Is Steve Jobs the apple of his investors’ eye?

Steve Jobs defines innovation. He created a great company decades ago. Pulled it out of the abyss to not only compete again, but become the defacto standard in an entirely new category. His company’s stock has gone through the roof in recent years. And now, he continues to build upon his many successes by launching each new product extension with greater fanfare than the last one. Jobs’ secretive brand building strategies have become legendary, taking on an aura that has yet to be copied by any business player in our era.

Yet through this same strategy, he’s made one serious miscalculation. And, investors rightly aren’t very happy about it. Jobs continues to be far too secretive about the status of his health. A recent photo on June 13th shows a man who looks so gaunt and unhealthy that anyone who has monetary interest in Apple should have reason to be concerned. And, they are. According to one recent article, one or two of Apple’s larger hedge fund investors have actually hired private detectives to track Mr. Jobs’ day to day appointments. They are looking for any clues that can help explain this sudden weight loss.

I guess one can understand why. In 2003, Jobs learned that he had a malignant tumor in his pancreas. This most common type of Pancreatic Caner carries a life expectancy of about a year. Back then, Mr. Jobs was entirely too secretive about the nature of his disease and how he planned to treat it. So, investors are wondering if it’s back or what other illness he could have this time around.

The bigger ethical and legal question is whether Apple investors have the right to know if their CEO is indeed very sick again.  On the one hand, cancer is a very personal disease. Many cancer patients choose to say little about their situation publicly. And of course, we can understand why and want to respect those rights. The other key point is that legally, Mr. Jobs has no fiduciary obligation to divulge every detail of his health situation to shareholders or the public at large.

But, in an age where Sarbanes-Oxley reigns and transparency within public companies is the golden rule, a CEO does need to disclose anything material that could jeopardize its short and long term viability. Because Steve Jobs is so closely tied to the success of Apple and because he doesn’t have a predetermined successor (at least that I know of,) I believe he should provide a little more disclosure on this vital issue. At the very least, it would certainly go a long way to calm down the frantic nerves of nervous investors.

Comments

[Jackie]

Totally agree. I think the major miscalculation Apple made was not concealing Jobs' health status, but rather tying his personality too closely with the health of the company. He is the only face of the company, leading every one of their product launches. Apple needs to put some of its key executives out in front and start showcasing Apple's bench team. Until they do that, investors have every right to ask about Jobs' health situation because they have created a situation where the two are inextricably linked.

[ed]

Yup, you are right. Ain't it funny. What used to be a HUGE positive (Apple personified through Jobs), now has some real negatives.

[Michael]

Let me offer a counterpoint. Steve Jobs' personal life is his own. And at any minute, that could change - from a chronic illness, a family tragedy, or an epiphany that he should be doing something different with his life - all of which could affect his tenure, or at least his energy, at Apple. And notwithstanding contractual obligations, he has that right. He should not feel the need to say one word to anyone about his condition, save immediate family. However...he has done a severe disservice to his board, investors, employees and customers by not putting a succession plan in place. By not grooming a handful of stars that could take the top spot tomorrow. By not planning a contingency scenario for his professional obligations, the way most of us do with our personal obligations. CEOs should be training talented direct reports to take their jobs and do it better. That's what makes for lasting companies. Whether Steve Jobs is ill or not is none of my business. But as an Apple shareholder, his lack of bench strength puts me at risk. That is where I, and so many others, are deserving of clarity and answers.