Late last week news broke that an Apple shareholder, R. Andre Klein, had filed suit against several senior officers of Apple. We've embedded the filing below so you can have a read through it should you wish. Because this is a fairly complex filing I've taken the time to read through it. What I'll offer you here is a simple explanation of the filing along with my opinion in the matter.
Most of the document is filled with a presentation of evidence that Apple's senior management, including the late Steve Jobs, along with directors of the company, had crafted illegal anti-poaching agreements between Apple and many other Silicon Valley companies. The evidence looks pretty compelling that these deals were in place. Did they know what they were doing was illegal? I don't know. Perhaps. Ed Colligan from Palm did appear to suggest (to Steve Jobs) that it might be illegal and wanted no part in it.
Anyway, the point is that Apple senior executives and directors (along with a huge list of other companies) probably had colluded to not actively recruit from each other's companies.
The shareholder suit, led by Klein and the law firm representing him, is out to directly sue these Apple executives and directors. The suit alleges that Apple's executives and directors lied in proxy filings because they did not disclose details about the DOJ investigation into these anti-poaching practices. It alleges that any reasonable shareholder, had they known about these material facts, would have considered voting differently in a shareholder vote (for example to elect certain directors or not).
But what about the money? The suit is vague here, but it suggests that Apple's executives and directors caused the company to lose millions of dollars because of lost innovation (because job hopping is good for innovation) and wasted time and money that the company had to invest in dealing with the DOJ investigation.
All of this, the plaintiff alleges, is the fault of Steve Jobs, Tim Cook, Bill Campbell, Mickey Drexler, Arthur Levinson, and a few others. Allegedly, they should he held accountable for the financial effect this had on shareholders.
My opinion? This whole thing is idiotic. It's beyond stupid. I'd like someone to sue this guy, and his law firm, for wasting the company's resources.
First of all, directors and senior officers are usually covered by D&O insurance provided by the corporation. So in suing these people, even if we shareholders were to win, we'd be paying out of our own pockets. The only possible winner here is the law firm.
Secondly, even if the executives and directors did pay a settlement it would be puny in comparison to the value of Apple shares. Let's say shareholders were to successfully sue for a monster settlement to a billion dollars, or 16 cents per share. If you happened to be wealthy enough to own one million dollars of Apple stock you'd get a life-changing sum of $1,700 as your portion of a billion dollar settlement.
And for all this, we shareholders need to now deal with the additional wasted efforts the executive team needs to invest in this extra lawsuit.
Here's what would be a lot more useful: Just demand that the corporation train its executive team and directors on how to develop law-abiding hiring practises. Have the company create appropriate new bylaws to deal with the problem.
And move on.
Let shareholders decide for themselves whether they want to stay invested in the company or not.
Here's the detailed filing:
We may earn a commission for purchases using our links. Learn more.
Report: 6 months in, Apple TV+ and Disney+ are both flying high
Apple TV+ and Disney+ are two of the newcomers to the streaming market but six months in they're doing great, according to a new report.
Apple retains top spot in the wearables market in Q1
A new report suggests Apple shipped over 21 million wearables units in Q1, giving it a 29.3% market share.
Judge dismisses lawsuit against Apple TV+ show 'Servant'
A lawsuit filed against Apple and M. Night Shyamalan over Apple TV+ show 'Servant' has been dismissed.
With a quality keyboard case, your iPad Pro is practically a laptop
You can make your 10.5-inch iPad Pro work like a MacBook for you with the right keyboard case.