JOHNSON & JOHNSON
For the period ended Mar 12, 2025. Filed Mar 12, 2025.
View on SEC.govAbout this filing
What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
Mar 12, 2025 · Filed Mar 12, 2025
Contents
2025 Proxy Statement – summary
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider. Please read the entire Proxy Statement carefully before voting.
| 1 | Election of 11 Director nominees |
| •Highly qualified slate of Director nominees with broad and relevant leadership experience.•All nominees are independent, except the Chairman and CEO.•Average Director tenure is approximately five and a half years, with frequent refreshment. |
Director nominee snapshot
Independence
| n | Independent |
|---|
Average age
| n | 50s | n | 60s | n | 70s |
|---|
Average tenure
| n | 0-2 years | n | 6-9 years |
|---|---|---|---|
| n | 3-5 years | n | 10+ years |
Board composition
Director skills
| 7 out of 11 | 4 out of 11 | 10 out of 11 | 7 out of 11 | 7 out of 11 | |||
| Academia/Government | Digital | Executive Leadership | Financial | Healthcare Industry | |||
|---|---|---|---|---|---|---|---|
| 7 out of 11 | 4 out of 11 | 8 out of 11 | 6 out of 11 | ||||
| International Business/Strategy | Marketing/Sales | Regulatory | Science/Technology | ||||
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| 2 | Advisory vote to approve named executive officer compensation (Say on Pay) |
| •The Compensation & Benefits Committee provides independent oversight with the assistance of an independent external advisor.•Executive compensation targets are determined based on an annual review of publicly available information and executive compensation surveys among the executive peer group. |
Base salary, annual incentive and long-term incentives
Below we describe the components of our total direct compensation, how we determine each component's amount and why we pay them.
| Component | Form | Vesting /performance period | How amount is determined | Why we pay each component |
|---|---|---|---|---|
| Base salary | Cash | Ongoing | •We base salary rates on:•Competitive data•Scope of responsibilities•Work experience•Time in position•Internal equity•Individual performance | •Recognizes job responsibilities. |
| Annual incentive | Cash | 1 year | •We set target awards as a percent of salary based on competitive data.•We determine award payouts based on business and individual performance. | •Motivates attainment of our near-term priorities, consistent with our long-term strategic plan. |
| Long-term incentives | Equity | 3 years (options: 10-year term) | •We set target awards as a percent of salary based on competitive data.•We grant long-term incentives based on business and individual performance, contribution and long-term potential.•We determine payouts based on achievement of long-term operational goals, total shareholder return (TSR) and share price appreciation. | •Motivates attainment of our long-term goals, TSR and share price growth.•Retains executives. |
| 2025 Proxy Statement | 9 |
|---|
Long-term incentives
Below we describe the forms of long-term incentives we use for our named executive officers, their weighting, performance periods, how the payouts are determined and why we use them.
| Long-termincentive form | Mix | Vesting /performance period | How payouts are determined | Why we use them |
|---|---|---|---|---|
| Performance share units (PSUs) | 60% | •0% to 200% vested three years after grant | •1/2 Earnings per share: three-year cumulative adjusted operational EPS.•1/2 Relative TSR: three-year compound annual growth rate versus the competitor composite peer group.•Share price | •Aligns with our long-term objective of growing quality earnings.•Reflects overall TSR outcomes relative to our competitors.•Ties PSU value directly to the share price. |
| Options | 30% | •1/3 of grant vests per year•10-year term | •Share price appreciation | •Motivates share price appreciation over the long-term.•Reinforces emphasis on long-term growth aligned with our objectives. |
| Restricted share units (RSUs) | 10% | •1/3 of grant vests per year | •Share price | •Ties RSU value directly to the share price. |
Notes:
Cumulative adjusted operational EPS is a non-GAAP measure. See page 85 for details.
No dividend equivalents are paid on our PSUs, options or RSUs.
2024 Say on Pay results
Approximately 90% of shares voted supported Say on Pay at our Annual Meeting in 2024. We continued to discuss our executive compensation program with our shareholders during the 2024 engagement cycle, and we describe in more detail our Say on Pay results, what we heard and what we did on page 58.
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| 3 | Ratification of appointment of independent registered public accounting firm |
| •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.•New lead engagement partner selected in connection with the mandated rotation every five years. |
| 4 | Shareholder proposal ― shareholder opportunity to vote on excessive golden parachutes |
| •Johnson & Johnson has already implemented a new Executive Officer Cash Severance Policy that expressly requires shareholder approval for cash severance payments of the nature described in the proposal. •Beyond the new Executive Officer Cash Severance Policy, Johnson & Johnson has a longstanding and effective U.S. Severance Pay Plan (Severance Plan) that applies to all full-time U.S. employees who are involuntarily terminated and provides a maximum cash severance of 2.0x salary, well below the cash severance threshold of 2.99x the sum of salary and target bonus in the proposal. •An overly broad severance policy that includes limitations on the vesting or payout of equity grants would significantly impact the Company’s competitiveness and ability to attract the best executive talent. •Johnson & Johnson takes a thoughtful, disciplined overall approach to executive compensation, and shareholders have consistently conveyed very high levels of support for our executive compensation program and practices. |
| 2025 Proxy Statement | 11 |
|---|
| 5 | Shareholder proposal ― produce a human rights impact assessment |
| •The proposal seeks a “human rights impact assessment,” but is fundamentally about pricing and access to medicines, an issue where Johnson & Johnson has a long history of commitment and leadership. •Anchored in Our Credo, Johnson & Johnson is an industry leader in its role in access to medicines and access to healthcare.•Johnson & Johnson has a longstanding commitment to respecting human rights that is reflected in its comprehensive Position on Human Rights and human rights program. •The Company is committed to continuously strengthening its approach to human rights, including due diligence processes, reporting and disclosure. |
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