Comments on: For J&J CEO, 4 Percent Job Cut = 22 Percent Pay Hike http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/ News, Comment and Conversation Sun, 21 Mar 2010 16:31:06 +0000 http://wordpress.org/?v=2.6.2 By: Ed Silverman http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/#comment-207681 Ed Silverman Thu, 13 Mar 2008 21:18:43 +0000 http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/#comment-207681 Chris, You're right. The folks judging Weldon are using a different litmus test. Anyway, when it comes to figuring out how big a cut to make or how much he might give back, I also don't know where to begin. Good to hash this over, though. I've no idea if it would be disclosed, by the way, if he were to have declined anything. Depends what we're talking about. Certainly not the home alarm system. Although if he were to do so then inform employees, well, that may be a useful step. (And eventually, we'd hear about it). Best ed Chris, You’re right. The folks judging Weldon are using a different litmus test. Anyway, when it comes to figuring out how big a cut to make or how much he might give back, I also don’t know where to begin. Good to hash this over, though.

I’ve no idea if it would be disclosed, by the way, if he were to have declined anything. Depends what we’re talking about. Certainly not the home alarm system. Although if he were to do so then inform employees, well, that may be a useful step. (And eventually, we’d hear about it).

Best
ed

]]> By: Chris http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/#comment-207514 Chris Thu, 13 Mar 2008 20:05:53 +0000 http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/#comment-207514 Hi Ed, I agree it's worth discussing - that's all I'm trying to do, not prove a point. I was trying to get at the extent to which he should take a cut and how much would it take to please the public. Of course it's impossible to please everybody so where does one draw the line? Sandwiches, security systems, deferred comp, bonus, limit his raise? I agree with you by the way about gestures and leadership - I've made them - but I think the people who he leads probably have other ways to judge his effectivess too. (Would it necessarily be disclosed if he had declined any part of his comp?) If only I had those choices to make... Hi Ed,
I agree it’s worth discussing - that’s all I’m trying to do, not prove a point. I was trying to get at the extent to which he should take a cut and how much would it take to please the public. Of course it’s impossible to please everybody so where does one draw the line? Sandwiches, security systems, deferred comp, bonus, limit his raise? I agree with you by the way about gestures and leadership - I’ve made them - but I think the people who he leads probably have other ways to judge his effectivess too. (Would it necessarily be disclosed if he had declined any part of his comp?)

If only I had those choices to make…

]]> By: Ed Silverman http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/#comment-207469 Ed Silverman Thu, 13 Mar 2008 19:15:42 +0000 http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/#comment-207469 Hey Chris, I don't disagree with your point. There are simply different ways to approach the discussion of ceo pay, in general, and any one ceo. Beyond share price, I was simply offering that, during a time of severe cost cutting, perhaps the highest paid executive can absorb a cut, as well. If nothing else, I think it's worth discussing. As to his sandwiches and home alarm, if he has the means to pay for that himself, he should. He did get a big increase - in percentage terms and real dollars. (I didn't say he shouldn't have a security system, by the way, I mentioned who pays for it). Symbolic gestures can count for something. It's another aspect of leadership. Cheers ed Hey Chris,

I don’t disagree with your point. There are simply different ways to approach the discussion of ceo pay, in general, and any one ceo.

Beyond share price, I was simply offering that, during a time of severe cost cutting, perhaps the highest paid executive can absorb a cut, as well. If nothing else, I think it’s worth discussing.

As to his sandwiches and home alarm, if he has the means to pay for that himself, he should. He did get a big increase - in percentage terms and real dollars. (I didn’t say he shouldn’t have a security system, by the way, I mentioned who pays for it). Symbolic gestures can count for something. It’s another aspect of leadership.

Cheers
ed

]]> By: Chris http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/#comment-207403 Chris Thu, 13 Mar 2008 18:28:45 +0000 http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/#comment-207403 Executive pay is a contentious topic for sure and I'm not qualified to evaluate how much one person's contributions are worth. But stumping up for his lunchtime tuna on rye wouldn't make a huge difference (apparently he does, by the way) nor would paying for his home security system. That, like travel on company aircraft and chauffeured cars are required for corporate security. More to the point how much should he have declined? What percentage would be enough? And what do the remaining 90% of J&J people think he should have done? If his actions result in an improved business and their pension plans improve I suspect they'll be quite happy and won't begrudge him his perks. Same goes for the shareholders too. Executive pay is a contentious topic for sure and I’m not qualified to evaluate how much one person’s contributions are worth. But stumping up for his lunchtime tuna on rye wouldn’t make a huge difference (apparently he does, by the way) nor would paying for his home security system. That, like travel on company aircraft and chauffeured cars are required for corporate security.

More to the point how much should he have declined? What percentage would be enough? And what do the remaining 90% of J&J people think he should have done? If his actions result in an improved business and their pension plans improve I suspect they’ll be quite happy and won’t begrudge him his perks. Same goes for the shareholders too.

]]> By: Ed Silverman http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/#comment-207304 Ed Silverman Thu, 13 Mar 2008 16:55:48 +0000 http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/#comment-207304 Well, there is more than one way to view this. One - how much is his contribution worth? That is an ongoing discussion about ceo pay, quite clearly. Two - in the context of a year in which thousands of J&J employees lost their jobs and the stock ended up rather flat, could he have forsaken some compensation in order to set a tone? There has been no public announcement that Weldon has agreed to decline some of his compensation. Meanwhile, his perquisites include unspecified sums for a home security system and and executive dining room meals, according to the proxy. But if Bill really wants to set an example about the need to cut back, he could have taken some of the compensation and paid for his own meals and home alarm system. Little things not only add up, but set a tone. Instead, it was business as usual in the executive suite. And that's worth examining. Cheers ed Well, there is more than one way to view this. One - how much is his contribution worth? That is an ongoing discussion about ceo pay, quite clearly. Two - in the context of a year in which thousands of J&J employees lost their jobs and the stock ended up rather flat, could he have forsaken some compensation in order to set a tone?

There has been no public announcement that Weldon has agreed to decline some of his compensation. Meanwhile, his perquisites include unspecified sums for a home security system and and executive dining room meals, according to the proxy.

But if Bill really wants to set an example about the need to cut back, he could have taken some of the compensation and paid for his own meals and home alarm system. Little things not only add up, but set a tone. Instead, it was business as usual in the executive suite. And that’s worth examining.

Cheers
ed

]]> By: Chris http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/#comment-207272 Chris Thu, 13 Mar 2008 16:15:11 +0000 http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/#comment-207272 Running a business the size of J&J which has over 200 companies within its portfolio, is a complicated job which involves structuring and shaping a multi-billion dollar business for the future. Remuneration packages are measured annually but actions such as his can take years to show benefit. Long range planning can't be measured by quarterly earnings reports. Whether that amount of money is right or not I don't know. But compare it with the truly obscene severance payments and final year packages made by ex-CEOs of the large financial institutions who oversaw their banks making losses and write-offs of billions following the sub-prime disaster. I know where I think the focus should be. Running a business the size of J&J which has over 200 companies within its portfolio, is a complicated job which involves structuring and shaping a multi-billion dollar business for the future. Remuneration packages are measured annually but actions such as his can take years to show benefit. Long range planning can’t be measured by quarterly earnings reports.

Whether that amount of money is right or not I don’t know. But compare it with the truly obscene severance payments and final year packages made by ex-CEOs of the large financial institutions who oversaw their banks making losses and write-offs of billions following the sub-prime disaster. I know where I think the focus should be.

]]> By: Paul http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/#comment-206023 Paul Thu, 13 Mar 2008 01:06:54 +0000 http://www.pharmalot.com/2008/03/for-jj-ceo-4-percent-job-cut-228-million/#comment-206023 Sounds like the CEO financed his pay raise by turfing staff. I'd love my pay jacked up as much as the CEO of my company, but alas, I am just a lowly middle management grunt. Sounds like the CEO financed his pay raise by turfing staff. I’d love my pay jacked up as much as the CEO of my company, but alas, I am just a lowly middle management grunt.

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