Apple Investors Aren't Stressed About Succession Planning

Despite the stock gyrations every time Apple's visionary CEO Steve Jobs takes a medical leave or questions about his poor health reappear, investors at Apple's (AAPL) annual shareholders meeting Wednesday seemed rather blase about the company's need to articulate its CEO succession plans.

Investors rejected, according to preliminary voting results, a shareholder proposal by the Central Laborers' Pension Fund, which called for Apple's board of directors to establish guidelines for adopting and disclosing a written CEO succession policy. Not only did investors turn their back on the proposal but none asked Apple management any questions about Jobs's current medical leave, the status of his health, when they expected him back (if ever) and how the company is positioned to move forward in his absence.

"I was disappointed with the results but not surprised," says Jennifer O'Dell, assistant director of corporate affairs for the pension fund, which submitted the proposal in September -- months before Jobs announced his third medical leave in January. "I think it's a victory for shareholders, nonetheless, because it raised awareness of the need."

The pension fund, which represents roughly 500,000 construction workers in the U.S. and Canada, plans to resubmit its proposal next year. In the meantime, O'Dell says, it hopes Apple's management and board will want to discuss some of its proposal's elements and consider implementing them.

Happy With Tim Cook

Some of the fund's recommendations are to develop a succession planning policy that's reviewed annually by the board, develop a criteria for assessing potential candidates and begin nonemergency CEO succession planning at least three years before an expected transition. Apple had previously stated in the proxy that it opposed the pension fund's plan and that it already performs a number of the proposed actions.

Several investors said after the meeting that they're just fine with having Tim Cook, Apple's chief operating officer and Jobs's right-hand man, run the show in the CEO's absence and take over on a permanent basis should that be needed.

"Tim Cook is doing a great job, just look at his bonus," quips George Crab, who holds 500 Apple shares and invested in the company shortly after it went public in 1980. "Even if Steve doesn't come back, he sees three to five years ahead [with his product vision], and Tim knows what to do with that."

Investor Bill Vorbau purchased his Apple holdings years ago when it was trading around $20 a share and sold all but two shares five years ago. He he thinks Apple has already made it clear that Cook will be the one to succeed Jobs, if and when it's needed.

But What About Google's Android?

Cook has also been the go-to guy when Jobs took medical leave in 2004 to treatment a rare form of pancreatic cancer and also in 2009 when Jobs underwent a liver transplant. Apple investor Jerry Kaplan, who holds a couple-hundred shares, says the issue of a succession plan is "overblown."

"This isn't a one-person company," Kaplan says. "I'm pretty happy with the way Apple is progressing [without Jobs]."

While investors were quiet on the succession front during the meeting, one issue that repeatedly came up was the threat of Google's (GOOG) Android mobile operating system. Investors questioned Cook on Apple's plans to address the growing threat and Android's market share lead over Apple.

One investor compared Google's Android vs. Apple iOS to the Microsoft Windows and Apple tussle from years ago. He asked Cook and Apple executives whether they learned anything from their Microsoft battles and if they were applying it to Android.

The comparison was rejected, with Cook adding that the Microsoft battle was over corporate customers, whereas the Android fight is about consumers.

Up Next: A March 2 Press Event

Some investors also questioned Cook about the iPad tablet computer and whether it's facing a June delay, following recent industry reports. Their concern are understandable: If the iPad relaunch slips to June, it likely would have lighter June-quarter sales since the device could have potentially missed the bulk of three months of sales. Apple's next iPhone version isn't anticipated to hit the stores until sometime around late June, providing little ability to offset any lost iPad sales.

Cook said he can't comment on new products until they're officially announced, but he directed investors to check out recent press reports saying Apple is holding a press event on March 2. Some of those reports say the event will feature an unveiling of the iPad 2. According to a Reuters report, the event will feature a product that Apple believes will define 2011.

View all Articles » Dawn Kawamoto is an award-winning business and technology reporter for DailyFinance. She previously covered the business angle of technology companies at CBS Interactive's CNET News and has also worked as a business reporter for the Los Angeles Daily News, Orange County Register and Santa Barbara News-Press.

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Why Do Private Money Investors Matter When Starting a Small Business?

In those days when socialism was at its peak and socialist economies were all about the government taking control of everything, life was pretty difficult for people. Those with political connection could erect industries and for the others life was still difficult. With the change in air, economies became capitalist and there arose a wave of free trade and then globalization. The government had suddenly ceased to play a major part in the business and allowed people to take part in the country's growth - inclusive growth as they called it.

This paved way for private companies to be setup and individuals creating jobs for themselves as well as others. This was going pretty well than when recession took all of us by surprise. It was time again to turn to the government but this time, things were different as people still held their reigns. The government was forced to inject funds and announce stimulus packages to prevent a probable economic collapse.

Private Investors are better than Banks

Continuing from the previous paragraph, banks became wary and so did the other major investment agencies. Some took it as an opportunity and invested in the ideas of people- they gained much. Though the concept of venture capitalism and angel investment existed before the recessional period, it was not much cared for. Today, the private investors are in demand as more people decide to create their own jobs and make their own money instead of working for others.

Private investors are better in the sense that they do not impose so many restrictions and bottleneck the business than what banks have started doing these days. If a person finds lack of funds, they will undoubtedly be forced to cut spending that may have been essential for the growth of their business - forcing good business ideas to shut shops!

They are Much less Demanding

Private investors do not impose restrictions and that is what makes them a good source of funds. Private equity is much in demand because it is easily available and can be used as much as wanted to see the business take off with a flying start. Apart from the funds, such investors are often willing to contribute with some intellectual help also. There is a personal reason for doing this - as they can expect better and faster returns with the words of wisdom that you gained from their managerial expertise.

Multiplying your Money: Returns Lures them!

If you have done an in-depth potential growth analysis of your business idea/venture, chances are high that you can lure them to believe in your fool-proof system; not to mention, that real time, original data always help your cause! This is what exactly happened in the case of the social network giants - Facebook. They could convince their investors easily because they had a system already running and in place!

In the end, they are investors and seek to invest in your business just for the sake of getting higher returns than other sources of investment.

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Are Angel Match Investors Good for My Small Business?

Small businesses, impatient to take off will desperately want any kind of investor to invest in their business, as long as they get funds. But hold on; this mentality may be the worst turning point your business is ready to suffer. Not all investors are angels and not for nothing are angel investors called so! Every given a thought as why angel investors are called so and not other investors when their basic job is the same - to invest in a venture?

Angel investors are the best possible source of funds that your small business could do with. The following points will give you an insight into why they are the best for your business venture. In fact, they are any day better than banks and similar financial institutions because in these days, banks simply and mercilessly will leach away your profits. Banks recovering from the recessional hammer simply want their loan amount to be back to them by hook or crook and things might get a bit difficult even after you successfully obtain a loan from them - the axe of threat perpetually hangs above your head until and unless you clear all your debts!

? One time investment amount is higher: Angel investors are known to invest a good amount into a promising business venture. When paying in a single installment, they help you with higher funds than that any investor would (strictly speaking of small businesses). Banks have always made available huge loan amounts but then the size of the business in discussion is 'small' here. The range of invest may go up to $1million at a time, depending on your requirements and the potential of your idea.

? The Problem with NDAs: Now, be very clear about this part. Angel Investors will not sign a NDA and if you think that is a risk to your multi-million dollar business idea, so it is! In fact, if you compare funding authorities on the same point, there is lesser chance of angel match investors leaking/using/selling your idea to their own profits than anybody else because in the end they will have to shut shop, if they can't garner/generate faith and goodwill in their clients - the wannabies!

If you're aware of intellectual property rights, you will be in safe hands and also

? They Won't Kill your Profits: If this is something you are worried about, then banks are the most notorious of the lot. Angel investors are never known to leach away your profits or make any deal that harms you and your idea in the long run. After they get their 'amount' back within the stipulated time frame, they are done with you.

? They Won't take over your small business: This is the last thing that angel investors will do with your business. In fact, they will never interfere with your way of working or running the business. If you require their help at some point of time, they will be only eager to help you - but then only with your consent!

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Where Are the Private Money Investors? Top Tips to Market Your Business Idea Across the Table!

With banks shying away from putting their money into new businesses and the government putting stringent rules in place in lieu of helping you with funds, getting funded by the 2 otherwise most obvious choices has become very difficult. Therefore, in order to find a suitable investor for your business (small or otherwise); you have to turn towards private investors.

Top Tip #1: Idea depending on the business type

VCs (Venture Capitalists) and Angel Investors always see businesses in terms of profits. The most obvious questions to expect is how much amount of return is your business capable of and you just can't give them a random figure! These kinds of investors have a strong market link and they are qualified enough to see through the idea and the potential of the same. Maybe they can't judge the exact figures but they can certainly make an assumption close to the actual figures - thanks to their information network and networking skills.

That straightaway means that you have to take your idea very seriously; in fact, have a working prototype of the same if possible and then approach the private investor. When they sit with you, they will have surely completed their homework on the potential of your project - time to do yours!

Top Tip #2: Networks, Contacts and Recommendations

When setting up a meeting with private investors, networking helps, especially if you have a connection with the top management level. Not necessarily that you'll have a personal contact with them but you can always find someone 'market credible' who has links to the top. This would undoubtedly make your files moves faster and getting the funding easier than you thought of!

Top Tip #3: Credit History

This might be the very reason as to why you approached private investors and not banks. Banks today, simply refuse to lend money to people who do not have a credit history and therefore the private investors. But there is a reason as why the following has been mentioned here. This is because having a credit record will make things faster. Remember one thing - these are investors who are interested in your business only because they see a fatter profit in a shorter time as compared to other sources if they had invested their money into.

Top Tip #4: Oiling Works!

This works every time and every where. Apart from sounding convincing, if you show importance to the person opposite you, there are chances that they will be flattered. Again, flirting and empty flattering is a strict no-no. Take interest in their business and they will take in yours! If you're good at people management, chances are high that you'll get the fund on your terms!

The internet is a great place to start with because of the fact the information about everything is available just at a click of a button. Private investors including the angel and the VCs have their websites from where you can setup an appointment with them for getting funded.

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Rising Mideast Tensions Could Send Investors to the Sidelines

When the social unrest sweeping the Arab world initially jumped from Tunisia to Egypt, it elicited plenty of undue pessimism. While many commentators feared that radical elements were taking over, the end of Hosni Mubarak's dictatorship in Egypt is instead likely to set the stage for more moderation and progress in the country.

But the region's turmoil may now be reaching a tipping point. Deadly violence is engulfing Libya, where Muammar Gaddafi's regime is using extreme force against protesters, and major pressures are being felt in Iran, Bahrain, Yemen and even China. In the long run, the hope is that the changes being ushered in may prove to be a cornerstone of further global economic growth and political stability.

More immediately, though, the uprisings are likely to create exactly the type of uncertainty that investors dread. And a U.S. stock market that has been moving steadily higher could finally see its momentum broken as a result.

Chaos Before Resolutions

Doomsayers are out in full force when it comes to analyzing the unfolding event across the Mideast. But the driving forces -- a younger generation seeking more freedom and opportunity -- offer plenty of reason for optimism over the long haul. About 60% of the Mideast's population is under 30, and a recent survey of youth in nine Mideast countries found their top wish is a desire to live in a free country.

The long-standing tensions in the region -- clearly one of the thorniest problems in geopolitics -- may eventually be resolved constructively, thanks to a new generation. But the process will be packed with plenty of chaos first. And while the immediate consequences for financial markets were relatively subdued with Egypt, the battles now engulfing Libya will have far more impact.

Unlike Egypt, Libya is a sizable player in world oil markets. The country produces 1.8 million barrels of crude oil per day, 90% of which is exported, analysts at global intelligence firm Stratfor wrote in a note to clients. That amounts to more than 20% of the 8.4 million barrels per day for Saudi Arabia, the world's biggest oil producer.

Rising oil prices act like a growth-dampening tax on the global economy. And crude rose sharply on global markets Monday amid prospects of less supply coming out of Libya. The March futures contract spiked up more than 6%, closing above $91a barrel.

Adding to Uncertainty

But tensions are mounting in unexpected ways that go beyond mere supply and demand. Iranian warships are poised to enter the Suez Canal in a move that would be seen as a provocation by Israel. As the hard-line Iranian regime sees protests swelling at home, its motivations are fairly easy to understand: Brinkmanship could help deflect attention away from domestic repression and stoke nationalist sentiment, particularly in the more conservative countryside.

That will only add to the uncertainty even if the move isn't as belligerent as it seems on the surface.

The stress is being felt as far away as China, where authorities are rushing to quell demonstrations in the Communist-led nation before they spiral out of control. Protesters inspired by events in the Middle East are clamoring for more openness and progress at home. But Beijing's authoritarian regime is clamping down on Internet access and mobile devices to try to maintain order.

Warm sentiments aside, investors should keep in mind just how precarious a situation China is in. The country walks a tightrope that attempts to use red-hot growth to deal with massive urbanization as people migrate from China's rural areas in search of employment.

Wildcards Raise the Risks

Close economic coordination that ranges from an export sector with razor-thin margins to a managed currency is required to keep that economic engine going. While Chinese officials have managed an impressive juggling act so far, wildcards like a sudden domestic push for openness add to the risks.

The social turmoil unfolding around the globe may eventually create a safer and more prosperous world. With that day a long way off, however, investors can't be blamed for heading to the sidelines as things shake out.

View all Articles » Vishesh Kumar, previously a staff reporter at The Wall Street Journal, has joined DailyFinance, where he will be focusing on investing, particularly in tech and telecom. Vishesh has also been on the staff of TheStreet.com, where he produced hundred of videos and also served as a writer; his work has appeared widely in many other major publications. His TV appearances include CNBC and ABC's "Good Morning America," and he has been a radio guest on National Public Radio and "The Brian Lehrer Show."

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Rio Tinto ready to reveal a record profit – and this time, investors want less of it spent

The mining company continues to benefit from soaring demand for commodities, but shareholders are becoming wary of big miners' propensity for grandiose and unsuccessful takeover bids

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Amazon Investors Weigh Short-Term Turmoil Against Long-Term Promise

Amazon (AMZN) is never a boring stock. Investors routinely value it at more than 50 times earnings. The company rolls out products predicted to be costly failures -- Prime, Web Services, Kindle -- that end up being profitable and effective. It faces periods of volatility as bulls battle bears -- with the bulls typically emerging as victors.

Strangest of all, Amazon functions like two stocks. One of them is more of a speculative stock, with unusually high valuations and epic bull-bear fistfights. Amazon's stinginess with internal metrics -- the company won't disclose how many Kindles it has sold -- adds to the speculation. Investors read into the company's silence and often disagree over how to interpret it.

It was this speculative Amazon that fell as much as 10% last Friday after Amazon reported earnings after the previous day's market closed. Amazon reported that margins slipped because the company is starting to invest more heavily in its distribution centers. Since then, Amazon has recovered little of that decline. The stock closed at $173.71 Thursday, down some 6% from its price before it reported earnings.

The second Amazon is a stock that rewards the patience of long-term investors with capital gains, delivering consistent growth as it finds new ways to build onto its share of the online retail market. That's the Amazon that warned its profit margins might be weighed down in 2011 so that the company can continue to expand around the globe.

What Are Investors to Think?

Amazon has shown time and again that such investments have paid off, despite skepticism. So, many analysts are holding to the long-term view, even as jittery investors sell the stock based on one quarter's number.

But in discussing the investments it's making, Amazon offered vague explanations. Chief Financial Officer Thomas Szkutak said Amazon was adding distribution centers to increase its ability to provide fulfillment services around the globe for its own store, as well as for other retailers who use Amazon to fulfill orders. Fulfillment costs were equal to 8.2% of revenue in the recent quarter, up from 7.7% in the same quarter a year earlier.

Szkutak also said Amazon "added a lot of infrastructure capacity to support our fast-growing Amazon Web Services business." Technology and content costs, which include Web services infrastructure, increased to 3.5% of revenue from 2.8% a year earlier.

Margins, a Touchy Issue

So, while Amazon is seeing impressive revenue growth -- net revenue jumped 36% in the quarter -- operating costs are growing even faster. That caused some, like Pacific Crest analyst Steve Weinstein, to wonder why Amazon isn't gaining leverage on its investments in fulfillment and technology, even as it hints that it may continue the pace of investments for much of this year.

Sponsored Links Margins have long been a touchy issue with Amazon and its investors. When the company introduced its Amazon Prime service -- which offers free two-day shipping for a $79 a year fee -- it eroded margins at first. But Prime ended up deepening customer loyalty, pushing revenue growth higher in the long run.

Despite the lack of details on how Amazon plans to invest in new fulfillment facilities, shareholders seem to take Amazon's word that they're necessary to maintain revenue growth. After all, the company has a strong track record on delivering returns from investments.

But this latest round of increased investments has so far been accompanied by lower-than-expected revenue growth. Amazon posted revenue of $12.95 billion last quarter, below the $12.98 billion the Street had been expecting. And the operating profit that Amazon is forecasting for the current quarter -- between $400 million and $525 million -- is short of the $567 million analysts had been looking for.

New Enticements for Prime Subscribers

Since Amazon reported its earnings, reports have emerged suggesting yet another reason why its margins could be weighed down further and longer than many have been expecting. Amazon may be adding unlimited access to free streaming of 5,000 movies and TV shows for its Prime subscribers. Rather than offering the movies as a new revenue stream, Amazon is offering them as an enticement for subscribers to its Prime service.

That could bring in many new members to Amazon Prime, which could in turn entice more shoppers to buy goods on Amazon's site and receive free two-day shipping. If so, that could generate a much higher volume of transactions for Amazon in coming years.

But in the near-term, the streaming of all those movies could require more investments in networking infrastructure. And the addition of new Prime memberships would mean greatly increasing the discounts on shipping costs it offers to customers. Both of those could push down margins more than investors are expecting.

So expect more turmoil as bulls and bears tussle over how much these moves will weigh on Amazon's profit margins. But for those with longer-term views, it's easy to imagine Amazon continuing to expand for years.

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Treasury TIPS: A Looming Disaster for Small Investors

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