TRENTON, N.J. and (AP) – The chief executive of Johnson & Johnson got an 11 percent increase in compensation in 2009, according to Associated Press calculations, while the health giant cut thousands of jobs and saw its annual revenue decline for the first time since the Depression.
Bill Weldon, who has been J&J’s CEO and chairman since 2002, received 2009 compensation valued at $25.6 million, based on figures in the company proxy statement filed Wednesday with the Securities and Exchange Commission.
The New Brunswick, N.J.-based maker of Band-Aids, Johnson’s baby shampoo, contraceptives and biologic drugs gave Weldon a salary of $1.8 million, plus $12.8 million under a cash incentive plan – $3.6 million in a performance bonus and the rest in long-term incentives that vested or were paid to Weldon in 2009.
The world’s largest maker of health care products gave Weldon, 61, stock options and restricted awards valued at $8 million, up about $1.6 million. He also received above-market returns the company valued at $2.7 million on that deferred compensation, up from $1.9 million the year before.
J&J gave Weldon perks and other compensation worth about $197,000, including $81,000 in contributions to his pension, $62,847 for personal use of company aircraft, $30,503 for a car and driver, and $480 for tax reimbursement. He also received unspecified sums for home security system monitoring fees and meals in the executive dining room.
In the prior year, J&J reported that Weldon received $3.9 million in perks and other compensation, but that included $3.63 million in long-term incentives paid to his retirement plan.
The Associated Press’ compensation formula is designed to isolate the value the company’s board placed on the executive’s total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the SEC, which reflect the size of the accounting charge taken for the executive’s compensation in the previous fiscal year.
The board’s compensation committee stated in the proxy that the “executive officers performed well against their business objectives despite economic challenges, an increasingly competitive business environment and significant patent expirations.”
“Despite a decline in sales, which the company had forecast, the company’s business met or exceeded expectations for 2009 and maintained the company’s long-term management focus; this included investing in products and platforms that have positioned the company for growth and continued leadership in global health care,” the statement said.
J&J’s 2009 revenue slipped 3 percent, to $61.9 billion from $63.75 billion in 2008. Meanwhile, net income dropped 5 percent to $12.27 billion.
In November, Johnson & Johnson announced its biggest restructuring ever, with plans to eliminate about 8,000 jobs globally. But the company’s stock performed well last year, rising 7.7 percent to $64.41 at the end of 2009.
In February, J&J said it was making changes to even out bonus levels across the sprawling company, with the result that 38 percent of employees would see a reduction in bonus payments, but 27 percent would see an increase and the rest would see no change.
The proxy statement, sent to shareholders ahead of the company’s April 22 annual meeting, includes two shareholder proposals up for a vote.
One recommends the board give shareholders an advisory vote on the policies of its compensation committee and on how much compensation it awards to the top executives. The other would give holders of 10 percent of outstanding common stock the power to call special shareholder meetings between the regular annual meetings.
The board of directors opposes both proposals.
Date: March 17, 2010
Source: Associated Press