Tim Cook, the CEO of Apple has said that the firm widely considered to be the most valuable in the world has more money than it really needs. He said that one of the primary concerns that need to be addressed by him at the moment is whether he would go against the ways of Steve Jobs, his predecessor who insisted on cash hoarding, by paying dividends to Apple shareholders this year by dipping into the company’s $98 billion cash surplus.
During an annual shareholders’ meeting held on Thursday, Cook had indicated that a collective decision was being arrived on by the entire board of Apple. Cook said that the management and the board are involved in deep discussions as the situation at hand is not clear cut and any course of action will not have complete support. Apple stopped distributing dividend returns 17 years ago in 1995, a time when the company was severely cash strapped and needed to hold on to its cash reserves. Though several suggestions had previously been made regarding the reinstatement of quarterly dividends, the co-founder of the company Steve Jobs had repeatedly brushed them aside.
Asif Khan, one of the shareholders of Apple from Sugar Land Texas has said that a quarterly dividend would not be a wise idea and has urged the company against doing so. He said that it would be a better idea if the company paid a single dividend at the end of this year when the provision that restricts the federal tax on dividends to just 15 percent of the amount expires. Asif Khan said that if the company decides to choose regular quarterly dividends, there is a chance that some of the investors might misinterpret this as Apple’s loss in faith over its ability to increase the stock price any more as the company brings out products such as the iPad and the iPhone.
About $160 billion was created in shareholder wealth over the last year, surging the stock value of Apple by about 50 percent. The combined value of prominent rival Google Inc. and Microsoft is still no match for the market value of Apple which stands at $480 billion. Despite the fact that most of the increase in the sales have occurred under the reign of Jobs, Apple’s financial results and stocks have not taken a beating even after the change in leadership.
