DEF 14A 1 a2019jnjproxy.htm DEF 14A Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant  ý
Filed by a Party other than the Registrant  o
Check the appropriate box:
o
 
Preliminary Proxy Statement
o
 
Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
ý
 
Definitive Proxy Statement
o
 
Definitive Additional Materials
o
 
Soliciting Material under § 240.14a-12
JOHNSON & JOHNSON
 
(Name of Registrant as Specified in Its Charter)
 
 
(Name of Person(s) Filing Proxy Statement, if Other Than Registrant)
Payment of Filing Fee (Check the appropriate box):
ý
No fee required.
o
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1
)
Title of each class of securities to which transaction applies:
(2
)
Aggregate number of securities to which transaction applies:
(3
)
Per unit price or other underlying value of transaction compute pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
(4
)
Proposed maximum aggregate value of transaction:
(5
)
Total fee paid:
o
Fee paid previously with preliminary materials.
o
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1
)
Amount Previously Paid:
(2
)
Form, Schedule or Registration Statement No.:
(3
)
Filing Party:
(4
)
Date Filed:




covercapturea01.jpg


 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 2

















Important Notice Regarding the Availability of Proxy Materials
for the Shareholder Meeting to be held on April 25, 2019:

The Proxy Statement and Annual Report to Shareholders are available at
www.investor.jnj.com/gov/annualmeetingmaterials.cfm




johnsonjohnsonimage.jpg
 
 
 
 
 
 
March 13, 2019
Notice of Annual Meeting and Proxy Statement
You are invited to attend the Annual Meeting of Shareholders of Johnson & Johnson. For entry to the Annual Meeting, please bring your admission ticket and a valid photo ID (see Admission Ticket Procedures on page 101).
 
When:
Thursday, April 25, 2019
10:00 a.m., Eastern Time
Doors to Meeting Open at 9:15 a.m.
Where:
Hyatt Regency New Brunswick
Two Albany Street
New Brunswick, New Jersey
We will broadcast the Annual Meeting as a live webcast at www.investor.jnj.com, under “Webcasts & Presentations.” The webcast will remain available for replay for three months following the Annual Meeting.
 
 
 
Items of Business:
 
1. Elect the 12 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 2019;
 
4. Vote on the two (2) 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 26, 2019.
Ensure that your shares are represented at the meeting by voting in one of several  ways:
 
iconproxy01cmykweb.jpg
Go to the website listed on your proxy card or Notice to vote VIA THE INTERNET
 
iconproxy01cmykphonea01.jpg
Call the telephone number specified on your proxy card or on the website listed on your Notice to vote BY TELEPHONE
 
iconproxy01cmykmail.jpg
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
 
personicon.jpg
Attend the Annual Meeting to vote IN PERSON (see “Annual Meeting Attendance” and “Admission Ticket Procedures” on page 101 of this Proxy Statement)
 
 
 
 
By order of the Board of Directors,
 
 
tjssignature.jpg
 
THOMAS J. SPELLMAN III
Assistant General Counsel and Corporate Secretary
 
 
 
 



A Message from Our Lead Director
jnjlogoredtransp.gif
mulcahy.gifa19picmulcahycolor.jpg
Dear Fellow Shareholders,
 
 
As our 2019 Annual Meeting approaches, it is my privilege as your Lead Director to share some of the ways that the Board of Directors is working to provide strong governance and independent oversight to represent your interests. With Our Credo as our guide, the Board oversees the company’s strategy, performance and leadership. Informed by a broad range of experience, background and skills, the Directors offer diverse perspectives to ensure a strong focus on the long-term success of Johnson & Johnson.
As the world’s largest healthcare company, Johnson & Johnson is a leader in this time of ever-increasing opportunity, challenge and change. To ensure that the company is well-positioned to meet these opportunities and challenges, the Board is committed to providing robust oversight of the company and its operations through leading corporate governance practices, engaged risk oversight, and its deep background in scientific innovation.
We value shareholder perspectives and diversity of thought and experience in the Boardroom, and we align Director skills with the current and anticipated future needs of the company.
As Lead Director, I prioritize engaging with shareholders and other key stakeholders, and I share the insights on corporate governance from these conversations with my fellow Directors. We value your perspectives, and we appreciate the thoughtful feedback that I have received from so many of you. The Board aspires to demonstrate its commitment to diverse perspectives and experiences by bringing together global leaders in business and healthcare, leading scientists and policy experts to ensure that we have the skills necessary to oversee the world’s largest healthcare company and to ensure its sustained growth. The Board also regularly welcomes new Directors whose skills align with both the current and anticipated future needs and direction of the company. This year, the Board is thrilled to nominate Marillyn Hewson, the Chairman, President and Chief Executive Officer of Lockheed Martin Corporation. Marillyn is the talented CEO of a complex global enterprise at the forefront of innovation and technology, and we are confident that Johnson & Johnson's shareholders will benefit from her tremendous leadership and experience.
Each year, the Board reviews the company’s executive compensation structure to ensure that Johnson & Johnson is incentivizing strong, Credo-based leadership and accountability, balancing short-term results and long-term growth. We also meet regularly with senior business leaders, and many employees who may become the future leaders of the company, to ensure that we have a thorough understanding of the company’s culture and talent pool. We apply the same level of rigor to our own Board performance by engaging in a thorough self-evaluation process that relies on both personal conversation and anonymous written feedback to validate that we are effectively fulfilling our responsibilities.
We provide robust oversight of the risks facing the company, its reputation and the industries in which it operates.
Johnson & Johnson operates in a challenging legal and regulatory environment, and the Board believes that risk oversight is one of its most important responsibilities. The Board works closely with management to understand the risks to the company and its reputation and ensure that Johnson & Johnson continues its deep commitment to patient safety, responsible business practices and accountability. The Audit Committee works closely with financial leadership and external auditors to oversee financial risks facing the company, and the Regulatory Compliance Committee works closely with management to oversee risks related to compliance, product quality and safety and cybersecurity. In response to shareholder feedback, we expanded disclosure about the Board's risk oversight in this Proxy Statement, beginning on page 23.
We oversee Johnson & Johnson's strategy to ensure that it is well-positioned to meet the challenges and opportunities of the future.
At the same time, we see tremendous opportunity for Johnson & Johnson in the evolving global healthcare landscape, and the Board works closely with senior leadership to ensure that the company’s strategy will position it to continue to lead global healthcare in the future. The foundation of this strategy is Johnson & Johnson's commitment to breakthrough scientific research and innovation. Last October, the Board experienced this commitment in person when we visited Actelion to meet the scientists and leaders of the pharmaceutical business’s newest therapeutic area. As is always the case when we visit the company’s innovators, we were inspired by their passion for developing potentially lifesaving products for patients around the world. The Board's Science, Technology & Sustainability Committee enlists Directors with deep scientific expertise to provide informed oversight of the company’s research and development programs and to ensure that ingenuity partners with social responsibility. The Board understands that long-term leadership in healthcare will require solutions that are innovative, sustainable and increasingly efficient and affordable to meet the expectations of patients and customers, now and in the future.
Your vote matters.
The Board never loses focus on the company's first priority, the patients and customers who use and trust Johnson & Johnson products, and we thank you for your investment in Johnson & Johnson and the trust that it implies. We kindly request that you support our voting recommendations, and we invite you to share your perspectives with us throughout the year via any of the means highlighted in this Proxy Statement.

Sincerely,
mulcahysignaturea01.jpg
Anne M. Mulcahy
Lead Director

jnjlogoredtransp.gif
2019 Proxy Statement - 4
 
 



Table of Contents
 
 
 
 
 
 
A MESSAGE FROM OUR LEAD DIRECTOR
 
 
 
2019 PROXY STATEMENT – SUMMARY
 
 
 
 
Voting Overview
 
 
 
 
BOARD OF DIRECTORS
 
INDEX OF FREQUENTLY
 
Item 1: Election of Directors
 
REQUESTED INFORMATION
 
Nominees
 
 
 
 
Director Nomination Process and Refreshment and Board Composition
 
Admission Ticket Procedures
 
Board Leadership Structure
 
Annual Meeting Attendance
 
Director Independence
 
Anti-Pledging Policy
 
Board Oversight of Strategy and Risk
 
94
Auditor Fees
 
Shareholder Engagement
 
Auditor Tenure
 
Additional Governance Features
 
Board Leadership
 
Board Committees
 
Board Meeting Attendance
 
Board Meetings and Processes
 
CEO Pay Ratio
 
Related Person Transactions
 
CEO Performance Evaluation
 
Stock Ownership and Section 16 Compliance
 
Compensation Consultant
 
Director Compensation
 
Contacting Our Board
 
COMPENSATION OF EXECUTIVES
 
Corporate Governance Materials
 
Item 2: Advisory Vote to Approve Named Executive Officer Compensation
 
60
Death Benefits
 
Compensation Committee Report
 
Director Biographies
 
Compensation Discussion and Analysis
 
Director Independence
 
2018 Performance and Compensation
 
Director Overboarding Policy
 
Executive Compensation Philosophy
 
Director Qualifications
 
Components of Executive Compensation
 
Exec Comp Recoupment Policy
 
Peer Groups for Pay and Performance
 
Helpful Websites
 
Compensation Decision Process
 
How to Vote
 
Governance of Executive Compensation
 
59
Long-Term Incentives
 
Additional Information Concerning Executive Compensation
 
Notice and Access
 
Executive Compensation Tables
 
Pay For Performance
 
2018 Summary Compensation Table
 
Peer Group Comparisons
 
2018 Grants of Plan-Based Awards
 
Perquisites
 
2018 Outstanding Equity Awards at Fiscal Year-End
 
28
Political Spending Oversight
 
2018 Option Exercises and Stock Vested
 
Proxy Access
 
2018 Pension Benefits
 
Related Person Transactions
 
2018 Non-Qualified Deferred Compensation
 
Risk Oversight
 
2018 Potential Payments Upon Termination
 
Severance Benefits
 
Ratio of the Annual Total Compensation of the Median-Paid Employee to CEO
 
Shareholder Outreach
 
AUDIT MATTERS
 
Shareholder Proposals
 
Audit Committee Report
 
 
Stock Ownership Requirements for:
 
Item 3: Ratification of Appt.of Independent Registered Public Accting. Firm
 
39
Directors
 
SHAREHOLDER PROPOSALS
 
Officers
 
Item 4: Clawback Disclosure
 
Stock Ownership
 
Item 5: Executive Compensation and Drug Pricing Risks
 
 
 
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
 
 
 

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 5


2019 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.
.
VOTING OVERVIEW - ITEMS OF BUSINESS
Election of Directors:
Board Vote Recommendation:
Please Vote FOR
All Nominees
 
 
 
 
 
 
1
 
Election of 12 Director Nominees (see page 10)
 
FOR
 
l
Diverse slate of Directors with broad and relevant leadership and experience.
 
 
l
All nominees are independent, except the Chairman.
 
 
 
l
Average Director tenure is 5.92 years.
 
 
 
 
 
 
 
 
 
Management Proposals:
Board Vote Recommendation:
Please vote FOR all
Management Proposals
 
 
 
 
 
 
 
 
 
 
2
 
Advisory Vote to Approve Named Executive Officer Compensation (“Say on Pay”) (see page 40)
 
FOR
 
 
 
l
Independent oversight by the Compensation & Benefits Committee with the assistance of an independent external advisor.
 
 
 
 
 
 
 
 
 
 
 
l
Executive compensation targets are determined based on annual review of publicly available information and executive compensation surveys among the Executive Peer Group. See page 62.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3
 
Ratification of Appointment of Independent Registered Public Accounting Firm (see page 93)
 
FOR
 
 
 
l
Pricewaterhouse Coopers LLP is an independent accounting firm with the breadth of expertise and knowledge necessary to effectively audit our business.
 
 
 
 
 
 
 
 
 
 
 
l
Independence supported by periodic mandated rotation of the audit firm's lead engagement partner.
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholder Proposals:
Board Vote Recommendation:
Please vote AGAINST all
Shareholder Proposals
 
 
 
 
 
 
4
 
Clawback Disclosure (see page 95)
AGAINST
 
l
Our recoupment policies are robust and effective, and we believe that the company's current ability to recoup compensation and its Credo-based culture discourages unreasonable risk-taking and reflects our strong commitment to ethics and integrity.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5
 
Executive Compensation and Drug Pricing Risks (see page 97)
AGAINST
 
l
Our compensation programs are already designed to effectively manage risk by expressly incorporating our Credo values, including the obligation to maintain reasonable prices.
 
 
 
 
 
 
 
l
Please see our detailed executive compensation disclosure starting at page 42 of this Proxy Statement.
 
 
 
 
 
 
 
 

jnjlogoredtransp.gif
2019 Proxy Statement - 6
 
 



 
DIRECTOR NOMINEES (see pages 10 to 16)
Name
 
 
Age
Director
Since
Primary Occupation
Board Committees
AUD
CBC
NCG
RC
STS
FIN
M. C. Beckerle
 
I
64
2015
Chief Executive Officer, Huntsman Cancer Institute; Distinguished Professor of Biology, College of Science, University of Utah
 
 
 
ü
C
 
D. S. Davis
 
I
67
2014
Former Chairman and Chief Executive Officer, United Parcel Service, Inc.
C
ü
 
 
 
 
I. E. L. Davis
 
I
68
2010
Chairman, Rolls-Royce Holdings plc; Former Chairman and Worldwide Managing Director, McKinsey & Company
ü
 
 
ü
 
 
J. A. Doudna
 
I
55
2018
Professor of Chemistry; Professor of Biochemistry and Molecular Biology; Li Ka Shing Chancellor's Professor in Biomedical and Health; University of California, Berkeley
 
 
 
 
ü
 
A. Gorsky
CH
 
58
2012
Chairman and Chief Executive Officer, Johnson & Johnson
 
 
 
 
 
C
M. A. Hewson
 
I
65
Nominee
Chairman, President and Chief Executive Officer, Lockheed Martin Corporation
 
 
 
 
 
 
M. B. McClellan
 
I
55
2013
Director, Duke-Robert J. Margolis, MD, Center for Health Policy
 
 
 
ü
ü
 
A. M. Mulcahy
LD
I
66
2009
Former Chairman and Chief Executive Officer, Xerox Corporation
ü
 
ü
 
 
ü
W. D. Perez
 
I
71
2007
Retired President and Chief Executive Officer, Wm. Wrigley Jr. Company
ü
 
C
 
 
 
C. Prince
 
I
69
2006
Retired Chairman and Chief Executive Officer, Citigroup Inc.
 
 
ü
C
 
 
A. E. Washington
 
I
68
2012
Duke University’s Chancellor for Health Affairs; President and Chief Executive Officer, Duke University Health System
 
ü
 
 
ü
 
R. A. Williams
 
I
69
2011
Former Chairman and Chief Executive Officer, Aetna Inc.
 
C
ü
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CH
Chairman of the Board
 
 
 
 
 
 
 
C
Committee Chair
 
 
 
 
 
 
 
LD
Lead Director
 
 
 
 
 
 
 
I
Independent Director
 
 
 
 
 
 
 
AUD
Audit Committee
 
 
 
 
 
 
 
CBC
Compensation & Benefits Committee
 
 
 
 
 
 
 
NCG
Nominating & Corporate Governance Committee
 
 
 
 
 
 
 
RC
Regulatory Compliance Committee
 
 
 
 
 
 
 
STS
Science, Technology & Sustainability Committee
 
 
 
 
 
 
 
FIN
Finance Committee
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 7


BOARD NOMINEE COMPOSITION AND REFRESHMENT (see page 18)
a20190114skills.jpg
 
CORPORATE GOVERNANCE HIGHLIGHTS (see page 27)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective Board Structure and Composition
 
Responsive and Accountable to Shareholders
 
 
þ
Strong independent Board leadership
 
þ
Annual election of Directors
 
 
þ
Independent Lead Director
 
þ
Majority voting standards for Director elections
 
 
þ
Annual review of Board leadership
 
þ
One class of stock
 
 
þ
Executive Sessions of independent Directors
 
þ
Proxy access
 
 
þ
Robust Board and Committee evaluations
 
þ
Director overboarding policy
 
 
þ
Regular Board refreshment
 
þ
No shareholder rights plan
 
 
þ
Diverse and skilled Board
 
þ
No supermajority requirements in Certificate of
 
 
 
 
 
 
 
 
 
 
Incorporation or By-Laws
 
 
Additional Governance Features
 
 
þ
Shareholder right to call special meeting
 
 
þ
Code of Business Conduct
 
þ
Active shareholder engagement
 
 
þ
Cybersecurity oversight
 
þ
Annual say-on-pay advisory vote
 
 
þ
Robust compensation recoupment policy framework
 
þ
Policy against pledging company stock
 
 
 
 
 
 
 
 
 
 
 
 
 

jnjlogoredtransp.gif
2019 Proxy Statement - 8
 
 



 
EXECUTIVE COMPENSATION
 
 
 

12.8% per year

2016 - 2018 Total
Shareholder Return (TSR)
performance as compared
to a 10.7% TSR per year for our peers

(TSR calculated using 20-day
average stock prices. See page 55 for detail)
Our Credo
 
 
 
 
 
When we assess performance, we review not only what results were achieved but also how they were achieved and whether they were achieved consistent with the values embodied in Our Credo.
In 2018, we upheld Our Credo values by focusing on the needs and well-being of: our patients, consumers, and healthcare professionals who use our products; our employees; the communities in which we live and work; and our shareholders.
 
Company Performance
 
 
 
 
We delivered strong performance in 2018. We exceeded our financial goals and met or exceeded our strategic goals. This was driven by strong performance in our Pharmaceuticals business and improving trends in our Medical Devices and Consumer businesses.
We summarize our performance against our financial and strategic goals and the performance of each of our businesses on pages 44 to 46.
 

35

Consecutive years of adjusted operational earnings increases

(See page 46 for detail on non-GAAP measures)
 
 
 
Financial Goal
Goal
Results
 
Exceeded our operational sales growth goal
3.5% - 4.5%
6.3%
 
Exceeded our adjusted operational EPS growth goal
6.8% - 9.6%
10.4%
 
Exceeded our free cash flow goal ($ Billions)
$17.1 - $17.9
$18.5
 
Note: Operational sales growth, adjusted operational EPS growth, and free cash flow are non-GAAP measures. See page 46 for details.

 

56
Consecutive years of dividend increases
Compensation Decisions for 2018 Performance
 
 
 
The company met or exceeded its combined financial and strategic goals. The Board recognized Mr. Gorsky’s 2018 performance by awarding him an annual performance bonus at 105% of target and long-term incentives at 105% of target. After reviewing market data and other factors, the Board kept Mr. Gorsky's salary rate unchanged at $1,650,000 per year.
 

~25%

Of 2018 sales from products launched in the past five years
 
 
 
 
 
 
 
 
 
 
 
2018 Amount
($)
Percent of Target
(%)
 
 
Salary Earned
$1,642,308
 
 

~$11 Billion

Invested in R&D in 2018
 
 
Annual Performance Bonus
3,030,000
105
%
 
 
 
Long-Term Incentive Awards
13,500,000
105
%
 
 
 
Total Direct Compensation
$18,172,308
 
 
 
We describe the performance and compensation of our Chairman/CEO (including, for comparison purposes, his compensation for 2016 and 2017) on page 47 and our named executive officers on pages 48 to 52.
 
 
 
Compensation Program Changes
 
 

11

Acquisitions & Licenses
in 2018
 
In October 2018, we approved a policy against pledging company stock. For more details, see page 56.

 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 9


Item 1: Election of Directors
þ
The Board of Directors recommends a vote FOR election
of each of the below-named nominees.
NOMINEES
There are 12 Director nominees for election at our 2019 Annual Meeting, to hold office until the next Annual Meeting and until their successors have been duly elected and qualified.
All of the nominees were elected to the Board at the last Annual Meeting and are currently serving as Directors of the company except for Ms. Marillyn A. Hewson, who is a new nominee for election to the Board. Ms. Hewson was initially identified as a potential nominee by members of the Nominating & Corporate Governance Committee and by an executive search firm. Ms. Hewson was recommended for nomination by the Nominating & Corporate Governance Committee, in keeping with the Board’s commitment to seek out Directors who are active and former chief executive officers of public companies and leaders of major complex organizations, as well as candidates with diverse backgrounds, skills and experiences.
Below are summaries of the primary occupation, skills and qualifications, and background of each of the nominees.

 
 
 
 
MARY C. BECKERLE, Ph.D.
Independent Director
 
 
a19pbeckerle.jpg
 
Primary Occupation:
 
Chief Executive Officer, Huntsman Cancer Institute at the University of Utah; Distinguished Professor of Biology, College of Science, University of Utah
 
 
 
 
Skills and Qualifications:
 
With her expertise in scientific research and organizational management in the healthcare arena, and her active participation in national and international scientific affairs, Dr. Beckerle provides a perspective crucial to a global healthcare company.
 
 
 
Background:
Director since 2015
 
Dr. Beckerle, age 64, has served as CEO of 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, and the Scientific Advisory Boards of the National Center for Biological Sciences at the Tata Institute of Fundamental Research in India, the Mechanobiology Institute in Singapore, and the Dana Farber/Harvard Cancer Center. Dr. Beckerle held a Guggenheim Fellowship at the Curie Institute in Paris, received the Utah Governor’s Medal for Science and Technology in 2001, the Sword of Hope Award from the American Cancer Society in 2004 and is an elected Fellow of the American Academy of Arts and Sciences and the American Philosophical Society. Dr. Beckerle was also named a National Association of Corporate Directors (NACD) Governance Fellow in 2012. In 2018, Dr. Beckerle received the Alfred G. Knudson Award in Cancer Genetics from the National Cancer Institute (NCI).
Current Committees:
 
l
Chairman, Science, Technology & Sustainability
l
Member, Regulatory Compliance
 
 
 
Other Public Board Service:
l
Huntsman Corporation (since 2011)
 
 
 
 
 
 
 
 
 
 
 
 
 
 

jnjlogoredtransp.gif
2019 Proxy Statement - 10
 
 



 
 
 
 
 
 
D. SCOTT DAVIS
 
Independent Director
 
 
 
a19pdaviss.jpg
Primary Occupation:
 
Former Chairman and Chief Executive Officer, United Parcel Service, Inc.
 
 
 
Skills and Qualifications:
 
Having served as Chairman and CEO of the world’s largest publicly-traded logistics company, and given his knowledge and passion for emerging markets and international operations, deep understanding of public policy and global economic indicators, and expertise in management, strategy, finance and operations, Mr. Davis brings to our Board his unique expertise in supply chain logistics at a time of rapid global expansion in the healthcare industry.
 
 
 
 
Background:
 
Director since 2014
 
Mr. Davis, age 67, 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 Vice Chairman and Chief Financial Officer. Prior to joining UPS, he was Chief Executive Officer of II Morrow Inc., a developer of general aviation and marine navigation instruments. 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. Mr. Davis is a trustee of the Annie E. Casey Foundation and a member of The Carter Center Board of Councilors.
 
Current Committees:
 
 
l
Chairman, Audit
 
l
Member, Compensation & Benefits
 
 
 
 
 
Other Public Board Service:
 
l
Honeywell International, Inc.
  (since 2005)
 
 
 
 
 
Recent Past Public Board Service:
 
l
United Parcel Service, Inc.
  (2008—2016)
 
l
EndoChoice, Inc. (2014—2016)
 
 
 
 
 
 
 
 
 
 
 
IAN E. L. DAVIS
 
Independent Director
 
 
 
a19pdavisi.jpg
Primary Occupation:
 
Chairman, Rolls-Royce Holdings plc; Former Chairman and Worldwide Managing Director, McKinsey & Company
 
 
 
Skills and Qualifications:
 
Having served as Chairman and Worldwide Managing Director of one of the world’s leading management consulting firms, and as a consultant to a range of global organizations across the public, private and not-for-profit sectors, Mr. Davis brings considerable global experience, management insight and business knowledge to our Board.
 
 
 
 
Background:
 
Director since 2010
 
Mr. Davis, age 68, 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, as well as expertise in the consumer products and retail industries. Mr. Davis is a Director of Teach for All, Inc., a global network of independent social enterprises working to expand educational opportunities in their nations; BP plc., a global energy group; and Majid Al Futtaim Holding LLC; and a Senior Advisor at Apax Partners, a private equity firm.
 
Current Committees:
 
 
l
Member, Audit
 
l
Member, Regulatory Compliance
 
 
 
 
 
Other Public Board Service:
 
l
BP, plc (since 2010)
 
l
Rolls-Royce Holdings plc (since 2013)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 11


 
 
 
 
 
 
JENNIFER A. DOUDNA, Ph.D.
 
Independent Director
 
 
 
a19pdouda.jpg
Primary Occupation:
 
Professor of Chemistry; Professor of Biochemistry & Molecular Biology; Li Ka Shing Chancellor's Professor in Biomedical and Health, University of California, Berkeley
 
 
 
Skills and Qualifications:
 
As a pioneer in the field of biochemistry, having co-discovered the simplified genome editing technique Crispr-Cas9, and with her vast academic experience and her steadfast concern for ethics in science, Dr. Doudna brings a global, ethical and scientific perspective to our Board.
 
 
 
 
Background:
 
Director since 2018
 
Dr. Doudna, age 55, 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 Biomedicine 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 Alan T. Waterman Award (2000); the Eli Lilly Award in Biological Chemistry of the American Chemical Society (2001); a co-recipient of the Breakthrough Prize in Life Sciences (2015); a co-recipient of the Gruber Prize in Genetics (2015); a co-recipient of the Canada Gairdner International Award (2016); the Heineken Prize for Biochemistry and Biophysics (2016); the Tang Prize (2016); the Japan Prize (2017); and the Albany Medical Center Prize (2017). Dr. Doudna was elected to the National Academy of Sciences (2002); the American Academy of Arts and Sciences (2003); the National Academy of Medicine (2010); the National Academy of Inventors (2014); and as a Foreign Member of the Royal Society (2016). Dr. Doudna is a Trustee for Pomona College.
 
Current Committees:
 
 
l
Member, Science, Technology & Sustainability
 
 
 
 
 
Other Public Board Service:
 
l
None
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALEX GORSKY
Management
 
 
a19pgorsky.jpg
 
Primary Occupation:
 
Chairman and Chief Executive Officer, Johnson & Johnson
 
 
 
Skills and Qualifications:
 
Having started his career at Johnson & Johnson in 1988 and having been promoted to positions of increasing responsibility across business segments, culminating in his appointment to CEO and election to our Board of Directors in 2012, Mr. Gorsky brings a full range of strategic management expertise, a broad understanding of the issues facing a multinational business in the healthcare industry, and an in-depth knowledge of the company’s business, history and culture to our Board and the Chairman position.
 
 
 
 
Director since 2012
 
Background:
Current Committees:
 
Mr. Gorsky, age 58, 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 company’s 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 also serves on the boards of the Travis Manion Foundation, the Congressional Medal of Honor Foundation, the National Academy Foundation, and the Wharton Board of Overseers. He is also a member of the Board of Directors of the Business Roundtable and serves as the Chairman of its Corporate Governance Committee.
l
Chairman, Finance
 
 
 
Other Public Board Service:
l
International Business Machines Corporation (since 2014)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

jnjlogoredtransp.gif
2019 Proxy Statement - 12
 
 



 
 
 
 
 
 
MARILLYN A. HEWSON
 
Independent Director
 
 
 
phewson2.jpg
Primary Occupation:
 
Chairman, President and Chief Executive Officer, Lockheed Martin Corporation
 
 
 
Skills and Qualifications:
 
Having served for more than three decades in executive and operational roles of a global security, aerospace and advanced technology company with worldwide interests, Ms. Hewson will bring to our Board vast experience, insight and knowledge of the complexities of global business management, strategic planning, cybersecurity, finance, supply chain, leveraged services, manufacturing, government relations and human capital management, including corporate governance and audit expertise derived from service on boards of other multinational corporations and non-profit organizations.
 
 
 
 
 
 
 
 
Director Nominee
 
Background:
 
l
Lockheed Martin Corporation
  (since 2014)
Ms. Hewson, age 65, has served since January 2014 as Chairman, President and Chief Executive Officer of Lockheed Martin Corporation (aerospace), a global security and aerospace company principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. 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 University of Alabama’s Culverhouse College of Commerce Board of Visitors and its President's Cabinet; the Board of Governors of the USO; the Board of Governors of the Aerospace Industries Association; the Board of Directors of the Congressional Medal of Honor Foundation; the Board of Directors of Catalyst, Inc.; the Board of Directors of the Business Roundtable; and the International Advisory Board of the Atlantic Council. Ms. Hewson also serves on the Board of Trustees for King Abdullah University of Science and Technology in the Kingdom of Saudi Arabia and on the Board of Trustees for Khalifa University of Science and Technology in the United Arab Emirates.
 
Recent Past Public Board Service:
 
l
DowDuPont Inc. (2007—2019)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MARK B. McCLELLAN, M.D., Ph.D.
 
Independent Director
 
 
 
a19pmclellan.jpg
Primary Occupation:
 
Director, Duke-Robert J. Margolis, MD, Center for Health Policy
 
 
 
Skills and Qualifications:
 
With his extensive experience in public health policy, including as Commissioner of the United States Food and Drug Administration and Administrator for the United States Centers for Medicare & Medicaid Services, Dr. McClellan possesses broad knowledge of, and unique insights into, the challenges facing the healthcare industry, making him a highly valued member of the board of a broad-based healthcare company.
 
 
 
 
 
Background:
 
Director since 2013
 
Dr. McClellan, age 55, 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 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 President Bill Clinton’s 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 a current board member of the Reagan-Udall Foundation for the U.S. Food and Drug Administration, is a member of the National Academy of Medicine and chairs 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.
 
Current Committees:
 
 
l
Member, Regulatory Compliance
 
l
Member, Science, Technology & Sustainability
 
 
 
 
 
Other Public Board Service:
 
l
Cigna Corporation (since 2018)
 
 
 
 
 
Recent Past Public Board Service:
 
l
Aviv REIT, Inc. (2013—2015)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 13


 
 
 
 
 
 
ANNE M. MULCAHY
 
Independent Director
 
 
 
a19pmulcahy.jpg
Primary Occupation:
 
Former Chairman and Chief Executive Officer, Xerox Corporation
 
 
 
Skills and Qualifications:
 
Having served as Chairman and CEO of a large, global manufacturing and services company with one of the world’s most recognized brands, Ms. Mulcahy provides to our Board valuable insight into organizational and operational management issues crucial to a large public company, as well as a strong reputation for leadership in business innovation and talent development.
 
 
 
 
Director since 2009; Lead Director since 2012
 
Background:
 
 
Ms. Mulcahy, age 66, 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 reappointed as a Board member in February 2018.
 
Current Committees:
 
 
l
Member, Audit
 
l
Member, Finance
 
l
Member, Nominating & Corporate Governance
 
 
 
 
 
Other Public Board Service:
 
l
Graham Holdings Company
  (since 2008)
 
l
LPL Financial Holdings Inc.
  (since 2013)
 
l
Williams-Sonoma, Inc. (since 2018)
 
 
 
 
 
Recent Past Public Board Service:
 
l
Target Corporation (1997—2017)
 
 
 
 
 
 
 
 
 
WILLIAM D. PEREZ
Independent Director
 
 
ppereza01.jpg
 
Primary Occupation:
 
Retired President and Chief Executive Officer, Wm. Wrigley Jr. Company
 
 
 
Skills and Qualifications:
 
With his experience as CEO of several large, consumer-focused companies across a wide variety of industries, Mr. Perez contributes to our Board significant organizational and operational management skills, combined with a wealth of experience in global, consumer-oriented businesses vital to a large public company in the consumer products space.
 
 
 
 
 
Background:
 
Mr. Perez, age 71, served as President and Chief Executive Officer for the Wm. Wrigley Jr. Company (confectionary and chewing gum) from 2006 to 2008. He was a Senior Advisor at Greenhill & Co., Inc. from 2010 to 2017. Before joining Wrigley, Mr. Perez served as President and Chief Executive Officer of Nike, Inc. Previously, he spent 34 years with S.C. Johnson & Son, Inc., including eight years as its President and Chief Executive Officer. Mr. Perez is a Director at Northwestern Memorial Hospital.
Director since 2007
 
Current Committees:
 
l
Chairman, Nominating & Corporate Governance
l
Member, Audit
 
 
 
Other Public Board Service:
l
Whirlpool Corporation (since 2009)
l
Johnson Outdoors Inc. (since 2018)
 
 
 
 

jnjlogoredtransp.gif
2019 Proxy Statement - 14
 
 



 
 
 
 
 
 
CHARLES PRINCE
 
Independent Director
 
 
 
a19pprince.jpg
Primary Occupation:
 
Retired Chairman and Chief Executive Officer, Citigroup Inc.
 
 
 
Skills and Qualifications:
 
Having served as Chairman and CEO of the nation’s largest and most diversified financial institution, Mr. Prince brings to our Board a strong mix of organizational and operational management skills combined with well-developed legal, global business and financial acumen critical to a large public company.
 
 
 
 
Background:
 
Mr. Prince, age 69, 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 and 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 member of the Council on Foreign Relations and The Council of Chief Executives.
 
Director since 2006
 
 
Current Committees:
 
 
l
Chairman, Regulatory Compliance
 
l
Member, Nominating & Corporate Governance
 
 
 
 
 
Other Public Board Service:
 
l
None
 
 
 
 
 
Recent Past Public Board Service:
 
l
Xerox Corporation (2008—2018)
 
 
 
 
 
 
 
 
 
A. EUGENE WASHINGTON, M.D., M.Sc.
Independent Director
 
 
a19pwashington.jpg
 
Primary Occupation:
 
Duke University’s Chancellor for Health Affairs; President and Chief Executive Officer, Duke University Health System
 
 
 
Skills and Qualifications:
 
Dr. Washington brings to our Board his distinct expertise born of significant achievements as a senior executive in academia, an accomplished clinical investigator, an innovator in healthcare, and a leader in shaping national health policy. With his unique combination of knowledge, skills and experience in organizational management, medical research, patient care, and public health policy, Dr. Washington provides an invaluable perspective for a company in the healthcare industry.
 
 
 
 
 
 
Director since 2012
 
Background:
Current Committees:
 
Dr. Washington, age 68, is currently 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 Chair of the Board of Directors of both the California HealthCare Foundation and The California Wellness Foundation. Dr. Washington currently serves on the Boards of Directors of the Kaiser Foundation Hospitals and Kaiser Foundation Health Plan, Inc.
l
Member, Compensation & Benefits
l
Member, Science, Technology & Sustainability
 
 
 
Other Public Board Service:
l
None
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 15


 
 
 
 
 
 
RONALD A. WILLIAMS
 
Independent Director
 
 
 
a19pwilliams.jpg
Primary Occupation:
 
Former Chairman and Chief Executive Officer, Aetna Inc.
 
 
 
Skills and Qualifications:
 
With his long and distinguished career in the healthcare industry, from his experience leading one of Fortune’s Most Admired healthcare companies to his career-long role as an advocate for meaningful healthcare reform, Mr. Williams provides our Board with an exceptional combination of operational management expertise and insight into both public healthcare policy and the healthcare industry critical to a large public company in the healthcare industry.
 
 
 
 
 
Background:
 
Director since 2011
 
Mr. Williams, age 69, 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. He is also an advisor to the private equity firm, Clayton, Dubilier & Rice, LLC. In addition, Mr. Williams serves on the boards of MIT Corporation, Peterson Institute for International Economics, the Advisory Board of Peterson Center on Healthcare and is Vice Chairman of the Board of Trustees of The Conference Board. Previously, Mr. Williams served on President Obama's Management Advisory Board from 2011 to January 2017, as Chairman of the Council for Affordable Quality Healthcare from 2007 to 2010, and as Vice Chairman of The Business Council from 2008 to 2010.
 
Current Committees:
 
 
l
Chairman, Compensation & Benefits
 
l
Member, Nominating & Corporate Governance
 
 
 
 
 
Other Public Board Service:
 
l
The Boeing Company (since 2010)
 
l
American Express Company
  (since 2007)
 
 
 
 
 
 
Recent Past Public Board Service:
 
 
l
Envision Healthcare Holdings, Inc.
  (2011 to 2017)
 
 
 
 
 
 
 

þ
The Board of Directors recommends a vote FOR election
of each of the above-named nominees.

jnjlogoredtransp.gif
2019 Proxy Statement - 16
 
 



DIRECTOR NOMINATION PROCESS AND REFRESHMENT AND BOARD COMPOSITION
Director Nomination Process
The Nominating & Corporate Governance Committee of the Board of Directors annually considers the size, composition and needs of the Board, reviews possible candidates for the Board, and recommends the nominees for Directors to the Board for approval. The Committee considers and evaluates suggestions from many sources, including shareholders, regarding possible candidates for Directors. Such suggestions, together with appropriate biographical information, should be submitted to the Office of the Corporate Secretary at our principal office address as set forth on page 103 of this Proxy Statement. Possible candidates suggested by shareholders are evaluated by the Nominating & Corporate Governance Committee in the same manner as other possible candidates.
 
 
General Criteria for Nomination to the Board
 
 
l
The highest ethical character and shared values with Our Credo
 
l
Reputation, both personal and professional, consistent with our image and reputation
 
l
Accomplishment within candidate’s field, with superior credentials and recognition
 
l
Active and former chief executive officers of public companies and leaders of major complex organizations, including scientific, government, educational and other non-profit institutions
 
l
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
 
l
Relevant expertise and experience and the ability to offer advice and guidance to the CEO based on that expertise and experience
 
l
Independence, without the appearance of any conflict in serving as a Director, and independence of any particular constituency with the ability to represent all shareholders
 
l
Ability to exercise sound business judgment
 
l
Diversity, reflecting differences in skills, regional and industry experience, background, race, ethnicity, gender and other unique characteristics
 
 
 
The Board is committed to seeking out highly qualified women and minority candidates and candidates with diverse backgrounds, skills and experiences as part of the search process for each Director. These criteria are incorporated into our Principles of Corporate Governance posted at www.investor.jnj.com/gov.cfm.

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 17


Board Nominee Composition
Understanding the importance of board composition and refreshment for effective oversight, the Nominating & Corporate Governance Committee strives to maintain a diverse Board of Directors, reflecting differences in skills, regional and industry experience, background, race, ethnicity, gender and other unique characteristics that are applicable to the company's business strategy. The Board has welcomed a new Director this year and last year, and every year during the period from 2009—2015. The Board has established a robust record of strategic and consistent refreshment, seeking new Directors with appropriate skills, qualifications and backgrounds consistent with the criteria established in our Principles of Corporate Governance. This year, Ms. Marillyn A. Hewson was recommended for nomination by the Nominating & Corporate Governance Committee, in keeping with the Board's commitment to refreshment, diversity and seeking out directors who are active chief executive officers of public companies (see "Nominees" on page 10). Ms. Hewson was recommended for the Committee's consideration by a third party search firm. Below are highlights of the composition of our Director nominees:
 
 
BOARD NOMINEE COMPOSITION
a20190114skillsa01.jpg
 
 

jnjlogoredtransp.gif
2019 Proxy Statement - 18
 
 



BOARD LEADERSHIP STRUCTURE
 
• Chairman of the Board and Chief Executive Officer: Alex Gorsky
• Independent Lead Director: Anne M. Mulcahy
¡ The Chairman and Lead Director positions are designated annually by the independent Directors
¡ The Nominating & Corporate Governance Committee annually reviews the Board leadership structure
• All 5 main Board Committees composed of independent Directors
• Independent Directors met in Executive Session at each of the 8 regular 2018 Board meetings
 
The Board believes that there is no single board leadership structure that is optimal in all circumstances. Accordingly, the relative benefits of different structures must be considered in the context of the specific circumstances, culture and challenges facing a company, and such consideration falls squarely on the shoulders of a company’s board, holding a diversity of views and experiences. As discussed in “Item 1: Election of Directors” on pages 10 to 16 of this Proxy Statement, our Directors come from a variety of organizational backgrounds with direct experience in a wide range of leadership and management structures. Moreover, our independent Directors appropriately challenge management and demonstrate the free-thinking expected of Directors. Given this makeup, our Board is in a very strong position to evaluate the relative benefits of the various types of board leadership structures while considering the perspectives of shareholders, and to ultimately decide which one best serves the interests of our stakeholders, as they are defined in Our Credo (on the back cover of this Proxy Statement).
Our Nominating & Corporate Governance Committee annually reviews whether it remains in our company’s best interests to continue to combine the roles of Chairman of our Board and CEO. In February 2018, our Board amended its Principles of Corporate Governance to reflect that our Nominating & Corporate Governance Committee reviews on an annual basis, and at other appropriate times, the Board’s leadership structure, including whether the roles of Chairman and Chief Executive Officer should be combined or separate. The Principles of Corporate Governance can be found at www.investor.jnj.com/gov.cfm.
In conducting its review, the Committee considers, among other things:
 
l
the effectiveness of the policies, practices and people in place at the company to help ensure strong, independent Board oversight;
 
l
the company’s performance and the effect that a specific leadership structure could have on its performance;
 
l
the Board’s performance and the effect that a specific leadership structure could have on the Board’s performance;
 
l
the Chairman’s performance in the role of Chairman (separate and apart from his performance as CEO);
 
l
the views of the company’s shareholders, expressed both during our shareholder engagement and through the fact that prior shareholder proposals on the topic have not received majority support;
 
l
applicable legislative and regulatory developments; and
 
l
the practices at other similarly situated companies and trends in governance
In November 2018, after reviewing and discussing Board leadership in consideration of these factors, the Nominating & Corporate Governance Committee concluded that it remains in our company’s best interest for the Board to be led by a joint Chairman and CEO. Based on the Committee's guidance, our Board believes that it is in the company's best interest for Mr. Gorsky to serve as both Chairman and CEO.
Our Board also believes that Ms. Mulcahy should continue to serve as Lead Director. The Lead Director role includes the broad range of responsibilities set out on the following page, consistent with those of most independent board chairs, impacting all critical aspects of the Board’s operations and decision-making.
The Lead Director provides strong independent leadership of the Board and keeps in frequent contact with the Chairman.

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 19


Duties and Responsibilities of the Lead Director
 
 
 
Board Agendas, Information and Schedules
Approves information sent to the Board and determines timeliness of information flow from management.
Periodically 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 assure that there is sufficient time for discussion of all agenda items.
With the Chair/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 Chair/CEO is not present, including Executive Session of the Independent Directors.
Communicating with Management
After each Executive Session of the Independent Directors, communicates with the Chair/CEO to provide feedback and also to effectuate the decisions and recommendations of the Independent Directors.
Acts as liaison between the Independent Directors and the Chair/CEO and management on a regular basis and when special circumstances exist or communication out of the ordinary course is necessary.
Communicating with Stakeholders
As necessary, meets with major shareholders or other external parties, after discussions with the Chair/CEO.
Is regularly apprised of inquiries from shareholders and involved in correspondence 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 Chair/CEO, distinguishing as necessary between performance as Chair 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 
Plays an increased role 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 or similar role, at another public company if approved by the full Board upon recommendation from the Nominating & Corporate Governance Committee.
 
Our Board will continue to monitor Board leadership considering what it observes in the marketplace, the evolution of viewpoints in the corporate governance community, and, most importantly, what the Board believes is in the best interest of Johnson & Johnson and its shareholders.


jnjlogoredtransp.gif
2019 Proxy Statement - 20
 
 



DIRECTOR INDEPENDENCE
All Directors are independent except for our CEO
It is our goal that at least two-thirds of our Directors be “independent,” not only as that term may be defined legally or mandated by the New York Stock Exchange (NYSE), but also without the appearance of any conflict in serving as an independent Director. The Board of Directors has determined that all non-employee Directors who served during fiscal 2018, as well as our new Director nominee, are “independent” under the listing standards of the NYSE and our Standards of Independence, including: Dr. Beckerle, Mr. I. E. L. Davis, Mr. D. S. Davis, Dr. Doudna, Ms. Hewson, Dr. McClellan, Ms. Mulcahy, Mr. Perez, Mr. Prince, Dr. Washington and Mr. Williams.
In order to assist the Board in making this determination, the Board adopted Standards of Independence as part of our Principles of Corporate Governance, which can be found at www.investor.jnj.com/gov.cfm. These Standards conform to, or are stricter than, the NYSE independence standards and identify, among other things, material business, charitable and other relationships that could interfere with a director’s ability to exercise independent judgment.
As highly accomplished individuals in their respective industries, fields and communities, the non-employee Directors and Director nominee are affiliated with numerous corporations, educational institutions, hospitals and charities, as well as civic organizations and professional associations, many of which have business, charitable or other relationships with the company. The Board considered each of these relationships in light of our Standards of Independence and determined that none of these relationships conflict with the interests of the company or would impair the relevant non-employee Director’s, or new Director nominee's, independence or judgment.
The table on the following page describes the relationships that were considered in making this determination. The nature of the transactions and relationships summarized in the table, and the role of each of the Directors and new Director nominee at their respective organizations, were such that none of the non-employee Directors or new Director nominee had any direct business relationships with the company in 2018 or received any direct personal benefit from any of these transactions or relationships.
All of the transactions and relationships of the type listed were entered into, and payments were made or received, by the company or one of its subsidiaries in the ordinary course of business and on competitive terms. In 2016, 2017 and 2018, the company’s transactions with, or discretionary charitable contributions to, each of the relevant organizations (not including gifts made under our matching gifts program) did not exceed the greater of $1 million or 1% of that organization’s consolidated gross revenues, and therefore did not exceed the thresholds in our Standards of Independence.

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 21


Director Independence - Transactions and Relationships
Director
Organization
Type of
Organization
Relationship to
Organization
Type of
Transaction or
Relationship
2018
Aggregate
Magnitude
Beckerle
Huntsman Cancer
Institute
Healthcare
Institution
Executive
Officer
Sales of healthcare products
<1%;
<$1 million
Beckerle
University of Utah
Educational
Institution
Employee
Sales of healthcare products; investigator payments and grants
<1%
Doudna
Howard Hughes Medical Institute
Healthcare Institution
Employee
Licensing
<1%;
<$1 million
Doudna
University of California - Berkeley
Educational Institution
Employee
Sales of healthcare products; research-related payments; sponsorship and grants
<1%;
<$1 million
Hewson
United Service Organizations
Non-profit Organization
Director
Grants; sponsorship; contributions
<1%;
<$1 million
McClellan
Alliance for Health Policy
Non-profit Organization
Director
Contributions
<1%;
<$1 million
McClellan
Duke University
Educational
Institution
Employee
Sales of healthcare products and services; research- related payments; grants; tuition reimbursement
<1%
McClellan
Reagan-Udall Foundation
Non-profit Organization
Director
Sponsorship; research related payments
<1%;
<$1 million
McClellan
Research! America
Public Education
and Advocacy
Organization
Director
Annual dues; sponsorship and
contributions
<$1 million
Mulcahy
Save the Children
Non-profit Organization
Trustee
Contributions
<1%
Perez
Northwestern Memorial Hospital
Healthcare Institution
Director
Research grants; rebates
<1%;
<$1 million
Washington
Duke University
Educational
Institution
Employee
Sales of healthcare products and services; research- related payments; grants; tuition reimbursements
<1%
Washington
Duke University
Health System
Healthcare
Institution
Executive
Officer
Sales of healthcare products and
services; rebates
<1%
Washington
Kaiser Foundation Health Plan, Inc.
Healthcare Institution
Director
Investigator payments; contributions; rebates
<1%;
<$1 million
Williams
The Cleveland Clinic Foundation
Non-profit Organization
Trustee
Grants; research related payments; rebates
<1%;
<$1 million
Williams
The MIT Corporation/Massachusetts Institute of Technology
Educational
Institution
Trustee
Sponsorships
<1%;
<$1 million
Williams
National Academy
Foundation
Non-profit
Organization
Director
Contributions; grants
<1%
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 page 33 of this Proxy Statement, none of the non-employee Directors has the authority to review, approve or deny any grant to, or research contract with, an organization.

jnjlogoredtransp.gif
2019 Proxy Statement - 22
 
 



BOARD OVERSIGHT OF STRATEGY AND RISK
Board Oversight of Strategy
One of the Board’s key responsibilities is overseeing the company’s corporate strategy, and the Board has deep expertise in strategy development and insight into the most important issues facing the company. Using its knowledge, expertise and diverse composition, the Board regularly discusses the key priorities of our company and its businesses, taking into consideration global economic, socioeconomic and regulatory trends, stakeholder interests and developments in healthcare.
 
l
Annually, the Board conducts an extensive review of the company’s long-term strategic plans.

 
l
Throughout the year and at most Board meetings, the Board receives information and updates from management and actively engages with senior leaders with respect to the company’s strategy, including the strategic plans for our businesses, research and development, and the competitive environment.
 
l
The company’s independent Directors hold regularly scheduled Executive Sessions, without management present, to discuss strategy.
 
l
The Board regularly discusses and reviews feedback on strategy from our shareholders and other stakeholders.

 
l
Corporate strategy discussions are enhanced with periodic engagements held outside the Boardroom, such as visits to our business locations and research and development facilities around the globe. These visits provide the Directors with an opportunity to observe the execution and impact of the company’s strategy and to engage with senior leaders and employees in our businesses to deepen their understanding of our businesses, their competitive environments and our corporate culture.
Board Oversight of Risk Management
The company’s senior executives are responsible for day-to-day management of strategic, operational, and compliance risks, including the creation of appropriate risk management policies. The Board is responsible for overseeing management's execution of its risk management responsibilities and for assessing the company’s approach to risk management. The Board has oversight responsibility for the company’s Enterprise Risk Management (ERM) framework that is designed to identify, assess, monitor, communicate and develop a plan to mitigate risks across the company, and to ensure a corporate culture of risk transparency and compliance. For more information about the company's ERM framework, please see: https://www.jnj.com/application/pdf:%2092/01/4efd5ba54bc09c6eb227db00da8a/jnj-erm-framework-2018-update.pdf.
The Board’s oversight of risk occurs as an integral and continuous part of the Board’s oversight of our business and seeks to ensure that management has processes in place to appropriately manage risk. The Board actively engages with senior management to understand and oversee the company’s various risks.
 
l
The Board considers strategic, operational, financial and reporting, reputational and compliance risks.
 
l
Throughout the year, the Board and the relevant Committees receive updates from management regarding various enterprise risk management issues and risks related to our businesses, including litigation and reputational risk.
 
l
The company’s independent Directors hold regularly scheduled Executive Sessions without management present to discuss risks facing the company and its businesses.
 
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 regularly on these matters, as set forth on the following page.

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 23


Audit
 
Oversees the company’s financial management and accounting, as well as financial reporting processes and practices, and monitors risks related to financial disclosure, tax and treasury through frequent engagements with management and our external auditor.
Compensation & Benefits
 
Reviews the company’s employee compensation policies and practices to assess whether such policies and practices could lead to unnecessary risk-taking behavior.
Nominating & Corporate Governance
 
Oversees the company’s governance structure and other corporate governance matters, including succession planning to ensure that the company has the leadership and oversight required to manage current and future business risks.
Regulatory Compliance
 
Oversees the company’s non-financial regulatory compliance in the areas of healthcare compliance, anti-corruption laws, the manufacture and supply of products consistent with applicable high-quality standards, and compliance with applicable laws and regulations related to medical product safety, environmental regulations, employee health and safety, privacy, cybersecurity and political expenditures.
Science, Technology & Sustainability
 
Oversees the company’s policies and programs designed to promote sustainable business practices, mitigate risks related to employee health and safety, and environmental compliance and stewardship, including the company's Health for Humanity 2020 Goals, the key performance indicators of the company's external citizenship and sustainability commitments.
Board Oversight of Talent Development and Human Capital Management
The Board and Committees are actively engaged in overseeing the company’s talent development and human capital management strategies designed to attract, develop and retain global business leaders who can drive financial and strategic growth objectives and build long-term shareholder value. The Board’s involvement in leadership development and succession planning is systematic and ongoing, and the Board provides input on important decisions in each of these areas. The Board has primary responsibility for succession planning for the CEO and oversight of succession planning for other executive officer positions. The Nominating & Corporate Governance Committee oversees the development of the process and protocols regarding succession plans for the CEO, and other executive officer positions. The Nominating & Corporate Governance Committee reviews succession plans for the Executive Committee on an annual basis with the CEO and Chief Human Resources Officer.
To improve the Board's understanding of the company’s culture and talent pipeline, the Board conducts meetings and schedules site visits at the company’s locations and meets regularly with high-potential executives in formal and informal settings. More broadly, the Board is regularly updated on key talent indicators for the overall workforce, including diversity and inclusion, recruiting and development programs, and is updated on the company’s human capital development strategy. For more information on Johnson & Johnson’s approach to talent development and engagement, please see healthforhumanityreport.jnj.com/our-people.
The Compensation & Benefits Committee, along with the Management Compensation Committee, oversees the design and management of corporate compensation programs, including long-term incentive compensation programs, as well as the design of the pension, savings, and health and benefit plans covering the company’s employees. The Compensation & Benefits Committee provides Board-level oversight regarding these matters.
Product quality and safety are top business priorities embodied in Our Credo. Johnson & Johnson’s businesses apply a scientific, evidence-based approach in decisions about the research, marketing and use of their products.
A Note About Talc Litigation:

Personal injury claims alleging that talc causes cancer have been made against Johnson & Johnson and its affiliates arising out of the use of body powders containing talc, primarily JOHNSONS® Baby Powder. Johnson & Johnson is committed to defending the safety of JOHNSONS® Baby Powder, based on extensive scientific evidence that demonstrates:
 
l
JOHNSONS® Baby Powder is safe;
 
l
The talc used in JOHNSONS® Baby Powder does not increase the risk of cancer; and
 
l
JOHNSONS® Baby Powder does not contain asbestos.
There has been extensive media coverage of talc product liability cases, including instances of inaccurate and misleading reporting, and this media coverage adversely impacted our share price during a period in which the stock market as a whole dropped significantly. Johnson & Johnson’s management, in concert with diligent Board oversight, has taken proactive steps to assure all stakeholders that the company views product quality and safety to be a top priority. Please see www.factsabouttalc.com for information about the safety of talc.

jnjlogoredtransp.gif
2019 Proxy Statement - 24
 
 



Risk Related to Executive Compensation
The following characteristics of our executive compensation program work to reduce the possibility that our executive officers, either individually or as a group, make excessively risky business decisions that could maximize short-term results at the expense of long-term value:
 
Characteristics
 
Description
 
Page #
 
Balanced Approach to Performance‑Based Awards
Performance targets are tied to multiple financial metrics, including operational sales growth, free cash flow, adjusted operational earnings per share growth, and long-term total shareholder return.

Performance-based awards are based on the achievement of strategic and leadership objectives in addition to financial metrics.

See “Base Salary, Annual Performance Bonus, and Long-Term Incentives.”
 
 
 
Performance Period and Vesting Schedules
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 Stock Options vest three years from the grant date. See "Long-Term Incentives."
 
 
Balanced Mix of Pay Components
The target compensation mix is not overly weighted toward annual incentive awards and represents a balance of cash and long-term equity-based compensation vesting over three years. See “2018 Pay Mix at Target.”
 
 
Capped Incentive Awards
Annual performance bonuses and long-term incentive awards are capped at 200% of target. See “Aligning Compensation to "The What" & "The How"".
 
 
Stock Ownership Guidelines
These guidelines require our CEO to directly or indirectly own equity in our company equal to six times salary, and the other members of our Executive Committee (the principal management group) to own equity equal to three times salary, and to retain this level of equity at all times while serving as an Executive Committee member. See “Stock Ownership Guidelines for Named Executive Officers.” In addition, the company has adopted the Johnson & Johnson Policy Against Pledging Company Stock. See www.investor.jnj.com/gov.cfm.
 
 
Executive Compensation Recoupment Policy
This Policy gives our Board authority to recoup executive officers’ past compensation in the event of a material restatement of our financial results and for events involving material violations of company policy relating to the manufacturing, sales or marketing of our products. See “Executive Compensation Recoupment Policy.”
 
 
No Change-in-Control Arrangements
None of our executive officers have in place any change-in-control arrangements that would result in guaranteed payouts. See "2018 Potential Payments Upon Termination."
 

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 25


SHAREHOLDER ENGAGEMENT
We actively engage with our shareholders throughout the year to listen to concerns, ask questions and share information and perspectives.
 
In 2018, our engagement took a number of forms:
shareholderengagementa03.jpg
l
During the proxy season, we reached out to our top 100 shareholders, who represent approximately 46% of our outstanding shares, and sought a dialogue and feedback on issues raised in our 2018 Proxy Statement.
 
l
We included a section on our proxy voting card inviting all of our shareholders to give us comments as an additional means to communicate with the Board, and 151 shareholders provided comments. Shareholders may contact any of our Directors, including the Lead Director, using any of the options described on page 103 of this Proxy Statement.
 
l
At the direction of our Lead Director, we continued to personally engage with our shareholders and other key stakeholders.
 
l
The company hosted its first Health for Humanity Report webinar coinciding with the release of our annual Health for Humanity Report, which documents our annual progress in citizenship and sustainability. The webinar provided shareholders with the opportunity to engage and ask questions of leaders in Investor Relations, Product Quality, Medical Safety, Legal, Global Public Health and Environmental Health, Safety and Sustainability.
 
 
 
OUR ANNUAL SHAREHOLDER ENGAGEMENT CYCLE
a19shareholdengage.jpg
Our 2018 engagement meetings and other governance exchanges covered a wide range of important corporate governance, environmental and social stewardship, compensation and public policy issues, as set forth below, and we shared the content of many of these discussions with our full Board or its key Committees.
Shareholder Engagement Topics
 
 
 
 
 
 
 
l
Board Composition and Diversity
 
l
Executive Compensation and Compensation Metrics
 
l
Board Evaluation Process
 
l
Lead Director Responsibilities
 
l
Board Oversight of Risk
 
l
Litigation
 
l
Board-Shareholder Engagement
 
l
Product Quality and Safety
 
l
Board Skills and Skills Matrix
 
l
Pharmaceutical Pricing Transparency and Access
 
l
Board Tenure and Refreshment
 
l
Separation of the Chairman and CEO Roles
 
l
Culture and Human Capital Management
 
l
Shareholder Proposal Process
 
l
Environment, Sustainability and Governance Reporting
 
l
Tax Policy
 
 
 
 
 
 

jnjlogoredtransp.gif
2019 Proxy Statement - 26
 
 



ADDITIONAL GOVERNANCE FEATURES
Johnson & Johnson is governed by the values set forth in Our Credo, which extend to our corporate governance practices and are reflected in our By-Laws and Principles of Corporate Governance. The Nominating & Governance Committee reviews our Principles of Corporate Governance, as well as our overall governance practices, on an annual basis to ensure that our corporate governance practices continue to meet the high standards expected by our shareholders. Our Principles of Corporate Governance can be found at www.investor.jnj.com/gov.cfm.
Effective Board Structure and Composition
 
 
 
Strong Independent Board Leadership
 
All of our Directors other than our Chairman and CEO are independent. All Committees other than the Finance Committee are comprised solely of Independent Directors.
Independent Lead Director
 
The Independent Directors elect 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 appropriate Board leadership.
Executive Sessions of Independent Directors
 
Independent Directors meet in Executive Session without management present at each Board and Committee meeting.
Robust 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. See page 17.
Responsive and Accountable to Shareholders
 
 
 
Annual Election of Directors
 
Directors are elected annually and individually to reinforce 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 3 years, may nominate and include in our proxy materials director nominees constituting up to 20% of our 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 total public company boards. Other Directors should not serve on more than five public company boards.
No Shareholder Rights Plan
 
The company does not have a “poison pill” and has no intention of adopting one at this time.
No Supermajority Requirements in Certificate of Incorporation or By-Laws
 
Our Certificate of Incorporation and By-Laws contain majority standards for all actions requiring shareholder approval.
Shareholder Right to Call 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.
Active Shareholder Engagement
 
See page 26 of this Proxy Statement for more information on the company’s shareholder engagement program.
Annual Say-on-Pay Advisory Vote
 
Shareholders are asked to vote annually on the company’s named executive officer compensation.
Johnson & Johnson Policy Against Pledging Company Stock
 
The company has a meaningful policy against pledging company stock. Please see www.investor.jnj.com/gov.cfm for more information.

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 27


Additional Governance Features
Code of Business Conduct
 
Johnson & Johnson has a comprehensive Code of Business Conduct designed to provide Directors, senior executives and employees with guidance on the 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 discussions of any significant cyber incidents, our risk mitigation program and the 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 Framework
 
The company has a comprehensive Compensation Recoupment Policy Framework designed to ensure that management is held accountable in the event of significant misconduct violating a significant company policy, law or regulation. Please see www.investor.jnj.com/gov/compensation-recoupment-policy.cfm for more information.
Political Spending Oversight and Disclosure
As a leader in the healthcare industry, Johnson & Johnson is committed to supporting the development of sound public policy in healthcare. We work with many organizations across the political spectrum on a variety of policy issues related to health and other topics that impact patients, consumers, and our company. As a result of constructive engagement with a number of our institutional investors, we were an early mover on the disclosure of corporate political expenditures and activities, and we have expanded that disclosure over the years as we continue the dialogue with our shareholders on this issue.
Our efforts were recognized when we were named as a
Trendsetter in Political Disclosure and Accountability in the 2018 CPA-Zicklin Index.
The Regulatory Compliance Committee receives an annual report of the company’s political contribution and lobbying policies, practices, and activities. In addition, the company’s Political Action Committee and U.S. corporate political spending is audited biennially by our internal auditors. Disclosure regarding the company’s political activities and expenditures, including the policies and procedures that govern that activity and spending, as well as the Board’s oversight role, are updated semi-annually and can be found at www.investor.jnj.com/gov/contributions.cfm.
U.S. Pharmaceutical Pricing Transparency Disclosure
Our U.S. Pharmaceuticals business provides extensive disclosures on our responsible business practices in its annual Janssen U.S. Transparency Report, found at: transparencyreport.janssen.com/us/us-pharmaceutical-transparency-report.
Disclosure on Environmental, Sustainability and Governance Topics
Our company provides extensive disclosures on our corporate citizenship and sustainability efforts in our annual Health for Humanity Report found at: healthforhumanityreport.jnj.com.


jnjlogoredtransp.gif
2019 Proxy Statement - 28
 
 



BOARD COMMITTEES
The Board of Directors has a standing Audit Committee, Compensation & Benefits Committee, Nominating & Corporate Governance Committee, Regulatory Compliance Committee and Science, Technology & Sustainability Committee, each composed entirely of non-employee Directors determined to be “independent” under the listing standards of the NYSE and our Standards of Independence. Under their written charters adopted by the Board, each of these Committees is authorized and assured of appropriate funding to retain and consult with external advisors, consultants and counsel. In addition, the Board has a standing Finance Committee, composed of the Chairman of the Board and the Lead Director, which exercises the authority of the Board between Board meetings in accordance with the company's By-Laws.
Board Committee Membership
The following table shows the current members and Chairmen of each of the standing Board Committees and the number of meetings each Committee held in 2018.
 
DIRECTOR NOMINEES (see pages 10 to 16)
Name
 
 
Age
Director
Since
Primary Occupation
Board Committees
AUD
CBC
NCG
RC
STS
FIN
M. C. Beckerle
 
I
64
2015
Chief Executive Officer, Huntsman Cancer Institute; Distinguished Professor of Biology, College of Science, University of Utah
 
 
 
ü
C
 
D. S. Davis(1)
 
I
67
2014
Former Chairman and Chief Executive Officer, United Parcel Service, Inc.
C
ü
 
 
 
 
I. E. L. Davis
 
I
68
2010
Chairman, Rolls-Royce Holdings plc; Former Chairman and Worldwide Managing Director, McKinsey & Company
ü
 
 
ü
 
 
J. A. Doudna
 
I
55
2018
Professor of Chemistry; Professor of Biochemistry and Molecular Biology; Li Ka Shing Chancellor's Professor in Biomedical and Health; University of California, Berkeley
 
 
 
 
ü
 
A. Gorsky
CH
 
58
2012
Chairman and Chief Executive Officer, Johnson & Johnson
 
 
 
 
 
C
M. A. Hewson
 
I
65
Nominee
Chairman, President and Chief Executive Officer, Lockheed Martin Corporation
 
 
 
 
 
 
M. B. McClellan
 
I
55
2013
Director, Duke-Robert J. Margolis, MD, Center for Health Policy
 
 
 
ü
ü
 
A. M. Mulcahy
LD
I
66
2009
Former Chairman and Chief Executive Officer, Xerox Corporation
ü
 
ü
 
 
ü
W. D. Perez
 
I
71
2007
Retired President and Chief Executive Officer, Wm. Wrigley Jr. Company
ü
 
C
 
 
 
C. Prince
 
I
69
2006
Retired Chairman and Chief Executive Officer, Citigroup Inc.
 
 
ü
C
 
 
A. E. Washington
 
I
68
2012
Duke University’s Chancellor for Health Affairs; President and Chief Executive Officer, Duke University Health System
 
ü
 
 
ü
 
R. A. Williams
 
I
69
2011
Former Chairman and Chief Executive Officer, Aetna Inc.
 
C
ü
 
 
 
Number of Meetings in 2018
 
9(2)(3)
7
4
5(3)
6
_
 
 
(1) 
Designated as an “audit committee financial expert”
(2) 
Does not include teleconferences held prior to each release of quarterly earnings (4 in total)
 
(3) 
Includes an annual joint meeting of the Audit and Regulatory, Compliance & Government Affairs Committees (now known as the Regulatory Compliance Committee)
 
 
 
 
 
 
 
 
 
 
 
 
 
CH
Chairman of the Board
 
 
 
 
 
 
 
C
Committee Chair
 
 
 
 
 
 
 
LD
Lead Director
 
 
 
 
 
 
 
I
Independent Director
 
 
 
 
 
 
 
AUD
Audit Committee
 
 
 
 
 
 
 
CBC
Compensation & Benefits Committee
 
 
 
 
 
 
 
NCG
Nominating & Corporate Governance Committee
 
 
 
 
 
 
 
RC
Regulatory Compliance Committee
 
 
 
 
 
 
 
STS
Science, Technology & Sustainability Committee
 
 
 
 
 
 
 
FIN
Finance Committee
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 29


Board Committee Responsibilities
Audit Committee
 
l
Oversees the company’s financial management, accounting and reporting processes and practices
 
l
Appoints, retains, compensates and evaluates independent auditor
 
l
Oversees the company’s internal audit organization, reviews its annual plan and reviews results of its audits
 
l
Oversees the quality and adequacy of the company’s internal accounting controls and procedures
 
l
Reviews and monitors the company’s financial reporting compliance and practices and its disclosure controls and procedures
 
l
Discusses with management the processes used to assess and manage the company’s exposure to risk and monitors risks related to tax and treasury
 
 
 
In performing these functions, the Audit Committee meets periodically with the independent auditor, management, and internal auditors (including in private sessions) to review their work and confirm that they are properly discharging their respective responsibilities. For more information on Audit Committee activities in 2018, see the Audit Committee Report on page 92.

A copy of the charter of the Audit Committee is available at www.investor.jnj.com/gov/committee.cfm.

The Board has designated Mr. D. S. Davis, the Chairman of the Audit Committee and an independent Director, as an “audit committee financial expert” under the rules and regulations of the U.S. Securities and Exchange Commission (SEC), after determining that he meets the requirements for such designation. The determination was based on his being a Certified Public Accountant and his experience as Chief Financial Officer at United Parcel Service, Inc.

Any employee or other person who wishes to contact the Audit Committee to report fiscal improprieties or complaints about internal accounting control or other accounting or auditing matters can do so by writing to the Audit Committee at the address of our principal office: One Johnson & Johnson Plaza, New Brunswick, NJ 08933, or by using the online submission form at www.investor.jnj.com/communication.cfm. Such reports may be made anonymously.
Compensation & Benefits Committee
 
l
Establishes the company’s 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 the company’s 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, and recommends for approval by the full Board, the compensation for our non-employee Directors
 
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
 
 
 
A copy of the charter of the Compensation & Benefits Committee is available at www.investor.jnj.com/gov/committee.cfm.
The Compensation & Benefits Committee has retained Frederic W. Cook & Co., Inc. as its independent compensation consultant for matters related to executive officer and non-employee Director compensation. For further discussion of the role of the Compensation & Benefits Committee in the executive compensation decision-making process, and for a description of the nature and scope of the consultant’s assignment, see “Governance of Executive Compensation” on page 65.

jnjlogoredtransp.gif
2019 Proxy Statement - 30
 
 



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 our executive succession plans
 
l
Considers 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 the nominees for Directors 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
A copy of the charter of the Nominating & Corporate Governance Committee can be found at www.investor.jnj.com/gov/committee.cfm.
Regulatory Compliance Committee
 
l
Oversees the company’s non-financial regulatory compliance in the areas of healthcare compliance, anti-corruption laws, and the manufacture and supply of products, consistent with applicable high-quality standards
 
l
Compliance with applicable laws and regulations related to medical product safety, environmental regulations, employee health and safety, privacy, cybersecurity and political expenditures
 
l
Reviews the policies, practices and priorities for the company’s political expenditure and lobbying activities
 
l
Oversees the company's compliance with privacy regulations
 
l
Oversees the company's risk management programs related to global cybersecurity, information security, product quality and technology
A copy of the charter of the Regulatory Compliance Committee can be found at www.investor.jnj.com/gov/committee.cfm.
Science, Technology & Sustainability Committee
 
l
Monitors and reviews the overall strategy, direction and effectiveness of the research and development organizations supporting the company's businesses
 
l
Serves as a resource and provides input, as needed, regarding the scientific and technological aspects of product safety matters
 
l
Reviews the company’s policies, programs and practices on environment, health and sustainability
 
l
Assists the Board in identifying and comprehending significant emerging science and technology policy and public health issues and trends that may impact the company’s overall business strategy
 
l
Assists the Board in its oversight of the company’s major acquisitions and business development activities as they relate to the acquisition or development of new science or technology
 
l
Oversees the company's policies and programs designed to promote sustainable business practices and mitigate risks related to employee health, safety and sustainability, including the company's external citizenship and sustainability commitments.
A copy of the charter of the Science, Technology & Sustainability Committee can be found at www.investor.jnj.com/gov/committee.cfm.
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 the company's By-Laws
 
l
Acts from time-to-time 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

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 31


BOARD MEETINGS AND PROCESSES
Director Meetings and Attendance
During 2018, the Board held nine meetings. Each Director attended at least 75% of the total of regularly-scheduled and special meetings of the Board and the Committees on which he or she served (during the period that he or she served).
It has been our longstanding practice for all Directors to attend the Annual Meeting of Shareholders. All 11 of our Directors who were elected to the Board at the 2018 Annual Meeting attended the Annual Meeting.
Executive Sessions
During 2018, each of the Audit, Compensation & Benefits, Nominating & Corporate Governance, Regulatory, Compliance & Government Affairs (now known as Regulatory Compliance), and Science, Technology & Sustainability Committees met in Executive Sessions without members of management present. The independent Directors met in Executive Session at every regular Board meeting during 2018 and held an additional special Executive Session to perform the annual evaluation of the CEO/Chairman. The Lead Director acted as Chair at all of these Executive Sessions.
Board and Committee Evaluations
Our Principles of Corporate Governance require that the Board and each Committee conduct an annual self-evaluation. These self-evaluations are intended to facilitate a candid assessment and discussion by the Board and each Committee of its effectiveness as a group in fulfilling its responsibilities, its performance as measured against the Principles of Corporate Governance, and its areas for improvement.
Board Evaluations: At the end of 2018, the Chairman and the Lead Director met with each Director individually to collect feedback on the Board’s responsibilities, structure, procedures, priorities, culture and engagement. Most Directors provided anonymous written comments through secure technology to enable additional candid feedback. In all cases, input from the evaluations was synthesized and discussed with the full Board with certain minor and administrative action items emerging from the discussion.
Committee Evaluations: Committee members are provided with a questionnaire to facilitate discussion during an Executive Session of the Committee, and upon completion of the self-evaluation, the Chairman of the Committee reports to the full Board on the discussion and any necessary follow-up actions.


jnjlogoredtransp.gif
2019 Proxy Statement - 32
 
 



RELATED PERSON TRANSACTIONS
Policies and Procedures
Our written Policy on Transactions with Related Persons requires the approval or ratification by the Nominating & Corporate Governance Committee of any transaction or series of transactions exceeding $120,000 in which the company is a participant and any related person has a direct or indirect material interest (other than solely as a result of being a director or trustee or less than 10% owner of another entity). Related persons include our Directors and executive officers and their immediate family members and persons sharing their households. It also includes persons controlling more than 5% of our outstanding common stock.
Under our Principles of Corporate Governance and Code of Business Conduct & Ethics for Members of the Board of Directors and Executive Officers, all of our Directors and executive officers have a duty to report to the Chairman or the Lead Director potential conflicts of interest, including transactions with related persons. Management also has established procedures for monitoring transactions that could be subject to approval or ratification under the Policy on Transactions with Related Persons.
Once a related person transaction has been identified, the Nominating & Corporate Governance Committee will review all of the relevant facts and circumstances and approve or disapprove of the entry into the transaction. The Committee will take into account, among other factors, whether the transaction is on terms no more favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction.
If advance Committee approval of a transaction is not feasible, the transaction will be considered for ratification at the Committee’s next regularly scheduled meeting. If a transaction relates to a member of the Committee, that member will not participate in the Committee’s deliberations. In addition, the Committee Chairman (or, if the transaction relates to the Committee Chairman, the Lead Director) may pre-approve or ratify any related person transactions involving up to $1 million.
 
 
 
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 the company for service as a Director or executive officer of the company
 
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
Contributions by the company 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 company 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 party performing similar banking services
 
 
 
 
 
 
Our Policy on Transactions with Related Persons can be found at www.investor.jnj.com/gov.cfm.

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 33


Transactions with Related Persons for 2018
A sister-in-law of Paulus Stoffels, Vice Chairman of the Executive Committee and Chief Scientific Officer, is a Senior Manager at Janssen Pharmaceutica NV, a wholly-owned subsidiary of the company, and earned $169,937 in total compensation in 2018 (using an exchange rate of 1.1418 USD/1 EUR), including base salary, any annual incentive bonus, the value of any long-term incentive award granted in 2018, and any other compensation. She also participates in the general welfare and benefit plans of Janssen Pharmaceutica NV. Her compensation was established in accordance with Janssen Pharmaceutica NV’s employment and compensation practices applicable to employees with equivalent qualifications and responsibilities and holding similar positions. Dr. Stoffels does not have a material interest in his sister-in-law’s employment, nor does he share a household with her.
Two sons of Dominic Caruso, a retired Executive Vice President, Chief Financial Officer, are employed by subsidiaries of the company. One is a Senior Manufacturing Team Leader at Janssen Biotech, Inc., a wholly-owned subsidiary of the company, and earned $125,580 in total compensation in 2018, including base salary, any annual incentive bonus, the value of any long-term incentive award granted in 2018, and any other compensation. Another son is a Manager of Contract Strategy and Analytics at Johnson & Johnson Health Care Systems Inc., a wholly owned subsidiary of the company, and earned $147,965 in total compensation in 2018, including base salary, any annual incentive bonus, the value of any long-term incentive award granted in 2018, and any other compensation. Both employees also participate in the general welfare and benefit plans of their employers. The compensation for each son was established in accordance with their respective company’s employment and compensation practices applicable to employees with equivalent qualifications and responsibilities and holding similar positions. The senior Mr. Caruso does not have a material interest in his sons’ employment, nor does he share a household with either of them.
A sister of Joseph J. Wolk, Executive Vice President, Chief Financial Officer, is a Talent Mobility Advisory Services Leader at Johnson & Johnson Services, Inc., a wholly-owned subsidiary of the company, and earned $184,119 in total compensation in 2018, including base salary, any annual incentive bonus, the value of any long-term incentive award granted in 2018, and any other compensation. She also participates in the general welfare and benefit plans of Johnson & Johnson Services, Inc. Her compensation was established in accordance with Johnson & Johnson Services, Inc.’s employment and compensation practices applicable to employees with equivalent qualifications and responsibilities and holding similar positions. Mr. Wolk does not have a material interest in his sister’s employment, nor does he share a household with her.
These transactions were approved by the Nominating & Corporate Governance Committee in compliance with our Policy on Transactions with Related Persons described on the preceding page.


jnjlogoredtransp.gif
2019 Proxy Statement - 34
 
 



STOCK OWNERSHIP AND SECTION 16 COMPLIANCE
Stock Ownership
The following table sets forth information regarding beneficial ownership of our common stock by each Director and nominee for election; our Chief Executive Officer, Chief Financial Officer and the three other most highly compensated executive officers named in the tables in the section “Executive Compensation Tables” on pages 69 through 91 (each a “named executive officer”); and by all Directors and executive officers as a group. Each of the individuals/group listed below is the owner of less than 1% of our outstanding shares. Because they serve as co-trustees of Johnson family trusts which hold stock for the benefit of others, Mr. Gorsky and Mr. Michael Ullmann, an executive officer, are deemed to “control” an additional 5,534,197 shares of our stock in which they have no economic interest, and those shares are not reflected in the table below. In addition to such shares, the Directors and executive officers as a group own/control a total of 1,256,909 shares. In the aggregate, these 6,791,106 shares represent less than 1% of the shares outstanding. All stock ownership is as of February 26, 2019.
 
 
 
 
 
 
 
 
 
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

 
6,222

 
0

 
6,222

 
D. Scott Davis
0

 
7,921

 
0

 
7,921

 
Ian E. L. Davis
4,193

 
13,007

 
0

 
17,200

 
Jennifer A. Doudna(4)
0

 
1,402

 
0

 
1,402

 
Joaquin Duato
115,353

 
0

 
616,123

 
731,476

 
Alex Gorsky
391,034

 
0

 
2,113,180

 
2,504,214

 
Marillyn A. Hewson
0

 
0

 
0

 
0

 
Mark B. McClellan
0

 
9,884

 
0

 
9,884

 
Anne M. Mulcahy
6,537

 
13,007

 
0

 
19,544

 
William D. Perez
18,222

 
24,254

 
0

 
42,476

 
Charles Prince
29,320

 
19,576

 
0

 
48,896

 
Paulus Stoffels(5)
231,516

 
0

 
345,455

 
576,971

 
Michael H. Ullmann
135,048

 
0

 
370,850

 
505,898

 
A. Eugene Washington
0

 
19,002

 
0

 
19,002

 
Ronald A. Williams
3,650

 
20,360

 
0

 
24,010

 
Joseph J. Wolk
15,716

 
0

 
44,616

 
60,332

 
All Directors and executive officers as a group (21)(6)
1,256,909

 
134,635

 
4,685,819

 
6,077,363

 
(1) 
The shares described as "owned" are shares of our common stock directly or indirectly owned by each listed person, including shares held in the 401(k) and Employee Stock Ownership Plans, and by members of his or her household, and are held individually, jointly or pursuant to a trust arrangement. Mr. Prince disclaims beneficial ownership of 800 shares listed as owned by him.
(2) 
Includes Deferred Share Units credited to non-employee Directors under our Amended and Restated Deferred Fee Plan for Directors and Deferred Share Units credited to the executive officers under our Executive Income Deferral Plan (Amended and Restated).
(3) 
Includes shares underlying options exercisable on February 26, 2019, options that become exercisable within 60 days thereafter and Restricted Share Units that vest within 60 days thereafter.
(4) 
Became a member of the Board in April 2018.
(5) 
On October 18, 2018 the Board of Directors approved the Johnson & Johnson Policy Against Pledging Company Stock. This policy prohibits the pledging of Johnson & Johnson shares by Directors and executive officers. Prior to adopting the new anti-pledging policy, Dr. Stoffels had pledged 30,000 shares as security. The Compensation & Benefits Committee grandfathered this pledge. See the Policy Against Pledging Company Stock at http://www.investor.jnj.com/gov.cfm.
(6) 
The sum total of all Directors and executive officers as a group does not include shares held by the Director nominee, or the shares held by the former named executive officers, Dominic J. Caruso and Sandra E. Peterson, both of whom retired in 2018.

 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 35


The following are the only persons known to us to be the beneficial owners of more than five percent of any class of our voting securities:
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
221,324,574 shares(1)
8.25%(1)
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
Common Stock
183,775,823 shares(2)
6.90%(2)
State Street Corporation
State Street Financial Center
One Lincoln Street
Boston, MA 02111
Common Stock
151,719,201 shares(3)
5.70%(3)
(1)    Based solely on an Amendment to Schedule 13G filed with the SEC on February 11, 2019, The Vanguard Group reported aggregate beneficial ownership of approximately 8.25%, or 221,324,574 shares, of our common stock as of December 31, 2018. Vanguard reported that it possessed sole dispositive power of 217,616,214 shares, sole voting power of 3,152,574 shares, shared dispositive power of 3,708,360 shares, and shared voting power of 623,729 shares.
(2)    Based solely on an Amendment to Schedule 13G filed with the SEC on February 11, 2019, BlackRock, Inc. reported aggregate beneficial ownership of approximately 6.90%, or 183,775,823 shares, of our common stock as of December 31, 2018. BlackRock reported that it possessed sole voting power of 159,297,187 shares and sole dispositive power of 183,775,823 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 13, 2019, State Street Corporation reported aggregate beneficial ownership of approximately 5.70%, or 151,719,201 shares, of our common stock as of December 31, 2018. State Street reported that it possessed shared voting power of 134,921,502 shares and shared dispositive power of 151,675,858 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 33 of this Proxy Statement.
Certain of our U.S. and international employee savings and retirement plans and other affiliates have retained BlackRock and its affiliates to provide investment management services. In connection with these services, we paid BlackRock approximately $2.9 million in fees during fiscal year 2018.
Certain of our U.S. and international employee savings and retirement plans and other affiliates have retained State Street and its affiliates to provide investment management, trustee, custodial, administrative and ancillary investment services. In connection with these services, we paid State Street approximately $7 million in fees during fiscal year 2018.

Section 16(a) Beneficial Ownership Reporting Compliance
Based on our review of Forms 3, 4 and 5 and amendments thereto in our possession and written representations furnished to us, we believe that during 2018 all reports for our executive officers and Directors that were required to be filed under Section 16 of the Securities Exchange Act of 1934 were filed on a timely basis, except that a Form 4 regarding a de minimis transaction was filed late for Ms. McEvoy due to an administrative oversight. Promptly after being informed of the omission, a Form 4 reporting the correct number of shares was filed for Ms. McEvoy. Also, upon becoming subject to Section 16 in July 2018, a Form 3 was filed for Mr. Sneed with the SEC on a timely basis that inadvertently failed to include 9,750 shares of Johnson & Johnson common stock held in a brokerage account. Promptly after being informed of the omission, an amendment to the Form 3 reporting the correct number of shares was filed for Mr. Sneed.


jnjlogoredtransp.gif
2019 Proxy Statement - 36
 
 



DIRECTOR COMPENSATION
Our Compensation & Benefits Committee is required by its charter to annually review non-employee Director compensation, including total compensation and each element of our non-employee Director compensation program.
During its annual review, the Compensation & Benefits Committee analyzes the competitive position of our non-employee Director compensation program and each element of that program against the programs of the peer group used for executive compensation purposes (see page 62 for information about the Executive Peer Group). Frederic W. Cook & Co., Inc., the Committee’s independent consultant, provides an independent assessment of the competitive data provided to the Committee and advises the Committee on non-employee Director compensation. Decisions regarding the non-employee Director compensation program are approved by our full Board of Directors, based on recommendations by our Compensation & Benefits Committee.
Fiscal 2019 Non-Employee Director Compensation
The Compensation & Benefits Committee’s analysis in 2018 of the competitive position of our non-employee Director compensation program showed that overall compensation for non-employee Directors and the retainer for the Lead Director were below the peer group median. As a result, our Compensation & Benefits Committee recommended, and our Board of Directors approved on September 11, 2018, the following non-employee Director compensation program for 2019 to achieve an overall compensation structure in line with the peer group median:
2019 Non-Employee Director Compensation
       ($)
Cash Compensation(1)
$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
(1) Increase of $5,000
 
Fiscal 2018 Non-Employee Director Compensation
The Compensation & Benefits Committee’s analysis in 2017 of the competitive position of our non-employee Director compensation program showed that overall compensation for non-employee Directors and the retainer for the Lead Director were below the peer group median. As a result, our Compensation & Benefits Committee recommended, and our Board of Directors approved on September 12, 2017, the following non-employee Director compensation program for 2018 to achieve an overall compensation structure in line with the peer group median.
2018 Non-Employee Director Compensation(1)
       ($)
Cash Compensation
$115,000
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
(1) See columns C and D of the table on the following page.
 


 
 
jnjlogoredtransp.gif
2019 Proxy Statement - 37


The compensation of our non-employee Directors for fiscal 2018 is set forth in the following table. Mr. Gorsky is an employee of the company, and therefore, received no additional compensation for his service as a Director. For a complete understanding of the table, please read the accompanying footnotes and the narrative disclosures.
 
2018 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
$135,000
$184,940
$20,000
$339,940
D. S. Davis
Audit Committee Chair
140,000
184,940
0
324,940
I. E. L. Davis
 
115,000
184,940
0
299,940
J. A. Doudna(1)
 
78,768
0
0
78,768
M. B. McClellan
 
115,000
184,940
0
299,940
A. M. Mulcahy
Lead Director
150,000
184,940
20,000
354,940
W. D. Perez
Committee Chair
135,000
184,940
20,000
339,940
C. Prince
Committee Chair
135,000
184,940
20,000
339,940
A. E. Washington
 
115,000
184,940
20,000
319,940
R. A. Williams
Committee Chair
135,000
184,940
20,000
339,940
(1) Elected as Director in April 2018.
 
 
 
 
Fees Earned or Paid in Cash (Column C)
Elective Fee Deferrals. As described below, under the Deferred Fee Plan for Directors, non-employee directors may elect to defer payment of all or a portion of their cash retainers until termination of board membership. In 2018, Dr. Washington and Mr. Williams elected to defer their 2018 cash retainers.
Stock Awards (Column D)
Deferred Share Units - Mandatory Deferral.  All figures in column D represent the grant date fair value of Deferred Share Units (DSUs) granted to each non-employee Director on February 13, 2018. The Board approved a 2018 DSU award valued at $185,000; therefore, pursuant to the terms of the Deferred Fee Plan for Directors, each non-employee Director was granted 1,428 DSUs (rounded down to the nearest whole share). DSUs are immediately vested but must be deferred until the Director completes service as a Board member. DSUs earn additional amounts based on a hypothetical investment in our common stock, including accruing dividend equivalents in the same amount and at the same time as dividends paid on our common stock. DSUs are settled in cash upon termination of Board membership.
All Other Compensation (Column E)
Charitable Matching Contributions. The amounts reported in column E represent the aggregate dollar amount for each non-employee Director for charitable matching contributions. Non-employee Directors are eligible to participate in our charitable matching gift program on the same basis as employees, pursuant to which we contribute, on a two-to-one basis for every dollar donated, up to $20,000 per year per person to certain charitable institutions.


jnjlogoredtransp.gif
2019 Proxy Statement - 38
 
 



Deferred Fee Plan for Directors
Elective Fee Deferrals. Under the Deferred Fee Plan for Directors, non-employee Directors may elect to defer payment of all or a portion of their cash retainers until termination of Board membership. Deferred fees are converted into DSUs, and earn additional amounts based on a hypothetical investment in our common stock, including accruing dividend equivalents in the same amount and at the same time as dividends paid on our common stock. DSUs are settled in cash upon termination of Board membership. In 2018, Dr. Washington and and Mr. Williams elected to defer all of their cash 2018 retainers.
Deferred Compensation Balances. At December 31, 2018, the aggregate number of DSUs held in each non-employee Director’s Deferred Fee Account, including both mandatory deferrals and any elective fee deferrals, as well as dividend equivalent accruals, was as follows: 
Name
Deferred Share Units (#)
M. C. Beckerle
4,820
D. S. Davis
6,519
I. E. L. Davis
11,605
J. A. Doudna
0
M. B. McClellan
8,482
A. M. Mulcahy
11,605
W. D. Perez
22,852
C. Prince
18,174
A. E. Washington
17,600
R. A. Williams
18,958

Additional Arrangements
We pay for or provide (or reimburse Directors for out-of-pocket costs incurred for) transportation, hotel, food and other incidental expenses related to attending Board and Committee meetings and Director orientation or other relevant educational programs or company meetings.
Stock Ownership Guidelines for Non-Employee Directors
The company’s stock ownership guidelines for non-employee Directors are intended to further align the Directors' interests with the interests of our shareholders. Stock ownership for the purpose of these guidelines includes shares directly owned by the Director, shares held indirectly that are beneficially owned by the Director, and DSUs. All Directors are prohibited from transacting in derivative instruments linked to the performance of our securities.
Name
Stock Ownership Guideline as a Multiple of Annual Cash Retainer
2018 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