Johnson and Johnson

Johnson & Johnson CEO Alex Gorsky’s total compensation grew 20 percent in 2020 to $29,575,974. This growth happened despite the negative financial impact of litigation from the company’s role in the opioid crisis, which has totaled $5 billion in fines and fees over the past two years. This massive expense, nearly a third of the company’s 2020 net income, was inappropriately excluded from executive compensation calculations.

In April, the Office of Illinois State Treasurer issued a filing with the U.S. Securities and Exchange Commission, urging Johnson & Johnson’s shareholders to vote against pay, arguing that the decision to exclude these litigation costs “insulate[s] named executives from the fallout of Johnson & Johnson’s role in the opioid crisis” and “boosts payouts by more than $2 million over the past two years” for the CEO.

This follows a trend of recent shareholder opposition to payment packages of drug distributors involved in the opioid crisis, such as AmerisourceBergen and Cardinal Health, where 48% and 39% of shareholders opposed pay this year, respectively. While Johnson & Johnson has denied any part of fueling the crisis, which has claimed the lives of nearly 450,000 in the United States between 1999 and 2018, the company is subject to “thousands of lawsuits filed by state, local and tribal governments across the country” related to its conduct in marketing opioid products.

Both Glass Lewis and ISS have recommended against the pay proposal at the company, which is likely to face high opposition at the company’s annual meeting.