Investors get the chance to vote on diversity, artificial intelligence, child safety, and charitable giving at Apple’s AAPL annual meeting on Feb. 26, 2025. You can read the full text of the independent shareholder proposals here in Apple’s proxy statement as well as management proposals about electing directors, ratifying an independent auditor, and executive compensation.
Apple’s annual meeting is the unofficial kickoff for the proxy-voting season. This year, a widely watched proposal asks Apple to stop its diversity, equity, and inclusion initiatives. Costco COST shareholders rejected an anti-DEI shareholder proposal in January. President Donald Trump issued executive orders to end DEI in the federal government, and companies are following suit. Thus, recently, Goldman Sachs GS abandoned its requirement that the companies it takes public have at least two diverse board members. In 2023, the US Supreme Court ended affirmative action in college enrollment. ISS, the proxy-voting advisor, said it will “indefinitely halt consideration of certain diversity factors in making vote recommendations with respect to directors at US companies.” (Morningstar Sustainalytics' environmental, social, and governance vote advisory service competes with ISS, and you can read its stance below.)
You can find more articles about the anti-DEI moves here and here.
Voting comes as Apple shares are up 35% over the past 12 months compared with a 24% gain for the Morningstar US Market Index and as the company grapples with coming tariffs imposed by the Trump administration. Morningstar analyst William Kerwin calls the shares “overvalued and reflecting overly optimistic expectations for the impact of generative AI software on device sales.” Kerwin sees 5% compound annual growth for iPhone revenue through fiscal 2029 and says investors “would have to assume closer to double-digit iPhone revenue growth over the same period to justify Apple’s Feb. 19 valuation.” Apple shares recently fetched $244 versus Kerwin’s fair value estimate of $200.
AI, Child Safety, DEI, and Charitable Giving on Apple’s Proxy-Voting Ballot
Should Apple report on the risks presented by its “unethical” or improper use of external data as it develops and trains its AI?
The National Legal and Policy Center worries that Apple’s developers will extract data from personal information collected online, copyrighted works, and proprietary commercial information provided by users. Apple opposes the resolution, maintaining that the company has a strong track record in protecting user privacy and a robust approach to integrating ethical considerations into its technology, as reflected in its Responsible AI principles. Apple adds that it already provides all the information requested regarding its AI data privacy practices and that the proposal’s specific criticisms have to do with OpenAI, the developer of ChatGPT, and cites controversies at other companies that don’t involve Apple.
Morningstar Sustainalytics analyst Ignacio Garcia Giner writes, “While we believe that enhancing transparency around the company’s use of AI will strengthen its position as a responsible and sustainable leader in the industry as well as allow investors to assess the company’s management of the related risks in what is a fast-developing area, we believe that at present the company has provided a sufficient response to the proponent’s concerns, which focus on the company’s use of external data in the development and training of Apple’s AI offerings. On this point, Apple’s response statement clarifies that the company does not use its users’ private personal data or user interactions when training its foundation models.” Morningstar Sustainalytics’ ESG voting policy advisory group recommends investors vote against the proposal.
Should Apple report on the costs and benefits of its software that allows it to identify child sexual abuse material?
Shareholder proponent American Family Association, represented by Bowyer Research, expresses concern about privacy and safety at Apple. It cites criticism of Apple for reversing plans to implement NeuralHash, a program designed to scan for child sexual abuse material, or CSAM, and for recommending age-inappropriate content through the App Store.
Apple opposes the resolution, claiming it has demonstrated its commitment to helping protect children in a changing online landscape and developed innovative technologies like Communication Safety. Apple says its current approach to child safety is informed by engagement with child safety advocates, human rights organizations, privacy technologies, customers, and other stakeholders. This is more appropriate than the universal surveillance the proposal describes, which affects Apple users’ human and civil rights.
Morningstar Sustainalytics’ Giner writes: “Apple and other large technology companies with social-media and cloud storage platforms face significant reputational and regulatory risks surrounding online content safety, particularly child safety, in a growing number of jurisdictions globally. Apple’s decision in 2023 to abandon plans to implement perceptual hashing software to detect the distribution and storage of CSAM has been controversial.”
At the same time, Giner noted, Alphabet GOOG and Meta Platforms META introduced their own perpetual hashing approaches to detecting child sexual abuse material. “While we believe that the problem of CSAM online must be tackled with a broad range of measures, we note that a criticism of existing measures is that they place emphasis on parental involvement for setting up Family Sharing and configuring settings for the features to be effective, placing responsibility on families to monitor and manage their child’s device usage. We therefore support the additional transparency that this proposal requests.”
Morningstar Sustainalytics recommends voting in favor of the proposal.
Should Apple consider abolishing its Inclusion & Diversity program?
The proposal, made by the National Center for Public Policy Research, notes that US Supreme Court rulings have raised significant legal concerns regarding corporate DEI programs, leading to an increase in DEI-related lawsuits and prompting many major companies to scale back or eliminate their DEI initiatives to mitigate litigation, reputational, and financial risks. It argues that Apple’s program could expose the company to substantial legal and financial liabilities.
Apple opposes the proposal, noting that it has a well-established compliance program and that the proposal inappropriately attempts to restrict its ability to manage its own business. Apple also says it’s committed to ethical business conduct and compliance with applicable laws and regulations across its global operations.
Morningstar Sustainalytics recommends voting against the resolution because terminating Apple’s DEI initiatives “contradicts Morningstar Sustainalytics’ ESG principles, which acknowledge that inclusive and diverse workplaces provide a strategic advantage, a stance supported by extensive research,” writes analyst Matteo Felleca. “We believe that the company’s efforts in managing inclusion and diversity, along with initiatives to cultivate an inclusive culture, are crucial for business success. These efforts lead to a more innovative, productive, and equitable workplace, ultimately improving business performance through stronger supplier and member relationships and increased employee satisfaction. Furthermore, we agree with the company that this proposal is unnecessarily prescriptive.”
Should Apple report on how its charitable contributions impact risks related to discrimination against individuals based on their speech or religion?
Proponent Wayne Frantzen, represented by Inspire Investing, singles out organizations to which Apple has made donations in the past, such as the Southern Poverty Law Center, which he says targets mainstream political and religious groups, and the Human Rights Campaign, which he says advocates policies that restrict free speech and religious freedom and influences corporate decisions that harm brand value.
Apple opposes the proposal as unnecessary, noting that it has a well-established corporate donations program that follows a strict internal governance and approval process. Apple also argues that the proposal attempts to inappropriately restrict its ability to manage its business.
Morningstar Sustainalytics recommends voting against the resolution, which it believes “underscores a partisan disagreement with these organizations’ missions rather than a substantive concern about potential risks to Apple’s business,” writes analyst Felleca.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.
