J&J will pay CEO $1.9 million salary for 2011

AP News
Posted: Feb 25, 2011 3:02 PM
J&J will pay CEO $1.9 million salary for 2011

Health care giant Johnson & Johnson raised Chief Executive William Weldon's salary but cut his annual bonus for 2010, after two years of revenue declines and an unprecedented string of recalls involving Tylenol and other household medicines.

The New Brunswick, N.J.-based company set Weldon's salary at $1.92 million effective Jan 1, up 3 percent from $1.86 million in the previous year. The company disclosed the pay raise Friday in a Securities & Exchange Commission filing.

But the company cut Weldon's annual bonus 45 percent to $1.97 million from $3.6 million in 2009.

In a statement, the company said that, "the board's compensation and benefits committee evaluates Mr. Weldon and all the executive officers against a set of both financial and strategic objectives."

For 2009, Weldon received total compensation of $25.6 million, which includes stock options, bonuses and other perks. J&J is expected to release his total compensation for 2010 next month.

In 2010, J&J's stock fell 4 percent to $61.85, a steep decline for a diversified company that sells everything from Band-Aids to chemically engineered biotech drugs.

In its last quarter the company reported a 12 percent drop in profit, as sales were squeezed by a weak economy, pricing pressures and recalls that have kept many popular nonprescription medicines off store shelves. Sales of the company's over-the-counter medicines fell more than 19 percent for the full year.

J&J's board also slashed the 2010 bonus of consumer products chairwoman, Colleen Goggins, who oversaw the factory at the center of many of J&J's largest recalls. She received a performance bonus of $500,000 in 2010, down from $1 million the year before.

Goggins, who is slated to retire in March, came under fire after a congressional hearing last May when she claimed the company had no part in a "phantom recall" in which contractors bought up defective Motrin tablets off store shelves. Goggins later said she had learned that the company wrote the instructions to conduct the operation.

Goggins base salary was unchanged at $827,200 per year.

J&J has issued 19 recalls since September 2009 covering over-the-counter medicines like Children's Tylenol and Benadryl, plus contact lenses and hip replacements.

Adding to the pain, the company shut down a key plant after federal regulators cited the facility for manufacturing problems, including releasing medicines containing tiny specs of metal.

Competitors Pfizer and Merck each named new CEOs in the past four months, generating speculation that J&J's board would follow suit and replace Weldon, who is 62 years old. But analysts have pointed out that many directors on the J&J board were nominated to their positions by Weldon, who is also chairman.

Weldon joined J&J in 1971 and was named chairman and CEO in 2002.