Prominent advisory firm Institutional Shareholder Services Inc [ISS] told clients in a note on Sunday that Apple (AAPL) should reject a proposal from Carl Icahn to have the company buyback an additional $50 billion of its common stock. The iPhone maker has already announced plans to return $100 billion over the next two and a half years to its shareholders through a combination of buybacks and dividend payments.
“[The Apple board] has returned the bulk of its U.S.-generated cash to shareholders via aggressive stock buybacks and dividends payouts,” the ISS wrote on its note. “In light of these good-faith efforts and its past stewardship, the board’s latitude should not be constricted by a shareholder resolution that would micromanage the company’s capital allocation process.”
Apple spent $23 billion to repurchase shares in the FY 2013, but has not said how much it will spend buying back stock in the FY 2014.
Icahn, who recently disclosed that he owned more than $3 billion of AAPL, wants to get the iPhone maker to return more cash to shareholders and has filed a resolution proposing that it give back $50 billion more through share buybacks.
Apple shareholders will vote on the nonbinding proposal at Apple’s annual meeting this month.
Update: Mr. Icahn seems to have dropped his push for more Apple buyback. CNBC reports the activist investor has just released a statement, saying that while he was “disappointed” that ISS recommended that Apple stockholders vote against his plan, he sees no reason to keep demanding the company increase its stock buyback plans, “particularly as [Apple] is already so close to fulfilling our requested repurchase target.”
Apple shares were up $11 or 2.14% at $530.84 in morning trading.