Ex-SEC chief says Apple has disclosed enough about health of Steve Jobs

Posted:
in AAPL Investors edited January 2014
The former chairman of the U.S. Securities and Exchange Commission has said he believes that Apple has publicly disclosed enough information about the health of its chief executive, Steve Jobs.



Arthur Leavitt told Bloomberg on Monday that he believes Apple's board of directors has acted appropriately when revealing information about its company's CEO. He also revealed that after leaving the SEC, he was approached about joining Apple's board, but the offer was rescinded because of differences about governance.



"It's easy to criticize the board, but I think the reality is that someone who owns Apple stock has got to be deaf, dumb and blind not to know that Jobs has an illness that can reoccur at any time," Leavitt reportedly said.



He said the announcement on Monday that Jobs will take a medical leave of absence from Apple is sufficient information for investors.



"For the board to opine on what the extent of the illness is right now I don't think is really necessary," he said.



Jobs issued a letter to Apple employees on Monday to reveal that he has taken a medical leave of absence, though he will retain his title as CEO and will be involved in major strategic decisions for the company. He also requested that the privacy of himself and his family be respected.



Jobs has long held the belief that his health is a private matter, though some investors, critics and pundits have argued otherwise. With a company such as Apple, where the success has been so closely attributed to Jobs, some hold the belief that details about Jobs' condition should be made public.



The current leave of absence marks the third for Jobs, who had surgery in 2004 to address pancreatic cancer. He also left the company in January of 2009 to receive a liver transplant, and returned in June of that year.



This week it was also revealed that Jobs allegedly traveled to Switzerland during his leave in 2009 for cancer treatment. With all those details of Jobs' history with cancer out in the open, Levitt said he believes investors know the risks.
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Comments

  • Reply 1 of 58
    Yes they have disclosed just enough to cause uncertainty in the market. Doesn't matter how many Macs, iPhones or iPads Apple sells as long as Jobs health remains uncertain the stock will continue to take a beating.



    Anyone that doubts that take a look at the stock the last three days in spite of record earnings.
  • Reply 2 of 58
    In the Bloomberg article, but omitted from this one:



    Quote:

    ?If there is a legitimate criticism of that board, it could be only for a lack of succession plan,? Levitt said in a separate interview on Bloomberg Radio with Tom Keene. ?There I think the investors have to understand that the company should be held accountable.?



  • Reply 3 of 58
    anonymouseanonymouse Posts: 6,580member
    Quote:
    Originally Posted by extremeskater View Post


    Yes they have disclosed just enough to cause uncertainty in the market. Doesn't matter how many Macs, iPhones or iPads Apple sells as long as Jobs health remains uncertain the stock will continue to take a beating.



    Anyone that doubts that take a look at the stock the last three days in spite of record earnings.



    Let go of the hate and you'll be a happier person.
  • Reply 4 of 58
    newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by extremeskater View Post


    Yes they have disclosed just enough to cause uncertainty in the market. Doesn't matter how many Macs, iPhones or iPads Apple sells as long as Jobs health remains uncertain the stock will continue to take a beating.



    Anyone that doubts that take a look at the stock the last three days in spite of record earnings.



    You might even want to "take a look" at the Nasdaq and the S&P as well. Are you suggesting that Apple is to blame for their "downfall" as well ??? Give me a break.
  • Reply 5 of 58
    jd_in_sbjd_in_sb Posts: 1,484member
    I feel very sad for Steve when I read these articles.
  • Reply 6 of 58
    I agree. I think Steve has disclosed enough. All investors need to know is that they have a temporary CEO while Steve is on sick leave. They have plenty of CEO-ready executives that any other company in the industry would love to have as their CEO. As sad as it would be, there is nothing that investors need to worry about if the worst happened.



    Medical history is a personal matter. All investors need to know is how it effects the company. Apple has a great succession plan. Because investors tend to act irrationally and over react, it is only short term investors that will suffer. Long term investors would actually benefit because they could take advantage of the short term share price drop.
  • Reply 7 of 58
    anonymouseanonymouse Posts: 6,580member
    Quote:
    Originally Posted by Dr Millmoss View Post


    In the Bloomberg article, but omitted from this one:
    Quote:

    [succession plan nonsense]





    1. Just because they haven't published a succession plan doesn't mean they don't have one, in some form or other.



    2. Making public a definitive, rigid succession plan would just be a completely stupid move by the board. How often would they update it? Whenever circumstances change? So, daily, right?



    Or, what if they publish one next week and don't update it constantly. Hypothetically, it becomes necessary to act on it 6 months from then, but, given circumstances, it's no longer the best plan. Do they blindly follow it, or risk shareholder lawsuits and do something else?





    This whole succession plan thing is just a bunch of nonsense. If and when the time comes to make succession decisions, the board will make the best decision for the time and circumstances, that's what they get paid to do. Exactly how many companies in the past have published succession plans? To my knowledge, it's not like this is at all a common practice.
  • Reply 8 of 58
    mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by anonymouse View Post


    This whole succession plan thing is just a bunch of nonsense. If and when the time comes to make succession decisions, the board will make the best decision for the time and circumstances, that's what they get paid to do. Exactly how many companies in the past have published succession plans? To my knowledge, it's not like this is at all a common practice.



    Apple's succession plan is the product pipeline that is probably at least a 2 years timeframe with a precise execution road map personally approved by Steve.



    What ever happens with regard to Steve, the stock probably won't be affected anymore by those circumstances, it is throughly baked in now.
  • Reply 9 of 58
    realisticrealistic Posts: 1,141member
    Quote:
    Originally Posted by anonymouse View Post


    1. Just because they haven't published a succession plan doesn't mean they don't have one, in some form or other.



    2. Making public a definitive, rigid succession plan would just be a completely stupid move by the board. How often would they update it? Whenever circumstances change? So, daily, right?



    Or, what if they publish one next week and don't update it constantly. Hypothetically, it becomes necessary to act on it 6 months from then, but, given circumstances, it's no longer the best plan. Do they blindly follow it, or risk shareholder lawsuits and do something else?





    This whole succession plan thing is just a bunch of nonsense. If and when the time comes to make succession decisions, the board will make the best decision for the time and circumstances, that's what they get paid to do. Exactly how many companies in the past have published succession plans? To my knowledge, it's not like this is at all a common practice.



    I agree publishing a plan could only serve to get high level employees upset if they weren't on the list and they felt that they should be.
  • Reply 10 of 58
    Quote:
    Originally Posted by esummers View Post


    I agree. I think Steve has disclosed enough. All investors need to know is that they have a temporary CEO while Steve is on sick leave. They have plenty of CEO-ready executives that any other company in the industry would love to have as their CEO. As sad as it would be, there is nothing that investors need to worry about if the worst happened.



    Medical history is a personal matter. All investors need to know is how it effects the company. Apple has a great succession plan. Because investors tend to act irrationally and over react, it is only short term investors that will suffer. Long term investors would actually benefit because they could take advantage of the short term share price drop.



    You're saying investors but actually talking about traders. Only traders benefit from volatility. Investors just have to sweat it out, and hope the fears subside.



    The article creates a straw-man argument when it refers to "the belief that details about Jobs' condition should be made public." I haven't seen anyone make that argument. The concerns are (1) about his fitness to fulfill his duties as CEO during his absence, (2) succession plans, and (3) the accuracy of the public information which is provided. As far as we know, the SEC is still looking into the accuracy issues from the last leave of absence.
  • Reply 11 of 58
    aaarrrggghaaarrrgggh Posts: 1,580member
    Quote:
    Originally Posted by anonymouse View Post


    1. Just because they haven't published a succession plan doesn't mean they don't have one, in some form or other.



    Quite possible, and I agree. I really don't want the competition getting a leg up on who the most respected executive team members are in the company.



    However, the board should formally state that there is an active succession plan, and they are prepared for the eventuality of critical executives.



    Going into a mode of searching for a new CEO with Cook (or someone else) acting as interim CEO might be their strategy. Hopefully, they think they have the talent within to make it work. I would want them to ideally state one position or another.
  • Reply 12 of 58
    Quote:
    Originally Posted by mstone View Post


    Apple's succession plan is the product pipeline that is probably at least a 2 years timeframe with a precise execution road map personally approved by Steve.



    What ever happens with regard to Steve, the stock probably won't be affected anymore by those circumstances, it is throughly baked in now.



    If thats the case why would the stock have been effected at all? So I don't see that as the case. Any bad news about Steve Jobs in any form will cause panic.



    The market even more so in the tech sector is rarely based on logic. This week is a perfect example on how perception trumps logic any day of the week.



    If people truly believed there were a two year approved plan in place by SJ then the AAPL woud have spiked on earnings, instead they have declined daily.



    Unless you feel the stock was over inflated based on either Verizon news or iPad 2 news. Which that I could buy.
  • Reply 13 of 58
    Quote:
    Originally Posted by newbee View Post


    You might even want to "take a look" at the Nasdaq and the S&P as well. Are you suggesting that Apple is to blame for their "downfall" as well ??? Give me a break.



    Funny when I say Apple is following the market trends then people want to dispute that. Make up your mind. Give me a break.
  • Reply 14 of 58
    anonymouseanonymouse Posts: 6,580member
    Quote:
    Originally Posted by aaarrrgggh View Post


    ... However, the board should formally state that there is an active succession plan, and they are prepared for the eventuality of critical executives. ...



    So they should say they have a secret succession plan?



    Sort of reminds me of the time on the West Wing when Josh told the press that the President had a secret plan to fight inflation.
  • Reply 15 of 58
    Quote:
    Originally Posted by aaarrrgggh View Post


    Quite possible, and I agree. I really don't want the competition getting a leg up on who the most respected executive team members are in the company.



    However, the board should formally state that there is an active succession plan, and they are prepared for the eventuality of critical executives.



    Going into a mode of searching for a new CEO with Cook (or someone else) acting as interim CEO might be their strategy. Hopefully, they think they have the talent within to make it work. I would want them to ideally state one position or another.



    This article explains the succession issues well I think.



    http://management.fortune.cnn.com/20...%99s-next-ceo/



    In part,



    Quote:

    But Apple may well have to bow to the Illinois union's wishes. The reason: Recent changes in SEC regulations have broadened legal definitions of risk, redefining CEO succession planning as fair game for shareholders demanding answers.



    Not so long ago, a company under pressure to reveal its CEO succession plan "could blow off a request like Proposition 5 by claiming that executive succession was a routine business matter best handled by management, not something the board or the shareholders should be involved in," says Dave Heine, an executive vice president in charge of the directors and C-suite practice at Minneapolis-based leadership consultants PDI Ninth House.



    Then, in 2009 and again in late 2010, the SEC issued rule changes that no longer allow companies to dodge the succession question.



    "That opened the door to these Proposition 5-type actions from shareholders," Heine notes. "So more and more boards of directors are trying to get out in front of this, and they're often at a loss as to what to say and how much detail to disclose," Heine says.



    Although Heine declines to say which of his Fortune 500 clients have sought his advice on this issue, he does allow that "our business in this area has gone up 200%" in the 14 months since the SEC began rewriting the script.



    So what does he tell beleaguered boards?



    "If you say nothing at all about CEO succession, investors get skittish," he says. "Apple could have avoided this whole controversy if they had shared some general information -- not necessarily naming names of potential successors to Steve Jobs, but outlining their criteria for selection and what they're doing to develop internal candidates."



    With annual report season almost upon us, look for more of them to include a page or two about succession.



    "Describing the process reassures shareholders, analysts, and employees that you do have one, even if you don't go into the kind of specific detail that could do you competitive harm," Heine says.



    One important element of succession planning is "spelling out the challenges the current CEO has faced and comparing them with what the next one will have to deal with," says Heine. "Doing this shows that you have your eye on how your industry is evolving and how the marketplace is changing, and what that implies about the qualifications you'll need in your next CEO."



  • Reply 16 of 58
    mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by extremeskater View Post


    If thats the case why would the stock have been effected at all? So I don't see that as the case. Any bad news about Steve Jobs in any form will cause panic.



    The market even more so in the tech sector is rarely based on logic. This week is a perfect example on how perception trumps logic any day of the week.



    If people truly believed there were a two year approved plan in place by SJ then the AAPL woud have spiked on earnings, instead they have declined daily.



    Unless you feel the stock was over inflated based on either Verizon news or iPad 2 news. Which that I could buy.



    No I am suggesting that it takes two or three sick leaves before the investors get the message that Steve is not going to be as involved as he once was, however since the planning is in place, it no longer is a significant factor in Apples earnings forecast, consequently Steve's departure is already figured into the stock price. Not saying that buy on rumor sell on news is not still an obvious trader technique but it will be much less of a factor now that there is no surprise.
  • Reply 17 of 58
    Wanted: CEO with ability to think different and skate to where the puck is going to be.
  • Reply 18 of 58
    paxmanpaxman Posts: 4,603member
    Quote:
    Originally Posted by Doctor David View Post


    Wanted: CEO with ability to think different and skate to where the puck is going to be.



    And who cares deeply and personally about the products the company produces
  • Reply 19 of 58
    Quote:
    Originally Posted by paxman View Post


    And who cares deeply and personally about the products the company produces



    Applicant must supply own RDF.
  • Reply 20 of 58
    newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by extremeskater View Post


    Funny when I say Apple is following the market trends then people want to dispute that. Make up your mind. Give me a break.



    My mind is made up ... so why do you have a different opinion this time? just askin' ... nothing personal.
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