CEO of beleaguered J&J still got $29M in 2010

By Reuters
Posted March 16 at 1:22 p.m.

After a year in which Johnson & Johnson’s product quality control was deemed such a shambles that the U.S. government will oversee some plants, the board had praise for Chief Executive William Weldon and awarded him almost $29 million in overall compensation.

The once golden reputation of the diversified health care giant was tarnished by seemingly endless recalls of widely used consumer products as well as recalls of medical devices and products from other units in 2010.

U.S. consumer product sales fell by more than 19 percent in 2010 and the company’s 2011 forecast for earnings growth of 1  to 3 percent fell shy of Wall Street projections.

Weldon’s compensation was trimmed 7 percent, but in what appears to be a disconnect, J&J’s board, in a year-end regulatory filing, said his performance “generally met expectations” despite a year in which “operational sales declined and fell below the goals for the year.”

“The board believes that Mr. Weldon provided strong leadership during a very demanding year and has worked to resolve multiple challenging issues and position the company for future growth,” it said in the filing.

The rash of consumer medicine recalls in 2009 and 2010 were largely responsible for the first back-to-back  sales declines for the company since World War II.

Last week, U.S. health regulators filed a consent decree against J&J’s McNeil consumer unit that will put some of its manufacturing plants under government supervision for at least five years.

The McNeil unit has recalled more than 300 million bottles and packages of Tylenol, Motrin, Rolaids, Benadryl and other products in the past year over faulty manufacturing and quality control problems.

The recalls cost the company $900 million in sales last year and hurt earnings, and Weldon was called to testify before Congress about problems that left pharmacy and supermarket shelves without Children’s Tylenol.

But Weldon’s 2010 compensation fell 7 percent, to $28.7 million from  $30.8 million in 2009. His performance bonus for 2010 was down 45 percent, to $1.98 million.

Colleen Goggins, head of the problem plagued McNeil unit, retirde in March. She was paid $7.7 million last year.

Veronica Cruz, vice president of quality at McNeil, and Hakan Erdemir, McNeil’s vice president of operations, were named as defendants in the government’s consent decree.

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