How Much Privacy Should Steve Jobs Get?


Peter Henning, a former SEC lawyer and professor at the Wayne State University of Law, said that while companies are required to share material information about a company (or information that a reasonable investor would consider important), there's nothing in securities laws that require companies to specifically disclose information about a CEO's health.

"It's a delicate balance," he said. "Do investors have a right to know what [Jobs'] prognosis is? The answer to that one, I really think, is no."

Henning said the wording and timing of the announcement might actually mean that Apple has learned from previous lessons -- specifically, a reported 2009 Securities and Exchange Commission investigation into Apple's disclosure's of Job's health.

When contacted by, an SEC spokesman declined to comment on the matter.

Henning said it's likely that nothing will come of the probe, but he added that it might have taught Apple that it's better to tackle such matters sooner than later.

"[Apple] learned… Get it out there, keep it simple and move on," he said. "Apple handled this as well as you can handle it."

Should SEC Should Give More Guidance on CEO Health?

Still, some academics argue that Apple -- and other companies facing similar situations -- should be obligated to share more information with their stakeholders.

"I think it falls in line with the general push toward transparency and accountability and everything that Sarbanes-Oxley and the SEC itself stand for," said Alexa Perryman, a professor at Texas Christian University's Neeley School of Business and co-author of the paper "When the CEO is Ill: Keeping Quiet or Going Public?" "It's very important that the board of directors and the CEO himself or herself realize that they have a bit of celebrity role, a bit of a public persona."

Apple's board has always argued that Jobs' health is not material information, but Perryman said, "Given the repetition and given the fact that there are those stock drops, it's getting harder and harder to say that."

Apple may be well within its legal limits by withholding information about Jobs' health but, in general, she said corporate boards need more SEC input when it comes to CEO health disclosures.

"Right now, it's up to each board of directors to make this call, but given that health has so many personal issues, HIPAA [issues], I think boards are going to need some guidance from the SEC to help them with these tricky decisions," she said.

Despite the shadow of Jobs' departure hanging over the company, in its first quarter earnings call with analysts today, Apple executives were optimistic about the future of the company. Apple's earnings report was much stronger than expected, with the company posting record quarterly profits of $6 billion for the last three months of 2010 and reporting a 78 percent jump in net income for the holiday quarter.

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