Researcher: Jobs should disclose health info to SEC

The U.S. Securities and Exchange Commission (SEC) should require public companies to fully disclose information about executives' health in light of Apple CEO Steve Jobs' health-related leave of absence and ongoing questions about his condition, said a university professor who specializes in executive management.

In a paper entitled "When the CEO is Ill: Keeping Quiet or Going Public," Alexa A. Perryman, assistant professor of management in the Neeley School of Business at Texas Christian University in Fort Worth, Texas, wrote that the SEC "should directly classify the health of a firm's CEO as a material fact requiring disclosure."

In her paper, Perryman uses the definition of "material" as from a U.S. Supreme Court case TSC Industries v. Northway. In that case, material information is defined as any information that could potentially impact the firm's future or value in the market.

Currently, the SEC lacks specific guidelines regarding executive health disclosures, Perryman said in an interview Tuesday. This has led to confusion and a difference of opinion among shareholders and industry watchers about how a CEO's health problems should be handled, particularly in the case of a high-profile CEO like Jobs.

Some believe Jobs' health -- cited last week as the reason he was taking a six-month leave of absence from Apple -- is a private matter, while others feel it has a direct effect on the company's stock price and so should be disclosed to shareholders.

Perryman is in the latter camp. She believes the SEC should require CEOs to disclose to the board of directors and to shareholders any information about a potentially life-threatening condition that could affect their ability to run the company, particularly if it would render them unable to work for a certain period of time or could shorten their life span.

"I think the SEC should take a more proactive stance," she said.

Jobs told Apple employees last Wednesday he was taking a leave but did not go into specifics about why, saying only that health-related issues and significant weight loss he only a few days before attributed to a "hormonal imbalance" are "more complex" than he originally thought.

The weight loss and Jobs' decision not to give his annual keynote address at the annual Macworld Expo in San Francisco earlier this month had raised speculation about his health. In 2004 Jobs disclosed he had been treated for pancreatic cancer.

Perryman said that though she can understand that such a situation raises privacy concerns, in the case of a "celebrity CEO" like Jobs, "you have to give up some of your privacy."

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