Traders ought to reject J&J CEO pay package deal, proxy adviser Glass Lewis says By Reuters
© Reuters. FILE PHOTO: Alex Gorsky, chairman and CEO of Johnson & Johnson, takes the stand in New Jersey Supreme Courtroom in New Brunswick, New Jersey
By Jessica DiNapoli
(Reuters) – Proxy adviser Glass Lewis is recommending traders reject the practically $30 million pay package deal for Johnson & Johnson (NYSE:) Chief Government Alex Gorsky, arguing that the healthcare firm is shielding its prime executives from the authorized value of poor enterprise selections.
J&J is attracting investor scrutiny as a result of it excluded from its calculation of inventory awards to its prime executives prices associated to lawsuits claiming that the healthcare firm helped gasoline the nation’s opioid disaster and that traces of asbestos in its talc child powder brought on most cancers, Reuters reported on Monday.
Together with the opioid and talc-related authorized prices would have weighed on Gorsky’s compensation, which totaled $29.6 million in 2020, up 17% from the earlier yr.
J&J stated it has all the time put aside sure one-time prices akin to litigation from calculating inventory awards for executives, an method that’s frequent throughout company America. J&J and Gorsky didn’t reply to requests for touch upon the Glass Lewis report, dated March 31.
Glass Lewis stated within the report back to traders that it’s “essential of the substantial monetary changes” to J&J’s efficiency outcomes and that shareholders ought to forged their ballots in opposition to it. A non-binding decision on the pay packages shall be up for a vote on the firm’s annual normal assembly on April 22.
“In our opinion, the changes associated to well-documented authorized actions basically protect executives’ compensation from the detrimental impression of their selections for the corporate,” Glass Lewis stated.
Gorsky, who turned CEO in 2012, has been on the helm of J&J through the opioid abuse and habit disaster, which in keeping with the U.S. Facilities for Illness Management and Prevention has claimed practically 450,000 lives in america between 1999 and 2018. In 2019, 50,000 folks died within the U.S. from opioid associated overdoses, in keeping with the Nationwide Institute of Well being.
The corporate has denied any half in fueling the disaster. J&J is certainly one of three corporations with COVID-19 vaccines licensed to be used in america, though it has run into some early manufacturing stumbles.
Drug distributors AmerisourceBergen (NYSE:) Corp and Cardinal Well being Inc (NYSE:) have additionally come underneath stress from traders on their strikes to put aside the prices of agreed-to opioid settlements in figuring out pay for his or her CEOs.
Cardinal Well being has stated it can have interaction with shareholders to include their views in its government compensation plan after a minority of them revolted in November in opposition to an identical government pay construction.
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