Johnson & Johnson CEO Takes 14% Pay Cut Amid Strategic Restructuring
Johnson & Johnson
Medical Device R&D and Manufacturer
Source: Medical Device Business Review
Author: Yu Bai
In the medicalIn the technology industry, the battle for top talent has escalated into one of the core battles determining the survival of enterprises.
As the saying goes, "A thousand soldiers are easy to find, but a good general is hard to come by." For large-scale, mature listed companies that have withstood the test of many years, the salary situation of the top leaders at the pyramid's peak is closely related to the company’s development.
As a result, executive compensation and even the entire company's compensation structure have become important areas of focus for investors.
On March 12, 2025, according to foreign media reports, the global healthcare giantJohnson & Johnson Chairman and CEO Joaquin Duato's total compensation in 2024 was $24.3 million.A decrease of 14% from the previous year's $28.4 million.
Source: FIERCE Pharma
Du Anqing is the overall head of Johnson & Johnson's two major segments, "Medical Devices" and "Pharmaceuticals," and this is his third year at the helm of Johnson & Johnson, succeeding former CEO Alex Gorsky.
In terms of salary structure, one of the main reasons for Du Anqing's "forced pay cut" this time is the year-by-year change in the calculation of the chief executive officer's pension value.
According to regulatory documents, hisPensionThe value is expected to increase by $6.2 million in 2023, while in 2024, it will only grow by $2.7 million.
ItsBonusAlso decreased, from $4.4 million in 2023 to $4 million last year, while equity awards fell year by year from $16 million to $15.7 million.
In addition, another major variable in compensation is closely related to the "security upgrade" incident.
The shooting of UnitedHealth CEO Brian Thompson in New York in December 2024 served as a wake-up call for executives in the U.S. healthcare industry.
Johnson & Johnson now requires its CEO to be in place starting from December 2024.All personal and business travel using company aircraft。
Documents reveal that last year, the company spent $145,381 on private jet usage for Du Anqing and $102,779 on home security services.
The Johnson & Johnson Board believes that, in view of the nature of the healthcare business and the company's internal review of safety protocols and risks, "executives should not face personal risks due to their association with the company."It is very important to provide family and personal safety for our designated executives.”。
It is worth mentioning that,After the CEO's compensation adjustment this time,Johnson & Johnson CEO's pay reached 293 times the average employee's compensation, down from a ratio of 338:1 the previous year.
Johnson & Johnson said that the proportion might be a conservative estimate.The actual pay gap between CEOs and ordinary employees may be smaller.
Behind the CEO Du Anqing's pay cut, the compensation of other executives also saw declines to varying degrees:
The Second-Highest Paid Executive at Johnson & Johnson in 2024 isExecutive Vice President and Chief Financial Officer Joseph Wolk, with a salary of $12.6 million, compared to $13.9 million from the previous yearDecrease by 9%。
Johnson & Johnson ExecutionVice President and Global President of Innovative MedicineJennifer Taubert's total compensation for 2024 was $11.2 million, up from $11 million in the previous year.Decrease by 2%。
Johnson & JohnsonExecutive Vice President of Innovative Drugs and R&DJohn ReedThe total compensation was $9.3 million, down from $20.6 million the previous year.Decreased by 55%(Including a $5.7 million signing bonus and $11.7 million in stock awards).
However, among them, Tim Schmid, the head of Johnson & Johnson MedTech, seems to be an exception.
In addition, he received approximately $4.1 million in other compensation, primarily to cover his relocation expenses from Singapore to the United States.
He joined Johnson & Johnson in 1993 and has worked for the company for a full 30 years, serving as Vice President of Johnson & Johnson in Europe, the Middle East, and Asia, President of Ethicon (the largest division of Johnson & Johnson), Chief Strategic Customer Officer of Johnson & Johnson Medical, and more.
In October 2023, Johnson & Johnson Medical officially announced the appointment of Tim Schmid, then Chairman of the Asia-Pacific region residing in Singapore, as its new leader.Global ChairmanAlsoExecutive Vice President。
Last year, Johnson & Johnson's total revenue was $88.8 billion.Among which, the sales of the medical technology department were 31.8 billion US dollars.
Medical technology has become an important part of Johnson & Johnson's growth strategy.
As strategic importance rises and a new leader takes office, the medical technology department is pushing forward with comprehensive changes in a bold and sweeping manner.
After redesigning the logo, Johnson & Johnson MedTech announced in 2024 that it would no longer emphasize the sub-brand names Cerenovus, Ethicon, DePuy Synthes, Biosense Webster, and Abiomed, but instead unify them under Johnson & Johnson MedTech.
The update of the logo and the removal of the name are not only for the "out with the old, in with the new" image but also driven by the company's new development direction and strategy.
From divesting its consumer health business, to selling Acclarent, the world's largest provider of balloon sinus dilation devices, as well as the entire Blink product line, and thenInvest$700 million to $800 millionTheReorganization of Orthopedic Business。These series of measures represent a shift from diversified expansion to focusing on core business, as well as a transition from scale-oriented to value creation.
By optimizing its product portfolio, focusing on flagship brands, tapping into high-return markets, and now refining salary structures, this century-old healthcare giant is reshaping its growth engine.
Johnson & JohnsonThe transformation journey is not only a business adjustment but also a profound response to the future development trends of the healthcare industry.
In today's increasingly competitive industry, only through continuous innovation, precise focus, and fully unleashing internal potential can one seize the initiative in times of change and achieve long-term success.
The content of this article is for reference only and does not constitute investment advice. Readers are expected to effectively distinguish.If any platform reprints this article, it must take responsibility for the content of the article. Medical Device Business Review is not responsible for the impact of secondary dissemination caused by the reprint.
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