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Apple shareholders overwhelmingly reject diversity proposal

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Apple headquarters Cupertino (stock)

Apple shareholders rejected a proposal yesterday that would have required the company to improve the diversity of its top ranks. This is the second year in a row that Apple shareholders have shot down the proposal, with just over 95 percent of the vote opposing it this time around — slightly more than last year.

The proposal, submitted by shareholders Tony Maldonado and Zevin Asset Management, asked Apple to “adopt an accelerated recruitment policy ... to increase the diversity of senior management and its board of directors." Maldonado and Zevin had argued that Apple’s upper ranks were responding too slowly to the company’s own diversity initiatives and that it would ultimately come back to bite them, be it through missing talent or new opportunities.

Though Maldonado didn’t expect the initiative to pass, he was looking to hit at least 6 percent of the vote this year, which would have allowed him to try again in 2018. He missed the target — and one reason why may be that Apple itself encouraged shareholders to reject the proposal.

“Apple basically duped the investors, to be quite honest,” Maldonado told The Verge in a phone call today. “They conned ’em to say, ‘Look, we're on top of it. Don’t worry about it. Everything’s fine.’ However, I believe that shareholders don’t have all information as to the background of the issue.”

Apple declined to comment for this article, but in its original statement on Maldonado’s proposal, the company essentially said that its existing diversity efforts were doing enough. “Our ongoing efforts to increase diversity are much broader than the ‘accelerated recruitment policy’ requested by this proposal,” Apple’s board wrote. It added that the company takes “a holistic view of inclusion and diversity” that extends to even app developers and suppliers.

But despite improvements to hiring, Apple’s overall diversity is still lacking. The company’s leadership is 82 percent white, and its senior leadership has historically been almost entirely white as well.

Maldonado also says there’s more he could have done to educate other shareholders on the proposal. “For some strange reason, I would say that shareholders have the belief that by accepting this proposal, the company would be forced to establish reverse discrimination policies,” he says. “We just have to probably expand on the campaign on educating all shareholders, including institution shareholders, that this is more beneficial and at the end of the long run it will help us to improve our bottom line.”

Because the proposal fell short of 6 percent of the vote this year, Apple has the ability to block future proposals that are similar to it for the next three years. Maldonado suspects there’ll be a way around it, possibly by being more specific about what a diversity initiative would entail — this current proposal left all the details up to Apple. He’s hoping to get the language worked out within the next couple months.

“It’s not over. It’s not down and out,” Maldonado says. “This is just the beginning of a long battle.”