Is Steve Jobs Obligated to Disclose Health Conditions?

Analysts debate whether investors are entitled to know more about what's ailing Apple's visionary CEO

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Apple CEO Steve Jobs's announcement that he will take an unexplained medical leave of absence has triggered speculation about the technology company's future and sent Apple shares tumbling on international exchanges and in early U.S. trading on Tuesday. But it's also raised a thorny question: Does Jobs--who took leaves for pancreatic cancer surgery in 2004 and a liver transplant in 2009--have a responsibility to publicly disclose more detailed information about his medical condition?

  • Jobs Is Legally Obligated to Disclose Health, contends Ben Heineman Jr., GE's former general counsel, at The Atlantic. He argues that details about Jobs's illness constitute "material information" as defined by securities law because they "would influence an investor's decision to buy or sell securities." He calls on the Securities and Exchange Commission to develop rules governing the disclosure of CEO illnesses and on Apple to release specifics about its CEO's condition in the name of "sound and fair investor relations." Heineman continues:

The right to privacy of a CEO about medical conditions should be outweighed by the need for disclosure ... when there is a life-threatening illness; when there is a substantial leave of absence that raises questions about current and future ability to lead the company; or when an illness impairs a CEO's ability to do his or her job ... It seems clear that one these conditions applies here. 

  • Even Partial Disclosure Would Help, states Ryan Tate at Gawker. Apple has never managed to keep information about Jobs's health from leaking to the media, he argues, and the company's argument that "there's no public dimension to Jobs' health issues" is "disingenuous." Tate explains that "a single dose of clear and accurate health data would not be nearly so crushing as the endless trickle of desperate info-grubbing, speculation, and uncertainty that ensued every other time Apple has tried saying nothing."
  • But Definition of 'Material Information' Is Vague, notes Wayne State University law professor Peter Henning, as quoted by Bloomberg. Henning explains that Jobs "may well be a special case just because he is viewed by the market as so important to the company, maybe on a par with Warren Buffett," but adds that the SEC's review of Apple's disclosures about Jobs's health in 2009 hasn't yielded any charges.
  • And Companies Have Interpreted Disclosure Differently, observes Matthew Herper at Forbes. He explains that Pacific Biosciences CEO Hugh Martin discussed his multiple myeloma with investors and the media in "excruciating detail," while the condition of Frank Baldino, Jr.--who was "every bit as pivotal to his company, Cephalon, as Jobs is to Apple"--was only revealed when he died of leukemia in December.
  • Leave Jobs Alone! declares Dan Lyons at The Daily Beast. Lyons, who is suspending the blog he created to impersonate Apple's CEO, claims details about Jobs's health have no news value and only serve to generate page views online:

If you really want to learn about cancer and liver transplants, you can go to the library. If you're an investor and really can't live with the uncertainty that [Monday's] announcement brings to Apple stock, well, sell your shares and thank Steve Jobs for the ridiculous profits you've made. If you decide to hang on to your shares, that's fine too--but don't go around claiming that your handful of shares gives you the right to pry into the private life of a sick man.

This article is from the archive of our partner The Wire.