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March 10, 2021 | |||||||||||
Notice of Annual Meeting and Proxy Statement | |||||||||||
You are invited to attend the Annual Meeting of Shareholders of Johnson & Johnson (the Company). Due to ongoing public health concerns regarding the COVID-19 pandemic and for the health and well-being of our shareholders, directors, management and associates, the 2021 Annual Meeting will be held online in a virtual format. You or your proxyholder will be able to attend the 2021 Annual Meeting online, vote and submit questions by visiting www.virtualshareholdermeeting.com/JNJ2021 and using the 16-digit control number included on your notice, on your Proxy card or in the voting instructions that accompanied your Proxy materials. As of this date, a state of emergency is in effect in the State of New Jersey relating to the COVID-19 pandemic. Johnson & Johnson is permitted to hold a virtual meeting of shareholders under New Jersey law so long as a state of emergency remains in effect. In the event that the state of emergency is lifted prior to the date fixed for the 2021 Annual Meeting, and it is not, therefore, then legally permissible to hold a completely virtual annual meeting under New Jersey law, we will announce alternative arrangements for the 2021 Annual Meeting as promptly as practicable. Any such change will be announced via press release and website posting, as well as the filing of additional Proxy materials with the Securities and Exchange Commission. | |||||||||||
Items of Business: | |||||||||||
1. Elect the 14 nominees named in this Proxy Statement to serve as Directors for the coming year; | |||||||||||
2. Vote, on an advisory basis, to approve named executive officer compensation; | |||||||||||
3. Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2021; | |||||||||||
4. Vote on the four shareholder proposals contained in this Proxy Statement, if properly presented at the Annual Meeting; and | |||||||||||
5. Transact such other matters as may properly come before the Annual Meeting and at any adjournment or postponement of the Annual Meeting. | |||||||||||
Voting: | |||||||||||
You are eligible to vote if you were a shareholder of record at the close of business on February 23, 2021. | |||||||||||
Ensure that your shares are represented at the meeting by voting in one of several ways: | |||||||||||
![]() | To vote VIA THE INTERNET prior to the meeting, go to the website listed on your proxy card or notice. | ||||||||||
![]() | To vote BY PHONE, call the telephone number specified on your proxy card or on the website listed on your notice. | ||||||||||
![]() | If you received paper copies of your proxy materials, mark, sign, date and return your proxy card in the postage-paid envelope provided to vote BY MAIL. | ||||||||||
![]() | To vote during the virtual meeting, visit www.virtualshareholdermeeting.com/JNJ2021 and use your 16-digit control number. Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting by using one of the methods described above. | ||||||||||
By order of the Board of Directors, | |||||||||||
![]() | |||||||||||
MATTHEW ORLANDO Worldwide Vice President, Corporate Governance Corporate Secretary | |||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be held on April 22, 2021: The Proxy Statement and Annual Report to Shareholders are available at www.investor.jnj.com/gov/annualmeetingmaterials.cfm. |
![]() | Dear Fellow Shareholders, | ||||||||||
The COVID-19 pandemic has presented unprecedented challenges, and our deepest sympathy is with everyone affected. We also wish to express our tremendous gratitude to the nurses, doctors, scientists and all other frontline workers - including those at Johnson & Johnson - who steadfastly ensured others' needs were met. While these extremely challenging circumstances have tested our collective ability to rapidly adapt and respond to them and the uncertainty ahead, the role of Johnson & Johnson is crystal clear. During Johnson & Johnson’s century-plus history, the Company has faced many significant health crises, and its responses have helped shape the Company’s culture, capabilities and strategic focus, further enabling it to lead with resilience during these turbulent times. Consistent with the values of Our Credo, the Company maintained its unwavering commitment to the health, safety and well-being of its employees, patients and consumers as further described on page 32 of this Proxy Statement. The Company also shared positive top-line results from its Phase 3 ENSEMBLE clinical trial for the Company's single-dose COVID-19 vaccine. Shortly after, based on the totality of scientific evidence, the Company received Emergency Use Authorization from the U.S. Food and Drug Administration for its single-dose COVID-19 vaccine and immediately began shipping doses in the U.S. |
![]() | 2021 Proxy Statement | 3 |
4 | 2021 Proxy Statement | ![]() |
A Message from Our Lead Director | Index of Frequently Requested Information | ||||||||||||||||
Our COVID-19 Response Efforts | |||||||||||||||||
2021 Proxy Statement — Summary | |||||||||||||||||
Voting Overview and Vote Recommendations of Board — Items of Business | |||||||||||||||||
Board of Directors | Annual Meeting Attendance | ||||||||||||||||
ITEM 1: Election of Directors | Anti-Pledging, Hedging Policy | ||||||||||||||||
Director Nomination Process, Board Refreshment and Board Composition | Auditor Fees | ||||||||||||||||
Nominees | Auditor Tenure | ||||||||||||||||
Board Leadership Structure | Board Evaluation | ||||||||||||||||
Board Committees | Board Leadership Structure | ||||||||||||||||
Board Meetings and Processes | Board Meeting Attendance | ||||||||||||||||
Oversight of Strategy | CEO Pay Ratio | ||||||||||||||||
Oversight of Risk | CEO Performance Evaluation | ||||||||||||||||
Oversight of Human Capital Management | Compensation Consultant | ||||||||||||||||
Shareholder Engagement | Compensation Summary | ||||||||||||||||
Corporate Governance Highlights | Contacting the Board | ||||||||||||||||
Director Independence | COVID-19 Response | ||||||||||||||||
Related Person Transactions | Corporate Governance Highlights | ||||||||||||||||
Stock Ownership and Section 16 Compliance | Director Biographies | ||||||||||||||||
Director Compensation | Director Independence | ||||||||||||||||
Compensation of Executives | Director Overboarding Policy | ||||||||||||||||
ITEM 2: Advisory Vote to Approve Named Executive Officer Compensation | Director Qualifications | ||||||||||||||||
Compensation Committee Report | Diversity, Equity and Inclusion | ||||||||||||||||
Compensation Discussion and Analysis | ESG Oversight | ||||||||||||||||
2020 Performance and Compensation | Exec. Comp. Recoupment Policy | ||||||||||||||||
Executive Compensation Philosophy | Human Capital Management | ||||||||||||||||
Components of Executive Compensation | Lead Director Duties | ||||||||||||||||
Peer Groups for Pay and Performance | Long-Term Incentives | ||||||||||||||||
Compensation Decision Process | Notice and Access | ||||||||||||||||
Governance of Executive Compensation | Pay For Performance | ||||||||||||||||
Additional Information Concerning Executive Compensation | Peer Group Comparisons | ||||||||||||||||
Executive Compensation Tables | Perquisites | ||||||||||||||||
2020 Summary Compensation Table | Political Spending Oversight | ||||||||||||||||
2020 Grants of Plan-Based Awards | Proxy Access | ||||||||||||||||
2020 Outstanding Equity Awards at Fiscal Year-End | Related Person Transactions | ||||||||||||||||
2020 Option Exercises and Stock Vested | Risk Oversight | ||||||||||||||||
2020 Pension Benefits | Severance Benefits | ||||||||||||||||
2020 Non-Qualified Deferred Compensation | Shareholder Engagement | ||||||||||||||||
2020 Potential Payments Upon Termination | Shareholder Proposals | ||||||||||||||||
Ratio of the Annual Total Compensation of the Median-Paid Employee to CEO | Stock Ownership Requirements: | ||||||||||||||||
Audit Matters | for Directors | ||||||||||||||||
Audit Committee Report | for Executive Officers | ||||||||||||||||
ITEM 3: Ratification of Appt. of Independent Registered Public Accounting Firm | Stock Ownership | ||||||||||||||||
Shareholder Proposals | Websites and Resources | ||||||||||||||||
ITEM 4: Report on Government Financial Support and Access to COVID-19 | Voting | ||||||||||||||||
Vaccines and Therapeutics | |||||||||||||||||
ITEM 5: Independent Board Chair | |||||||||||||||||
ITEM 6: Civil Rights Audit | |||||||||||||||||
ITEM 7: Executive Compensation Bonus Deferral | |||||||||||||||||
General Information | |||||||||||||||||
General Information |
![]() | 2021 Proxy Statement | 5 |
Voting Overview and Vote Recommendations of Board - Items of Business | |||||||||||||||||
Election of Director Nominees: Please Vote FOR all Nominees | |||||||||||||||||
1 | Election of 14 Director Nominees (page 12) | ||||||||||||||||
• | Diverse slate of Director nominees with broad and relevant leadership and experience. | ☑ | |||||||||||||||
• | All nominees are independent, except the Chairman. | ||||||||||||||||
• | Average Director tenure is 6 years, with frequent refreshment. | ||||||||||||||||
Management Proposals: Please Vote FOR all Management Proposals | |||||||||||||||||
2 | Advisory Vote to Approve Named Executive Officer Compensation (Say on Pay) (page 46) | ||||||||||||||||
• | Independent oversight by the Compensation & Benefits Committee with the assistance of an independent external advisor. | ☑ | |||||||||||||||
• | Executive compensation targets are determined based on annual review of publicly available information and executive compensation surveys among the Executive Peer Group (page 72). | ||||||||||||||||
3 | Ratification of Appointment of Independent Registered Public Accounting Firm (page 103) | ||||||||||||||||
• | PricewaterhouseCoopers LLP is an independent accounting firm with the breadth of expertise and knowledge necessary to effectively audit our business. | ☑ | |||||||||||||||
• | Independence supported by periodic mandated rotation of the audit firm's lead engagement partner. | ||||||||||||||||
Shareholder Proposals: Please Vote AGAINST the following Shareholder Proposals | |||||||||||||||||
☒ | |||||||||||||||||
4 | Report on Government Financial Support and Access to COVID-19 Vaccines and Therapeutics (page 105) |
☒ | |||||||||||||||||
5 | Independent Board Chair (page 107) |
☒ | |||||||||||||||||
6 | Civil Rights Audit (page 110) |
☒ | |||||||||||||||||
7 | Executive Compensation Bonus Deferral (page 114) |
6 | 2021 Proxy Statement | ![]() |
DIRECTOR NOMINEES (pages 12 to 18) | ||||||||||||||||||||||||||||||||||||||
Name | Age | Director Since | Primary Occupation | Board Committees | ||||||||||||||||||||||||||||||||||
AUD | CB | NCG | RC | STS | FIN | |||||||||||||||||||||||||||||||||
M. C. Beckerle | I | 66 | 2015 | Chief Executive Officer, Huntsman Cancer Institute; Distinguished Professor of Biology, College of Science, University of Utah | ü | C | ||||||||||||||||||||||||||||||||
D. S. Davis | I | 69 | 2014 | Former Chairman and Chief Executive Officer, United Parcel Service, Inc. | C | ü | ||||||||||||||||||||||||||||||||
I. E. L. Davis | I | 70 | 2010 | Non-Executive Chairman, Rolls-Royce Holdings plc; Former Chairman and Worldwide Managing Director, McKinsey & Company | ü | ü | ||||||||||||||||||||||||||||||||
J. A. Doudna | I | 57 | 2018 | Professor of Chemistry; Professor of Biochemistry & Molecular Biology; Li Ka Shing Chancellor's Professor in Biomedical and Health, University of California, Berkeley | ü* | ü | ||||||||||||||||||||||||||||||||
A. Gorsky | CH | 60 | 2012 | Chairman and Chief Executive Officer, Johnson & Johnson | C | |||||||||||||||||||||||||||||||||
M. A. Hewson | I | 67 | 2019 | Executive Chairman, Former Chairman and Chief Executive Officer, Lockheed Martin Corporation | ü | ü* | ||||||||||||||||||||||||||||||||
H. Joly | I | 61 | 2019 | Former Chairman and Chief Executive Officer, Best Buy Co., Inc. | ü* | ü | ||||||||||||||||||||||||||||||||
M. B. McClellan | I | 57 | 2013 | Director, Duke-Robert J. Margolis, MD, Center for Health Policy | ü | ü | ||||||||||||||||||||||||||||||||
A. M. Mulcahy | LD I | 68 | 2009 | Former Chairman and Chief Executive Officer, Xerox Corporation | ü | C | ü | |||||||||||||||||||||||||||||||
C. Prince | I | 71 | 2006 | Former Chairman and Chief Executive Officer, Citigroup Inc. | ü | C* | ||||||||||||||||||||||||||||||||
A. E. Washington | I | 70 | 2012 | Duke University's Chancellor for Health Affairs; President and Chief Executive Officer, Duke University Health System | ü | ü | ||||||||||||||||||||||||||||||||
M. A. Weinberger | I | 59 | 2019 | Former Chairman and Chief Executive Officer, EY (Ernst & Young) | ü | C* | ||||||||||||||||||||||||||||||||
N. Y. West | I | 59 | 2020 | Former Lieutenant General, U.S. Army | ü | |||||||||||||||||||||||||||||||||
R. A. Williams | I | 71 | 2011 | Former Chairman and Chief Executive Officer, Aetna Inc. | C | ü | ||||||||||||||||||||||||||||||||
*At our April 2021 Board Meeting, the following appointments will be effective: Dr. Doudna, Member, NCG; Mr. Joly, Member, CB; Ms. Hewson, Member, RC; Mr. Weinberger, Chairman, RC; Mr. Prince, Member, RC |
CH | Chairman of the Board | CB | Compensation & Benefits Committee | |||||||||||
C | Committee Chair | NCG | Nominating & Corporate Governance Committee | |||||||||||
LD | Lead Director | RC | Regulatory Compliance Committee | |||||||||||
I | Independent Director | STS | Science, Technology & Sustainability Committee | |||||||||||
AUD | Audit Committee | FIN | Finance Committee |
![]() | 2021 Proxy Statement | 7 |
Board Refreshment and Board Nominee Composition (page 11) | ||||||||||||||||||||||||||||||||||||||||||||
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Corporate Governance Highlights (page 35) | ||||||||||||||||||||||||||||||||||||||||||||
Effective Board Structure and Composition | Responsive and Accountable to Shareholders | |||||||||||||||||||||||||||||||||||||||||||
ü | Strong independent Board leadership | ü | Annual election of Directors | |||||||||||||||||||||||||||||||||||||||||
ü | Independent Lead Director | ü | Majority voting standard for Director elections | |||||||||||||||||||||||||||||||||||||||||
ü | Annual review of Board leadership | ü | One class of stock | |||||||||||||||||||||||||||||||||||||||||
ü | Executive Sessions of independent Directors | ü | Proxy access | |||||||||||||||||||||||||||||||||||||||||
ü | Private Committee sessions with key compliance leaders | ü | Director overboarding policy | |||||||||||||||||||||||||||||||||||||||||
ü | Rigorous Board and Committee evaluations | ü | No shareholder rights plan | |||||||||||||||||||||||||||||||||||||||||
ü | Regular Board refreshment | ü | No supermajority requirements in Certificate of Incorporation / By-Laws | |||||||||||||||||||||||||||||||||||||||||
ü | Diverse and skilled Board | ü | Shareholder right to call special meetings | |||||||||||||||||||||||||||||||||||||||||
ü | Removal of Directors with or without cause | |||||||||||||||||||||||||||||||||||||||||||
Additional Governance Features | ü | Active shareholder engagement | ||||||||||||||||||||||||||||||||||||||||||
ü | Code of Business Conduct | ü | Annual Say on Pay advisory vote | |||||||||||||||||||||||||||||||||||||||||
ü | Cybersecurity oversight | ü | Policy Against Pledging, Hedging and Short Selling of Company Stock | |||||||||||||||||||||||||||||||||||||||||
ü | Enhanced litigation disclosure | ü | Disclosure on drug pricing in Janssen U.S. Transparency Report | |||||||||||||||||||||||||||||||||||||||||
ü | Robust compensation recoupment policy framework | ü | ESG disclosure in annual Health for Humanity Report | |||||||||||||||||||||||||||||||||||||||||
ü | Stock Ownership Guidelines | |||||||||||||||||||||||||||||||||||||||||||
Our Annual Shareholder Engagement Cycle (page 33) | ||||||||||||||||||||||||||||||||||||||||||||
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8 | 2021 Proxy Statement | ![]() |
Our Credo |
2020 Performance and Annual Incentives |
2018-2020 Performance Share Unit (PSU) Payout |
Compensation Decisions for 2020 Performance |
2020 Shareholder Engagement |
Compensation Program Changes in 2020 |
![]() | 2021 Proxy Statement | 9 |
Nominees | |||||
Director Nomination Process | |||||
General Criteria for Nomination to the Board | |||||
Candidates for the Board should meet the following criteria: | |||||
• | Possess the highest ethical character and share values with Our Credo | ||||
• | Strong personal and professional reputation consistent with our image and reputation | ||||
• | Proven record of accomplishment within candidate’s field, with superior credentials and recognition | ||||
• | Leadership of a major complex organization, including scientific, government, educational and other non-profit institutions |
The Board also seeks Directors who: | |||||
• | Are widely recognized leaders in the fields of medicine or biological sciences, including those who have received the most prestigious awards and honors in their fields | ||||
• | Have expertise and experience relevant to our business, and the ability to offer advice and guidance to the CEO based on that expertise and experience | ||||
• | Are independent, without the appearance of any conflict in serving as a Director, and independent of any particular constituency, with the ability to represent all shareholders | ||||
• | Exercise sound business judgment | ||||
• | Are diverse, reflecting differences in skills, regional and industry experience, background, race, ethnicity, gender and other unique characteristics |
10 | 2021 Proxy Statement | ![]() |
Board and Committee Evaluations | |||||
Board Evaluations: At the end of 2020, the Chairman and the Lead Director met with each Director individually to collect feedback on the Board’s responsibilities, structure, composition, procedures, priorities, culture and engagement. Directors also had the opportunity to provide anonymous written comments through secure technology to enable additional candid feedback, and a number of Directors chose to provide anonymous written comments. In all cases, input from the evaluations was summarized and discussed with the full Board. The results of the evaluations were positive and affirming, with only minor administrative action items to address. | ||
Committee Evaluations: Committee members complete a written questionnaire to facilitate self-evaluation during an Executive Session of the Committee. Upon completion of the self-evaluation, the Committee Chair shares the results with the full Board, including any follow-up actions. |
Board Refreshment and Board Nominee Composition | |||||
![]() | 2021 Proxy Statement | 11 |
![]() | The Board of Directors recommends a vote FOR election of each of the below-named Director nominees. |
![]() | Mary C. Beckerle, Ph.D. | |||||||||||||||||||||||||
Independent Director since 2015 | ||||||||||||||||||||||||||
Biography | ||||||||||||||||||||||||||
Dr. Beckerle, age 66, has served as Chief Executive Officer of the Huntsman Cancer Institute at the University of Utah since 2006. She is the Associate Vice President for Cancer Affairs and a Distinguished Professor of Biology and Oncological Sciences at the University of Utah. Dr. Beckerle joined the faculty of the University of Utah in 1986 and currently holds the Jon M. Huntsman Presidential Endowed Chair. Dr. Beckerle has served on the National Institute of Health (NIH) Advisory Committee to the Director, on the Board of Directors of the American Association for Cancer Research, as President of the American Society for Cell Biology and as the Chair of the American Cancer Society Council for Extramural Grants. She currently serves on a number of scientific advisory boards, including the Medical Advisory Board of the Howard Hughes Medical Institute, the Board of Scientific Advisors of the National Cancer Institute (USA) and the External Advisory Board of the Dana Farber/Harvard Cancer Center. | ||||||||||||||||||||||||||
Skills & Qualifications | ||||||||||||||||||||||||||
• | Expertise in scientific research and organizational management in the healthcare arena | |||||||||||||||||||||||||
• | Active participant in national and international scientific affairs | |||||||||||||||||||||||||
• | Strong focus on patient experience | |||||||||||||||||||||||||
Current Committees: | ||||||||||||||||||||||||||
• | Chair, Science, Technology & Sustainability | |||||||||||||||||||||||||
• | Member, Regulatory Compliance | |||||||||||||||||||||||||
Other Public Board Service: | ||||||||||||||||||||||||||
• | Huntsman Corporation (since 2011) | |||||||||||||||||||||||||
![]() | D. Scott Davis | ||||||||||||||||||||||
Independent Director since 2014 | |||||||||||||||||||||||
Biography | |||||||||||||||||||||||
Mr. Davis, age 69, served as Chairman and Chief Executive Officer of United Parcel Service, Inc. (UPS) (shipment and logistics) from 2008 to 2014, and as Chairman from 2014 to 2016. Previously, Mr. Davis held various leadership positions with UPS, primarily in the finance and accounting area, including as Vice Chairman and Chief Financial Officer. Mr. Davis is a Certified Public Accountant. He previously served on the Board of the Federal Reserve Bank of Atlanta from 2003 to 2009, serving as Chairman in 2009. | |||||||||||||||||||||||
Skills & Qualifications | |||||||||||||||||||||||
• | Deep understanding of emerging markets and international operations, public policy and global economic indicators | ||||||||||||||||||||||
• | Expertise in management, strategy, finance and operations | ||||||||||||||||||||||
• | Expertise in supply chain logistics at a time of rapid global expansion | ||||||||||||||||||||||
Current Committees: | |||||||||||||||||||||||
• | Chair, Audit | ||||||||||||||||||||||
• | Member, Compensation & Benefits | ||||||||||||||||||||||
Other Public Board Service: | |||||||||||||||||||||||
• | Honeywell International, Inc. (since 2005) | ||||||||||||||||||||||
Recent Past Public Board Service: | |||||||||||||||||||||||
• | United Parcel Service, Inc. (2008-2016) | ||||||||||||||||||||||
• | EndoChoice, Inc. (2014-2016) | ||||||||||||||||||||||
12 | 2021 Proxy Statement | ![]() |
![]() | Ian E. L. Davis | |||||||||||||||||||||||||
Independent Director since 2010 | ||||||||||||||||||||||||||
Biography | ||||||||||||||||||||||||||
Mr. Davis, age 70, is currently non-executive Chairman, Rolls-Royce Holdings plc. Mr. Davis retired from McKinsey & Company (management consulting) in 2010 as a Senior Partner, having served as Chairman and Worldwide Managing Director from 2003 until 2009. In his more than 30 years at McKinsey, he served as a consultant to a range of global organizations across the public, private and not-for-profit sectors. Prior to becoming Chairman and Worldwide Managing Director, he was Managing Partner of McKinsey's practice in the United Kingdom and Ireland. His experience included oversight for McKinsey clients and services in Asia, Europe, the Middle East and Africa, and he has expertise in the consumer products and retail industries. Mr. Davis is a Director at Majid Al Futtaim Holding LLC, and a Senior Advisor at Apax Partners, a private equity firm. | ||||||||||||||||||||||||||
Skills & Qualifications | ||||||||||||||||||||||||||
• | Expertise in leading a broad global business | |||||||||||||||||||||||||
• | Deep understanding of global business trends | |||||||||||||||||||||||||
• | Expertise in finance, strategy and business transformation | |||||||||||||||||||||||||
Current Committees: | ||||||||||||||||||||||||||
• | Member, Audit | |||||||||||||||||||||||||
• | Member, Regulatory Compliance | |||||||||||||||||||||||||
Other Public Board Service: | ||||||||||||||||||||||||||
• | Rolls-Royce Holdings, plc (since 2013) | |||||||||||||||||||||||||
Recent Past Public Board Service: | ||||||||||||||||||||||||||
• | BP, plc (2010-2020) | |||||||||||||||||||||||||
![]() | Jennifer A. Doudna, Ph.D. | ||||||||||||||||||||||
Independent Director since 2018 | |||||||||||||||||||||||
Biography | |||||||||||||||||||||||
Dr. Doudna, age 57, joined the faculty at University of California, Berkeley, as a Professor of Biochemistry & Molecular Biology in 2002. She directs the Innovative Genomics Institute, a joint UC Berkeley-UC San Francisco center, holds the Li Ka Shing Chancellor's Professorship in Biomedical and Health, and is the Chair of the Chancellor's Advisory Committee on Biology at UC Berkeley. Dr. Doudna is Principal Investigator at the Doudna Lab at UC Berkeley and has founded and serves on the Scientific Advisory Boards of Caribou Biosciences, Inc. and Intellia Therapeutics, Inc., both leading CRISPR genome engineering companies. She has been an Investigator with the Howard Hughes Medical Institute since 1997. Dr. Doudna is the recipient of numerous scientific awards in biochemistry and genetics, including the Nobel Prize in Chemistry in 2020. Dr. Doudna is a Trustee for Pomona College. | |||||||||||||||||||||||
Skills & Qualifications | |||||||||||||||||||||||
• | Pioneer in the field of biochemistry, having co-discovered the simplified genome editing technique CRISPR-Cas9 | ||||||||||||||||||||||
• | Expertise in scientific research and innovation | ||||||||||||||||||||||
• | Leader in integration of scientific research and ethics | ||||||||||||||||||||||
Current Committees: | |||||||||||||||||||||||
• | Member, Science, Technology & Sustainability | ||||||||||||||||||||||
Other Public Board Service: | |||||||||||||||||||||||
• | None | ||||||||||||||||||||||
![]() | 2021 Proxy Statement | 13 |
![]() | Alex Gorsky | |||||||||||||||||||||||||
Management Director since 2012 | ||||||||||||||||||||||||||
Biography | ||||||||||||||||||||||||||
Mr. Gorsky, age 60, was appointed as Chairman, Board of Directors in December 2012. He was named Chief Executive Officer, Chairman of the Executive Committee and joined the Board of Directors in April 2012. Mr. Gorsky began his Johnson & Johnson career with Janssen Pharmaceutica Inc. in 1988. Over the next 15 years, he advanced through positions of increasing responsibility in sales, marketing and management. In 2001, Mr. Gorsky was appointed President of Janssen Pharmaceutical Inc., and in 2003 he was named Company Group Chairman of the Johnson & Johnson pharmaceutical business in Europe, the Middle East and Africa. Mr. Gorsky left Johnson & Johnson in 2004 to join Novartis Pharmaceuticals Corporation, where he served as head of the pharmaceutical business in North America. Mr. Gorsky returned to Johnson & Johnson in 2008 as Company Group Chairman for Ethicon. In early 2009, he was appointed Worldwide Chairman of the Surgical Care Group and member of the Executive Committee. In September 2009, he was appointed Worldwide Chairman of the Medical Devices and Diagnostics Group. Mr. Gorsky became Vice Chairman of the Executive Committee in January 2011. Mr. Gorsky serves on the Boards of the Travis Manion Foundation, the National Academy Foundation and the Wharton Board of Advisors. He is a Member of the Board of the Business Roundtable and serves as the Chairman of its Corporate Governance Committee. | ||||||||||||||||||||||||||
Skills & Qualifications | ||||||||||||||||||||||||||
• | Leadership of global business in healthcare industry | |||||||||||||||||||||||||
• | Expertise in strategy and operations of our Company as well as its risks and challenges | |||||||||||||||||||||||||
• | Deep commitment to ethical, Credo-based leadership | |||||||||||||||||||||||||
Current Committees: | ||||||||||||||||||||||||||
• | Chair, Finance | |||||||||||||||||||||||||
Other Public Board Service: | ||||||||||||||||||||||||||
• | International Business Machines Corporation (since 2014) | |||||||||||||||||||||||||
![]() | Marillyn A. Hewson | ||||||||||||||||||||||
Independent Director since 2019 | |||||||||||||||||||||||
Biography | |||||||||||||||||||||||
Ms. Hewson, age 67, was named the Executive Chairman of Lockheed Martin Corporation (aerospace) in June 2020, having served as Chairman, President and Chief Executive Officer from 2014 to June 2020. Ms. Hewson was Chief Executive Officer and President of Lockheed Martin from January to December 2013, and has served as a Director since 2012. Ms. Hewson currently serves on the Board of Governors of the United Service Organizations (USO), the University of Alabama President’s Cabinet and the Culverhouse College of Business Board of Visitors, and chairs the Catalyst Board of Directors. | |||||||||||||||||||||||
Skills & Qualifications | |||||||||||||||||||||||
• | Expertise in executive and operational leadership in a global, regulated industry | ||||||||||||||||||||||
• | Insight and experience in global business management, strategic planning, cybersecurity, finance, supply chain, leveraged services and manufacturing | ||||||||||||||||||||||
• | Expertise in government relations and human capital management | ||||||||||||||||||||||
Current Committees: | |||||||||||||||||||||||
• | Member, Compensation & Benefits | ||||||||||||||||||||||
Other Public Board Service: | |||||||||||||||||||||||
• | Lockheed Martin Corporation (since 2012) | ||||||||||||||||||||||
• | Chevron Corporation (since January 2021) | ||||||||||||||||||||||
Recent Past Public Board Service: | |||||||||||||||||||||||
• | DuPont; DowDuPont Inc. (2007-2019) | ||||||||||||||||||||||
14 | 2021 Proxy Statement | ![]() |
![]() | Hubert Joly | |||||||||||||||||||||||||
Independent Director since 2019 | ||||||||||||||||||||||||||
Biography | ||||||||||||||||||||||||||
Mr. Joly, age 61, served as the Executive Chairman of Best Buy Co., Inc. (consumer electronics) from June 2019 to June 2020, having joined the company in 2012 as President and Chief Executive Officer and becoming Chairman, President, and Chief Executive in 2015. From 2004 to 2008, he was Global President and Chief Executive Officer, Carlson Wagonlit Travel, and then served as President and Chief Executive Officer of Carlson Companies from 2008 to 2012. In 1999, he joined Vivendi as Global Chief Executive Officer, Vivendi Universal Games, and was later appointed Executive Vice President of U.S. Assets and Deputy Chief Financial Officer of Vivendi Universal. Prior roles included, from 1996 to 1999, Vice President, Europe and President of Electronic Data Systems France and, from 1983 to 1996, McKinsey & Company, eventually serving as Partner. Mr. Joly is a Senior Lecturer of Business Administration at Harvard Business School and serves on the Board of Directors of Sciences Po Foundation, the Board of Trustees of the Minneapolis Institute of Art and the International Advisory Board of his alma mater, HEC Paris. | ||||||||||||||||||||||||||
Skills & Qualifications | ||||||||||||||||||||||||||
• | Extensive strategic, operational and financial expertise relevant to international corporations | |||||||||||||||||||||||||
• | Successfully led the digital transformation of consumer businesses, with focus on customer experience | |||||||||||||||||||||||||
• | Experience in business transformation and human capital management | |||||||||||||||||||||||||
Current Committees: | ||||||||||||||||||||||||||
• | Member, Nominating & Corporate Governance | |||||||||||||||||||||||||
Other Public Board Service: | ||||||||||||||||||||||||||
• | Ralph Lauren Corporation (since 2009) | |||||||||||||||||||||||||
Recent Past Public Board Service: | ||||||||||||||||||||||||||
• | Best Buy Co., Inc. (2012-2020) | |||||||||||||||||||||||||
![]() | Mark B. McClellan, M.D., Ph.D. | |||||||||||||||||||||||||
Independent Director since 2013 | ||||||||||||||||||||||||||
Biography | ||||||||||||||||||||||||||
Dr. McClellan, age 57, became the inaugural Director of the Duke-Robert J. Margolis, MD, Center for Health Policy and the Margolis Professor of Business, Medicine and Policy at Duke University in January 2016. He is also a faculty member at Dell Medical School at The University of Texas in Austin. Previously, he served from 2007 to 2015 as a Senior Fellow in Economic Studies and as Director of the Initiatives on Value and Innovation in Health Care at the Brookings Institution. Dr. McClellan served as Administrator of the Centers for Medicare & Medicaid Services for the U.S. Department of Health and Human Services from 2004 to 2006 and as Commissioner of the U.S. Food and Drug Administration (FDA) from 2002 to 2004. He served as a Member of the President's Council of Economic Advisers and as Senior Director for Healthcare Policy at the White House from 2001 to 2002 and, during the Clinton administration, held the position of Deputy Assistant Secretary for Economic Policy for the Department of the Treasury. Dr. McClellan previously served as an Associate Professor of Economics and Medicine with tenure at Stanford University, where he also directed the Program on Health Outcomes Research. Dr. McClellan is the founding Chair and Senior Advisor to the Board of the Reagan-Udall Foundation, is a Member of the National Academy of Medicine and the Academy's Leadership Consortium for Value and Science-Driven Health Care, and Co-Chairs the Guiding Committee of the Health Care Payment Learning and Action Network. He sits on the Boards of Directors of ResearchAmerica!, Long Term Quality Alliance, Alignment Healthcare, National Alliance for Hispanic Health, PrognomIQ, Inc. and United States of Care. | ||||||||||||||||||||||||||
Skills & Qualifications | ||||||||||||||||||||||||||
• | Extensive experience in public health policy and regulation, including as Commissioner of the U.S. Food and Drug Administration and Administrator for the U.S. Centers for Medicare & Medicaid Services | |||||||||||||||||||||||||
• | Broad knowledge of, and unique insights into, the challenges facing the healthcare industry | |||||||||||||||||||||||||
Current Committees: | ||||||||||||||||||||||||||
• | Member, Regulatory Compliance | |||||||||||||||||||||||||
• | Member, Science, Technology & Sustainability | |||||||||||||||||||||||||
Other Public Board Service: | ||||||||||||||||||||||||||
• | Cigna Corporation (since 2018) | |||||||||||||||||||||||||
![]() | 2021 Proxy Statement | 15 |
![]() | Anne M. Mulcahy | |||||||||||||||||||||||||
Independent Director since 2009 Lead Director since 2012 | ||||||||||||||||||||||||||
Biography | ||||||||||||||||||||||||||
Ms. Mulcahy, age 68, was Chairman and Chief Executive Officer of Xerox Corporation (business equipment and services) until July 2009, when she retired as CEO after eight years in the position. Prior to serving as CEO, Ms. Mulcahy was President and Chief Operating Officer of Xerox. She also served as President of Xerox's General Markets Operations, which created and sold products for reseller, dealer and retail channels. Earlier in her career at Xerox, which began in 1976, Ms. Mulcahy served as Vice President for Human Resources with responsibility for compensation, benefits, human resource strategy, labor relations, management development and employee training; and as Vice President and Staff Officer for Customer Operations, covering South America and Central America, Europe, Asia and Africa. Ms. Mulcahy was the U.S. Board Chair of Save the Children from March 2010 to February 2017, and was appointed as a Trustee in February 2018. | ||||||||||||||||||||||||||
Skills & Qualifications | ||||||||||||||||||||||||||
• | Experience leading a large, global manufacturing and services company with one of the world's most recognized brands | |||||||||||||||||||||||||
• | Expertise in finance, organizational and operational management issues crucial to a large public company. | |||||||||||||||||||||||||
• | Deep commitment to business innovation and talent development | |||||||||||||||||||||||||
Current Committees: | ||||||||||||||||||||||||||
• | Chair, Nominating & Corporate Governance | |||||||||||||||||||||||||
• | Member, Finance | |||||||||||||||||||||||||
• | Member, Audit | |||||||||||||||||||||||||
Other Public Board Service: | ||||||||||||||||||||||||||
• | Graham Holdings Company (since 2008) | |||||||||||||||||||||||||
• | LPL Financial Holdings Inc. (since 2013) | |||||||||||||||||||||||||
• | Williams-Sonoma, Inc. (since 2018) | |||||||||||||||||||||||||
Recent Past Public Board Service: | ||||||||||||||||||||||||||
• | Target Corporation (1997-2017) | |||||||||||||||||||||||||
![]() | Charles Prince | ||||||||||||||||||||||
Independent Director since 2006 | |||||||||||||||||||||||
Biography | |||||||||||||||||||||||
Mr. Prince, age 71, served as Chief Executive Officer of Citigroup Inc. (financial services) from 2003 to 2007 and as Chairman from 2006 to 2007. Previously, he served as Chairman and Chief Executive Officer of Citigroup's Global Corporate and Investment Bank from 2002 to 2003, Chief Operating Officer from 2001 to 2002 and held positions of increasing responsibility since joining Commercial Credit Company, a predecessor to Citigroup, in 1979. Mr. Prince began his career as an attorney at U.S. Steel Corporation in 1975. Mr. Prince is a Director of Lord Abbett Family of Funds. | |||||||||||||||||||||||
Skills & Qualifications | |||||||||||||||||||||||
• | Expertise leading a diverse global company in a regulated environment | ||||||||||||||||||||||
• | Deep expertise in compliance and risk oversight | ||||||||||||||||||||||
• | Well-developed legal, global business and financial acumen | ||||||||||||||||||||||
Current Committees: | |||||||||||||||||||||||
• | Chair, Regulatory Compliance | ||||||||||||||||||||||
• | Member, Nominating & Corporate Governance | ||||||||||||||||||||||
Other Public Board Service: | |||||||||||||||||||||||
• | None | ||||||||||||||||||||||
Recent Past Public Board Service: | |||||||||||||||||||||||
• | Xerox Corporation (2008-2018) | ||||||||||||||||||||||
16 | 2021 Proxy Statement | ![]() |
![]() | A. Eugene Washington, M.D., M.Sc. | |||||||||||||||||||||||||
Independent Director since 2012 | ||||||||||||||||||||||||||
Biography | ||||||||||||||||||||||||||
Dr. Washington, age 70, is Duke University's Chancellor for Health Affairs and the President and Chief Executive Officer of the Duke University Health System. Previously, he was Vice Chancellor of Health Sciences, Dean of the David Geffen School of Medicine at UCLA; Chief Executive Officer of the UCLA Health System; and Distinguished Professor of Gynecology and Health Policy at UCLA. Prior to UCLA, he served as Executive Vice Chancellor and Provost at the University of California, San Francisco (UCSF) from 2004 to 2010. Dr. Washington co-founded UCSF's Medical Effectiveness Research Center for Diverse Populations in 1993 and served as Director until 2005. He was Chair of the Department of Obstetrics, Gynecology, and Reproductive Sciences at UCSF from 1996 to 2004. Dr. Washington also co-founded the UCSF-Stanford Evidence-based Practice Center and served as its first Director from 1997 to 2002. Prior to UCSF, Dr. Washington worked at the Centers for Disease Control and Prevention. Dr. Washington was elected to the National Academy of Sciences' Institute of Medicine in 1997, where he served on its governing Council. He was founding Chair of the Board of Governors of the Patient-Centered Outcomes Research Institute, served as a member of the Scientific Management Review Board for the NIH, and also served as Chairman of the Board of Directors of both the California Healthcare Foundation and The California Wellness Foundation. Dr. Washington serves on the Boards of Directors of the Kaiser Foundation Hospitals and Kaiser Foundation Health Plan, Inc. | ||||||||||||||||||||||||||
Skills & Qualifications | ||||||||||||||||||||||||||
• | Expertise in medicine, clinical research and healthcare innovation | |||||||||||||||||||||||||
• | Important customer, patient and healthcare provider perspective through leadership of complex health systems | |||||||||||||||||||||||||
• | Expertise in health policy | |||||||||||||||||||||||||
Current Committees: | ||||||||||||||||||||||||||
• | Member, Compensation & Benefits | |||||||||||||||||||||||||
• | Member, Science, Technology & Sustainability | |||||||||||||||||||||||||
Other Public Board Service: | ||||||||||||||||||||||||||
• | None | |||||||||||||||||||||||||
![]() | Mark A. Weinberger | ||||||||||||||||||||||
Independent Director since 2019 | |||||||||||||||||||||||
Biography | |||||||||||||||||||||||
Mr. Weinberger, age 59, served as the Global Chairman and Chief Executive Officer of EY (Ernst & Young) (professional services) from 2013 through June 2019, having served as Global Chairman and CEO-elect in the prior year. He was Assistant Secretary of the U.S. Treasury in the George W. Bush Administration and was appointed by President Bill Clinton to serve on the U.S. Social Security Administration Advisory Board. Mr. Weinberger serves as a Senior Advisor to Stone Canyon Industries Holdings Inc. and Teneo. He is an Executive Advisor to G100 and World 50. Mr. Weinberger also serves as a Strategic Advisor to the Board of FCLTGlobal, which focuses on long-term investing and corporate governance. Mr. Weinberger is on the CEO Advisory Council of JUST Capital. He sits on the Board of Directors of the National Bureau of Economic Research (NBER), is a Senior Advisor to Chief Executives for Corporate Purpose (CECP) and is a member of the Aspen Economic Strategy Group. He is a member of the Boards of Trustees for Emory University, Case Western Reserve University, The Concord Coalition, The Greater Washington Partnership and US Council for International Business. | |||||||||||||||||||||||
Skills & Qualifications | |||||||||||||||||||||||
• | Experience leading a business and working at the highest levels of government | ||||||||||||||||||||||
• | Track record of driving transformative change in the public and private sectors during periods of unprecedented disruption | ||||||||||||||||||||||
• | Expertise in finance, accounting, compliance and corporate governance, with a strong commitment to corporate purpose | ||||||||||||||||||||||
Current Committees: | |||||||||||||||||||||||
• | Member, Audit | ||||||||||||||||||||||
• | Member, Regulatory Compliance | ||||||||||||||||||||||
Other Public Board Service: | |||||||||||||||||||||||
• | MetLife Inc. (since 2019) | ||||||||||||||||||||||
• | Saudi Aramco (since 2019) | ||||||||||||||||||||||
![]() | 2021 Proxy Statement | 17 |
![]() | Nadja Y. West, M.D. | |||||||||||||||||||||||||
Independent Director since 2020 | ||||||||||||||||||||||||||
Biography | ||||||||||||||||||||||||||
Dr. Nadja West, age 59, retired from the U.S. Army with the rank of Lieutenant General in October 2019. She served as the 44th Army Surgeon General, and the Commanding General of the U.S. Army Medical Command from 2015 to 2019, overseeing the highest medical readiness and battlefield wound survival rates in history. As the Joint Staff Surgeon from 2013 to 2015, Dr. West was the principal medical advisor to the Chairman of the Joint Chiefs of Staff at the Pentagon, where she coordinated all related health services issues, including operational medicine, force health protection and readiness within the military. Her prior roles include Deputy Chief of Staff for Support, U.S. Army Medical Command from 2012 to 2013, ensuring proper resources and support for smooth operation of the entire command. From 2010 to 2012, Dr. West served as Commanding General of the Europe Regional Medical Command. She is the recipient of numerous U.S. military awards, including the Distinguished Service Medal, the Defense Superior Service Medal and the Legion of Merit with three Oak Leaf Clusters. Dr. West currently serves as Trustee of both the National Recreation Foundation and Mount St. Mary’s University; and board member of Americares and The Woodruff Foundation. | ||||||||||||||||||||||||||
Skills & Qualifications | ||||||||||||||||||||||||||
• | Proven executive and operational leadership, strategic planning and healthcare management | |||||||||||||||||||||||||
• | Expertise in government relations and human capital management | |||||||||||||||||||||||||
• | Operational crisis management and disaster response experience pertaining to global health issues | |||||||||||||||||||||||||
• | Extensive information security and cybersecurity experience | |||||||||||||||||||||||||
Current Committees: | ||||||||||||||||||||||||||
• | Member, Science, Technology & Sustainability | |||||||||||||||||||||||||
Other Public Board Service: | ||||||||||||||||||||||||||
• | Nucor Corporation (since 2019) | |||||||||||||||||||||||||
• | Tenet Healthcare Corporation (since 2019) | |||||||||||||||||||||||||
![]() | Ronald A. Williams | ||||||||||||||||||||||
Independent Director since 2011 | |||||||||||||||||||||||
Biography | |||||||||||||||||||||||
Mr. Williams, age 71, served as Chairman and Chief Executive Officer of Aetna Inc. (managed care and health insurance) from 2006 to 2010 and as Chairman from 2010 until his retirement in April 2011. Previously, Mr. Williams served on President Barack Obama's Management Advisory Board from 2011 to 2017, as Chairman of the Council for Affordable Quality Healthcare from 2007 to 2010, as Vice Chairman of The Business Council from 2008 to 2010 and on the Board of MIT Corporation until July 2019. He is an advisor to the private equity firm Clayton, Dubilier & Rice, LLC. In addition, Mr. Williams serves on the Boards of Directors of Peterson Institute for International Economics, the NAF (formerly National Academy Foundation) and the President's Circle of the National Academics, the Advisory Board of Peterson Center on Healthcare and is Chairman of the Board of Trustees of The Conference Board. | |||||||||||||||||||||||
Skills & Qualifications | |||||||||||||||||||||||
• | Broad experience leading a complex company in the healthcare industry | ||||||||||||||||||||||
• | Expertise in executive compensation matters, corporate governance and leadership during times of business disruption and transformation | ||||||||||||||||||||||
• | Expertise in operational management and insight into both public healthcare policy and the healthcare industry | ||||||||||||||||||||||
Current Committees: | |||||||||||||||||||||||
• | Chair, Compensation & Benefits | ||||||||||||||||||||||
• | Member, Nominating & Corporate Governance | ||||||||||||||||||||||
Other Public Board Service: | |||||||||||||||||||||||
• | The Boeing Company (since 2010) | ||||||||||||||||||||||
• | American Express Company (since 2007) | ||||||||||||||||||||||
Recent Past Public Board Service: | |||||||||||||||||||||||
• | Envision Healthcare Holdings, Inc. (2011-2017) | ||||||||||||||||||||||
18 | 2021 Proxy Statement | ![]() |
• | Chairman of the Board and Chief Executive Officer: Alex Gorsky | |||||||||||||
• | Independent Lead Director: Anne M. Mulcahy | |||||||||||||
• | The Chairman and Lead Director positions are evaluated and appointed annually by the independent Directors | |||||||||||||
• | The Nominating & Corporate Governance Committee annually reviews and evaluates the Board leadership structure in Executive Session | |||||||||||||
• | All five main Board Committees are composed of independent Directors | |||||||||||||
• | Independent Directors met in Executive Session at each of the eight regular 2020 Board meetings |
• | The independent Directors appropriately challenge management and demonstrate the independence and free thinking necessary for effective oversight. | ||||
• | The Directors prioritize shareholder engagement and discuss the feedback received. |
In conducting its review, the Committee considers, among other things: | |||||
• | The effectiveness of the policies, practices and people in place at our Company to help ensure strong, independent Board oversight | ||||
• | Our Company’s performance and the effect a specific leadership structure could have on its performance | ||||
• | The Board’s performance and the effect a specific leadership structure could have on performance, including the Board's efficacy at overseeing specific enterprise risks | ||||
• | The Chairman’s performance in the role of Chairman (separate and apart from his/her performance as CEO) | ||||
• | The views of our Company’s shareholders as expressed both during our shareholder engagement and through voting results at shareholder meetings | ||||
• | Applicable legislative and regulatory developments | ||||
• | The practices at other similarly situated companies and trends in governance |
![]() | 2021 Proxy Statement | 19 |
Board Agendas, Information and Schedules | • | Approves information sent to the Board and determines timeliness of information flow from management | ||||||
• | Provides feedback on quality and quantity of information flow from management | |||||||
• | Participates in setting, and ultimately approves, the agenda for each Board meeting | |||||||
• | Approves meeting schedules to ensure sufficient time for discussion of all agenda items | |||||||
• | With the Chairman/CEO, determines who attends Board meetings, including management and outside advisors | |||||||
Committee Agendas and Schedules | • | Reviews in advance the schedule of Committee meetings | ||||||
• | Monitors flow of information from Committee Chairs to the full Board | |||||||
Board Executive Sessions | • | Has the authority to call meetings and Executive Sessions of the independent Directors | ||||||
• | Presides at all meetings of the Board at which the Chairman/CEO is not present, including Executive Sessions of the independent Directors | |||||||
Communicating with Management | • | After each Executive Session of the independent Directors, communicates with the Chairman/CEO to provide feedback and also to act upon the decisions and recommendations of the independent Directors | ||||||
• | Acts as liaison between the independent Directors and the Chairman/CEO and management on a regular basis and when special circumstances arise | |||||||
Communicating with Stakeholders | • | Meets with major shareholders or other external parties | ||||||
• | Is regularly apprised of inquiries from shareholders and involved in responding to these inquiries | |||||||
• | Under the Board’s guidelines for handling shareholder and employee communications to the Board, is advised promptly of any communications directed to the Board or any member of the Board that allege misconduct on the part of Company management, or raise legal, ethical or compliance concerns about Company policies or practices | |||||||
Chair and CEO Performance Evaluations | • | Leads the annual performance evaluation of the Chairman/CEO, distinguishing as necessary between performance as Chairman and performance as CEO | ||||||
Board Performance Evaluation | • | Leads the annual performance evaluation of the Board | ||||||
New Board Member Recruiting | • | Interviews Board candidates, as appropriate | ||||||
CEO Succession | • | Leads the CEO succession planning process | ||||||
Crisis Management | • | Participates in crisis management oversight, as appropriate | ||||||
Limits on Leadership Positions of Other Boards | • | May only serve as chair, lead or presiding director, or similar role, or as CEO of another public company if approved by the full Board upon recommendation from the Nominating & Corporate Governance Committee |
20 | 2021 Proxy Statement | ![]() |
Board Committee Membership | |||||
Director Nominees | ||||||||||||||||||||||||||||||||||||||
Name | Age | Director Since | Primary Occupation | Board Committees | ||||||||||||||||||||||||||||||||||
AUD | CB | NCG | RC | STS | FIN | |||||||||||||||||||||||||||||||||
M. C. Beckerle | I | 66 | 2015 | Chief Executive Officer, Huntsman Cancer Institute; Distinguished Professor of Biology, College of Science, University of Utah | ü | C | ||||||||||||||||||||||||||||||||
D. S. Davis(1) | I | 69 | 2014 | Former Chairman and Chief Executive Officer, United Parcel Service, Inc. | C | ü | ||||||||||||||||||||||||||||||||
I. E. L. Davis | I | 70 | 2010 | Non-Executive Chairman, Rolls-Royce Holdings plc; Former Chairman and Worldwide Managing Director, McKinsey & Company | ü | ü | ||||||||||||||||||||||||||||||||
J. A. Doudna | I | 57 | 2018 | Professor of Chemistry; Professor of Biochemistry & Molecular Biology; Li Ka Shing Chancellor's Professor in Biomedical and Health, University of California, Berkeley | ü* | ü | ||||||||||||||||||||||||||||||||
A. Gorsky | CH | 60 | 2012 | Chairman and Chief Executive Officer, Johnson & Johnson | C | |||||||||||||||||||||||||||||||||
M. A. Hewson | I | 67 | 2019 | Executive Chairman; Former Chairman and Chief Executive Officer, Lockheed Martin Corporation | ü | ü* | ||||||||||||||||||||||||||||||||
H. Joly | I | 61 | 2019 | Former Chairman and Chief Executive Officer, Best Buy Co., Inc. | ü* | ü | ||||||||||||||||||||||||||||||||
M. B. McClellan | I | 57 | 2013 | Director, Duke-Robert J. Margolis, MD, Center for Health Policy | ü | ü | ||||||||||||||||||||||||||||||||
A. M. Mulcahy | LD I | 68 | 2009 | Former Chairman and Chief Executive Officer, Xerox Corporation | ü | C | ü | |||||||||||||||||||||||||||||||
C. Prince | I | 71 | 2006 | Former Chairman and Chief Executive Officer, Citigroup Inc. | ü | C* | ||||||||||||||||||||||||||||||||
A. E. Washington | I | 70 | 2012 | Duke University's Chancellor for Health Affairs; President and Chief Executive Officer, Duke University Health System | ü | ü | ||||||||||||||||||||||||||||||||
M. A. Weinberger | I | 59 | 2019 | Former Chairman and Chief Executive Officer, EY (Ernst & Young) | ü | C* | ||||||||||||||||||||||||||||||||
N. Y. West | I | 59 | 2020 | Former Lieutenant General, U.S. Army | ü | |||||||||||||||||||||||||||||||||
R. A. Williams | I | 71 | 2011 | Former Chairman and Chief Executive Officer, Aetna Inc. | C | ü | ||||||||||||||||||||||||||||||||
Number of meetings in 2020 | 10(2) | 7 | 5 | 5 | 4 | 0 | ||||||||||||||||||||||||||||||||
(1) | Designated as an “audit committee financial expert” | |||||||||||||||||||||||||||||||||||||
(2) | Does not include virtual meetings held prior to each release of quarterly earnings (four in total) | |||||||||||||||||||||||||||||||||||||
* | At our April 2021 Board Meeting, the following appointments will be effective: Dr. Doudna, Member, NCG; Mr. Joly, Member, CB; Ms. Hewson, Member, RC; Mr. Weinberger, Chairman, RC; Mr. Prince, Member, RC | |||||||||||||||||||||||||||||||||||||
CH | Chairman of the Board | CB | Compensation & Benefits Committee | |||||||||||
C | Committee Chair | NCG | Nominating & Corporate Governance Committee | |||||||||||
LD | Lead Director | RC | Regulatory Compliance Committee | |||||||||||
I | Independent Director | STS | Science, Technology & Sustainability Committee | |||||||||||
AUD | Audit Committee | FIN | Finance Committee |
![]() | 2021 Proxy Statement | 21 |
Audit Committee | |||||
l | Oversees our financial management, accounting and reporting processes and practices | ||||
l | Appoints, retains, compensates and evaluates our independent auditor | ||||
l | Oversees our Global Audit & Assurance organization, reviews its annual plan and reviews results of its audits | ||||
l | Oversees the quality and adequacy of our Company’s internal accounting controls and procedures | ||||
l | Reviews and monitors our financial reporting compliance and practices and our disclosure controls and procedures | ||||
l | Discusses with management the processes used to assess and manage our exposure to financial risk and monitors risks related to tax and treasury |
Compensation & Benefits Committee | |||||
l | Establishes our executive compensation philosophy and principles | ||||
l | Reviews and recommends for approval by the independent Directors the compensation for our Chief Executive Officer and approves the compensation for our other executive officers | ||||
l | Sets the composition of the group of peer companies used for comparison of executive compensation | ||||
l | Oversees the design and management of the various pension, long-term incentive, savings, health and benefit plans that cover our employees | ||||
l | Reviews the compensation for our non-employee Directors and recommends compensation for approval by the full Board | ||||
l | Provides oversight of the compensation philosophy and policies of the Management Compensation Committee, a non-Board committee composed of Mr. Gorsky (Chairman/CEO), Mr. Joseph J. Wolk (Executive Vice President, Chief Financial Officer) and Dr. Peter M. Fasolo (Executive Vice President, Chief Human Resources Officer), which, under delegation from the Compensation & Benefits Committee, determines management compensation and establishes perquisites and other compensation policies for employees other than our executive officers |
22 | 2021 Proxy Statement | ![]() |
Nominating & Corporate Governance Committee | |||||
l | Oversees matters of corporate governance, including the evaluation of the policies and practices of the Board and the Board leadership structure | ||||
l | Oversees the process for performance evaluations of the Board and its Committees | ||||
l | Reviews key talent metrics for the overall workforce, including metrics related to Diversity, Equity and Inclusion (DEI). | ||||
l | Evaluates any questions of possible conflicts of interest for the Board and Executive Committee members | ||||
l | Reviews potential candidates for the Board as discussed on page 10 and recommends Director nominees to the Board for approval | ||||
l | Reviews and recommends Director orientation and continuing education programs for Board members | ||||
l | Oversees compliance with the Code of Business Conduct & Ethics for Members of the Board of Directors and Executive Officers | ||||
l | Evaluates our Board leadership structure on an annual basis |
Regulatory Compliance Committee | |||||
l | Oversees regulatory compliance and adherence to high standards of quality in the areas of healthcare compliance, anti-corruption laws, and the manufacture and supply of products | ||||
l | Compliance with applicable laws, regulations and Company policies related to medical safety, product quality, environmental regulations, employee health and safety, privacy, cybersecurity and political expenditures | ||||
l | Reviews the policies, practices and priorities for our political expenditures and lobbying activities | ||||
l | Oversees our compliance with privacy regulations | ||||
l | Oversees our risk management programs related to global cybersecurity, information security, product quality and technology |
Science, Technology & Sustainability Committee | |||||
l | Monitors and reviews the overall strategy, priorities and effectiveness of the research and development organizations supporting our businesses | ||||
l | Assists the Board in identifying and comprehending significant emerging science and technology policy and public health issues and trends that may impact our overall business strategy | ||||
l | Assists the Board in its oversight of our major acquisitions and business development activities as they relate to new science or technology | ||||
l | Serves as a resource and provides input as needed regarding the scientific and technological aspects of product- safety matters | ||||
l | Oversees our environmental, social and governance (ESG) policies and programs designed to promote sustainable business practices and to mitigate risks related to employee health, safety and sustainability, including our external citizenship and sustainability commitments and our annual Health for Humanity Report |
Finance Committee | |||||
l | Composed of the Chairman and Lead Director of the Board | ||||
l | Exercises the authority of the Board during the intervals between Board meetings, as permitted by law and our By‑Laws | ||||
l | Acts between Board meetings as needed, generally by unanimous written consent in lieu of a meeting | ||||
l | Any action is taken pursuant to specific advance delegation by the Board or is later ratified by the Board |
![]() | 2021 Proxy Statement | 23 |
Director Meetings and Attendance |
Executive Sessions |
Private Committee Sessions with Key Compliance Leaders |
Oversight of Strategy | |||||
l | The Board conducts an extensive review of our enterprise long-term strategic plans on an annual basis. The Board also reviews the long-term strategic plans of each of our business segments. | ||||
l | Throughout the year, the Board reviews and discusses matters related to our strategy with senior management to ensure that our business activities are aligned with our short- and long-term strategy and we are making progress toward our strategic goals. | ||||
l | Independent Directors hold regularly scheduled Executive Sessions without management present to discuss Company performance and review long-term strategy. Certain Committees also meet in private session with senior management in our financial, legal, compliance and quality functions, among others. | ||||
l | The Board regularly discusses and reviews global economic, geopolitical, social, industry and regulatory trends and the competitive environment. The Board also considers feedback from our shareholders and other stakeholders to ensure that our short- and long-term strategies are appropriately designed to promote sustainable growth. | ||||
l | The Board consults with external advisors to understand outside perspectives on the risks and opportunities facing our Company. |
24 | 2021 Proxy Statement | ![]() |
Our Approach to Enterprise Risk Management | |||||
![]() | 2021 Proxy Statement | 25 |
Board Oversight of Risk Management | |||||
l | The Board reviews and discusses strategic, operational, financial and reporting, reputational, enterprise compliance and human capital management risks. | ||||
l | Throughout the year, the Board and applicable Committees receive updates from management regarding various enterprise risk management issues and risks related to our business segments, including risks related to litigation, product quality and safety, reputation, human capital, drug pricing and sustainability. | ||||
l | The Board consults with external advisors, including outside counsel, consultants, auditors and industry experts, to ensure that it is well informed about the risks and opportunities facing our Company. | ||||
l | The Board reviews feedback provided by shareholders to ensure that it understands shareholder perspectives and concerns. Please see pages 33 and 34 for more information on Shareholder Engagement. | ||||
l | Independent Directors hold regular Executive Sessions without management present to discuss our risk management practices and risks facing our Company and our businesses. In certain Committees, independent Directors also meet in private session with management and compliance leaders. | ||||
l | In addition, the Board has tasked designated Committees of the Board to assist with the oversight of certain categories of risk management, and the Committees report to the full Board on these matters following Committee meetings. Each Committee reviews its charter on an annual basis to ensure that its oversight responsibilities are evolving with our business, industry and societal trends, and investor expectations |
26 | 2021 Proxy Statement | ![]() |
A Note about Litigation: | |||||
Patient safety and product quality have always been and will remain our first priority, and our employees around the globe are committed to ensuring that our products are safe and of high quality. Our functionally independent Quality and Compliance organization, led by our Chief Quality Officer, implements quality processes and procedures designed to ensure that our products meet our quality standards, which meet or exceed industry requirements. You can learn more about our quality processes at https://healthforhumanityreport.jnj.com/responsible-business-practices/product-quality-safety-reliability. In addition, our functionally independent medical safety organization, which is led by our Chief Medical Officer, monitors our products from research and development through clinical trials, as well as pre- and post- regulatory approvals. This team of doctors and scientists prioritizes our patient experience and ensures that safety remains our first consideration in any decision along the value chain involving our products. We recognize that there are many factors that contribute to the decision to commence litigation, many of which are not related to product quality or patient safety. Furthermore, jury verdicts are not medical, scientific or regulatory conclusions about our products. When faced with litigation, our approach will depend on the facts and circumstances. | |||||
Regarding the ongoing talc and opioids litigation: | |||||
• | We deeply sympathize with those suffering from any medical condition. Our focus remains on delivering life-saving and life-changing treatments and solutions to our patients and customers around the world. | ||||
• | We are committed to defending the safety of JOHNSON'S® Baby Powder. Please see factsabouttalc.com for information on the safety of talc. | ||||
• | We acted responsibly in selling approved opioid-based pain medicines that met real patient needs and were designed and labeled to reduce abuse and misuse. As previously announced, the Company and its U.S.-based Janssen Pharmaceutical Companies have entered into an agreement in principle to settle the ongoing opioids litigation. Please see factsaboutourprescriptionopioids.com for information on our position regarding ongoing litigation. | ||||
• | In response to a shareholder proposal included in our 2020 Proxy Statement, we published a Board Report on Risk Related to Opioids on October 5, 2020. Please see investor.jnj.com/board-report-on-oversight-of-risk-related-to-opioids. | ||||
Oversight of Risks Related to Executive Compensation | |||||
![]() | 2021 Proxy Statement | 27 |
Balanced Performance-Based Awards | Performance-based awards are based on the achievement of strategic and leadership objectives in addition to financial metrics and relative shareholder returns versus peers | |||||||
Multi-Year Performance Period and Vesting | The performance period and vesting schedules for long-term incentives overlap and, therefore, reduce the motivation to maximize performance in any one period. Performance share units, restricted share units and options vest three years from the grant date | |||||||
Balanced Mix of Pay Components | The target compensation mix is weighted toward long-term equity compensation vesting over three years | |||||||
Capped Incentive Awards | Annual performance bonuses and long-term incentive awards are capped at 200% of target | |||||||
Stock Ownership Guidelines | Our CEO must directly or indirectly own equity in our Company equal to twelve times base salary, and the other members of our Executive Committee must own equity equal to six times base salary and retain this level of ownership at all times while serving as an Executive Committee member | |||||||
No Change-in-Control Arrangements | None of our executive officers have in place any change-in-control arrangements that would result in guaranteed payouts | |||||||
Compensation Recoupment Policy | The Board has the authority to recoup executive officers' past compensation in the event of a material restatement of our financial results and for significant misconduct of Company policy or laws relating to the manufacturing, sales or marketing of our products | |||||||
Our Approach to Overseeing Environmental, Social and Governance (ESG) Matters | |||||
• | Promoting sound governance structures and controls, strategy and goal setting, risk identification, prioritization and mitigation systems and disclosure and reporting to support our approach to long-term value creation | ||||
• | Investing in our employees; creating a diverse, equitable and inclusive environment in which all can belong; and empowering employees to strengthen the communities in which we live and work | ||||
• | Tackling the world’s toughest healthcare challenges through our dedicated Global Public Health organization, which is focused on combining innovative R&D, novel access programs, country-based operations and advocacy | ||||
• | Marshaling our expertise, resources and partnerships to reduce the environmental footprint of our operations, our products and our extended supply chain |
28 | 2021 Proxy Statement | ![]() |
• | In our 2019 Health for Humanity Report, we reported against the Sustainability Accounting Standards Board (SASB) Standards for all three of our business segments for the first time in response to the continually evolving information expectations of our investors. | ||||
• | The 2019 Health for Humanity Report provides quantitative diversity data, including a comprehensive breakdown of Johnson & Johnson’s global workforce by gender and US workforce by race, ethnicity and gender. | ||||
• | Further reinforced our commitment to reporting high-quality, validated data, we disclosed externally assured data in the areas of quality, human capital development, philanthropy and environmental governance, which add to the already externally assured data for our carbon emissions, Health for Humanity 2020 Goals and UN SDG commitments. | ||||
• | We published an Index of our ESG policies and positions to help our stakeholders understand how we are managing the risk of these relevant ESG topics and embedding sustainability into decision-making, which is a critical component of sustainability governance. Please see https://www.jnj.com/about-jnj/policies-and-positions. | ||||
• | We developed an ESG Resources page on our corporate website that aggregates ESG content from across the enterprise in a single tool. Please see https://www.jnj.com/esg-resources. |
Board Oversight of ESG | |||||
![]() | 2021 Proxy Statement | 29 |
![]() | ![]() | Ranked #3 in 2020 ![]() |
Board Oversight of Human Capital Management | |||||
Strategy | |||||
• | Attracting and recruiting the best talent | ||||
• | Developing and retaining talent | ||||
• | Empowering and inspiring talent |
30 | 2021 Proxy Statement | ![]() |
Culture and Employee Engagement | |||||
On a biennial basis, we conduct the Our Credo Survey, which assesses employee sentiment and the degree to which our employees believe that senior leadership demonstrates Our Credo values and fulfills our responsibility to stakeholders, including employees. In the interim years, we conduct the Our Voice Employee Survey, which measures employee sentiment about important aspects of our culture such as employee engagement, DEI, development, health and wellness, collaboration, execution, innovation and compliance and risk. The results of both surveys are closely reviewed by the Board, senior leadership and the Human Resources organization, and managers are provided with detailed anonymized reports highlighting their team results, strengths and areas where an improvement plan is recommended. In 2020, the Company conducted the Our Credo Survey, which was administered in 78 countries and made available in 36 languages. In a year of unprecedented challenge, the Company achieved an all-time high for both participation rate and favorability. Our overall participation rate was 93%, 3% higher than 2018. Our overall favorability, which reflects how we are fulfilling our commitments to our employees, increased to 89%, 4% higher than 2018. | In the 2020 Our Credo Survey, employees reported they believe management: | ||||||||||
95% | Ensures our first responsibility is to the patients, doctors and nurses, mother and fathers and all others who use our products and services. | ||||||||||
87% | Provides an inclusive work environment where each employee is considered as an individual. | ||||||||||
94% | Acts responsibly to the communities in which we live and work and the world community as well. | ||||||||||
Growth and Development | |||||
Diversity, Equity and Inclusion (DEI) | |||||
• | Accelerate the Company’s efforts to advance a culture of inclusion and innovation | ||||
• | Build a diverse workforce for the future | ||||
• | Enhance business results and reputation |
![]() | 2021 Proxy Statement | 31 |
Compensation and Benefits | |||||
Health, Wellness and Safety | |||||
32 | 2021 Proxy Statement | ![]() |
Our Approach to Shareholder Outreach and Engagement | ||||||||
• | Our shareholder outreach and engagement program occurs throughout the year beginning in the fall. In early summer, we review the voting results from the prior Annual Shareholders’ Meeting, our current performance, the external environment and market trends. We develop a shareholder outreach and engagement plan for the fall and review it with our advisors to ensure that our program is focused on topics of greatest interest to our shareholders. During the fall engagement season: | |||||||
• | We reached out to shareholders representing approximately 55% of our shares outstanding. | |||||||
• | We engaged with approximately 55 U.S. and international institutional shareholders representing approximately 34% of our shares outstanding. | |||||||
• | Prior to the 2020 Annual Meeting, we reached out to our top 100 shareholders to discuss and receive feedback on the items of business and disclosure in our 2020 Proxy Statement. | |||||||
• | We include a section on our voting card and vote landing page inviting all shareholders to share comments with the Board. Prior to the 2020 Annual Meeting,179 shareholders provided comments. Shareholders may contact any of our Directors, including the Lead Director, using any of the options described on page 120. | |||||||
• | We hosted our third annual Health for Humanity Report webinar coinciding with the release of our annual Health for Humanity Report in June 2020. The Health for Humanity Report documents our sustainable progress toward our purpose to change the trajectory of health for humanity. The webinar provided shareholders with the opportunity to engage and ask questions of our business leaders in areas of investor relations, product quality, medical safety, legal, global public health and environmental health, safety & sustainability. | |||||||
• | Our Board continually reviews feedback from our shareholders. | |||||||
Our Annual Shareholder Engagement Cycle | ||||||||
![]() |
![]() | 2021 Proxy Statement | 33 |
Shareholder Engagement Topics | |||||
• | Board Composition and Diversity | • | Lead Director Responsibilities | |||||||||||
• | Board Evaluation Process | • | Litigation | |||||||||||
• | Board Oversight of Risk | • | Pharmaceutical Pricing Transparency and Access | |||||||||||
• | Board Tenure and Refreshment | • | Product Quality and Safety | |||||||||||
• | COVID-19 Response and Vaccine | • | Separation of the Chairman and CEO Roles | |||||||||||
• | Culture and Human Capital Management | • | Shareholder Engagement and Communication | |||||||||||
• | Diversity, Equity and Inclusion | • | Shareholder Proposals | |||||||||||
• | ESG Issues and Reporting | • | Succession Planning and Talent Development | |||||||||||
• | Executive Compensation and Performance Metrics | • | Tax Policy |
Shareholder Feedback | |||||
What We Heard | What We Did | |||||||
Provide more disclosure on the Board's oversight of human capital management. | We expanded disclosure on the Board's oversight of our Human Capital Management strategy and provided a more robust overview of our approach to recruitment, development, diversity, equity and inclusion, and fostering Company culture (see "Oversight of Human Capital Management" on pages 30 to 32). | |||||||
Provide more streamlined and accessible information about the Company's ESG practices. | We created a webpage that collates relevant links and ESG content from across the Company's website, including an index of our policies and positions on a wide range of ESG topics (see "Oversight of ESG Risk — Enhancing Disclosure and Reporting" on page 29). | |||||||
Report against the Sustainability Accounting Standards Board (SASB) framework. | In the 2019 Health for Humanity Report (issued in June 2020), the Company reported against the SASB Standards for all three of our business segments (see "Oversight of ESG Risk — Enhancing Disclosure and Reporting" on page 29). | |||||||
Issue a consolidated report on the Board's oversight of risks related to the opioid crisis. | We published the Board Report on Oversight of Risk Related to Opioids, describing the governance measures that the Company has implemented to monitor and manage the financial and reputational risks related to the opioid crisis (see "A Note About Litigation" on page 27). | |||||||
Further align executives' interests with the long-term interests of shareholders. | To further ensure that senior executives' interests are aligned with shareholders, we doubled the stock ownership requirements for our CEO from 6 to 12 times salary; and from 3 to 6 times salary for other members of our Executive Committee (see "Executive Compensation Summary — Compensation Program Changes in 2020" on page 50). | |||||||
Enhance the Board's accountability to shareholders. | To increase the Board's accountability to shareholders, we amended the Company's Restated Certificate of Incorporation to permit the removal of directors with or without cause. | |||||||
Continue to disclose the Company's progress against its climate commitments. | In September 2020, the Company publicly announced three next-generation climate goals: • By 2025, source 100% of our electricity needs from renewable source • By 2030, achieve carbon neutrality for our operations, going beyond our Science-Based Target to reduce absolute Scope 1 and 2 emissions 60% from 2016 levels • By 2030, reduce absolute upstream Scope 3 emissions 20% from 2016 levels See https://www.jnj.com/global-environmental-health/climate-and-energy. |
34 | 2021 Proxy Statement | ![]() |
Effective Board Structure and Composition | ||||||||
Strong Independent Board Leadership | All Directors other than our Chairman/CEO are independent. All Committees other than the Finance Committee are comprised solely of independent Directors. | |||||||
Independent Lead Director | The independent Directors appoint a Lead Director on an annual basis. | |||||||
Annual Review of Board Leadership | The Nominating & Corporate Governance Committee conducts an annual review of the Board leadership structure to ensure effective Board leadership. | |||||||
Executive Sessions of Independent Directors | Independent Directors meet in Executive Session without management present at each Board and Committee meeting. | |||||||
Private Committee Sessions with Key Compliance Leaders | Independent Directors hold private Committee sessions with key compliance leaders without the Chairman/CEO present. | |||||||
Rigorous Board and Committee Evaluations | The Board evaluates its performance on an annual basis. Each Committee evaluates its performance on an annual basis based on guidance from the Nominating & Corporate Governance Committee. | |||||||
Regular Board Refreshment | The Board’s balanced approach to refreshment results in an effective mix of experienced and new Directors. | |||||||
Diverse and Skilled Board | The Board is committed to diversity, reflecting differences in skills, regional and industry experience, background, race, ethnicity, gender and other unique characteristics. |
Responsive and Accountable to Shareholders | ||||||||
Annual Election of Directors | Each Director is elected annually to ensure accountability to our shareholders. | |||||||
Majority Voting Standard for Director Elections | In an election where the number of Directors nominated does not exceed the total number of Directors to be elected, Director nominees must receive the affirmative vote of a majority of votes cast to be elected. If a Director nominee receives more votes “against” his or her election than votes “for” his or her election, the Director must promptly offer his or her resignation. | |||||||
One Class of Stock | Our common stock is the only class of shares outstanding. | |||||||
Proxy Access | Each shareholder or a group of up to 20 shareholders owning 3% or more of our common stock continuously for at least three years may nominate and include in our proxy materials Director nominees constituting up to 20% of the Board in accordance with the terms set forth in our By-Laws. | |||||||
Director Overboarding Policy | A Director who serves as CEO at our or any other company should not serve on more than two public company boards. Other Directors should not serve on more than five public company boards. | |||||||
No Shareholder Rights Plan | We do not have a “poison pill” and have no intention of adopting one at this time. | |||||||
No Supermajority Requirements in Certificate of Incorporation or By-Laws | Our Amended and Restated Certificate of Incorporation and By-Laws contain majority standards for all actions requiring shareholder approval. | |||||||
Shareholder Right to Call a Special Meeting | Shareholders holding 10% of shares may call a special meeting for good cause, and shareholders holding 25% of shares may call a special meeting for any reason. | |||||||
Removal of Directors With or Without Cause | Directors may be removed by shareholders with or without cause. | |||||||
Active Shareholder Engagement | See pages 33 and 34 for more information on our shareholder engagement program. | |||||||
Annual Say on Pay Advisory Vote | Shareholders are asked to vote annually on our named executive officer compensation. | |||||||
Policy Against Pledging, Hedging and Short Selling of Company Stock | We have a meaningful policy prohibiting Directors and executive officers from pledging, hedging or short selling Company stock (see www.investor.jnj.com/gov.cfm). |
![]() | 2021 Proxy Statement | 35 |
Additional Governance Features | ||||||||
Code of Business Conduct | We have a comprehensive Code of Business Conduct designed to provide Directors, senior executives and employees with guidance on our Company’s compliance policies. Independent Directors, members of the Executive Committee and all employees receive biennial training on the Code of Business Conduct. | |||||||
Cybersecurity Oversight | The Regulatory Compliance Committee reviews and receives periodic briefings concerning global cybersecurity, information security and technology risks, including any significant cyber incidents, our risk mitigation program and our Company’s internal escalation process. The Chief Information Security Officer leads our cybersecurity risk mitigation program, which is fully integrated into the overall enterprise risk management framework and overseen by the Regulatory Compliance Committee. | |||||||
Robust Compensation Recoupment Policy | Our Company has a comprehensive Compensation Recoupment Policy designed to ensure that management is held accountable in the event of significant misconduct violating a significant Company policy, law or regulation (see www.investor.jnj.com/gov/compensation-recoupment-policy.cfm). | |||||||
Stock Ownership Guidelines | The Company ownership guidelines require our CEO to own shares equal to twelve times his/her base salary and each of our other executive officers to own sufficient shares to equal six times their base salaries. See “Stock Ownership Guidelines for Named Executive Officers” on page 77. |
Political Spending Oversight and Disclosure | |||||
36 | 2021 Proxy Statement | ![]() |
All Directors are independent except for our CEO |
![]() | 2021 Proxy Statement | 37 |
Director | Organization | Type of Organization | Relationship to Organization | Type of Transaction or Relationship | 2020 Aggregate Magnitude | ||||||||||||
Beckerle | Huntsman Cancer Institute | Healthcare Institution | Executive Officer | Sales | <1% | ||||||||||||
Beckerle | University of Utah | Educational Institution | Employee | Sales; investigator payments; grants | <1% | ||||||||||||
Doudna | University of California - Berkeley | Educational Institution | Employee | Sales; research-related payments; sponsorships; grants | <1% | ||||||||||||
Hewson | Business Roundtable | Non-profit organization | Director | Annual dues | <1%; <$1 million | ||||||||||||
Joly | Harvard Business School | Educational institution | Employee | Contributions; grants; rental payments; rebates; consulting fees; lab supplies; tuition; training programs; memberships; subscriptions | <1% | ||||||||||||
McClellan | Duke University | Educational Institution | Employee | Sales; research-related payments; grants; tuition reimbursements | <1% | ||||||||||||
McClellan | National Alliance for Hispanic Health | Non-profit organization | Director | Contributions; membership | <1%; <$1 million | ||||||||||||
McClellan | Research!America | Non-profit Organization | Director | Annual dues; sponsorships; contributions | <$1 million | ||||||||||||
Mulcahy | Save the Children | Non-profit Organization | Trustee | Contributions | <1% | ||||||||||||
Washington | Duke University | Educational Institution | Employee | Sales; research-related payments; grants; tuition reimbursements | <1% | ||||||||||||
Washington | Duke University Health System | Healthcare Institution | Executive Officer | Sales; rebates | <1% | ||||||||||||
Weinberger | Business Roundtable | Non-profit Organization | Director | Annual dues | <1%; <$1 million | ||||||||||||
Weinberger | Case Western Reserve University | Educational Institution | Trustee | Investigator payments; rebates; grants; sponsorships | <1% | ||||||||||||
Weinberger | Emory University | Educational Institution | Trustee | Sales; investigator payments; rebates; grants; sponsorships | <1%; <$1 million | ||||||||||||
West | Americares | Non-profit Organization | Trustee | Grants; contributions | <1%; <$1 million | ||||||||||||
Williams | The Cleveland Clinic Foundation | Non-profit Organization | Trustee | Grants; investigator payments; rebates | <1% | ||||||||||||
Williams | NAF (formerly National Academy Foundation) | Non-profit Organization | Director | Contributions | <$1 million | ||||||||||||
Note: Any transaction or relationship under $25,000 is not listed above. | |||||||||||||||||
In the event of Board-level discussions pertaining to a potential transaction or relationship involving an organization with which a Director is affiliated, that Director would be expected to recuse him or herself from the deliberation and decision-making process. In addition, other than potential review and approval of related person transactions under our Policy on Transactions with Related Persons described on the following page, none of the non-employee Directors has the authority to review, approve or deny any grant to or research contract with an organization. |
38 | 2021 Proxy Statement | ![]() |
Policies and Procedures | |||||
The following types of transactions have been deemed by the Committee to be pre-approved or ratified, even if the aggregate amount involved will exceed $120,000: | ||||||||
l | Compensation paid by our Company for service as a Director or executive officer | |||||||
l | Transactions with other companies where the related person’s only relationship is as a non-executive employee, less than 10% equity owner or limited partner, and the transaction does not exceed the greater of $1 million or 2% of that company’s annual revenues | |||||||
l | Our contributions to charitable organizations where the related person is an employee and the transaction does not exceed the lesser of $500,000 or 2% of the charitable organization’s annual receipts | |||||||
l | Transactions where the related person’s only interest is as a holder of our stock and all holders receive proportional benefits, such as the payment of regular quarterly dividends | |||||||
l | Transactions involving competitive bids | |||||||
l | Transactions where the rates or charges are regulated by law or government authority | |||||||
l | Transactions involving bank depositary, transfer agent, registrar, trustee under a trust indenture or a party performing similar banking services | |||||||
![]() | 2021 Proxy Statement | 39 |
Transactions with Related Persons for 2020 | |||||
40 | 2021 Proxy Statement | ![]() |
Stock Ownership | |||||
Name | Number of Common Shares(1) (#) | Deferred Share Units(2) (#) | Common Shares Underlying Options or Stock Units(3) (#) | Total Number of Shares Beneficially Owned (#) | ||||||||||||||||||||||
Mary C. Beckerle | 0 | 8,950 | 0 | 8,950 | ||||||||||||||||||||||
D. Scott Davis | 0 | 10,746 | 0 | 10,746 | ||||||||||||||||||||||
Ian E. L. Davis | 4,193 | 16,117 | 0 | 20,310 | ||||||||||||||||||||||
Jennifer A. Doudna | 0 | 3,859 | 0 | 3,859 | ||||||||||||||||||||||
Joaquin Duato | 196,791 | 0 | 844,721 | 1,041,512 | ||||||||||||||||||||||
Alex Gorsky | 477,885 | 0 | 2,730,372 | 3,208,257 | ||||||||||||||||||||||
Marillyn A. Hewson | 3,000 | 3,212 | 0 | 6,212 | ||||||||||||||||||||||
Hubert Joly | 5,000 | 2,378 | 0 | 7,378 | ||||||||||||||||||||||
Mark B. McClellan | 0 | 12,818 | 0 | 12,818 | ||||||||||||||||||||||
Anne M. Mulcahy | 7,516 | 16,117 | 0 | 23,633 | ||||||||||||||||||||||
Charles Prince | 29,320 | 23,057 | 0 | 52,377 | ||||||||||||||||||||||
Paulus Stoffels(4) | 275,547 | 0 | 596,253 | 871,800 | ||||||||||||||||||||||
Jennifer A. Taubert | 115,126 | 0 | 338,398 | 453,524 | ||||||||||||||||||||||
A. Eugene Washington | 0 | 24,201 | 0 | 24,201 | ||||||||||||||||||||||
Mark A. Weinberger | 0 | 3,212 | 0 | 3,212 | ||||||||||||||||||||||
Nadja Y. West(5) | 0 | 1,123 | 0 | 1,123 | ||||||||||||||||||||||
Ronald A. Williams | 3,650 | 23,884 | 0 | 27,534 | ||||||||||||||||||||||
Joseph J. Wolk | 24,949 | 0 | 75,923 | 100,872 | ||||||||||||||||||||||
All Directors and executive officers as a group (24) | 1,606,569 | 149,674 | 6,194,413 | 7,950,656 |
![]() | 2021 Proxy Statement | 41 |
Name and Address of Beneficial Owner | Title of Class | Amount and Nature of Beneficial Ownership | Percent of Class | ||||||||
The Vanguard Group 100 Vanguard Boulevard Malvern, PA 19355 | Common Stock | 227,946,104 shares(1) | 8.66%(1) | ||||||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | Common Stock | 188,510,542 shares(2) | 7.20%(2) | ||||||||
State Street Corporation State Street Financial Center One Lincoln Street Boston, MA 02111 | Common Stock | 144,029,634 shares(3) | 5.47%(3) | ||||||||
(1) Based solely on an Amendment to Schedule 13G filed with the SEC on February 10, 2021, The Vanguard Group reported aggregate beneficial ownership of approximately 8.66%, or 227,946,104 shares, of our common stock as of December 31, 2020. Vanguard reported that it possessed sole dispositive power of 216,472,293 shares, shared dispositive power of 11,473,811 shares, and shared voting power of 4,272,484 shares. Vanguard also reported that it did not possess sole voting power over any shares beneficially owned. | |||||||||||
(2) Based solely on an Amendment to Schedule 13G filed with the SEC on January 29, 2021, BlackRock, Inc. reported aggregate beneficial ownership of approximately 7.20%, or 188,510,542 shares, of our common stock as of December 31, 2020. BlackRock reported that it possessed sole voting power of 163,863,390 shares and sole dispositive power of 188, 510,542 shares. BlackRock also reported that it did not possess shared voting or dispositive power over any shares beneficially owned. | |||||||||||
(3) Based solely on a Schedule 13G filed with the SEC on February 12, 2021, State Street Corporation reported aggregate beneficial ownership of approximately 5.47%, or 144,029,634 shares, of our common stock as of December 31, 2020. State Street reported that it possessed shared voting power of 126,726,258 shares and shared dispositive power of 143,989,480 shares. State Street also reported that it did not possess sole voting or sole dispositive power over any shares beneficially owned. | |||||||||||
As a result of being beneficial owners of more than 5% of our stock, The Vanguard Group (Vanguard), BlackRock, Inc. (BlackRock), and State Street Corporation (State Street) are currently considered “related persons” under our Policy on Transactions with Related Persons described on page 39. |
42 | 2021 Proxy Statement | ![]() |
2020 Non-Employee Director Compensation | ($) | ||||
Cash Compensation | $120,000 | ||||
Lead Director Cash Retainer | 35,000 | ||||
Audit Committee Chair Cash Retainer | 25,000 | ||||
Committee Chair (other than Audit) Cash Retainer | 20,000 | ||||
Value of Deferred Share Units | 185,000 |
![]() | 2021 Proxy Statement | 43 |
2020 Total Non-Employee Director Compensation | |||||||||||||||||
A | B | C | D | E | F | ||||||||||||
Name | Role for Additional Cash Retainer | Fees Earned or Paid in Cash ($) | Stock Awards (DSUs) ($) | All Other Compensation ($) | Total ($) | ||||||||||||
M. C. Beckerle | Committee Chair | $140,000 | $184,871 | $20,000 | $344,871 | ||||||||||||
D. S. Davis | Audit Committee Chair | 145,000 | 184,871 | 0 | 329,871 | ||||||||||||
I. E. L. Davis | 120,000 | 184,871 | 0 | 304,871 | |||||||||||||
J. A. Doudna | 120,000 | 184,871 | 20,000 | 324,871 | |||||||||||||
M. A. Hewson | 120,000 | 184,871 | 16,000 | 320,871 | |||||||||||||
H. Joly | 120,000 | 184,871 | 20,000 | 324,871 | |||||||||||||
M. B. McClellan | 120,000 | 184,871 | 0 | 304,871 | |||||||||||||
A. M. Mulcahy(1) | Lead Director; Committee Chair | 168,825 | 184,871 | 20,000 | 373,696 | ||||||||||||
W. D. Perez(2) | Committee Chair | 43,726 | 0 | 20,000 | 63,726 | ||||||||||||
C. Prince | Committee Chair | 140,000 | 184,871 | 20,000 | 344,871 | ||||||||||||
A. E. Washington | 120,000 | 184,871 | 20,000 | 324,871 | |||||||||||||
M. A. Weinberger | 120,000 | 184,871 | 0 | 304,871 | |||||||||||||
N. Y. West(3) | 9,534 | 0 | 2,000 | 11,534 | |||||||||||||
R. A. Williams | Committee Chair | 140,000 | 184,871 | 20,000 | 344,871 | ||||||||||||
(1) Appointed as Nominating & Corporate Governance Committee Chair in April 2020. Chairman retainer payment was prorated. (2) Retired from Board in April 2020. Cash fees are prorated for partial year of service. (3) Appointed to Board in December 2020. Cash fees are prorated for partial year of service. |
44 | 2021 Proxy Statement | ![]() |
Name | Deferred Share Units (#) | ||||
M. C. Beckerle | 7,827 | ||||
D. S. Davis | 9,623 | ||||
I. E. L. Davis | 14,994 | ||||
J. A. Doudna | 2,736 | ||||
M. A. Hewson | 2,089 | ||||
H. Joly | 1,255 | ||||
M. B. McClellan | 11,695 | ||||
A. M. Mulcahy | 14,994 | ||||
W. D. Perez(1) | 26,332 | ||||
C. Prince | 21,934 | ||||
A. E. Washington | 23,078 | ||||
M. A. Weinberger | 2,089 | ||||
N. Y. West(2) | 0 | ||||
R. A. Williams | 22,761 | ||||
(1) Retired from the Board in April 2020. (2) Appointed to Board in December 2020. |
Stock Ownership Guidelines for Non-Employee Directors | |||||
Name | Stock Ownership Guideline as a Multiple of Annual Cash Retainer | 2020 Compliance with Stock Ownership Guidelines? | Ownership Threshold Met?(1) | ||||||||
M. C. Beckerle | 5x | Yes | Yes | ||||||||
D. S. Davis | 5x | Yes | Yes | ||||||||
I. E. L. Davis | 5x | Yes | Yes | ||||||||
J. A. Doudna | 5x | Yes | No(3) | ||||||||
M. A. Hewson | 5x | Yes | Yes | ||||||||
H. Joly | 5x | Yes | Yes | ||||||||
M. B. McClellan | 5x | Yes | Yes | ||||||||
A. M. Mulcahy | 5x | Yes | Yes | ||||||||
W. D. Perez (2) | 5x | Yes | Yes | ||||||||
C. Prince | 5x | Yes | Yes | ||||||||
A. E. Washington | 5x | Yes | Yes | ||||||||
M. A. Weinberger | 5x | Yes | No(3) | ||||||||
N. Y. West | 5x | Yes | No(3) | ||||||||
R. A. Williams | 5x | Yes | Yes | ||||||||
(1)Non-employee Directors have five years after first becoming subject to the guidelines to achieve the required ownership threshold. (2)Retired from the Board in April 2020. (3)Joined Board within past five years. |
![]() | 2021 Proxy Statement | 45 |
![]() | The Board of Directors recommends that shareholders vote, in an advisory manner, FOR approval of the compensation of our named executive officers and the executive compensation philosophy, polices and procedures described in the Compensation Discussion and Analysis (CD&A) section of this Proxy Statement. | |||||||||||||||||||
Before you vote, we urge you to read the following for additional details on our executive compensation | When casting your 2021 Say on Pay vote, we encourage you to consider: | |||||||||||||||||||
l | We did not reset our annual or long-term incentive goals because of COVID-19. | |||||||||||||||||||
l | Our named executive officers’ 2020 compensation is aligned with our Company’s 2020 performance, with annual incentives and PSUs paid out below target due to the impact of COVID-19. | |||||||||||||||||||
l | Compensation Discussion and Analysis on pages 48 to 78 | l | We mitigated the impact of the pandemic on our patients, customers, communities, and employees. | |||||||||||||||||
l | We developed a vaccine to be distributed on a not-for-profit during the pandemic. | |||||||||||||||||||
l | We continue to engage with our shareholders on our executive compensation program and evaluate our programs to ensure alignment with our shareholders. | |||||||||||||||||||
l | Executive Compensation Tables on pages 79 to 101 | |||||||||||||||||||
We believe our executive compensation programs promote long-term, sustainable value creation and are strongly aligned with the long-term interests of our shareholders. The guiding principles of our executive compensation program continue to be: pay for performance, accountability for short-term and long-term performance, alignment with shareholders’ interests, and market competitiveness. We assess performance by reviewing not only what financial and strategic objectives were achieved but also how those results were achieved and whether they were achieved consistent with the values embodied in Our Credo. As an advisory vote, the results of this vote will not be binding on the Board or the Company. However, the Board and the Compensation & Benefits Committee value the opinions of our shareholders. They will consider the outcome of the vote when making future decisions on the compensation of our named executive officers and our executive compensation philosophy, policies and procedures. Following our Annual Shareholder Meeting on April 22, 2021, the next advisory vote on executive compensation is expected to occur at the 2022 Annual Meeting of Shareholders, unless the Board modifies its policy on the frequency of holding such advisory votes. |
46 | 2021 Proxy Statement | ![]() |
![]() | 2021 Proxy Statement | 47 |
Executive Compensation Philosophy | ||||||||