How Sick is the CEO?

22 June 2009

Shareholders want to know everything.

The inner workings of the income statement, the line-item details of the balance sheet, the next stage in the product cycle, and the intricate moves of the competition….they want to know it all.

They even want to know the details of the physical health of the CEO. This morning it was reported that Steve Jobs, soon to return as CEO of Apple after a 6 month leave of absence, had a liver transplant a few months ago. A debate is now going on as to whether the Board of Directors should officially disclose the severity of Jobs’ medical condition upon his return.

Should a company have to disclose this level of detail? Disclosure is more of an art than a science. To effectively answer the question you need to ask – “How important is the CEO to the current and future prospects of the company?”

In this case, many would argue that Jobs is important enough to disclose the specifics of his personal medical problems.

It doesn’t stop at a manager’s health either. I have personally witnessed institutional shareholders ask a CEO what kind of car he drives and what part of town he lives in.

Should we be surprised? I don’t think so. A CEO and senior management team is often thought of as the key elements of success or significant points of failure in a company. When you are CEO of a publicly traded company, investors will want to get personal.

2 Responses to “How Sick is the CEO?”

  1. Carl Thompson

    Of course Apple viloated SEC FD rules (again). Even Warren Buffet agrees with me this time.

    Their IR and Board have always been suspect at best. Does anyone remember the Board (including AlGore)approving back dated options not too long ago??? They quickly swept that under the rug, showing the power of having AlGore as both the criminal and policeman.

    We’ll see more of the same with this FD violation. Nothing will come iof it.

  2. Anil Dilawri

    Thanks for the comment, Carl.

    But next time, tell us how you really feel ;-)

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