Mesh Medical Device News Desk, April 30, 2017 ~ At this year’s annual J&J shareholders meeting, CEO Alex Gorsky promised that the company puts patients first.
Protesters outside in the streets shared a different view.
But did shareholders even see or did they care?
While about 30 protesters lined the streets, shouting and holding posters with messages of “J&J Hurts Women,” across the street, people filed off buses and into Johnson & Johnson’s 2017 annual shareholders meeting.
The 90-minute meeting was held in the historic State Theater in downtown New Brunswick, New Jersey, home of J&J, with a theme of corporate sustainability and a focus on patients.
The women, and their family members, gathered by the online group MAM (Mesh Awareness Movement) had been implanted with J&J’s transvaginal mesh, which is facing more product liability lawsuits than any of six other mesh makers.
They were kept across from the theater behind metal barricades. No shareholders appeared to approach the crowd.
Out of the second floor windows of the theater, however, curtains were parted by onlookers.
One man appeared to have a large camera recording the rally.
One woman sitting nearby expressed her disgust with the protesters. “Why don’t they just get jobs,” she asked.
Maybe they had jobs but lost them, I suggested.
She was not dissuaded from her opinion.
LET THE DOGS AND PONIES BEGIN
But this was not a day for stories of litigation losses but for uplifting messages of profitability and people.
The gathering brought about 250 investors and J&J executives into the auditorium to be greeted with a full-wall video montage of the multitude of J&J products, from baby lotion to Listerine, Neutrogena to Roc, Tylenol, Aveeno, Benadryl and Band-Aid, among others pictured in the “family album.”
“No wonder the media doesn’t cover this story,” said the metal J&J hip recipient sitting next to me.
CEO Alex Gorsky came out on stage for opening remarks which included welcoming members of the Johnson family who were in the audience.
Mr. Gorsky introduced the corporate “family” including Dominic Caruso- CFO; Joaquin Duato- Chair Pharmaceuticals; Peter Fasolo- HR; Sandra Peterson -Group Worldwide chair; Paul Stoffels, MD- Chief Science officer; Kathy Wengel – Supply chain; Gary Pruden- Worldwide Chair of Medical Devices, who, after a 32-year career climbing up the ladder of J&J in sales, marketing, Janssen Pharmaceuticals, and medical devices, is stepping down June 1.
There was no mention of his tenure punctuated by the Risperdal scandal, 50,000 transvaginal mesh lawsuits, as well as the medical device Acclarent and its $18 million DOJ fine. (See more on Killing My Career).
With more than two billion shares, the company had received enough proxy motions to have a forum. Here are the Proxy Materials shareholders voted on.
At issue was the confirmation of the 10 nominees for the Johnson & Johnson Board of Directors. Most came from other industries such as United Parcel Service, Rolls-Royce, Xerox Wrigley Citigroup, and Aetna.
They were considered a shoe-in and approved.
Shareholders also voted on whether the role of CEO should be separate from the Board of Directors. Half of the S&P companies have evolved to this model which was encouraged by Cathy Rowan, representing the Interfaith Center for Corporate Responsibility, who was given two minutes to addressed the crowd.
Gorsky said that proposal could limit board’s ability to choose best person suited for the role at any particular time. He recommended shareholders to vote against that proposal, which they did.
Another board proposal was that executive compensation be awarded every year, as opposed to every two or three years.
That too passed.
Gorsky’s compensation is reported to be about $21 million annually.
CEO Gorsky reported the first quarter J&J results were solid (here). The board voted to increase the quarterly dividend by 5 percent, from 80 cents to 84 cents per share.
Another video break with video snippets of financial reporters, including Jim Cramer of Mad Money on CNBC, gushing over J&J as the company to invest in.
Gorsky pronounced the J&J Credo, CRAY-doh, like Playdoh. Here it is.
For 70 years, J&J has considered patients and customers as its first responsibility. “Sustainable results,” and “Always put people first,” is part of the company public relations.
Other accolades include the dedication of resources to create tomorrows’ breakthroughs.
FREE CASH FLOW
The goal to grow earnings faster than sales was met in 2016, reported Mr. Gorsky.
With strong cash flow the company can capitalize on the opportunities.
“We start with funding our internal growth initiatives – research and development $9 billion in 2016. For the remaining free cash flow of $15.5 billion, our first priority is to deliver a competitive dividend to our shareholders which has been done for 55 consecutive years.”
The goal of Janssen Pharmaceuticals is to launch 10 products by 2019, each with $10 billion in potential annual sales.
The medical device division plans to accelerate growth as well.
“We are driving growth in priority platforms, implementing novel new models with plans to grow the medical device division by doubling the new products with 12 major launches set for 2017,” said the CEO.
The Citizenship and Sustainability reports to the company in five key areas-global disease challenges, essential surgery, women and children health, healthy work force and environmental health.
The J&J Bioethics Committee, is now leading clinical trials through the Yale Open Data process. More transparency on how we operate to address the important issue of us healthcare costs.
We are committed to always putting people first, he said. It’s evidence among 130,000 employees around the world. J&J often cited as a best company to work for, as recently cited by Fortune Magazine (here).
MINDFUL AND GRATEFUL
Alex Gorsky repeated the phrases “mindful” and “grateful” often.
He is grateful to be the CEO of J&J, grateful to billions of healthcare workers who trust our products every day and he is grateful to the Board of Directors and shareholders. And he is incredibly confident in the continued success of Johnson and Johnson.
The presentation ended with a black and white video montage of tight shots of faces, voiced by a Donald Sutherland-type voice over accolades and inspirational statements about improving billions of lives.
“That changes everything for everyone on earth.”
When the announcement of the vote was announced the webcast ended. Shareholders at home would never listen to the questions from the audience, which were not scripted.
But that was time to take to the two microphones on either side of the auditorium.
One person from PETA asked about the ethical use of animals for product testing.
Another asked about the protesting people outside and the potential for protracted litigation.
An elderly woman was very concerned that J&J didn’t have tough enough lawyers to deal to fight the millions mounting in talcum powder trial losses.
Most questions were met with deflection and assurances the company is working on the issues.
A young woman with two metal Pinnacle hips, made by J&J, expressed concern to Mr. Gorsky about her future. Her cobalt and chromium levels are elevated. Her family is suffering, she’s lost her job as a news anchor. Doctors turn her away.
She asked the company for any professional help and guidance on how to deal with the complications from the implanted prosthesis.
She was promised someone from the company would call her.
No one ever did.
Mr. Gorsky told her afterward that he too had a hip prosthesis. Metal, she asked? No, he said.
(Pinnacle metal-on-metal hips have been removed from the market. The company now makes ceramic or plastic hip prosthesis.)
At the close of the day, J&J’s share was $123.74 and on an upswing. ###