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View Full Version : Tim Cook angrily rejects political proposal asking for profits-first policies



iggibar
02-28-2014, 10:42 PM
Tim Cook Angrily Rejects Political Proposal Asking for Profits-First Policies - Mac Rumors (http://www.macrumors.com/2014/02/28/tim-cook-angrily-rejects-ncppr-proposal/)

Stick it to 'em Tim!

"At today's annual meeting of Apple shareholders, Apple CEO Tim Cook informed investors that are primarily concerned with making reasonable economic returns that their money is no longer welcome."
Way to lay the smackdown!

MacInWin
02-28-2014, 11:52 PM
On the other hand, he has a responsibility to the people who loan the company money (stockholders) to do the things he wants to do. That's how the public market works. Doing a "smackdown" on his investors is NOT generally a good idea. Explaining to the investors why he is using their money the way he is using their money is a better approach, IMHO. Then any investor who is unhappy about his decisions can vote with their money.

Exodist
03-01-2014, 02:17 AM
Its not like Apple is going belly up.. They are turning a profit more now then ever. Sounds like just had some shareholders wanting to squeeze another penny instead of wanting to let Tim future proof the company with more investments and research & development. His job is to make sure the company continues to run day after day and year after year while still making a profit. Most stockholders would assume to invest today, get their profit tomorrow and pull out. Letting the company fall to the ground while they move onto the next big investment.

bobtomay
03-01-2014, 06:01 AM
And while we're at it, lets just go back to the days when no such thing as a middle class existed either. I'm just about as conservative as they come politically, but even I would not consider going back to the place the NCPPR would have us go. You don't have to be a liberal to realize that group has no soul.

vansmith
03-01-2014, 06:23 AM
I don't actually believe that Apple doesn't put profits first (they're a business after all with a huge profit margin) but I do believe that they do put other things first before massive profits some of the time. Then again, at least they believe in climate change, something that "think tank" decided was worthy of quotation marks as if it wasn't real. I'm going to warn you - if you value your brain, tread lightly.

The first line of that press release gets me:
At today's annual meeting of Apple shareholders in Cupertino, California, Apple CEO Tim Cook informed investors that are primarily concerned with making reasonable economic returns that their money is no longer welcome.Evidently, this person doesn't realize that Apple very much is concerned with making returns on their investments and distribution. How could you make that conclusion about a company that sells goods for a pretty penny?

My favourite part though is this:
The National Center's shareholder resolution noted that "[s]ome trade associations and business organizations have expanded beyond the promotion of traditional business goals and are lobbying business executives to pursue objectives with primarily social benefits. This may affect Company profitability and shareholder value."Oh no, wouldn't want to care about people now would we? This statement is nothing short of violent - pursuing profits to the discrediting of work done to help social causes.

Lifeisabeach
03-01-2014, 09:13 AM
IMO, I think Apple really needs to buy back all of their stock and go private. Hungry wolves have their eyes on Apple and if like-minded people do manage to get a majority share of the company in time, they will put in place whoever they want so they can sacrifice the company's core values and squeeze everything they can out of it. This is a sad trend, but vulture capitalism is a big problem today. Just look at what happened to Hostess.

@ MacInWin

I think Apple also has the right to tell shareholders that they don't want their money, or they should have the right anyway in principle. Besides, judging from a vote on the matter, 97+% of the shareholders agree with Tim Cook. It's probably worth mentioning that hardly any of these people actually loaned money to Apple. That money was loaned out many years ago by others, and the stock is just traded as a commodity these days. If I understand this all correctly, anyway.

bobtomay
03-01-2014, 09:25 AM
... That money was loaned out many years ago by others, and the stock is just traded as a commodity these days. If I understand this all correctly, anyway.

10-4

Apple has never seen a penny from the pocket of that group of "investors".

harryb2448
03-01-2014, 04:50 PM
As a shareholder I agree with Cook 100%. Put some money in during the 'dark days' back in 1999 and any return has to be worth the risk.

Exodist
03-01-2014, 07:51 PM
I don't actually believe that Apple doesn't put profits first ...

Someone would be mad to think otherwise. But making sure company continues to turn a profit for years to come -vs- turning a huge profit for a year then bottom up is more important. But some people just want to see it all burn I guess...

osxx
03-01-2014, 08:12 PM
IMO, I think Apple really needs to buy back all of their stock and go private. Hungry wolves have their eyes on Apple and if like-minded people do manage to get a majority share of the company in time, they will put in place whoever they want so they can sacrifice the company's core values and squeeze everything they can out of it. This is a sad trend, but vulture capitalism is a big problem today. Just look at what happened to Hostess.

@ MacInWin

I think Apple also has the right to tell shareholders that they don't want their money, or they should have the right anyway in principle. Besides, judging from a vote on the matter, 97+% of the shareholders agree with Tim Cook. It's probably worth mentioning that hardly any of these people actually loaned money to Apple. That money was loaned out many years ago by others, and the stock is just traded as a commodity these days. If I understand this all correctly, anyway.
Well said and I agree.

XJ-linux
03-01-2014, 09:32 PM
"Apple CEO Gets Upset When Asked Investment Question by Investor; Turns it into Populist Gold with Rant"

CEOs don't like to get called on stuff at all, let alone publicly. The investor got what you get in these situations. I don't buy what Cook is spinning as anything more than a good CEO doing his job and capitalizing on a situation. As far as the environment and social issues... when they quit using pollution central and slave labor to drive their product, I'll take their environmental and social consciousness more seriously. Whatever.

chas_m
03-02-2014, 08:42 AM
From what I've read of this thread, did anyone actually catch the *context* of his *actual remarks* or did we all stop reading at the headline/lead?

He didn't say that Apple wasn't interested in making a profit, nor did he say that investors who are interested in profit should go elsewhere. What he *did actually say* is that not **everything** Apple does is concerned with return on investment above all other considerations -- and brought up the example of Apple making sure that their devices work well for blind and other disabled persons. As for the "go elsewhere" quote, he again didn't actually say that, its a paraphrase. What he actually said was that sometimes Apple invests in things not because of guaranteed ROI but because they were "just and right." His actual quote: "if you want me to do things only for ROI reasons, you should get out of this stock."

The reason he said that is because the idiot questioner (unsurprisingly from a conservative dumb tank) asked to him pledge -- on the spot -- that Apple would from now on filter everything they do by ROI. Said idiot also had his proposal put on the ballot for shareholders to vote on -- and he didn't manage to get even three percent of the vote. His other question to Cook made it plain he was a climate-change-denier nutcase with an agenda against Al Gore. Again, Cook handed him his rear end and told him to SD&STFU.

ENTIRELY appropriate answers on both counts, IMO.

Lifeisabeach
03-02-2014, 11:26 AM
Chas, I know exactly what was said, and the context. I'm pretty sure everyone else in the discussion does as well. What I'm confused over is why you think we don't?

chas_m
03-02-2014, 10:10 PM
Sorry, I was irritated at the poor quality of the reporting I'd seen on the event in question, and that was reflected in the thread title and some of the things said in earlier posts. I meant only to clarify what actually happened as opposed to what most of the media summarized. My apologies to any members here that I offended with my over-caffeinated tone.

RavingMac
03-03-2014, 11:53 AM
I think something that is often forgotten is a corporation is not by default a profit producing engine. A corporation is a legal construct whereby people band together and pool their resources, talents and labor to accomplish a common vision. That vision may only be to maximize ROI, but it doesn't have to be. Witness the many non-profit corporations.

Apple has profit as a major part of its vision, but it isn't the sole goal, and I believe that was the message Tim Cook was trying to get accross.

EDIT: I wouldn't want to be treated by an MD whose only goal was maximum ROI. The unfortunate truth is most of us have to labor to eat, pay the bills and keep a roof over our heads. If we are truly fortunate we can achieve those ends through laboring at something we find interesting and fulfilling.
And, I believe we all benefit when we are served by people who would do what they do if they were rich enough to not have to work.

vansmith
03-03-2014, 12:19 PM
Witness the many non-profit corporations.I think you just touched on something important - corporations are commonly divided into profit/non-profit because profit generation is the main determiner of what constitutes the goals for a corporation. In other words, profit is inextricably linked to what characterizes a corporation. That doesn't really have much to do with anything here other than that Apple very much falls into the "for profit" sector.


Apple has profit as a major part of its vision, but it isn't the sole goal, and I believe that was the message Tim Cook was trying to get accross.Profit certainly is the sole goal though. While the company pursues other ventures, they're all done in the pursuit of generating products to sell for a profit. For example, building a new factory that is environmentally "green" is done so that the company grows and makes more money. Otherwise, why would you build a new factory? For example, Apple's Maiden data center may be very "green" (see here (http://arstechnica.com/apple/2014/03/at-apple-shareholders-meeting-tim-cook-tells-off-climate-change-deniers/)) but it was designed and built to help drive revenue growth and not as some exhibition for how Apple is environmentally conscious to the exclusion of financial growth. In other words, all parts of the corporate vision ultimately feed into the fiscal one.

RavingMac
03-03-2014, 12:27 PM
I have to disagree. If profit was the sole goal of Apple Corp, and thus the shared vision of the employees who implement that vision, it wouldn't be the marvelous profit engine it is.

Apple succeeds so wonderfully at making money because it was founded by, and continues to be staffed by, people whose only interest in life isn't money.

vansmith
03-03-2014, 01:20 PM
If profit was the sole goal of Apple Corp [...] it wouldn't be the marvelous profit engine it is.That's not how business works though ;). Businesses are profitable because they want to be so, not as the consequence of decisions that are made exclusive of choices designed to increase profit.


Apple succeeds so wonderfully at making money because it was founded by, and continues to be staffed by, people whose only interest in life isn't money.Some people might be invested (excuse the word choice) in the company for non-financial reasons but the company is designed around the growth of revenue. If it wasn't, the profit margin wouldn't be considerably larger than other consumer electronic companies. For reference: Apple's profit margin is 21.28% (http://ca.finance.yahoo.com/q/ks?s=AAPL), Samsung's is 13.32% (http://ca.finance.yahoo.com/q/ks?s=005930.KS), Sony's is 1.38% (http://ca.finance.yahoo.com/q/ks?s=SNE) and HP's is 4.73% (http://ca.finance.yahoo.com/q/ks?s=HPQ) (to name a few). The company is run by people who, at the end of the day, do what they do as business people to make money. Are they driven by some passion? Sure but their role as executives at a business subordinate passion to profit (otherwise, Apple wouldn't be successful).

Lifeisabeach
03-03-2014, 02:10 PM
That's not how business works though ;). Businesses are profitable because they want to be so, not as the consequence of decisions that are made exclusive of choices designed to increase profit.

Businesses are (or rather, need to be) profitable because it's impossible to run at a loss indefinitely. Even non-profits / not-for-profits have to actually turn a profit regularly to stay operational. The difference in those is that all profits go back into the company, not investors.

RavingMac
03-03-2014, 03:10 PM
We may have to agree to disagree, but I think you are misreading what I am saying. I never said profit was not a motive, or even the major motive, it just isn't the only motive. None of us as individuals are totally one-sided, why would we expect that of groups.

I'll end with this question, do you truly believe Elon Musk is solely motivated by ROI?

vansmith
03-03-2014, 03:34 PM
Businesses are (or rather, need to be) profitable because it's impossible to run at a loss indefinitely. Even non-profits / not-for-profits have to actually turn a profit regularly to stay operational. The difference in those is that all profits go back into the company, not investors.Absolutely. And, as you mentioned, for profit corporations seek profit for the sake of profit, non-profit seek it for the purposes of fiscal solvency. Apple is very much the former in that it seeks profit for the sake of profit.


We may have to agree to disagree, but I think you are misreading what I am saying. I never said profit was not a motive, or even the major motive, it just isn't the only motive. None of us as individuals are totally one-sided, why would we expect that of groups.I know you weren't saying that and I agree. Apple does a lot of work that doesn't have direct connections to profit production. That said (and this might be where we disagree), I think that everything Apple does is at a minimum indirectly driven by profit. Green initiatives? It buys them publicity for the sake of increasing positive corporate exposure.

If something is made public by a corporation, I have a hard time believing that the public disclosure wasn't strategic. This happens for all corporations and happens in really common ways. Take for example same-sex marriage (see here (http://www.businessinsider.com/major-brands-that-support-gay-marriage-photos-2013-3?op=1) for a list for example): many that supported it showed their support through advertisements, perfect symbolism for how support for causes get tied back to the promotion of a product.


I'll end with this question, do you truly believe Elon Musk is solely motivated by ROI?

At least partially. He wouldn't have sold off PayPal for ridiculous sums of money nor would he have made Tesla public if he wasn't. He also wouldn't be selling Tesla cars with a 32% profit margin (source (http://www.thestreet.com/story/12471323/1/will-this-upgrade-help-tesla-tsla-today.html)). Does he do some interesting stuff that isn't motivated by profit? Sure but he does a substantial amount of for-profit work.

RavingMac
03-03-2014, 04:43 PM
I don't think we're that far apart.

Bottomline is what makes people (especially those who run corporations) get up in the morning. There are those who eat, sleep and drink dollars. And there are those to whom dollars are a counter and resource in the grand game.

Profit and success gives them the credential and resource to do that which truly stirs their juices. These are the sort that push the envelope of what is possible, and draw us into the future with their dreams.
Not those to whom dollars are an end unto themselves.

I am hopeful, based on Tim Cook's response, that he is at least partly of the first group, rather than solidly in the second (which I had initially feared).
If so, he may have the vision to keep Apple on track rather than sliding into the mediocrity of so many of our corporations.

vansmith
03-04-2014, 10:47 AM
If so, he may have the vision to keep Apple on track rather than sliding into the mediocrity of so many of our corporations.It would certainly seem that he has adopted the Apple ethos which I think should allay any fears that the company is going to change drastically for the worse. While I don't think their vision is entirely unique (like any other company, they certainly adapt the practices of others to some extent), they are in a relatively small club when it comes to being environmentally conscious (and this report would suggest that the company is going to stand by this).

west1
03-07-2014, 09:02 PM
Funny, i have always learned, in economics in college, and as an investor, that a publicly owned corporation's first responsibility is to make a profit!
Everything else comes in down the totem pole!

RavingMac
03-07-2014, 11:42 PM
Funny, i have always learned, in economics in college, and as an investor, that a publicly owned corporation's first responsibility is to make a profit!
Everything else comes in down the totem pole!

Don't think anyone has said anything different. Corporations that aren't profitable don't endure. But, corporations whose ONLY vision is the almighty dollar generally don't end up as profitable as those who desire and strive to excel beyond the strict bottom line.

Honestly, I'm getting a bit tired of rehashing this so I probably ought to just let it rest. But, I will give one more example, professional sports. Professional football is a HUGELY profitable business, and you can be sure that those who manage it strive to maximize profits.

Still, many if not most of those who manage and execute the business of football, also love the game of football, and desire to excel in it, as well as make a lot of money along the way. Teams, coaches, players, managers want to win games and championships because that is a path to great profit. But, they also want to win because they are human beings with multi-faceted outlooks on life like all of us.
People as individuals rarely make every decision for coldly logical reasons. Anyone who has worked long with people finds that groups of people together don't have that much better track record. And, for better or for worse corporations are groups of people run by individuals and groups of people, and decisions that affect the bottom line will be made by those same people the way they always have been.
Some will be well reasoned and calculated decisions in accordance with best business practices. Many more won't.