Shareholder approval of NetApp option exchange was razor thin

netapp_new_logo_colorNetApp asked its shareholders to approve a proposal to allow a “one-time option exchange” for its employees at a special meeting held April 21. The measure was approved, according to a filing May 5 that detailed the terms of the exchange program. What wasn’t known until today was just how close the company came to losing that vote.

In its annual 10-K filing with the SEC Wednesday, the Sunnyvale supplier of data storage systems and services revealed the vote totals. The number of shares voted in favor of the option repricing was 129,568,703, which represented 50.3 percent of the total shares voted. The number of shares voted against the proposal was 1127,715,080, which represented 49.6 percent. The number of shares that voted to abstain on the matter was 75,253, which represented 0.03 percent.

As shareholder votes go, it doesn’t get much closer than this. In its argument in favor of the measure, NetApp’s board said that 95% of its employees hold stock options which are underwater as the end of February, making them unable to “provide the retention or incentive value” they were designed for.” Shareholders holding a significant amount of NetApp stock didn’t seem to care.


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