Report: Jerome York “Disgusted” that Jobs Concealed Health Problems

| Apple Stock Watch

Recently deceased Apple board member Jerome York was “disgusted” at the way Apple CEO Steve Jobs concealed the seriousness of the health problems he had in late 2008 and early 2009. In an interview with The Wall Street Journal he gave late in 2009, Mr. York told the newspaper that he almost resigned when found out, and that he wished he had done so.

He said that the only reason he didn’t was because he wanted to avoid the inevitable uproar that would have occurred had he done so. “Frankly, I wish I had resigned then,” he told The Journal.

At issue was the way that Apple, its board, and Mr. Jobs himself did not fully disclose his health problems, problems that led to a liver transplant that also went undisclosed until after the fact. At the time, the company said that Mr. Jobs was having a hormone imbalance that prevented him from properly digesting and absorbing nutrients, but after a six month medical leave of absence, it was revealed that he had had a liver transplant.

Though asked by the media and some Apple investors to offer more information about Mr. Jobs’s health, company spokespersons and the board publicly insisted that the company’s CEO was a “private matter.” According to The Journal’s story, Mr. York felt that shareholders had a right to more information than they were given.

It’s not clear why the newspaper withheld any coverage of its interview with Mr. York until now, though it’s likely that the comments were made at the time on the condition that they be held as long as he was alive. Mr. York passed away on March 18th after suffering a cerebral hemorrhage.

He was the head of the audit committee on Apple’s board, and was seen as an independent voice, though he seldom voiced his opinion outside of the audit committee’s responsibilities, according to The Journal.

Counting CEO Steve Jobs, Apple’s board of directors currently has six members, which is among the smallest of any Fortune 500 company, according to research firm Corporate Library. The board had eight members in 2009 until Google CEO Eric Schmidt left due to the overlapping areas in which the two companies competed.

That left seven members, and the board determined at that time that it had enough members to handle its various responsibilities and three committees. Mr. York’s passing, however, leaves the board at six and short a third member with a strong background in finance or accounting, as required by Apple’s bylaws for the audit committee.

Comments

Joe

First, I doubt if he came out and said that - if he said it at all, it was probably taken out of context.

If he DID say so, he’s the biggest hypocrite in the world.
First, if he was so disgusted, why didn’t he resign? Greed over morals?

Second, if he feels that executives should publicize their health records, where are his? For that matter, where can I download the medical records of the CEO of the Wall Street Journal who first published this? York died of cerebral hemorrhage. Stroke can be predicted by high blood pressure, elevated cholesterol levels, diabetes, or family history. If he thinks that executives are obligated to publicize that, why didn’t he put his (and his family’s) on the web?

John

Hi Steve!

Bosco (Brad Hutchings)

Joe, to paraphrase former Woz girlfriend Kathy Griffin, how do you type… oh forget it… York was a board member. He did not run the day to day business of the company. He was elected by the shareholders presumably to look out for their interests. He could have been civilly and criminally liable for misconduct in his oversight duties.

Jobs, on the other hand, does run the company. He runs it with a level of control that is uncommonly high in American business. During his absence, he continued to run the company with the same level of control and there was no doubt anywhere in the high ranks that he did. He is the face of the company. With its P/E ratio at the time, much of the value in AAPL was directly tied to the presence of Steve Jobs. Good or bad (and I think it’s beyond all bad), that is an unavoidable fact. Apple also had escaped a serious back-dated stock options scandal that had Steve’s and the BOD’s hands all over it. It escaped mostly because it could afford to buy back the diluted value and offload a couple of managers who would take the blame and presumably, adequate severances to lie low and keep quiet. That kind of scam where options are backdated and the spread is not paid is the same kind of thing Enron did with energy.

Pancreatic cancer remission is far, far more serious than elevated cholesterol levels. 5 year survivability is quite low. The explanation of it being a rare subtype should not have dismissed the issue. The only thing that made later cover-ups of Jobs’ health workable was that he survived. If he died or was forced to resign after the extensive cover-up, Apple would be in the tank because investors would have seen the thing they value the most permanently gone and people spending months trying to hide the known circumstances that led to it being gone.

York was old and experienced enough to know that eventually, the Apple tide will ebb. It happens to all companies eventually. And Apple is way to dependent on the perceived importance of Steve Jobs to gracefully manage his final exit from the company. That’s where a record of positive ethics can save your corporate ass and the asses of your shareholders.

geoduck

I was one of those saying loudly that the details of Jobs ‘hormonal imbalance’ were nobodies business but his.

Then Jobs got a liver transplant. It was a lot more serious than they let on.

I may have been wrong. At least the board should have known.

Tom

Steve jobs should be fined or punished by the board.  because jobs hide the fact that he was gunna go thru a dangerous operation…

Joe

“I may have been wrong. At least the board should have known.”

If we believe this report, the board DID know - and they chose not to do anything about it.

The Board could have asked Jobs to release the information. If Jobs refused, and they felt that Jobs was violating his SEC oblications. the Board members should have resigned. The fact that none of them resigned is an indication that none of the Board members felt that disclosure was required.

Bosco (Brad Hutchings)

Bzzzzzzzzzzzt. Wrong Joe. The fact the board knew, hid it, and then a respected, experienced board member had misgivings about hiding it indicates that too much of the company’s perceived value was/is wrapped up in one guy. This is a far more dangerous situation long term than a particular breech of ethics and fiduciary duty that, because Steve survived, had no consequence. Or, in the spirit of emails from Steve…
——-
From: Steve Jobs <sjobs@apple.com>
To: AAPL Shareholders <suckers@apple.com>
Subject: My health

I survived. Not that big of a deal.

-Steve
Sent from my iPhone

Tiger

Maybe I’m wrong for this, but this story has irony written all over it. The media are publishing all these statements by the guy put in the ground last week about the guy who’s still alive and running the company…about health disclosure.

Both were WELL paid by Apple and should be held to the same standard. And since NONE of the board did resign, was it really that big of a deal to them either individually or collectively?

SJ is not a deity. Apple will continue to function even after he’s long gone. He was good enough to rescue the company from abject failure and put it on the track to continue to succeed.

geoduck

If we believe this report, the board DID know - and they chose not to do anything about it.

OK that’s better. The first time through I got the impression that he didn’t tell even the board, after re reading the article I see that side of it. If the board knew and made an executive decision not to disclose it then that’s within their right. It’s there job to make decisions on what they think is best for Apple.

daemon

The way I read it is that York was disgusted by Steve Jobs’ cover-up and he almost resigned when he and the rest of the board found out about just how serious Steve Jobs condition really was.

He later says he regrets not resigning right then.

Joe

“He later says he regrets not resigning right then.”

Hearsay. There’s no way to know if he actually said that or what the context was.

More importantly, after the fact statements are worthless. At the time, he (and all the other Board members and Officers) went along with the public statements. That is prima facie proof that Apple was complying with their legal obligations as they perceived them at the time. Even if someone changed their mind later, it’s irrelevant.

daemon

Hearsay. There?s no way to know if he actually said that or what the context was.

You’re one of those people that don’t believe that Obama was actually born in Hawaii, aren’t you?

Bosco (Brad Hutchings)

Worse than that, daemon. He’s a “49-Stater”.

daemon

Ya know Birthers are funny because even if they’re right and Obama was born in Malaysia/South Africa/China it still wouldn’t matter, because he’s the natural born child of a US Citizen.

http://germany.usembassy.gov/acs/dual_nationality.html

Bryan Chaffin

Keep the discussion on topic, please - no more in this thread about Obama’s origins. We have a political forum for that sort of thing.

Joe, I personally don’t think that something from an interview with a major newspaper should be dismissed as hearsay. If The Journal says in a news article that Mr. York said something, I accept that it was said. 

Context is king, of course, but I accept that the words they report him as having said were indeed uttered.

Bosco (Brad Hutchings)

Sorry. The point of bringing up birthers was that Joe is in denial. By far the most interesting point underlying all of this is that the WSJ (the nation’s business paper of record) editorial staff has it out for Steve Jobs in a big way. While it’s not terribly cool for reporters to be digging through your trash, it’s criminally stupid to give them a reason to continue if you know they’re doing it. Much like Tiger Woods the night before Thanksgiving, Steve Jobs is one small screw-up away from a firestorm led by the WSJ. They didn’t appreciate his visit last month.

deasys

As a member of Apple’s BOD, Jerry carried an important fiduciary responsibility to Apple’s shareholders. He damn well should have known about—and revealed—his own likelihood to abandon those responsibilities because of his personal health issues. Now Apple is—without prior warning—without his good counsel.

On the other hand, Jobs is back on the job…

Nookster

As if he was capable of warning anyone about a forthcoming brain haemorrhage. Bears no comparison with SJ’s ailments in any shape or form.

eugenio

I’ll gladly step in for him.

AlaskaBoy

http://www.reuters.com/article/idUSTRE55J1MR20090620
Per a Reuters article:
?- 70 percent of liver transplant patients are still alive three years later, according to UNOS. Ninety-four percent of people aged 50 to 64 live for at least three months.?
http://www.liverfoundation.org/education/info/transplant/
Per The Liver Foundation:
?The outlook for patients is often expressed as a five-year survival rate. This refers to the percentage of liver transplant patients who are still alive five years after their transplant. The five-year survival rate for liver transplant patients is about 75 percent. ...?
http://online.wsj.com/article/SB124546193182433491.htm
Per a June 2008 Wall Street Journal article on Steve Jobs:
?Apple has previously drawn criticism from some shareholders over what they have called limited disclosure of Mr. Jobs’s health problems, which began in 2004. In this case, it is unclear whether the surgery is material because Mr. Jobs was already on leave. Material information like that must be disclosed only “if you are asking shareholders to make a decision based on [that] information,” said John Olson, a senior partner at Gibson, Dunn & Crutcher in Washington. “You can’t expect the company to give a blow-by-blow account of Steve Jobs’s health.”
?At least some Apple directors were aware of the CEO’s surgery. As part of an agreement with Mr. Jobs in place before he went on leave, some board members have been briefed weekly on the CEO’s condition by his physician.?
... .?
?But over the last year concerns about Mr. Jobs’s health grew among investors as he exhibited noticeable weight loss, and the company’s stock price see-sawed as health speculation intensified. While Apple has a deep bench of senior managers, Mr. Jobs, who co-founded Apple in 1976, is considered the company’s visionary and creative leader.?
?In early January, Mr. Jobs said he had a hormone imbalance that was “relatively simple and straightforward” to treat. But about a week later, he announced that the issue was more complex than he had thought, and in a letter to employees he said he would be taking a leave and Mr. Cook would take over temporarily.?
?William Hawkins, a doctor specializing in pancreatic and gastrointestinal surgery at Washington University in St. Louis, Mo., said that the type of slow-growing pancreatic tumor Mr. Jobs had will commonly metastasize in another organ during a patient’s lifetime, and that the organ is usually the liver. “All total, 75% of patients are going to have the disease spread over the course of their life,” said Dr. Hawkins, who has not treated Mr. Jobs.?
?Getting a liver transplant to treat a metastasized neuroendocrine tumor is controversial because livers are scarce and the surgery’s efficacy as a cure hasn’t been proved, Dr. Hawkins added. He said that patients whose tumors have metastasized can live for as many as 10 years without any treatment so it is hard to determine how successful a transplant has been in curing the disease.?

So ... what we got here.  In rough numbers 70-75% of liver transplant patients survive 3-5 years.  Also Jobs had a roughly 94% of surviving at least 3 months.  One week Jobs had a hormone imbalance and the next week ?the issue was more complex.?  Probably the docs found the abnormality (liver tests), reassured Jobs that it probably was not serious, ?a hormone imbalance?, but would ?re-test with more labs in a week.?  That?s when the labs came back abnormal again and the prognosis worsened.  This is what he reported in a seemingly honestly statement.  During his year after pancreatic surgery he looked bad, as he should have as they removed his pancreas and started him on insulin.  Likely he?s been on an insulin pump.  Also likely, is that it is the best and latest model.  Is he out of the woods?  Maybe.  The tumor can still be there somewhere, growing slowly, and may reappear any day.
Should he or Apple have announced suddenly, Jobs is dying of liver cancer and his only hope is a transplant.  What would have happened to the stock prices.  They?d have plummeted.  Would that have been irresponsible?  I don’t know, tell me.  Then the whining would have started about that announcement and the drop in stock prices, and later when Jobs didn?t die, more whining about Apple?s intentional announcement to drive the stock price down so everyone in the know could buy at cheap prices.  Whine, whine, whine.
Is Jobs going to die?  He certainly will.  When is the question.  Next year, 5 years, or 40 years.  Living and owning stock are both a gamble.  You can easily remove one of the above risks if you don?t like the odds.  Anyway, this is how I look at it.

brett_x

Then the whining would have started about that announcement and the drop in stock prices, and later when Jobs didn?t die, more whining about Apple?s intentional announcement to drive the stock price down so everyone in the know could buy at cheap prices.? Whine, whine, whine.

I’m with you on that AlaskaBoy.

Steve123

York was old and experienced enough to know that eventually, the Apple tide will ebb. It happens to all companies eventually. And Apple is way to dependent on the perceived importance of Steve Jobs to gracefully manage his final exit from the company. That?s where a record of positive ethics can save your corporate ass and the asses of your shareholders. But the main fact was that he was suffering from some disease god knows what but it doesn’t reveled.

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