The Wall Street Journal

Apple Mum On Jobs's Treatment, Diagnosis

By YUKARI IWATANI KANE and JOANN S. LUBLIN

Apple Inc. said Chief Executive Steve Jobs returned to work after a nearly six-month medical leave, but the company provided no update on its leader's health and didn't say if his responsibilities would change.

Mr. Jobs's return will fuel debate over the company's disclosure practices, which have drawn the attention of the Securities and Exchange Commission.

The SEC, which opened an informal probe earlier this year, is continuing to look at the issue, people familiar with the situation said. Apple's board hired outside counsel to represent it regarding disclosures after the launch of the probe, said other people familiar with the matter.

Apple declined to comment on the SEC inquiry or on the hiring of outside counsel to represent the board. Apple didn't issue a release Monday announcing Mr. Jobs's return, but made the disclosure in response to requests from reporters. "He's currently at Apple a few days a week and working from home on the remaining days," said a company spokesman, reading a statement. "We're very glad to have him back."

The Cupertino, Calif., company declined to comment on whether the 54-year-old cancer survivor is working full time or if his workload has changed from before he went on leave. Apple also declined to comment on the status of Mr. Jobs's health.

Mr. Jobs had been on medical leave since mid-January after announcing that he had a "hormone imbalance," but has given few details about his condition. Mr. Jobs had a liver transplant in Tennessee about two months ago. The Methodist University Hospital Transplant Institute confirmed Mr. Jobs had undergone a liver transplant and said his prognosis was "excellent."

Some governance experts said Mr. Jobs's return will likely revive controversy over the Apple board's failure to disclose his liver transplant surgery and his post-surgical prognosis. Apple and its directors have consistently kept a tight lid on Mr. Jobs's health, even though the CEO is regarded as key to the company's strategy and direction. Because Mr. Jobs "is back in the office as CEO, the company ought to disclose the details of his treatment,'' said Charles Elson, head of the Weinberg Center for Corporate Governance at the University of Delaware's business school.

Harvey Pitt, a former SEC chairman, questioned why the Apple board didn't disclose that Mr. Jobs needed a liver transplant in January. Mr. Pitt now runs corporate-governance consultancy Kalorama Partners LLC. "We haven't gotten to the point where liver transplants are viewed as routine surgery," he said, adding that he has questions about "what processes [the board] went through in deciding what disclosure to be made."

In the past, some ailing executives also haven't volunteered information about their health or revealed their reduced work schedules as a result of their illness. In 1992, Steven J. Ross, who was then chairman and co-CEO of Time Warner Inc., died after a year-long battle with prostate cancer. The media giant said Mr. Ross was still running the show during much of that time. He actually was working from home only a few hours a day, a friend later said. Time Warner has declined to comment on the Ross situation.

Some investors said they were satisfied with Apple's disclosures. "It doesn't bother us," said Tim Ghriskey, a fund manager for Solaris Investment, which owns Apple stock. "If the SEC knows what the best way to handle the situation is, then they should come out and say here are the rules."

―Justin Scheck and Kara Scannell contributed to this article.
Write to Yukari Iwatani Kane at yukari.iwatani@wsj.com and Joann S. Lublin at joann.lublin@wsj.com



Bloomberg
Jobs Returns to Work as Apple CEO After Medical Leave (Update3)

By Connie Guglielmo

June 29 (Bloomberg) -- Steve Jobs is back at work at Apple Inc., returning to his job as chief executive officer as planned after taking medical leave in January.

“Steve is back to work,” said Steve Dowling, a spokesman at the Cupertino, California-based company. Jobs is at Apple a few days a week and working from home the rest of the time, he said. “We are very glad to have him back.”

Jobs’s return may reassure investors concerned that he was too sick to continue as CEO, said Gene Munster, an analyst with Piper Jaffray & Co. in Minneapolis. Jobs, a cancer survivor, said in January he would resume his daily duties at the end of June. Jobs’s doctors disclosed last week that he had a liver transplant and said he is recovering well.

“It should give investors confidence in Apple’s three-to- five-year road map,” said Munster, who recommends buying the stock and doesn’t own it. “Having Steve Jobs back means they got the visionary back.”

Dowling declined to say whether Jobs, 54, is actually at the office today. He also declined to comment on Jobs’s liver transplant or whether the company will provide more information on the CEO’s health.

Apple, maker of Macintosh personal computers and the iPhone, fell 47 cents to $141.97 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have jumped 66 percent this year.

Liver Transplant

Jobs had his transplant about two months ago, according to a person familiar with the matter. Jobs was the sickest patient on the waiting list at the time a liver was available, James Eason, chief of transplantation at the Methodist University Hospital, said in a June 23 statement.

Most liver-transplant patients are back at work in about two to three months, Abhinav Humar, clinical director of the Division of Transplantation at the University of Pittsburgh Medical Center, said this month. He didn’t treat Jobs and has no direct knowledge of his case.

Jobs, who co-founded Apple in 1976 with Steve Wozniak, appeared thinner at the company’s developers conference in June 2008, sparking speculation he was ill. Apple first said he was suffering from a “common bug” and then declined to comment, saying his health was a private matter. The shares fluctuated with each new report on Jobs’s health.

Nutritional Ailment

On Jan. 5, Jobs announced he would remain CEO while seeking a “relatively simple” treatment for a nutritional ailment. Nine days later, Jobs said he had decided to take himself “out of the limelight” and go on leave after learning his health issues were more complex than he originally thought.

Those disclosures bothered some corporate governance experts, who said Apple and its board should have been more forthcoming with information on Jobs’s health. Jobs’s January statements may be a sign the board is aware of those concerns, said Ryan Jacob, head of the Jacob Internet Fund in Los Angeles, which owns Apple shares.

“The impression was there, prior to January, that the board didn’t have a complete handle on the condition of the CEO and that was troubling because, as an investor, I count on the board to represent my interests,” Jacob said. “The impression now is the board has a much better handle on his health situation and is a little more demanding because he did take leave.”

Tim Cook

Operating chief Tim Cook, an 11-year Apple veteran promoted to the No. 2 post in October 2005, was in charge of day-to-day operations while Jobs was on leave. Cook, 48, also filled in for a month in 2004 while Jobs recuperated from surgery to remove an islet cell neuroendocrine tumor in his pancreas.

“Apple, Tim Cook in particular, showed they could operate business as usual in his absence,” said Romeo Dator, a fund manager with U.S. Global Investors in San Antonio. Apple is among the top holdings in the firm’s $2 billion in assets, he said. “It’s good that he’s back.”

Jobs, who was fired by Apple’s board in 1985 after a management dispute, returned to the company in 1997. Gil Amelio, Apple’s CEO at the time, bought Next Inc., the workstation computer company Jobs founded after leaving Apple. Within several months, Amelio was ousted and Jobs took over as interim CEO, calling himself jokingly “iCEO.” He made the position permanent in January 2000.

New Macs

In the past dozen years, Jobs has added new Mac designs, including the iMac PC and MacBook Air ultra-slim laptop. He led Apple into digital music with the iPod in 2001, and mobile phones with the iPhone in 2007.

During Jobs’s absence, Cook and a team that includes marketing chief Phil Schiller and design leader Jonathan Ive ran the operation. They updated desktop and notebook Macs and redesigned some of Apple’s iPod media players. At the Worldwide Developers Conference in San Francisco earlier this month, Schiller filled in for Jobs as the main speaker, introducing a faster version of the iPhone that went on sale June 19.

“His absence had an unintended consequence, in that it showed Tim Cook had the ability to manage the company as if Steve Jobs was still there,” Jacob said. “As incredibly important as he is, by him taking a step back, it showed that there are good people behind Steve Jobs.”

To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net

Last Updated: June 29, 2009 16:15 EDT