Has David Einhorn won?
It’s a relevant question now that it’s increasingly likely that Apple will raise its dividend. The tech giant has been under increasing pressure to dole out more of its $137 billion hoard from activist shareholders like Einhorn, president of Greenlight Capital. The hedge fund manager filed a lawsuit at the beginning of February to get CEO Tim Cook and his team to do just that.
Apple will probably lift its quarterly dividend 56% to $4.14 a share, for an annual payout of $15.7 billion, according to a survey of analysts by Bloomberg. The resulting yield of 3.7% would be higher than 86% of the companies in the Standard & Poor’s 500 Index paying dividends.
As the news service notes, Cook, who a year ago this month reinstated a dividend and announced a $10 billion buyback, faces mounting pressure to take bolder steps to pay out more of Apple’s cash and investments. Many companies announce dividend changes once a year, Bloomberg adds, fueling speculation about Cook’s plans as Apple approaches the anniversary of last year’s announcement, which came on March 19. The CEO reinstated dividends after a 17-year hiatus, breaking with a pattern set by co-founder Steve Jobs, who sought to preserve capital.
Cook called the shareholder lawsuit against the company a “silly sideshow” at the time of its filing, even as he said he was open to looking at the shareholder’s proposals for sharing more cash with investors.
Einhorn’s suit said a proposal slated for a vote at the company’s annual meeting in February would make it more difficult to enact his plan to reward shareholders by distributing a new class of shares.