WSJ Under-Estimates J&J CEO Weldon’s Walk-Away Package By 38 Percent. . .


. . .But, at $197 Million, Weldon’s is still almost 20 percent smaller than Ex-CEO Fred Hassan’s was, as granted at the end of 2009!

And Mr. Weldon — say whatever else you like aout the man, but he worked for 40 years to earn it. Hassan? A little more than five years. [So, Weldon worked eight times longer to earn about 20 percent less.]

The MSM reports calculate only the cash values for soon to be Ex-CEO Weldon, not the present value of his stock options, at today’s NYSE closing price for J&J of $65.08. So, that — plus the vesting of his February 2012 JNJ RSUs and Stock Option awards [see page 45 of the link (but such amounts are ommitted from the year end 2011 proxy, on which the WSJ relied)] — add about $53.47 million to the Weldon walkaway haul.

But even so — it is still well shy of Fred Hassan’s deal, just as Ex-CEO Clark’s deal (after 36 years at legacy Merck) was dwarfed by Hassan’s $235 million, all-in — for five years of mismanagement. From tonight’s Wall Street Journal reporting, then:

. . . .CEO Weldon’s pension valued at $48.4 million, deferred compensation at $95.1 million

J&J says Weldon earned benefits over a 40-year career

J&J changes executive-pay practices after shareholder-advisory vote last year

J&J spokesman Al Wasilewski said Weldon, who started working at the company in 1971, earned his post-retirement benefits over “a very long career at J&J, 10 of those years as CEO.”

Weldon, who will be succeeded as CEO by Vice Chairman Alex Gorsky, stands to collect benefits from two main buckets. The present value of his accumulated pension benefit is $48.4 million, portions of which are paid out as a monthly annuity for life, according to a proxy statement filed Wednesday with the Securities and Exchange Commission.

Weldon’s pension value ranks well into the top 10% of CEOs of S&P 500 companies, said Paul Hodgson, chief communications officer and senior research associate at GMI Ratings, which tracks corporate-governance information.

In addition, Weldon has accumulated $95.1 million in nonqualified deferred-compensation plans. This represents portions of his salary and bonus that have been deferred in prior years, as well as company contributions to savings plans. Parts of his deferred compensation have been recorded each year as part of Weldon’s total annual compensation.

Of the $95.1 million, more than $70 million represents Weldon’s accumulated balance from a legacy cash incentive plan that J&J has discontinued and replaced with a new executive-compensation plan. This amount would be paid to Weldon at retirement, Wasilewski said. All deferred compensation is subject to taxes. . . .

Here is my spread sheet [an Excel file] on his option- and RSU- values, by the way. Break out your tiny violins, folks. But — if you do — be sure not to play them for Mr. Hassan. Sheesh.

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