Apple chief hints company will part with some cash

2012-02-24 14:59

Apple chief executive Tim Cook believes the world’s most valuable company has more money than it needs.

Cook’s next challenge is to figure out whether Apple should break from the cash-hoarding ways of his predecessor, the late Steve Jobs, and dip into its $98 billion (about R754 million) bank account to pay shareholders a dividend this year.

During a question-and-answer session at the company’s yearly shareholders’ meeting, Cook indicated he and the rest of Apple’s board are nearing a decision.

The board and management are “thinking about this very deeply”, Cook said. “This isn’t a case where 100% of people are going to agree with what we do.”

The question of how to handle Apple’s cash stockpile is a touchy one, partly because company co-founder Jobs had steadfastly brushed aside suggestions that the company restore its quarterly dividend.

Apple stopped making the shareholder payments in 1995 when it was in such deep trouble that it needed to hold on to every cent.

Things got so bad that Apple turned to rival Microsoft Corporation in 1997 for $150 million infusion to stay afloat.

Microsoft came to the rescue at the same time Apple named Jobs as its chief executive – a decision that turned out to be one of the smartest business moves ever made.

Cook dropped his strongest hint yet that Apple will part with some of the money. “Frankly speaking,” Cook said, “it’s more than we need to run the company.”

One Apple shareholder, Asif Khan of Sugar Land in Texas, the US, urged Cook to resist committing to dividend every three months.

He thinks it makes more sense for Apple to pay a one-time dividend later this year before the expiration of a provision that limits the federal tax rate on dividends to 15%.

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