Bruce Wasserstein, Steve Jobs: Are boards coming clean about CEO health?
Oct 12th 2009 10:00AM
Updated Dec 4th 2009 4:43PM
It's a ghoulish business writing about the health of public company CEOs. Nobody likes facing illness, but even with their immense wealth, top executives all end up in the same place as every other person born on this planet.
Boards of directors at public companies are supposed to comply with disclosure laws to protect shareholders when their CEOs suffer illnesses that keep them away from their work. Unfortunately for shareholders of Lazard Ltd. (LAZ) and Apple Inc. (AAPL), the boards at these companies may be ignoring the spirit if not the letter of the disclosure laws.
This issue comes to mind again this morning with news of Lazard CEO Bruce Wasserstein's hospitalization for heart problems. And it took center stage with the far more prominent Steve Jobs of Apple whose absence from work due to pancreatic cancer in 2004 and a liver transplant earlier this year did not get the kind of disclosure that many thought they should have received.
As I posted back in July 2006, Wasserstein, who is often touted as one of the most successful investment bankers of his generation, reportedly disappeared from the office of Lazard for eight weeks. My source told me that he had "lost 50 pounds and returned to work looking like a wobbly 75-year-old."
The next month, I received reports that Wasserstein "has a prior heart condition and this may have been a recurrence. He looks like he lost 75 pounds and his voice sounds different." Another person told me that Wasserstein "had received quadruple bypass surgery prior to joining Lazard." And a third told me that "I saw Bruce Wasserstein two weeks ago and decided he must be sick because he looks like s--t."
But Lazard did not mention this eight week absence at the time. And Wasserstein told one of my sources "it's just the pneumonia" -- the same ailment from which he claimed he suffered in December 2005 as reported in a January 15, 2006 New York Times profile. But Lazard's comment to me on the August 2006 post was "Bruce is fine."
Today's news about Wasserstein's heart-related hospitalization raises questions about Lazard's disclosure back in 2006. My conversations about Lazard's disclosure back then suggest that the legal situation is murky -- forcing boards to weigh the need to disclose material, market-moving information against health records privacy issues.
But I would not be shocked to learn that Wasserstein really did have a serious medical issue in 2006 that Lazard should have disclosed and did not. And perhaps its escape from legal trouble back then made it far less likely to take a chance Sunday night.
I hope Wasserstein returns to health soon and that public company boards will err on the side of disclosure to shareholders if their CEOs suffer health problems.