David Einhorn, who heads Greenlight, said Thursday that the proposal would restrict the ability of Apple's board to unlock shareholder value. Some investors have been pushing Apple to do more with its enormous pile of cash $137 billion and growing.
The company started paying a dividend last year, but at $2.65 per share, it doesn't measure up to other companies with similar cash reserves. Apple has also started to repurchase some of its shares, but Greenlight and others say it should be pushing its cash in another direction.
Greenlight, a shareholder since 2010 with 1.3 million Apple shares, said it is dissatisfied with the way the company allocates capital. Einhorn said his firm has been talking with Apple over the past several months about the creation of new preferred stock that would be distributed to Apple shareholders.
Apple, he said, rejected the idea in September.
A representative for Apple could not immediately be reached for comment early Thursday.
In a letter to Apple shareholders, Greenlight called Apple a "phenomenal company filled with talented people creating iconic products that consumers around the world love." But it said the company has an "obligation to examine all options to create and unlock additional value."
Apple, Greenlight continued, "has $145 per share of cash on its balance sheet. As a shareholder, this is your money."
Shares of Apple, based in Cupertino, Calif., rose $3.59 to $458.29 in morning trading amid a broader market decline.