and said "We are going to thoroughly evaluate their proposal."

When filing his suit, Einhorn accused Apple of having a "depression era" mentality, likening the company to his grandmother, who saved every penny in case the economy tanked yet again. Speaking at the Goldman Sachs conference, Cook took umbrage at that characterization.

Apple doesn't have a depression-era mentality. Apple makes bold and ambitious bets on product and we're conservative financially. ... We're investing in retail around the world, in product innovation, in new product, in supply chain. We're acquiring some companies. ... To add to that fact, we're returning $45 billion to shareholders through a combination of dividends and buybacks. I don't know how a mentality with a depression-era mindset would have done all those things.

Cook says that he won't campaign for the charter amendment that Apple is proposing, dubbed Proposition 2. "You're not gonna see us do campaign mailing, he said. "You're not gonna see a "Yes on 2" in my front yard. This is a waste of shareholder money, it's a distraction, and it's not a seminal issue for Apple."

Cook didn't spend all of his Goldman Sachs talk decrying Einhorn's suit. He also took time to lay into OLED displays, such as the 4.8-inch AMOLED display that Samsung uses in its popular Galaxy S III smartphone. "Some people use displays, the color saturation is awful," he said. "The Retina display is twice as bright as an OLED display."

He also revealed that there are times in his hectic career when he needs a pick-me-up – perhaps he's depressed by the fact that 2012 saw him sink from being the highest paid CEO in the US to making a meager $4.7m in total compensation.

When Cook has the blues, he medicates himself by visiting an Apple retail store. "It's like Prozac," he said. ®

Bootnote

There's another wrinkle to the distribution of Apple's cash pile to its shareholders: about 70 per cent of that lucre is held offshore, and repatriating it to the US would cause a substantial chunk o' change to land in the coffers of the Internal Revenue Service. That is, unless Apple – along with other companies such as Google and Microsoft that are in a similar position – can get Congress to declare another "tax holiday", a bennie for which they have been arguing since at least mid-2011.