Home Depot yesterday disclosed that Ted Decker, the retail chain's chair, president and CEO, will take " a temporary medical leave of absence."
"The company expects Decker to return within the next few months," it said in a statement that also explained that two executives -- Ann-Marie Campbell, senior executive vice president, and Richard McPhail, CFO -- will share leadership duties on an interim basis.
However, the reason for Decker's medical leave was missing from Home Depot's announcement -- which means the company may be bucking a trend. (Home Depot didn't respond to a request for comment about why it didn't disclose the cause for Decker's absence.)
These days, more companies the size of Home Depot -- it's a $340 billion company with some 470,000 employees -- tend to favor greater transparency in these scenarios, says corporate governance expert Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware.
He doesn't mean to sound insensitive. He also said it's tragic when a CEO has a serious health problem. And certainly it's only human to want to give a person privacy and space when they're facing an illness.
At the same time, leaders give up an expectation of privacy when they become the well-paid head of a large company, Elson added. That's when a person becomes "if not a public figure, certainly a quasipublic figure," and their health status becomes material to investors.
"People are investing in you, depending and relying on your leadership, and if your leadership is going to be compromised in some way, you need to explain it."
Some companies seem to agree, even though there are no regulations that directly address this issue, giving boards some discretion about how to behave.
In 2020, JPMorgan published a candid memo about CEO Jamie Dimon's emergency surgery to repair an aortic tear. In 2015, Goldman Sachs disclosed that then-CEO Lloyd Blankfein was being treated for lymphoma, a form of blood cancer, without taking a leave. Last year, Accenture CEO Julie Sweet told employees that she would be undergoing breast cancer treatment and continuing to work throughout the therapy. "The good news is the prognosis from my doctor is excellent; the cancer was caught early, and my condition is curable," she wrote in a staff memo.
Then again, Oracle chose not to disclose why former CEO Mark Hurd needed medical leave in 2019, just one month before he died. (A governance expert told the Journal at the time that the company's choice wasn't appropriate.) CEOs have been said to keep health changes from their boards. And on past occasions, companies have been called to task for using euphemisms or vague language. In 2009, Apple's disclosure that visibly thinner former CEO Steve Jobs had a " hormone imbalance" raised debate about what the market deserves to know, says Elson. Jobs died in 2011 from pancreatic cancer, for which he had surgery in 2004.
It's possible that Home Depot will eventually reveal more about Decker's medical leave. The risk if it doesn't is that the rumor mill may take over, creating uncertainty and volatility, which is "the last thing you want," Elson said. "Look, by issuing an announcement like that, you're going to leave people guessing and you're going to create a lot of volatility in the stock based on a guessing, and that's not how the system should work."
Lila MacLellan
Editor, CEO Brief
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