Apple's Jobs takes medical leave, remains CEO; Succession planning in focus

Apple's Jobs takes medical leave, remains CEO; Succession planning in focus

Summary: Apple CEO Steve Jobs is taking a medical leave to focus on his health. He will remain CEO, but Tim Cook, chief operating officer, will run Apple day to day.

SHARE:

Cook takes over day to day as CEO Jobs takes medical leave.

Cook takes over day to day as CEO Jobs takes medical leave.

Apple said Monday that CEO Steve Jobs is taking a medical leave to focus on his health. He will remain CEO.

As Jobs takes his leave, Tim Cook, chief operating officer will take over Apple's day-to-day operations. In early 2009, Jobs went on a medical leave for six months in early 2009 to have a liver transplant. During that time, Cook filled in and Apple didn’t miss a beat. Jobs is a pancreatic cancer survivor.

Here's what Jobs sent to Apple employees:

Team,

At my request, the board of directors has granted me a medical leave of absence so I can focus on my health. I will continue as CEO and be involved in major strategic decisions for the company.

I have asked Tim Cook to be responsible for all of Apple’s day to day operations. I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011.

I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy.

Steve

The news is likely to put Apple succession planning back on the front burner. Earlier this month, a pension fund proposed that Apple become more forthcoming about its succession planing for Jobs, who is a pancreatic cancer survivor. Details of Jobs' latest medical leave were disclosed.

In that proposal, which was detailed in Apple's proxy statement, the Central Laborers Pension Fund in Jacksonville, Ill. argued that Apple do the following:

  • Apple’s board will review the succession plan each year;
  • Develop criteria for the CEO position and a process to evaluate candidates;
  • Identify internal candidates;
  • Begin a “non-emergency CEO succession planning” process, three years before a transition;
  • Report the succession plan to shareholders each year.

Apple urged a vote against the proposal.

Jobs' latest medical leave is likely to put the succession planning on the front burner again. Here are a few thoughts since Jobs' health will be a key issue again.

  • The medical leave hand-off at Apple has been well established from the first time Jobs took time off. Cook has proven that he can run Apple on a day-to-day basis.
  • There will be more probing about Jobs' health and what exactly he's doing. Obviously, Jobs wants his privacy, but shareholders are going to want more details.
  • The succession planning proposal in Apple's proxy statement may get more serious consideration as Jobs take leave.
  • Details of the duration of Jobs' medical leave are likely to impact Apple shares. If it's a short leave---quite possible since Jobs is still CEO---then the damage will be minimal.
  • Now it's clear why Cook is one well-paid operating chief. Cook made $59 million in Apple's fiscal year.

Related: Pondering Apple in a post-Jobs world

Topics: Health, Apple, CXO, Enterprise Software, Legal, IT Employment

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

44 comments
Log in or register to join the discussion
  • RE: Apple's Jobs takes medical leave, remains CEO

    Wow, any clue what medical condition he is suffering?
    markh789
    • RE: Apple's Jobs takes medical leave, remains CEO

      @markh789

      "my family and I would deeply appreciate respect for our privacy."

      I realize people always have the want-to-know, sometimes for the best reasons... but with Apple being the secretive company that it is, if he can avoid telling anyone, my guess is he will. Quite frankly, I wouldn't blame him either.
      Badgered
    • If anything, this does not end Apple's power

      Because both Thomas Cook, Jonathan Ive, and others, expressed <b>compete compliance with Jobs' principles about products development and quality.</b><br><br>They just need to continue to run the company the way they do now, and Apple will be fine.<br><br>So no doom and gloom for Apple, whatever happens.<br><br>And yes, get well to Jobs.
      DDERSSS
      • Maybe not so true

        @denisrs, only because while they were running the company in Steve Jobs' absence the last time, people where allways secure in the knowledge that Steve Jobs was still there for advice or input, if needed, that he was coming back soon.

        Hopefully this isn't anything too serious, but unfortunately if it is, things may be different if it looks like he won't be coming back soon.

        At the moment though, lets hope for a good recovery.
        John Zern
      • But chances are high that it **is** true

        @John Zern: if fact, to release such products as Apple does one may <b>not</b> need to be absolutely unique. Steven Jobs is about:<br>1) perfectionism (attention to detail, quality is here);<br>2) minimalism (simplicity of UI, product lines, clarity in everything is here);<br>3) confident bold moves (not being sorry or feared to let go, be ready to move to the future technology and force everyone around to do it).<br><br>People around Jobs are such (or else he would not tolerate them around).<br><br>The only thing these may lack is so-called:<br>4) visionary.<br><br>These people may continue to do HQ products and move technology rapidly, but these may not able to grasp tiniest bits of emerging technology to later turn around whole industries or invent new categories of products.<br><br><b>That "Thomas Edison" quality is, most probably, unique. People like that do not appear on the stage of progress much often than couple of times in a Century.</b>
        DDERSSS
      • 100% agreed

        @denisrs
        if he really doesn't come back, apple will be fine the next few years, but the lack of his vision will show after a while. apple will become something ordinary in the long run. i have the felling this is a sad day and i really, really hope i am wrong. get well soon, steve!
        banned from zdnet
      • RE: Apple's Jobs takes medical leave, remains CEO

        @denisrs
        Last time Tim Cook took charge, he let iPhone 4 happen. Before somebody said that iPhone 3GS wasn't release yet, remember that iPhone 3GS was already in the pipeline and iPhone 4 was being developed.
        illegaloperation
      • Only Time will tell

        @denisrs. as there appears to be disagreement on that point
        On one side you have
        [i]Should something happen to Jobs, he has created a "model that Walt Disney gave us," Bajarin said. "Disney died relatively young, but what Disney did before he died was to create an incredible vision and creative team and management who fully understood his vision of the future. Disney didn't suffer at all ? it had some ups and downs, but ultimately it fulfilled Walt's dreams.[/i]

        Yet on the other side you have:
        [i]You can?t easily separate the company from the man or the man from the company. This makes his departure increasingly painful the longer he is away because more and more of what made Apple successful will be less and less evident. Initially the problem will be a lack of high-level excitement at new product launches, but the products will still have Steve?s fingerprints on them. "Eventually even these fingerprints will be gone and the company will become more like most consumer electronics companies with growing lines of increasingly less-interesting products. The most noticeable moment will likely be when Apple tries to launch its next big thing in a few years. The iPod, iPhone, iPad amazing line of successes may well end with the iPad."[/i]

        Only time will give us the correct answer.
        :|
        Tim Cook
  • RE: Apple's Jobs takes medical leave, remains CEO

    Get well soon Steve. Being a cancer survivor myself, I can relate.
    gtdworak
  • Sounds bad

    Sounds as if things are not good at all.
    NoAxToGrind
    • RE: Apple's Jobs takes medical leave, remains CEO

      @NoAxToGrind - don't read too much into it and just wish Steve well in getting healthy.
      The Danger is Microsoft
  • RE: Apple's Jobs takes medical leave, remains CEO

    Best wishes and hoping for a quick recovery.
    james347
  • RE: Apple's Jobs takes medical leave, remains CEO

    Once worked for Apple, talked with Jobs from time to time.

    I wish him a successful recovery from whatever health issue he is currently suffering.

    I also would not want to be an Apple stockholder at this time. The stock is wildly overpriced and poised for a disastrous plunge, since so much of the perceived success of the company is tied up with Jobs.
    Dorkyman
    • no

      @Dorkyman
      you don't know what you are talking about. with an 2011 P/E of 16 (ex-cash 13) the stock is not overpriced. if anything it is very cheap (for reference amazon has a P/E of 70).

      the stock price will suffer anyhow as the market is not behaving rational in the short term and of course steve jobs not coming back would be a gigantic loss for the company (and the world) and thus will affect the stock price negatively.
      banned from zdnet
      • ?

        @banned from zdnet

        On my Yahoo analysis pages, HP/Microsoft/Cisco trade at about 12-13. AAPL is at 23, about double. Are they inherently worth twice as much as other well-regarded companies? Don't think so.
        Dorkyman
      • RE: Apple's Jobs takes medical leave, remains CEO

        @ Dorkyman

        He mentioned Amazon, not HP/Microsoft/Cisco. But even so, compare earnings growth. That's what people use to determine if a PE ratio is too high. Apple's earnings growth is much larger than that of the other companies you mention.
        msalzberg
      • RE: Apple's Jobs takes medical leave, remains CEO

        @banned from zdnet uttered the following:
        "of course steve jobs not coming back would be a gigantic loss for the company (and the world)..."

        Do you really think the whole world would be "at a gigantic loss" if SJ wasn't around anymore? (I'll help you with the answer: NO)

        The passing of SJ would be news for about a day outside the US, and that's about it.
        Scrat
  • Wishing him the best recovery.

    I owe a lot of what I've got to the two Steves.
    ye
  • RE: Apple's Jobs takes medical leave, remains CEO

    Are we going to get more articles about the ZDNet bloggers crying about their stocks like we did last time Steve Jobs when on medical leave?
    Loverock Davidson
    • Really?

      @Loverock Davidson There are times in life when one steps back and says to themselves "now's not right, give it a rest". This would be one of them.
      sportmac