Lessons learned from Steve Jobs' illness and public disclosure
When the head of a New York-based investment firm was hospitalized for a heart condition, the executive took a very different approach from Apple co-founder Steve Jobs' own health-related disclosure.
Lazard CEO Bruce Wasserstein felt little push-back from investors after he recently issued a short but poignant message, stating that he was hospitalized for an irregular heartbeat. "His condition is serious," the note said, "but he is stable and recovering."
It was a very different approach from the one taken at Apple early this year. In January, after months of rumors with no public response, Jobs ceded control of day-to-day operations. He returned to work in June after receiving a liver transplant.
In a new report from The Wall Street Journal, Michael Corkery examined the effect differing levels of disclosure had on the stock prices of both companies. His conclusion: "Openness can be healthy."
"The computer maker’s shares see-sawed when investors worried that the company was being less than forthcoming about the health of CEO Steve Jobs," the report said.
Apple’s secrecy surrounding the health of Jobs has had a major effect on Apple's stock price, while the open stance of Lazard resulted in a 1 percent drop. Throughout Jobs' career, Apple has been notoriously tight-lipped about the health of its chief and has always rebutted any questions about his health as being a "private matter." The report suggested that Wasserstein's more forthcoming approach was to his company's benefit.
"A CEO doesn’t want his company's stock price to go up when he gets sick because it means investors don’t consider him a critical asset," Corkery wrote. "But he doesn’t want it to tank either. By being straightforward about Wasserstein’s illness, Lazard is enabling investors to decide for themselves about the possibility of a leadership change at the storied firm."
Jobs began to buck his secrecy trend at the beginning of this year with his open letter to Apple fans about his apparent weight loss and failure to show at the Macworld keynote. When he returned to the stage at Apple’s annual music event in September, Jobs acknowledged his health.
"So, I’m vertical, I’m back at Apple and loving every minute of it," he said, "and working with some talented teams to come up with some great products for the future."
Lazard CEO Bruce Wasserstein felt little push-back from investors after he recently issued a short but poignant message, stating that he was hospitalized for an irregular heartbeat. "His condition is serious," the note said, "but he is stable and recovering."
It was a very different approach from the one taken at Apple early this year. In January, after months of rumors with no public response, Jobs ceded control of day-to-day operations. He returned to work in June after receiving a liver transplant.
In a new report from The Wall Street Journal, Michael Corkery examined the effect differing levels of disclosure had on the stock prices of both companies. His conclusion: "Openness can be healthy."
"The computer maker’s shares see-sawed when investors worried that the company was being less than forthcoming about the health of CEO Steve Jobs," the report said.
Apple’s secrecy surrounding the health of Jobs has had a major effect on Apple's stock price, while the open stance of Lazard resulted in a 1 percent drop. Throughout Jobs' career, Apple has been notoriously tight-lipped about the health of its chief and has always rebutted any questions about his health as being a "private matter." The report suggested that Wasserstein's more forthcoming approach was to his company's benefit.
"A CEO doesn’t want his company's stock price to go up when he gets sick because it means investors don’t consider him a critical asset," Corkery wrote. "But he doesn’t want it to tank either. By being straightforward about Wasserstein’s illness, Lazard is enabling investors to decide for themselves about the possibility of a leadership change at the storied firm."
Jobs began to buck his secrecy trend at the beginning of this year with his open letter to Apple fans about his apparent weight loss and failure to show at the Macworld keynote. When he returned to the stage at Apple’s annual music event in September, Jobs acknowledged his health.
"So, I’m vertical, I’m back at Apple and loving every minute of it," he said, "and working with some talented teams to come up with some great products for the future."
Comments
Plus Apple has more of a cult-like following, rather than a business-like following. So I can see the paranoia more about Apple's CEO than most other companies.
I dunno. It's 2 different industries. Jobs has always had a higher profile; heck, I didn't even know what this 'Lazard' was, much less who its CEO was. I don't think you can really compare the two.
Plus Apple has more of a cult-like following, rather than a business-like following. So I can see the paranoia more about Apple's CEO than most other companies.
Totally disagree, the point was that Apple caused bigger drama with Steve illness, then what was required and this could have been handled much better. As shareholder, I was dismayed at THE lack of information and secrecy behind his illness.
Btw:Lazard is BIG investment firm that handles a LOT of money for private investors and Bruce Wasserstein (he is one of the LEADER in investment industry http://www.businessweek.com/magazine...6/b4048007.htm) is main driver of the investment decisions. By telling the investors of his illness and that it maybe serious, but he is stable, it stops panic and people pulling their funds from the firm.
Steve has to be more upfront with his illness, especially since he is driving force of Apple and it is BUSINESS!
Apple need to have heir-apprant in wings that can take over, if anything happens to Steve. That Cook guy did very well, but not sure if he has the same innovation qualities as Steve.
P.S. Steve will know Bruce Wasserstein very well and vice versa, they both Billionaires (http://en.wikipedia.org/wiki/Bruce_Wasserstein) and very succcessful business men!
Is there any comparison between Jobs --fountainhead of a company that makes innovative products appreciated around the world-- and Lazard/Wasserstein --a corrupt, influence peddling financier? iCool vs. i-bank? Seriously?
For the uninformed, see: yield-burning scandal, fraud, kickbacks, etc.
What's the difference? Geez, I dunno, is Lazard CEO Bruce Wasserstein considered an icon for his industry? When people think investment firms, do they immediately picture Bruce Wasserstein? No offense to Mr. Wasserstein, and I truly hope he recovers, but the comparison is (forgive the pun) Apple and oranges...
Actually Yes,Bruce Wasserstein is one of ICONs in investment industry and when he opens his mouth a look of people listen very carefully. Do a little research on this guy.
Jobs' health issue are not a public issue. He is only human.
Jobs' executive staff took the reigns and kept Apple going without skipping a beat. That says a lot about how affective Jobs' leadership is. The company was shown to survive without him and Wall Street should know that Apple will be good after Jobs' leave for real and for good.
Jobs' health issue are not a public issue. He is only human.
Wall Street should know, sorry mate, but they do not and it was evident at the time, with the stock price movement. Steve Jobs health was shareholders issue and WE had a right to know, since his health does affect the company performance.
Until a clear heir apparent is named and the secrecy is dropped, shareholders will hold Steve accountable for such behavior.
This has nothing to do with Steve being human, as WSJ said more about "Openness can be healthy."
In a new report from The Wall Street Journal, Michael Corkery examined the effect differing levels of disclosure had on the stock prices of both companies. His conclusion: "Openness can be healthy."
Well, there's always the old adage about damage control:
Get it out early, get it out yourself!
EDIT: I take back what I said... whoever said "do your research" was right. I should've done my research
As others have noted, there's no logical comparing of Apple, Inc. and an investment firm. They're too fundamentally different to be compared in any important way with each other.
I detest these critical, gossipy, cheap jabs at one of the few companies that is doing well these days.
It's no one else's business how Steve chooses to divulge his personal matters. Apple did a decent job without Steve while he was gone, and for that matter, who knows that he didn't have a hand in during at least part of his physical absence?
"Lesson learned. . ."? What's the lesson, and who learned it?
As others have noted, there's no logical comparing of Apple, Inc. and an investment firm. They're too fundamentally different to be compared in any important way with each other.
I detest these critical, gossipy, cheap jabs at one of the few companies that is doing well these days.
It's no one else's business how Steve chooses to divulge his personal matters. Apple did a decent job without Steve while he was gone, and for that matter, who knows that he didn't have a hand in during at least part of his physical absence?
AAPL and LAZ are publicly-traded companies, and the story was about transparency regarding health of the CEO. The fact that they are in different industries misses the point altogether. When you are dealing with a publicly-traded company, the health of a CEO is definitely the business of the shareholders, as is the succession plan to replace him or her. Sooner or later it will come out, and it is just a matter of how and when it will be disclosed. Berkshire Hathaway (BRKA) might face this in the near future with Warren Buffett advancing in age, and it will be interesting to see how it plays out.
I agree with 90pc of the above comments?this is just some random banker, not a pioneer and staple figure of the technology business, no comparison.
Wasserstein's illness was a lot more straightforward to diagnose and treat than Jobs'. There is simply no comparison.
With a treatment path that had as many twists and turns as Jobs' did, including months of inconclusive tests to try to figure out why he couldn't put on weight, what exactly should Apple have disclosed, and how much would all the conflicting information have affected the price of AAPL? I wish Apple and Jobs could have been more forthcoming, but I understand fully why they weren't: better to keep your mouth shut until you have a definitive medical answer upon which you can make a public statement.
I too think the comparison of Jobs' and Wasserstein's cases is not exactly of the apples to apples variety.
Wasserstein's illness was a lot more straightforward to diagnose and treat than Jobs'. There is simply no comparison.
With a treatment path that had as many twists and turns as Jobs' did, including months of inconclusive tests to try to figure out why he couldn't put on weight, what exactly should Apple have disclosed, and how much would all the conflicting information have affected the price of AAPL? I wish Apple and Jobs could have been more forthcoming, but I understand fully why they weren't: better to keep your mouth shut until you have a definitive medical answer upon which you can make a public statement.
Yeah!!!!.....What he said!!!
Wall Street should know, sorry mate, but they do not and it was evident at the time, with the stock price movement. Steve Jobs health was shareholders issue and WE had a right to know, since his health does affect the company performance.
Until a clear heir apparent is named and the secrecy is dropped, shareholders will hold Steve accountable for such behavior.
This has nothing to do with Steve being human, as WSJ said more about "Openness can be healthy."
Are you saying Apple's stock wouldn't have tanked if Apple came out and said "Steve Jobs is taking leave of the company because he's very ill and needs a liver transplant"? Really?
Wall Street would not have just sat back - there would have been a massive sell-off of Apple shares. (I'm not saying Apple's secrecy was the best way to go, but there are some privacy issues involved, and I don't see Apple as having done anything legally wrong).
As far as whats-his-name at Lazard, you can't compare the two situations.
"The computer maker?s shares see-sawed when investors worried that the company was being less than forthcoming about the health of CEO Steve Jobs," the report said."
[ View this article at AppleInsider.com ]
So AAPL would be "more stable" stable if Jobs/Apple were open about what happened or if he went into the hospital next week for even a checkup?
I think we would see the stock price drop like a rock.
Actually Yes,Bruce Wasserstein is one of ICONs in investment industry and when he opens his mouth a look of people listen very carefully. Do a little research on this guy.
Exactly my point. "Do a little research on this guy."? THAT was my point, you don't need to do any research for Steve Jobs to be a familiar name. Plus you sound like you have anger issues... easy.... why are people so prone to getting irate when blogging. Something about being more anonymous behind a screen name sure can make people have an unhealthy edge.
Are you saying Apple's stock wouldn't have tanked if Apple came out and said "Steve Jobs is taking leave of the company because he's very ill and needs a liver transplant"? Really?
Wall Street would not have just sat back - there would have been a massive sell-off of Apple shares. (I'm not saying Apple's secrecy was the best way to go, but there are some privacy issues involved, and I don't see Apple as having done anything legally wrong).
As far as whats-his-name at Lazard, you can't compare the two situations.
No, the way to handle it is to tell your shareholders some information without the 'cloak and dagger' scenario.
As for your last statement, can you provide some evidence not to compare the two situations.