By: The Associated Press//April 22, 2010
By: The Associated Press//April 22, 2010//
Shareholders of health care giant Johnson & Johnson on Thursday narrowly rejected a proposal to give themselves a “say on pay” of top executives, but the vote results may not be final.
The close vote — 52 percent against and 48 percent for — was on a proposal to give stockholders an advisory vote on compensation of top executives.
J&J CEO William Weldon said that because the preliminary vote was so close, it is possible that the final tally, including votes cast at the meeting, could change.
Most shareholders, including large institutional investors, cast votes in advance of annual meetings electronically or by mail. A final result will be reported next week.
The “say on pay” issue has been a hot one in recent years as shareholders of many major corporations, concerned about the number of executives getting compensation packages exceeding $10 million a year, have pushed for some voice in executive compensation — and in some cases, have gotten it. Weldon, one of the country’s highest-paid executives, got compensation valued at $25.6 million in 2009.
J&J shareholders also rejected a proposal to reduce the percentage of shares needed to call a special meeting, on a vote of 63 percent against and 37 percent for the plan. The proposal would have reduced the level of shares needed to call a special meeting to 10 percent, from the 25 percent set by the company in 2008 — in response to a proposal from the same shareholder, William Steiner of Piermont, N.Y.
The votes came at an annual meeting near the company’s New Brunswick, N.J., headquarters, where about 1,900 shareholders packed into a hotel auditorium and three overflow rooms.
Weldon told the crowd that the company had come through a very difficult year but had met many of its goals, including launching important new products, focusing sales efforts on fast-growing markets in emerging companies and increasing productivity by starting a restructuring program. J&J plans to eliminate about 8,000 jobs worldwide.
“We continue to deliver solid financial results,” Weldon said. “Our people still managed to hold operational sales steady, improve profitability and move innovations into the market.”
One shareholder from the National Center for Public Policy Research, a group opposed to the recently enacted health care overhaul, asked whether J&J’s reputation would be hurt by the company’s support of the plan. Weldon said he did not expect that.
“I think there is support for people having accessible, affordable health care,” he said, drawing applause from the crowd.
He also said J&J doesn’t like every aspect of the legislation.
“The costs will begin immediately, while access to additional [newly insured] patients is still years away,” he added.
Weldon noted the global health care market is expected to grow about 5 percent a year over the next five years, fueled partly by big jumps and the number of people with medical insurance in populous countries such as China, India and Brazil — areas J&J is targeting.
He also announced J&J has raised its quarterly dividend to 54 cents from 49 cents. The change increases the company’s annual dividend to $2.16 from $1.96.
In trading Thursday, J&J shares fell 61 cents to $64.78.