The board of directors of Apple Inc. is recommending that shareholders reject a proposal led by activist investor Carl Icahn that would see the technology company spend most of its huge cash hoard buying back its own shares and paying extra dividends to investors.

In a proxy statement released late last week, Apple's board responded to a proposal led by Icahn that called on the company to spend "not less than $50 billion US" to buy back Apple shares, which would pump up the value of those that remain for shareholders.

Thanks to the popularity of its landmark iPhones and iPads, Apple has more than $147 billion in cash sitting in various bank accounts around the world, and the company has yet to lay out how it plans to spend that money to increase shareholder value.

Major share buyback

Icahn's original plan was for Apple to spend up to $150 billion on a combination of dividends and share buybacks, but he watered down that proposal to the new $50 billion minimum.

Icahn's plan centres on the notion that there is nothing the company could invest in that would provide a greater return to shareholders over the long run than simply giving them a one-time dividend and reducing the number of the company's shares.

In the proxy, the board lays out the reasons why they don't support that plan.

"The company's success stems from the company’s unique ability to combine world-class skills in hardware, software and services to deliver innovative products that create new markets and delight hundreds of millions of customers," Apple said. "This success has created tremendous value for the company’s shareholders."

That's the company's way of telling investors they'll get a better deal on their dollar if they let the company invest that money in creating new devices that will give them a greater return on their investment down the line.

Apple already gave shareholders a bonus in April, when it announced it plans to spend up to $100 billion on dividends and up to $60 billion on share buybacks in the next few years. The company has already spent $43 billion on those plans, but Icahn's proposal calls for Apple to pick up the pace even more.

"While the board and management oppose this shareholder proposal, they are fully committed to returning cash to shareholders," Apple said. "The board and management team believe that capital should be returned to shareholders on an efficient and sustained basis and that the evaluation of capital return should be performed regularly and carefully with the best long-term interest of the business and shareholders in mind."