Critics took the gun from Johnson & Johnson CEO’s $ 30 million payday
Institutional Shareholder Services last week joined rival consulting firm Glass Lewis in recommending that J&J investors vote to reject Gorsky’s compensation agreement at the company’s annual stock exchange this month. The ISS said J&J’s co-management was not good, giving you a rating of 7 on a scale of 1 to 10, with 1 leading the way. For compensation alone, the ISS has given J&J a rating of 9, which is much closer than the lowest.
What’s worse is the fact that J&J paid billions of dollars at official residences last year, including $ 4 billion tied to its role in the national opioid epidemic.
The Centers for Disease Control and Prevention estimates that some 500,000 people died of opioid-related overdoses in the U.S. between 1999 and 2019. J&J is one of the many manufacturers of opioid-based painkillers, and other drug manufacturers are also involved in the opioid epidemic. Despite being officially paid, J&J has denied that there is anything wrong with the rise in overdose.
J&J has also set aside an additional $ 4 billion in lawsuits linked to claims that its talcum powder contained cancer-causing asbestos. The company keeps its products safe and that any pollution was an isolated incident.
The ISS said in its report J&J declined to divulge enough details to shareholders as to how the company’s board of directors estimates court costs involving millions of dollars in Gorsky’s $ 30 million cash and cash rewards last year.
J&J, like most companies, does not include a one-time legal fee for the metrics it uses to calculate management compensation, but the ISS has said it believes these areas should have been included in Gorsky’s salary.
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Critics took the gun from Johnson & Johnson CEO’s $ 30 million payday
More than a hundred company leaders met to discuss state voting rules
“As inadequacies have been made in this article, a vote against this proposal is needed,” the ISS said in a statement.
Gorsky has been Johnson & Johnson’s chief executive since 2012, which includes some years of legal fees.
In a statement, J&J said its executive compensation was “designed to encourage long-term, sustainable value creation.” The company also noted that although loss of debt is not included in the performance measures for its executives, it is a factor in which the board imposes compensation.
“The company’s management of the costs of compensation lawsuits is within the scope of the industry,” said J&J.
Vaccine, but a strange discharge
J&J had great success last year: It is one of only three companies to successfully vaccinate against the spread of the COVID-19-approved emergency use in the U.S.
However, the release of the J&J vaccine has faced product delays and quality control issues. A contractor manufacturer working for J&J in the Baltimore industry was forced to drop millions of doses of the company’s vaccine COVID-19 last month. Separately, several states have temporarily shut down vaccination sites using the J&J vaccine following reports of disruptions.
Even without legal payments, J&J has a financial year left over by 2020. Sales have increased by just 1%, to about $ 82.6 billion, and the company’s revenue has dropped by 8% since 2019, to $ 14.7 billion.
The J&J board compensation committee has given Gorsky a 14% salary increase by 2020 to 30.1 million, according to ISS estimates. An investment adviser company noted that Gorsky’s pay was 365 times that of the company’s $ 81,000 annual employee pay.
“I think [Gorsky’s] pay is too high,” said Rosanna Landis Weaver, a senior compensation analyst at As You Sow, a nonprofit that promotes equitable shareholding, environmental and other issues.
“You have to do events that only happen once whether they are good or bad in the same way,” he said. “He will seek fame for the best things that happen, such as developing the COVID-19 vaccine, but that means he should also be fined for the worst things that happen again.”