3rd UPDATE: Apple Board Defends Jobs Health Disclosures

Apple Inc. (AAPL) board members on Wednesday defended the company's disclosure last month of a medical leave by Chief Executive Steve Jobs, and said he remains deeply involved in the company's strategic matters.

Jobs' absence from the company's shareholder meeting Wednesday underscored the prospect of leadership succession at the computer maker.

After the meeting, some shareholders expressed frustration at the board's refusal to disclose more than what is already known about the company's succession plans, and Jobs' health. The board also didn't respond to questions about an investigation by securities regulators into how the company handled the health disclosures.

"I'm disappointed the board was not more forthcoming," said Brandon Rees, a representative of the AFL-CIO Reserve Fund, which owns a significant amount of Apple stock. Louis Malizia, assistant capital strategies director for the International Brotherhood of Teamsters, shared the sentiment.

"I feel like I don't know any more than I did," he said.

The annual meeting, held at Apple's Cupertino, Calif., headquarters, marked the first time shareholders have had a chance to quiz board members directly since Jobs said in mid-January he was pursuing medical treatment that would require him to take time off work. Except for a brief statement at the time, the board has been silent on the matter, despite criticism from some investors.

The announcement raised the prospect of a change in leadership at the company.

"We believe we have met all disclosure obligations," Genentech Inc. (DNA) CEO Arthur Levinson told shareholders. Levinson has been an Apple board member since 2000. "Nothing has changed. Succession planning is something this board takes up regularly. You can assume we will do that responsibly."

"I'm confident in the future of the company," added Apple Chief Operating Officer Tim Cook, who has assumed many of Jobs' day-to-day duties in his absence.

The meeting is the first that Jobs, a co-founder of the company, has missed in a decade. In addition to Jobs' absence, Google Inc. (GOOG) CEO and Apple board member Eric Schmidt wasn't at the meeting.

News about Jobs' health, which has been a concern since he disclosed he had been treated successfully for pancreatic cancer, has moved Apple's stock price. Jobs, 54 years old, is considered integral to the company's success and is credited with reviving the company upon his return about 12 years ago.

At Wednesday's meeting, Jobs was re-elected to the board of directors, as were seven other members. Although Jobs was absent, shareholders sang "Happy Birthday" to him, as he celebrated his birthday earlier this week.

The give-and-take between board members and shareholders went little beyond what is already known about Jobs' health. Similarly, little news was given on succession plans for the company's top leadership.

In recent trading, Apple shares were up 2.7% at $92.71. Apple's shares have fallen by more than 50% since hitting their all-time high of $202.96 on Dec. 28, 2007.

The board faces a difficult challenge balancing the needs of shareholders on one hand with concerns over Jobs' privacy on the other. Jobs is notoriously reluctant to share details about his health.

Apple shareholders have called for more details on Jobs' health, as well as the company's succession plans, because of the outsized role Jobs plays at the company. Few CEOs are as important to their companies or so closely identified with them as Jobs is with Apple. The executive is considered both the face of Apple and its chief innovator. For example, Jobs is cited as the lead author of Apple's all-encompassing patent for its hit iPhone.

On Jan. 5, Apple shares rose almost 2% after Jobs confirmed months of rumors that he had suffered a health setback because he said the condition was easily treatable. Shares began falling when Jobs announced nine days later that the treatment he was seeking was more complex and he would need to take a leave of absence until June. They fell up to 5% after reports the Securities and Exchange Commission has begun investigating whether Apple disclosed the health difficulties in a timely fashion.

Apple's board, which includes former Vice President Al Gore, has been silent since a brief note on Jan. 5, even though pressure has been on them to say something. Board members have either declined to comment or failed to return requests for comment on the situation.

In Jobs' absence, Apple has pushed other executives, namely Chief Operating Officer Tim Cook and Senior Vice President Phil Schiller, as the public faces of the company. That's helped to soothe some investors worried about whether the company has the bench strength to move ahead without Jobs, and the stock has rallied, though many remain anxious for information about his health.

"There are still some concerns about that," Shaw Wu, an analyst at Kaufman Brothers, said of Jobs' health status. "Many people see it as a private matter, but on the other hand, he's such an important part of the company."

Intuit Inc. (INTU) Chairman William Campbell, an Apple director since 1997, and Levinson were chosen as co-lead directors.

Also re-elected were Jobs, a board member since 1997; Gore, a board member since 2003; J. Crew Group Inc. (JCG) Chief Executive Millard Drexler, a director since 1999; Avon Products Inc. (AVP) Chief Executive Andrea Jung, a director since 2008; Schmidt, a director since 2006; and venture capitalist Jerome York, a member since 1997.

A request for Apple to allow shareholders to express their opinion on senior executive compensation was voted down. So were proposals for Apple to be more transparent about corporate political donations, to call for universal health care and to disclose more about its carbon footprint.

-By Ben Charny, Dow Jones Newswires; 415-765-8230; [e-mail]