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Tim Cook Rejects Politics of the NCPPR

• sramsay 13y ago
  I'm pleased that Tim Cook said this, but Apple has been marketing itself as the manufacturer of counter-cultural hippy objects for anarchic outside-the-box geniuses for decades, while at the same time behaving like any other RoI-driven capitalist enterprise -- worse than most, in my opinion. I'm not even convinced that this wasn't, despite appearances, a prepared statement designed to re-assure stockholders.
  • mrcwinn 13y ago
    The world gets far too complicated if we not only choose to respond to events, but also attempt to assess the motives of the parties whose minds we can't get inside of. A "think tank" demanded the world's most profitable company focus more on profitability while implicitly claiming — incorrectly — that renewable energy can't save money. Think what you will of either sides motives, but Tim Cook said and did the right thing here and that's about where we can leave it.
  • mitchty 13y ago
    Could we once, not have to play favorite sports team with companies and enjoy a CEO talking down a shareholder that is trying to play politics? Of course not, now we need to play into conspiracy theories that this whole thing was a prepared statement by Apple. No, I guess we can't not be us vs them on things as tech people. Always have to play teams at all times. After all EVERYONE hates the Yankees cause they are successful. This crap crops up on every story not about actual technical things (even then) be it Google, Microsoft, or Apple, or whatever. Gets draining to be honest, I use a combination of the above's products. People seem to want to follow some type of religious zeal to this crap. Some days I want to just go move to a remote greek mountain and cut out my vocal cords and ears so I don't have to endure constant bickering about this junk. /rant/squirrel mode banter off I'm going to bed.
• DiabloD3 13y ago
  Companies shouldn't always do things for profit, because doing things only for profit, well, isn't profitable. Good will has a monetary value, and it is often worth far more than just making money is. I never said I was eloquent.
  • alexeisadeski3 13y ago
    Sounds like you're saying that companies should only do things for profit - but only if it's actually profitable :)
    • bruce511 13y ago
      I think he's suggesting that there are two kinds of profit. The short-term, next-quarter-results kind which fuel wall street, and the longer play when money is invested now and achieves a payback later. Unfortunate when the word "profit" appears in text, it is often unclear which one is being referred to. The easiest way to maximize short-term profit is to simply fire all r&d staff. Reduce expendses, sell exiting products and profits for that quarter will go up by plenty. That'll work for 2 quarters, maybe even a year, before the whole thing implodes. Obviously we don't do that - we forgoe some of the immediate profit to gain profit in the future. But there's no guarantee that what r&d are working on will ever pay off. There's risk involved. There are also solid reasons for doing one product, which will never make profit, in order to complement another product which will. That complement might be direct, or indirect. Taking Tim's example of making sure apple devices can be used by blind people, that may indeed be profitable if one considers both the blind people who buy your product, and also the people who _know_ blind people who made their decision based on your blind-friendliness. This is of course impossible to measure. And therein lies the root problem when it comes to "only doing things to maximize profits". It's mpossible to measure the actual profitability, over both short and long term profits, of pretty much anything we do. There are slimply too many unknowns. Had Tim answered the question another way, would that impact profitability? If the question had not been asked, would that improve profitability? Given that the question was asked, and answered the way it was, does Apple gain some goodwill? Does that mean that by soundly rejecting the question it accomplished what the question asked for? Profit is impossible to optimize for. To make profit you encounter risk. And by definition some risky actions will ultimately be unprofitable. Thus the line about companies responsibility being just to make profits, and the promise the Question asked for, is not meaningful in any practical way.
• ericHosick 13y ago
  It seems to me that Apple is directly investing into its brand name by doing things like planning on "having 100 percent of its power come from green sources". The ROI is, among other things, customer loyalty.
• sheetjs 13y ago
  > "If you want me to do things only for ROI reasons, you should get out of this stock." While I agree with his sentiment, I wish he took a moment to explain that pursuing environmental sustainability may actually help the top line (rather than insinuating that those goals are net negative to shareholders)
  • interpol_p 13y ago
    But explaining that could almost make it seem like helping the top line justifies environmental sustainability, when really they should do it regardless of whether it helps the top line.
  • Zigurd 13y ago
    That's a rathole to avoid if you can. It may sound dismissive, but these guys are cranks, and their time in the spotlight is rightly to be minimized. 97%+ of shareholders understand that Apple goes the extra mile in sustainability and agrees with that approach.
    • dhoulb 13y ago
      Completely agree. Whether or not worker safety contributes to ROI should never be a question. Same with environmental impact.
      • edias 13y ago
        But realistically you do at some point. Sacrificing 1% of profits for a 20% safety increase is reasonable and smart, but doing the reverse would never happen. Environmental impact in particular is an endless money hole. You can always spend more money to be marginally better, and every company (and individual) has their cut off.
      • monkeyspaw 13y ago
        I disagree, mostly because you presented your opinion as black and white. Apple has, what, > 10k workers? If it cost them $100 billion to prevent one software worker from getting carpal tunnel, your statement suggests that cost should be born by Apple. Similarly, if it cost the cumulative GDP of the US to prevent N amount of pollution, your statement suggests that Apple should go bankrupt preventing that pollution. Back in the real world, I suspect we generally agree. The problem, IMO, is that companies (and consumers) aren't forced to capture the hidden costs of injuries/pollution. I just disagree with your black and white assessment. The laws of economics mean companies have to assign dollar values to human life and safety, as much as we dislike the feeling it gives us.
• coldcode 13y ago
  What rock do these people crawl out from at night?
  • deleted 13y ago
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  • vacri 13y ago
    Lignite, most likely.
• Steko 13y ago
  Came for the comic sans, stayed for the delicious irony of a think tank run on outside donations complaining to the most profitable company in the world that they aren't focused enough on ROI.
  • spacehome 13y ago
    The think tank is pushing somebody's agenda, and even though the think tank as an organization isn't profiting, I'm sure the officers are doing quite well for themselves.
    • nikster 13y ago
      Isn't a think tank basically the same as lobbyists, e.g. legalized corruption? Think tanks push an agenda, which creates laws beneficial to the business interests of the think tank's backers, which creates $Bns in profits. In that view, think tanks are probably the most profitable business there is. Certainly the highest ROI when it works out. Politics can be bought for hundreds of thousands, but bring in billions.
      • tvanantwerp 13y ago
        I work at a think tank, and no, this is not what think tanks are. (Not most, anyway.)
      • briandh 13y ago
        No. In the US, many (most?) think tanks are 501(c)(3) nonprofits -- NCPPR included -- and cannot make lobbying a primary activity [1] More broadly, think tanks are groups of like-minded people expressing their opinions, typically about how governments should be run. The fact that they accept donations in order to be able to work full time on the cause and to extend the reach of their advocacy, and that many of those donations come from individuals or organizations who stand to benefit if some of the think tank's desired policies are implemented, does not make them "legalized corruption". [1] http://www.irs.gov/Charities-%26-Non-Profits/Lobbying http://www.irs.gov/Charities-%26-Non-Profits/Lobbying
• mikestew 13y ago
  "<Tim Cook> said that there are many things Apple does because they are right and just, and that a return on investment (ROI) was not the primary consideration on such issues" The next time someone trots out the tired old "companies are legally obligated to maximize profits/shareholder value" to explain away crappy corporate behavior, I'm linking to this. And kudos to Cook for telling NCPPR to take a figurative hike.
  • MichaelGG 13y ago
    That line about legal obligation doesn't even pass basic analysis. Who is to say what maximizes value? Contributing to open source creates a good name, but does it harm the company by helping competitors? It's such an idiotic line and is usually given as a poor substitute for reasoning about a company's actions.
    • edias 13y ago
      It's not an idiotic line, it's just incomplete. They have a legal obligation to their shareholders demands, whether that be profits or otherwise. That is a simple fact that can't be disputed. It just happens that for most public companies, shareholders wan't short term profits.
      • 001sky 13y ago
        This is worth parsing through slightly. CEO's have a fiduciary responsibility (not to act with malfeasance); and the shareholders have the right to replace the CEO. That's about it. The CEO is not under any obligation other than self-interest when it comes to what happens in between. The meme about "profit maximization" is one of those Keynesian sayings "of a defunct economist" that seems to rule people's imaginations.
  • deleted 13y ago
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  • selmnoo 13y ago
    Yeah because that's just what we need, another asinine interpretation of an event in which the CEO was basically hand-tied to do one thing: not fuck up PR. And let's just ignore the legal precedents where companies were sued for their philanthropic work, and indeed lost. (see the many court cases in which courts end up ruling that companies are not allowed to engage in purely philanthropic duties when there is a rigid fiduciary responsibility to maximize profits; see eBay vs. Craigslist). And anyway, actions speak louder than words. What I know of Apple is that it had a CEO who orchestrated keeping wages down for engineers, orchestrated price fixing of ebooks, kept taking credit for other people's work, frequently partook in borderline psychopathic behavior (woz: "I begged Steve that we donate the first Apple I to a woman who took computers into elementary schools but he made my buy it and donate it myself."), etc. etc. If Tim Cook actually goes on to commit some serious dollar on philanthropic activities, I would change my mind about Apple, until then, it's clear that it's all a bullshit PR dance.
• fdschoeneman 13y ago
  Wait a second. From the lede: "The self-described conservative think tank was pushing a shareholder proposal that would have required Apple to disclose the costs of its sustainability programs and to be more transparent about its participation in "certain trade associations and business organizations promoting the amorphous concept of environmental sustainability."" What is so wrong with that request? Forget your opinions and mine, as well as of the think tank. Asking Apple to disclose what it is spending, and where, is a reasonable request. And even if you're a firm believer in the dangers of anthropogenic global warming, you must understand that not all of the organizations doing research or providing information about it are entirely reputable. Information is good. Put it out there. Let stockholders decide.
  • sc68cal 13y ago
    Because it's concern trolling - they do not offer these proposals to actually get the information - they are looking for ammunition to stir the pot.
    • fdschoeneman 13y ago
      Like I said, forget their opinions, but also forget their motivations. What is wrong with the request?
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      • jameskilton 13y ago
        But you can't. If the motivations weren't there, they wouldn't have asked the question. That kind of question only exists when there's an underlying motivation to use such information as ammunition. This is why such attacks are so cunning. The question sounds logical and fair, but it must be avoided because the potential damage is massive.
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• bluthru 13y ago
  Also, it's not like Apple's out there on their own investing in renewable energy. Intel, Google, and other tech companies are quite mindful of their environmental impact.
• doktrin 13y ago
  Good for Tim Cook. This was an appropriate response.
• rdl 13y ago
  All things being equal, I'd like it if Apple provided these numbers to shareholders/the public. I support Apple continuing to participate in these programs, but giving shareholders accurate numbers seems like a worthy goal, and I'd actually like to know the scale of Apple's investment in green energy as a benchmark for how far along the green energy industry is coming -- if it's a 100% markup, it's got a long way to go, but 25-50% wouldn't be too bad.
  • honksillet 13y ago
    I agree. Regardless of what one think about the questioner, I would really like to know the answer to the first question.
  • gress 13y ago
    It might be a worthy goal, but it might also be destructive to shareholder value if it results in shifting attention to green politics and a nasty battle with climate change deniers.
• rjknight 13y ago
  I understand and agree with the idea that companies should maximise shareholder value, but I've never understood the argument that shareholder value is exclusively determined by profit. As I see it, the stock market consists of various firms saying "buy our stock, and we will try to achieve X with your investment", where X might be maximum ROI, but I don't understand why it has to be. If I want to found a company which has some goals other than making a profit, and so long as I am explicit about this then nobody is being cheated or defrauded, the investors are getting exactly what they signed up for. If Tim Cook widely announces what Apple's future philanthropic principles will be, he's giving everyone a chance to decide if they want to own stock in a company which follows those principles. The market will judge that via sales and purchases of Apple stock. What could possibly be more free-market than that?
  • nickff 13y ago
    It is also possible that Apple might maximize profit and shareholder value by pursuing philanthropy, if customers see the charity as adding value to the products (, possibly in improved brand image).
  • mongol 13y ago
    "Future philanthropic principles" are probably not for the CEO to decide. It sounds like something for the board. However I agree that a company should be able to define its mission and include things apart from maximum profit.
    • bowlofpetunias 13y ago
      However, this is not necessarily "philantropic". It's marketing, and directly connected with ROI. If Apple had the social and environmental sense of responsibility of GoDaddy, I lot less of us would feel comfortable buying Apple products.
    • eropple 13y ago
      It's only for the board to decide if the board isn't comfortable granting that responsibility to the CEO. They obviously are. If some climate change deniers want to get buttmad about it they'd better buy a lot more stock.
• discreteevent 13y ago
  Tim Cook shrugged.
• icu 13y ago
  For me this article highlights the tension between long term value creation and the short term quarterly profit perspective of Wall Street. I think the creation of value comes before Return on Investment (RoI). Creating value is much harder than showing a RoI because value is somewhat intangible and is seen through people's personal values/beliefs. Also it may take time before the value you have created makes its way to the bottom line. Arguably Apple's brand, and how stakeholders feel about it, increases Apple's ROI for its shareholders. Do Apple's customers care about environmental issues? I'm sure they do. If Apple ignores this it will eventually hurt Apple's bottom line. Do Apple's employees care about worker safety? Again, I'm pretty sure they do and I'm pretty sure that if Apple's management doesn't pay attention it will eventually hurt the bottom line. Personally I like the idea of a 'Triple Bottom Line'[1] which acknowledges that businesses can create negative value to parts of society when maximizing profit (negative externalities if you are an Economist). It sounds to me like Tim Cook internalizes this world view and uses it to steer Apple's corporate decision making. I applaud this and hope that this inspires other big corporations but also the future entrepreneurs on Hacker News. [1][http://en.wikipedia.org/wiki/Triple_bottom_line http://en.wikipedia.org/wiki/Triple_bottom_line]
• zacinbusiness 13y ago
  I think it would be awesome if Apple could somehow go "unpublic." Is there a word for that? Buy back all of their stock and dissolve it. A powerhouse of design and engineering like Apple would be a real force if it didn't have to blow their asshole investors each quarter or risk some kind of coup.
  • dredmorbius 13y ago
    Is there a word for that? "Private"
    • zacinbusiness 13y ago
      It's 6am. Also I'm a dumbass sometimes. But thank you :-)
      • dredmorbius 13y ago
        No worries.
  • lotsofmangos 13y ago
    That's what Dell just did.
    • amirmc 13y ago
      And Richard Branson's Virgin Group. Also, DeBeers diamond business, I believe.
  • repsilat 13y ago
    A company can't buy itself, at least in cash. The cash reserves of a company are (or should be) worth less than the company itself. The company obviously can't raise capital to buy itself by issuing shares, so it would have to get the money loaned to it. At this point I think it needs to convince its creditor that its stock is undervalued, and at that point the creditor is better off just buying the undervalued shares themselves. If they bought enough then they could take the company private if they wanted. Now, maybe if someone who owned a company outright decided to donate all of their shares to the company, then it could "own itself". I don't know how that might work legally, though.
• Tycho 13y ago
  I would like to know actually how much of Apple's sustainability projects involves government subsidies. Oh well.
• JDulin 13y ago
  The climate change versus shareholder value debate aside, I would be angry that this representative was obviously trying to hijack the shareholding meeting discussion to make a political point or have me (Tim Cook) say something polarizing. They got the latter, but not in the form they hoped for.
• smsm42 13y ago
  I think Tim Cook is ready for a run for Congress. It's classic politician - "we're doing the right thing, and we're not going to disclose to you how much it costs you to do it, because it's the right thing, and if you don't like this just STFU and GTFO". Indeed, what the gall has the shareholder to ask the executive how much the policy costs him! One should soundly reject this novel and outrageous concept of executives reporting to shareholders the actual results of their pet policies. The less shareholders know, the better. Especially when it comes to the question if the decisions taken by the management rely on public subsidies - shareholders don't need to know if their wellbeing depends on taxpayer-funded handouts, that would only disturb them. Just trust the Supreme Leader, he's doing the right thing.
  • deleted 13y ago
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  • tsax 13y ago
    The mindless congratulation of Cook here on HN is amusing. For the longest time I thought the think tank rep trolled Cook with some agitprop political question. Now I find out they simply wanted to find out the exact spending amounts on these 'sustainability' initiatives. The gall, right? Stupid right-wingers I tell you!
• paul_f 13y ago
  "The representative asked Mr. Cook if that was the case only because of government subsidies on green energy. Mr. Cook didn't directly answer that question" It's a shareholder meeting. Answer the question. Unless the answer is embarrassing, which, without more data, we have to assume it is.
  • gress 13y ago
    Assuming it is embarrassing is a baseless attack on Tim Cook. We could equally assume that it was an irrelevant line of discussion that would allow extremists to distract the meeting from important business. This was a shareholder meeting, not a trial.
• DanielBMarkham 13y ago
  So let me get this straight: Conservative group buys stock in Apple. During shareholder meeting asks CEO to report detailed and accurate figures regarding sustainability costs. CEO goes off on a bit of a restrained tear, telling the group if they don't like Apple's sustainability policies they should get out of the stock. So, since Apple fans have long been the left-leaning, creative, wine and croissant crowd, was this a paid publicity stunt? Or just simple happenstance? This kind of story is like giving away free candy. People can argue the politics of it, people can talk about the role of profit in corporate governance, people can argue about climate science. Coverage of the story just goes on and on. Seriously, you couldn't ask for a better PR platform. I'm pretty damn close to calling bullshit on this entire story.
  • ceejayoz 13y ago
    It's pretty unlikely that the NCPPR would be willing to help Apple with a pro-environmental PR stunt. http://en.wikipedia.org/wiki/National_Center_for_Public_Policy_Research http://en.wikipedia.org/wiki/National_Center_for_Public_Poli...
• walshemj 13y ago
  Go Tim - Its true what they say about the quiet Englishman OK IDS is the exception. What should have really happened is that another voter at the meeting should have called move next business and have the motion dumped. Moving next business is a very brutal way of a meeting telling some one with a not wanted motion to FO - defiantly would send the right message.