Johnson & Johnson Freezes Salaries and Cuts Yearly Bonuses
Times are tough in the financially-struggling.jpg)
pharmaceutical industry and seemingly getting tougher.
First, Bristol-Myer Squibb (BMS) announced last week that it will freeze salaries but not cut yearly performance bonuses for its employees. One week later, Johnson & Johnson (J&J)—a company known not to be upstaged or outdone by a competitor—is planning on cutting the yearly performance-bonuses for 38% of its workforce and will freeze the salaries of certain other employees.
While BMS publicly announced its salary freeze, J&J plans were uncovered in an internal announcement and other company documents obtained by The Wall Street Journal. According to the Journal article, “The health-care giant told employees Jan. 25 that it is making the moves to standardize compensation across its various businesses and regions, thereby making it easier for its workers to move around within the company. In the U.S., the changes will bring bonus targets in line with market levels, one document said.”
Interestingly, J&J hasn't yet reported its CEO, William Weldon’s compensation for last year. In 2009, Mr. Weldon turned down a salary raise. His total compensation in 2008 fell 4.1% from the year before to $29.4 million, according to the most recent regulatory filing.
The salary freeze and bonus cuts help to explain why a good friend and lifelong J&J employee (25 years and counting) wasn’t too keen on the company during a visit earlier this week. During a conversation, in which I unknowingly lauded J&J’s treatment of its employees, my friend quipped “Looks can be deceiving; J&J is like every other big corporation. People really don’t matter—it’s all about P&L”
Until next time...
Good Luck and Good Job Hunting!!!!
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The Pharmalot blog authored by the intrepid Ed Silverman (1).jpg)
Roche announced Tuesday that it will replace Arthur Levinson, PhD, Genentech’s current CEO and American biotechnology pioneer, with Pacal Soriot, DVM, MBA who currently leads Roche’s worldwide commercial operations. Dr. Levinson will become Chairman of Genentech’s newly configured board of directors but no longer have control over day-to-day operations at the company. Mr. Soriot will become CEO of Genentech and head all of Roche’s pharmaceutical activities in the US. Some of the other changes that will occur at the company include: Susan Desmond-Hellmann, Genentech’s president of product development, will move into an advisory role after the middle of this year. Genentech CFO David Ebersman is leaving the company and Ian Clark, who heads commercial operations for Genentech, will be chief marketing officer of Roche’s pharma division..jpg)
The ink hasn’t had time to try on the deal sheet and Pfizer already has announced what the impact of its acquisition of Wyeth will have on the combined company. Here’s what to expect: Pfizer will shed at least 19,000 jobs from it newly combined work force of 128,000 employees; it will slash its stock dividend by 50%; and it will take a $2.3 billion charge to settle a federal investigation over off label promotion of its former pain drug Bextra. 
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Glassdoor.com a site that allows people to rate CEO and company performance selected .jpg)
Do you ever wonder what the person who you share an office with is making? Or, have you ever wondered what other people think about the CEO of your company? Or, should I consider working at that company? The answers to these questions and more can now be found at a 4-month old website called .jpg)
Oh, what a difference a couple of years or results from a pivotal clinical trial can have on a company’s financial outlook. As you may recall in 2005, Merck was in a shambles after the Vioxx scandal broke. Its CEO was ousted, its stock was trading at less than $35 per share and employee morale was at an all time low. After two short years, Richard Clark, a life-long Merck employee, was able to turn the company around. Merck’s stock reached a high of almost $61 last December and many of its employees were dancing in the streets of Rahway because their stock options were now worth more than the paper that they were printed on. But, like many things in life, all good things must come to an end..jpg)
Over the past 30 years or so, the vast majority of chief executives in the drug business have made their way to the top via the sales and marketing departments. Few senior executives have toiled in a research laboratory or for that matter, know the difference between NMR and protein purification. However, things may be changing in the industry. A quick perusal of the CEOs of the top 20 pharmaceutical and biotechnology companies (see below) reveals that 11 of 20 have degrees in engineering (4), medicine (2) and science (5). The remaining 9 have degrees in business and finance (3), sales and marketing (4) or law (2). Several of the scientists (2), engineers (3) and one physician also earned MBA degrees.
