Does Steve Jobs Deserve Fortune's "CEO of the Decade" Award?

Fortune Magazine has named Apple (AAPL) CEO Steve Jobs as “CEO of the Decade”. There is no denying the fact that Apple has delivered for shareholders over the past decade. As the Fortune article states, Apple’s market capitalization has risen from $5 billion in 2000 to approximately $170 billion today. This has been due to Jobs’ ability to create a culture of innovation at Apple that has resulted in groundbreaking new technologies such as the iPod and iPhone, not to mention the company’s widely acclaimed personal computers.

Cultural and Business Icon

It is easy to forget the dire straits facing Apple when Mr. Jobs returned to the CEO position in 2000. As the Fortune article describes, the company was failing to perform financially and was frequently the target of takeover speculation. Then, in a very short period of time, Mr. Jobs changed the situation with a series of product introductions including a new operating system for the Mac, the first generation iPod, and perhaps most importantly, the iTunes music concept.

Mr. Jobs also succeeded in building significant intangible value for Apple by making it “cool” again. Much of this was due to Mr. Jobs himself and the image he projected at product launches. This intangible brand equity combined with quality product introductions to deliver real value to Apple shareholders.

Personal Obstacles

The most dramatic business success stories are associated with leaders who not only overcame business challenges but also dealt with personal obstacles. Mr. Jobs has had a series of health problems that only make his achievements from a business perspective more impressive. He has also used his experiences to provide leadership to young people as one can see from the impressive Stanford University commencement address shown below. Click on this link for the text of the address or view the video shown below.

Corporate Governance

The main objection to Mr. Jobs’ leadership of Apple has been regarding the question of corporate governance. Mr. Jobs failed to notify shareholders regarding his health problems both during his cancer surgery in 2004 and his liver transplant earlier this year.

To what extent is this a valid shareholder complaint?

Mr. Jobs is widely seen to be irreplaceable at Apple. Larry Ellison had the following to say when Fortune asked him about succession at Apple:

Larry Ellison, a CEO known to dislike the topic of succession, says of his friend, “He’s irreplaceable. He’s built a fabulous brand. He’s got a wealth of products. Whenever he leaves, I hope he retires in good health and he’s sailing off in his yacht in the Mediterranean. But they’re going to miss him terribly, because it’s a consumer products company. The product cycle is so fast.

The question is whether the right to privacy must take a back seat to the right of shareholders to be kept informed regarding the health of a CEO who has driven such a significant amount of shareholder value creation in recent years. From Warren Buffett’s perspective, Mr. Jobs should have revealed more information regarding his health to shareholders:

Certainly Steve Jobs is important to Apple. So it’s a material fact. Whether he is facing serious surgery or not is a material fact. Whether I’m facing serious surgery is a material fact. Whether [General Electric CEO] Jeff Immelt is, I mean, so I think that’s important.

Mr. Jobs has created a tremendous amount of value for Apple shareholders and is obviously a genius when it comes to technology and business, but from a corporate governance perspective, the lack of disclosure regarding his health issues has been a cause of legitimate concern. This was the case in 2004 and apparently not much changed since the same pattern emerged again in 2009.

Disclosure: No position in AAPL

Comments

[Michael J. ...:]

Thanks for including the video of Steve Jobs' commencement address at Stanford. I have heard it several times before but it is still inspiring. It vividly demonstrates that when one's pursue his passions in life, inevitably those passions will seep into other aspects of our life, including the way we work and analyze and solve problems. A single-minded MBA without a well-rounded set of interests and experiences (and able to "Think Different") is simply not going to effective as one who does.

Nov 06 05:01 AM

[mollytjm:]

i think the first part of the article is great...but the last part misses the most important fact: Jobs has created a company and built a staff that is so sound and brilliant, that Apple will survive without him.
That doesn't mean he's replaceable per se...he's a one time creation...but there are amazing people at Apple today, drawn there by him. He's assembled a team that is in a class by itself. Would they miss him?...of course. But the future of the company is not in doubt. One of Apple's best qualities is that it sees what's coming...and creates it now. That won't stop.
Kudos to Jobs for this honor. He deserves it indeed.
long APPL

Nov 06 09:22 AM

[Ravi Nagarajan:]

If so, why the secrecy when it comes to disclosure about his health, which is most certainly a material fact? Don't get me wrong, I think Jobs is a genius and I respect what he has done. However, his fiduciary duty to shareholders extends to questions of corporate governance as well.

On Nov 06 09:22 AM mollytjm wrote:
Jobs has created a company and built
> a staff that is so sound and brilliant, that Apple will survive without
> him.

Nov 06 09:42 AM

[Tony Petroski:]

Jobs deserves the title and his health and other issues are his own business.

A curious commencement speech. "I dropped out and now look, I'm up here lecturing you folks."

Nov 06 10:56 AM

[Ravi Nagarajan:]

On Nov 06 10:56 AM Tony Petroski wrote:

> Jobs deserves the title and his health and other issues are his own
> business.

When you are not only in a position with fiduciary responsibilities to shareholders but also a CEO as associated with the company's brand, many would argue that a higher responsibility to shareholders must trump personal privacy.

Nov 06 12:54 PM

[Clue Giver:]

This dimwit has simply regurgitated a bunch of erroneous ideas and myths incorrect facts to support his preconceived ideas.

Stupid about sums up this article and it's author.

The article s PURE GARBAGE!

Nov 06 01:56 PM

[None-Too-Gr...:]

I too have often wondered how the Stanford officials on the podium felt when Steve mentioned that he had never graduated from college himself. Yesterday I was looking a CNN/Fortune's article on the top 40 execs under the age of 40, and a good portion of them are only high school graduates with perhaps some college.

Nov 06 08:48 PM

[raytray4:]

The title asks if Steve Jobs deserves the award. If he doesn't, who does? It would have been nice if the author answered the question in the article.

Nov 07 11:25 PM

[pacalis:]

True, but if you look at the Technology Review 35 Innovators you'll find most have done graduate work.

On Nov 06 08:48 PM None-Too-Great Hits wrote:

> I too have often wondered how the Stanford officials on the podium
> felt when Steve mentioned that he had never graduated from college
> himself. Yesterday I was looking a CNN/Fortune's article on the top
> 40 execs under the age of 40, and a good portion of them are only
> high school graduates with perhaps some college.

Nov 08 01:37 PM

[GSlusher:]

Of course, they knew that when they asked him.

On Nov 06 08:48 PM None-Too-Great Hits wrote:

> I too have often wondered how the Stanford officials on the podium
> felt when Steve mentioned that he had never graduated from college
> himself.

Nov 08 06:48 PM