The fight over Johnson & Johnson CEO Alex Gorsky’s $30 million payday is heating up. The state of Illinois, charitable organization OxFam and several religious organizations have filed letters with the Securities and Exchange Commission opposing his pay.
The letters urge shareholders to vote no on a “say on pay” proposal set for consideration at J&J’s annual shareholder meeting on April 22. Officials in Illinois, which owns J&J stock in its municipal retirement fund, take issue with how the company computed Gorsky’s 2020 pay. They said it is unfair to exclude the billions of dollars the pharmaceutical company has paid to settle legal claims related to its role in the opioid epidemic. Illinois is asking J&J to cut Gorsky’s pay by at least $2 million.
“We support compensation plans that reward executives for such laudable achievements as vaccine development despite the recent recommendation from the Centers for Disease Control and Prevention and the U.S. Food and Drug Administration to pause the use of the Janssen vaccine in response to rare adverse reactions involving blood clots,” states the letter, which was written by Illinois’s treasurer. “Compensation plans work more effectively when they take both successes and failures into account.”
Earlier this year, two influential investor advisory firms also urged shareholders of the pharmaceutical giant to make the company claw back some of Gorsky’s pay package.
Institutional Shareholder Services in early April joined rival advisory firm Glass Lewis in recommending that J&J investors vote to reject Gorsky’s compensation deal at the company’s annual shareholder gathering this month. ISS said J&J’s corporate governance was poor, giving it a 7 rating on a scale of 1 to 10, where 1 is the best. On compensation alone, ISS gave J&J a rating of 9, close to its lowest.