Time & Attendance
By Staff Report
Aug. 25, 2011
The succession plan that Apple Inc. executives refused to disclose earlier this year became public Aug. 25 as company co-founder Steve Jobs announced that he is resigning as CEO and passing the reins to the company’s chief operating officer.
In a letter to Apple’s board of directors Jobs wrote: “I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come. I hereby resign as CEO of Apple. I would like to serve, if the board sees fit, as chairman of the board, director and Apple employee. As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.”
Cook—who joined the Cupertino, California-based company in 1998 and took over day-to-day operations of Apple in January after Jobs went on his third leave of absence because of ongoing health problems—was widely believed to be the leading candidate for the position.
Apple has faced criticism in recent months for its refusal to disclose a succession plan for Jobs, who was diagnosed with pancreatic cancer in 2004 and underwent a liver transplant in 2009.
Earlier this year, a group of Apple shareholders represented by the Central Laborers’ Pension Fund in Jacksonville, Florida, submitted a proposal to force the company to publicize its plan. The board rejected the measure at its annual shareholders meeting in February stating that revealing the information would put the company at a competitive disadvantage. In its proxy statement, the board stressed that a plan was in place, making the proposal unnecessary.
“I think people have been fairly critical of Apple for not releasing enough information on their succession plans, but what can you release that’s not proprietary?” says David Larcker, director of the Corporate Governance Research Program at Stanford University’s Graduate School of Business.
Larcker says that the demand for greater transparency has made shareholders more vocal about matters of corporate governance, a movement he supports. But he commends Apple leaders for executing a smooth transition.
“At some point you have to trust that the board is on top of the situation,” Larcker says. “They clearly identified Mr. Cook as the guy. You want some discussion but you don’t want to disclose everything. In our society there are privacy issues and in this case there are compassion issues. I think they did a nice job.”
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