Shareholders Criticize Apple Over Steve Jobs' Health Disclosures - InformationWeek

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2/26/2009
10:38 AM
Mitch Wagner
Mitch Wagner
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Shareholders Criticize Apple Over Steve Jobs' Health Disclosures

Apple shareholders are taking the company to task over how it handled disclosures about Steve Jobs's health, saying the company needs to be more forthcoming about the CEO's condition. But Apple directors say they've done nothing wrong -- and that nothing has changed since Jobs announced last month that he was withdrawing from day-to-day operations, and the ailing CEO plans a June return.

Apple shareholders are taking the company to task over how it handled disclosures about Steve Jobs's health, saying the company needs to be more forthcoming about the CEO's condition. But Apple directors say they've done nothing wrong -- and that nothing has changed since Jobs announced last month that he was withdrawing from day-to-day operations, and the ailing CEO plans a June return.Apple shareholders sought clarification on Jobs's future from directors at the annual shareholder meeting Wednesday.

For the last nine months, Apple has refused to get into specifics about the well-being of its chief executive, Steven P. Jobs, even as he said last month that he was taking a six-month leave of absence to deal with health issues.

At its annual shareholder meeting here on Apple's corporate campus, run by the chief operating officer, Timothy Cook, the company responded to inquiries about Mr. Jobs by saying that he still planned to return to the company in June.

"He is deeply involved in all strategic matters and has delegated day-to-day authority to Tim Cook and his team," said Arthur Levinson, a co-lead director of Apple and the chief executive of Genentech. "That's where it stands."

Mr. Levinson said that Apple's board regularly discussed the matter of succession at the company and that "if there is new information we deem of import to disclose, that will happen."

Jobs received pancreatic cancer surgery in 2004; last year, he turned up gaunt at a summer announcement. Apple reassured the press and shareholders that Jobs was fine -- right up until January, when Jobs announced he was withdrawing from day-to-day operations at Apple to take care of his health. He said then he planned to return in June. He said he was suffering from a hormonal imbalance that prevents him from absorbing food.

At the meeting, Cook, who's running day-to-day operations in Jobs's absence, reviewed the company's accomplishments in the past year. Cook dressed like Jobs in blue jeans and a black shirt (but collared, not a mock turtleneck like Jobs wears).

The event was the first shareholder meeting Jobs has missed since he returned to Apple more than a decade ago.

Board members said Jobs remains deeply involved in the company strategy:

After the meeting, some shareholders expressed frustration at the board's refusal to disclose more than what is already known about the company's succession plans, and Jobs' health. The board also didn't respond to questions about an investigation by securities regulators into how the company handled the health disclosures.

"I'm disappointed the board was not more forthcoming," said Brandon Rees, a representative of the AFL-CIO Reserve Fund, which owns a significant amount of Apple stock. Louis Malizia, assistant capital strategies director for the International Brotherhood of Teamsters, shared the sentiment.

"I feel like I don't know any more than I did," he said."

Longtime Mac owner and stockholder Scott Grannis said he felt "slighted:"

Scott Grannis has owned Apple Inc. products for two decades, from his first Mac in 1987 to the latest iPhone. He bought his first Apple shares in 2001 for $9.25 each.

For all his enthusiasm, Grannis says he's not happy with how the company handled disclosures about the health of Chief Executive Officer Steve Jobs.

"Even being a fan of Apple, I wish they would've been a little more forthright," said Grannis, 59, the former chief economist at Western Asset Management Co. in Pasadena, Calif. "I've felt slighted. I've felt disappointed."

On the other hand, shareholder Daniel Hung stood up for Apple:

"As much as the board of directors should have been a little more forthcoming with public disclosures, how many other companies do we ask this of?" said Daniel Hung, who writes about Apple on his blog The Curious Investor and owns the shares. "The only thing I could fault them on is relying on Steve Jobs so much over the years that it's becoming a public issue now."

And board members defended the company's disclosures.

"We believe we have met all disclosure obligations," Genentech Inc. (DNA) CEO Arthur Levinson told shareholders. Levinson has been an Apple board member since 2000. "Nothing has changed. Succession planning is something this board takes up regularly. You can assume we will do that responsibly."

In other activity at the board meeting:

Shareholders approved the re-election of the eight-member board, which includes Jobs, former Vice President Al Gore, and Google CEO Eric Schmidt.

And the shareholders sang "Happy Birthday" to Jobs, who turned 54 on Tuesday.

What do you think? How well is Apple handling questions about Jobs's health?

For a look at the challenges facing Apple, read, "Where Does Apple Go From Here?"

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
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