Steve Jobs's health: A personal or public matter?

Many investors see the innovative Apple CEO as fundamental to the company's success. If he's unwell, they think they should be told.

Kimberly White/Reuters/File
In this file photo, Apple Corporation CEO Steve Jobs speaks at the Apple Worldwide Developers Conference in San Francisco, Calif. on June 9, 2008.

Reports this week of Steve Jobs's liver transplant in a Tennessee hospital raised questions about just how much information US corporations are obliged to release about their top executives.

Do investors, analysts, and Apple employees, for that matter, have the right to know the private details of Jobs's health, or is prying into the medical lives of CEOs unwarranted?

Jobs's health has been the subject of dogged curiosity among Silicon Valley insiders, technology reporters, and bloggers since he underwent surgery to treat pancreatic cancer in 2004. The interest grew even more intense when he began showing signs of weight loss and announced in January that he was taking a leave of absence from the Cupertino, Calif., company because of an undisclosed health issue.

Apple is known for being tight-lipped, but it has come under criticism from shareholders for not being more transparent about the health of its visionary head. Jobs is credited with turning the company around and for its successes with the iPod, the iPhone, and iTunes.

"Certainly, the health of the CEO is material information. Even if the CEO isn't someone who is held in such esteem as Steve Jobs, all CEO transitions have some cost associated with it," says Ben Hermalin, a finance professor at the University of California, Berkeley.

"In the spirit of things, to the extent that he is still the CEO and people may think their assessment of the firm is dependent on whether he will come back and run it, [Jobs's health condition] is probably information that should have been disclosed," he adds.

Announcement of his departure in January sent Apple stock down by $6.03 a share, illustrating just how the market views the connection between the wellbeing of Jobs and the future of Apple.

In his memo to Apple employees announcing his temporary leave, Jobs wrote that "the curiosity over my personal health continues to be a distraction not only for me and my family, but everyone else at Apple as well."

An Apple spokesperson has been quoted saying Jobs will return at the end of the month, but did not give any more details.

Whether Apple has a legal obligation to reveal more about Jobs's health – as opposed to an ethical obligation – is another matter and one that is being debated by corporate governance experts. John Coffee, a Columbia University law professor who specializes in corporate governance issues, told Business Week that the Security and Exchange Commission "has assiduously avoided giving clear guidance on when the CEO's health is material."

There is a fine line dividing when such matters are material and when they aren't, acknowledges Professor Hermalin. "Certainly [investors] would want to know how capable he or she is in running the firm."

But Paul Saffo, a Silicon Valley technology analyst, says Jobs's health isn't the public's business and that investors should be paying more attention to the company's products – such as the early success of the new generations of iPhones that went on sale late last week – and not the private lives of its top executive.

"The shareholders have no rights to pry into Steve Jobs's personnel health…. Love his computers but leave the guy alone," he says.

Jobs has undoubtedly been instrumental in Apple's success over the past decade, he adds, but the company has moved beyond Jobs and has a deep reservoir of skilled management talent.

"Apple is no longer sled dog management where everyone is following the lead dog."

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