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After sending a letter to Tim Cook in October urging him to increase Apple’s buyback plan to $150 billion, billionaire investor Carl Icahn today announced he will soon issue a precatory proposal to call for a shareholder vote on an larger buyback. He won’t, however, be pushing for the $150 billion buyback he originally proposed:
A precatory proposal is essentially a formal request asking Apple to hold the vote, but it means Apple executives wouldn’t actually have to implement the buyback even if the majority of shareholders approved it.
Icahn has been proposing a larger buyback from Apple of around $150 billion since first announcing back in August that he had taken “a large position” in the company. His “large position” was later revealed to be somewhere in the neighborhood of $2.5B and he’s several times met with CEO Tim Cook to discuss his proposal.
Icahn previously said executing the buyback immediately would result in “further stock appreciation of 140% for the shareholders who choose not to sell into the proposed tender offer.” He also agreed to withhold his shares and not participate in the buyback to “invalidate any possible criticism” regarding the long term benefits of the proposal.
Apple hasn’t issued a public response specifically regarding Icahn’s recent proposals, but Cook hinted at its Q4 earnings call that it’s committed to its current program. He also noted that Apple had doubled its capital return program to $100 billion and returned $36 billion to shareholders. Today, a spokesperson confirmed Apple received the precatory proposal and echoed Cook’s comments in a comment to TIME:
