Apple and Google: Faith and Heresy

The tech giants' annual meetings exposed shareholder rifts over controversies including stock options and policies in China. The bloggers weighed in, too

True believers made the pilgrimage to Silicon Valley on May 10, as both Apple (AAPL) and Google (GOOG) held their annual meetings. The companies' fervent supporters turned out en masse. It took Google CEO Eric Schmidt a mere five seconds to get a round of applause as he opened his shareholder meeting—and all he had to do was mention the lunch Google had served.

Heretics were in the crowd too, however. Some shareholders have become sharply critical of Google and Apple for practices that have recently become public. Apple and its CEO, Steve Jobs, have come under fire for the timing of stock options awards, while Google and Schmidt have taken criticism for the company's policies regarding censorship in China. Never mind that both CEOs have annual base salaries of only $1 (see BusinessWeek.com, 5/10/07, "The Elite Circle of $1 CEOs").

The buzz among bloggers and others on the Web was over the rifts that surfaced at the annual meetings. One writer at Slashdot said that although there are plenty of examples of "technology companies like Google kowtowing to repressive politic regimes such as China's," the shareholder proposal raised at Google's annual meeting was particularly "interesting." Another writer responded with "so the 'Do No Evil' [Google's self-proclaimed guiding principle] actually lasted about 5 seconds into Google becoming" a publicly traded company.

Google Defeats China Proposal

The proposal came from the Comptroller of New York City, which controls almost 500,000 Google shares through pension funds for the city's policemen, firemen, and other municipal workers. Patrick Doherty, from the comptroller's office, spoke at the gathering and said Google's current policies in China make it complicit in that country's efforts to stop free speech on the Web. He called on the company to stop engaging in "proactive censorship" and to "use all legal means to resist censorship."

Google urged shareholders to vote against the proposal. David Drummond, Google's senior vice-president for corporate development, said that the company is "committed to free expression." He said the New York City proposal would force the company to shut down its Google.cn site, the search engine that operates in China, and that would result in less information being available in that country, instead of more. "Applying a rigid set of rules is not always going to get us the right outcome," he said. Moments later, the proposal was officially voted down.

But that certainly won't be the end of the issue. One writer at the Web site of the Berkman Center for Internet & Society at Harvard Law School said "businesses such as Google and Yahoo! (YHOO), despite their own initiatives, are going to be required to take action to deal with this issue." The person pointed out that there may be legislative or regulatory action on the issue in the future. "The question remains whether government, corporate shareholders, or the companies themselves will make the final decision on the terms of which freedom of expression and privacy are maintained online, around the world."