Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Investors should reject J&J CEO pay package, proxy adviser Glass Lewis says

Stock MarketsApr 01, 2021 01:50PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Alex Gorsky, chairman and CEO of Johnson & Johnson, takes the stand in New Jersey Supreme Court in New Brunswick, New Jersey 2/2

By Jessica DiNapoli

(Reuters) - Proxy adviser Glass Lewis is recommending investors reject the nearly $30 million pay package for Johnson & Johnson (NYSE:JNJ) Chief Executive Alex Gorsky, arguing that the healthcare company is shielding its top executives from the legal cost of poor business decisions.

J&J is attracting investor scrutiny because it excluded from its calculation of stock awards to its top executives costs related to lawsuits claiming that the healthcare company helped fuel the nation's opioid crisis and that traces of asbestos in its talc baby powder caused cancer, Reuters reported on Monday.

Including the opioid and talc-related legal costs would have weighed on Gorsky's compensation, which totaled $29.6 million in 2020, up 17% from the previous year.

J&J said it has always set aside certain one-time costs such as litigation from calculating stock awards for executives, an approach that is common across corporate America. J&J and Gorsky did not respond to requests for comment on the Glass Lewis report, dated March 31.

Glass Lewis said in the report to investors that it is "critical of the substantial financial adjustments" to J&J's performance results and that shareholders should cast their ballots against it. A non-binding resolution on the pay packages will be up for a vote at the company's annual general meeting on April 22.

"In our opinion, the adjustments related to well-documented legal actions essentially shield executives' compensation from the detrimental impact of their decisions for the company," Glass Lewis said.

Gorsky, who became CEO in 2012, has been at the helm of J&J during the opioid abuse and addiction crisis, which according to the U.S. Centers for Disease Control and Prevention has claimed nearly 450,000 lives in the United States between 1999 and 2018. In 2019, 50,000 people died in the U.S. from opioid related overdoses, according to the National Institute of Health.

The company has denied any part in fueling the crisis. J&J is one of three companies with COVID-19 vaccines authorized for use in the United States, although it has run into some early manufacturing stumbles.

Drug distributors AmerisourceBergen (NYSE:ABC) Corp and Cardinal Health Inc (NYSE:CAH) have also come under pressure from investors on their moves to set aside the costs of agreed-to opioid settlements in determining pay for their CEOs.

Cardinal Health has said it will engage with shareholders to incorporate their views in its executive compensation plan after a minority of them revolted in November against a similar executive pay structure.

Investors should reject J&J CEO pay package, proxy adviser Glass Lewis says
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email