WASHINGTON (AP) -- Health care giant Johnson & Johnson lowered Chief Executive William Weldon's total compensation by 9 percent in 2010, after two years of revenue declines and an unprecedented string of recalls that have battered the reputation of medicines like Tylenol and other household brands.
The New Brunswick, N.J.-based company awarded Weldon a package worth $23.2 million -- including salary, bonus and other awards -- down from $25.6 million in the previous year. The company disclosed the pay Wednesday in a Securities and Exchange Commission filing.
The maker of Band-Aids, baby shampoo, contraceptives and biologic drugs saw its revenue fall in both 2009 and 2010. Previously the company had seen steady sales growth every year since the Great Depression.
Much of the decline has been due to recalls involving millions of bottles of over-the-counter medicines, including Children's Tylenol, Benadryl and Motrin. Last week federal regulators signed a legally binding agreement with the company to oversee control of operations at three plants linked to the problems.
But J&J's board gave Weldon positive marks for the year overall, saying he "provided strong leadership during a very demanding year." In commenting on the string of recalls -- 20 since September 2009 -- the board said "Weldon's leadership and engagement with employees, legislators, regulators, investors and the news media enabled the company to deal with the issues."
Some industry experts were taken aback by the review and pay package granted to Weldon.
"Does paying a guy $23.2 million express any sense of concern about what has happened at that company?" remarked Erik Gordon, an analyst and professor at University of Michigan's Ross School of Business. "The board has shown what they're willing to do: nothing." Gordon, who has stated that Weldon should retire due to the recent recalls, said the board should have cut the CEO's compensation in half.
J&J's board appeared to tie most of the recall problems to consumer products Chairwoman Colleen Goggins, who oversaw the company's McNeil Consumer Healthcare unit before retiring earlier this month. Her total compensation fell 12 percent to $6.5 million for the year. Still, the board did not level any direct criticism at Goggins, instead praising her "distinguished career with the company."
Weldon's salary grew 3 percent for the year to $1.9 million. His annual performance bonus fell $1.6 million, or 45 percent, to $1.9 million from $3.6 million last year. But when combined with other components of his incentive package, his total non-equity compensation totaled $12 million, down just 6 percent from the previous year.
Like most corporate executives, the bulk of Weldon's compensation came in the form of stock options and awards, both of which decreased. Stock options fell 10 percent to $4.7 million while awards fell 6 percent to $12 million.
Weldon received various perks worth more than $254,000, including use of company aircraft, cars and personal security.
In 2010, J&J's stock fell 4 percent to $61.85, a steep decline for a diversified company that sells everything from hip replacements to contact lenses.
In its last quarter the company reported a 12 percent drop in profit, as sales were squeezed by a weak economy, pricing pressures and recalls that have kept many popular nonprescription medicines off store shelves. Sales of the company's over-the-counter medicines fell more than 19 percent for the full year.
Competitors Pfizer Inc. and Merck & Co. each named new CEOs in recent months, generating speculation that J&J's board would follow suit and replace Weldon. But analysts have pointed out that many directors on the J&J board were nominated to their positions by Weldon, who is also chairman.
Weldon, 62, joined J&J in 1971 and was named chairman and CEO in 2002.
The Associated Press formula is designed to isolate the value that the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.
J&J will hold its annual meeting April 28 in New Brunswick.