8-KMaterial Agreements

JOHNSON & JOHNSON 8-K Report, Material Agreement (Feb 18, 2005)

Filed February 18, 2005For Securities:JNJ

Summary

This Form 8-K filing from Johnson & Johnson (JNJ) dated February 17, 2005, details material definitive agreements related to executive and director compensation. The Compensation Committee finalized compensation for Named Executive Officers for 2004, including base salaries, performance bonuses, stock options, and long-term incentive awards. Notably, it outlines salary adjustments effective February 28, 2005, for key executives like Chairman/CEO William C. Weldon and Vice Chairman/CFO Robert J. Darretta, along with their bonus payouts and stock option grants. The filing also introduces a new 2005 Long Term Incentive Plan for Non-Employee Directors, which will be submitted for shareholder approval. This plan replaces stock option grants with annual equity awards (restricted or deferred stock) and includes a one-time grant of common stock for new directors. Changes to the Deferred Fee Plan for Non-Employee Directors were also approved, primarily removing the mandatory deferral of a portion of director fees. These updates signal a strategic shift in how executive and director compensation is structured and awarded.

Key Highlights

  • 1Johnson & Johnson's Compensation Committee approved 2004 compensation for Named Executive Officers, including base salaries, cash/stock bonuses, and stock option grants.
  • 2Effective February 28, 2005, Chairman/CEO William C. Weldon's base salary was set at $1,600,000 and Vice Chairman/CFO Robert J. Darretta's at $990,000.
  • 3Significant bonus payments were awarded for 2004 performance, with Mr. Weldon receiving $2,500,000 and Mr. Darretta receiving $874,500.
  • 4Stock option grants were issued with an exercise price of $66.18, exercisable from February 15, 2008, and expiring on February 13, 2015.
  • 5A new 2005 Long Term Incentive Plan was approved for Non-Employee Directors, shifting away from stock options to annual equity awards, pending shareholder approval.
  • 6Changes to the Deferred Fee Plan for Non-Employee Directors were made, removing the mandatory deferral of $20,000 in annual fees.
  • 7The company anticipates filing its 2005 Proxy Statement around March 16, 2005, which will provide further details on executive and director compensation.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report on material definitive agreements related to executive and director compensation. It details the compensation decisions made by Johnson & Johnson's Compensation Committee for its Named Executive Officers for the 2004 performance year and announces changes to the compensation structure for Non-Employee Directors.

Yes, the filing indicates that new base salaries for Named Executive Officers were approved and are effective February 28, 2005. It also details bonus payments awarded for 2004 performance, which were paid out based on the Committee's discretion in cash or common stock awards.

The company has approved a new compensation plan for Non-Employee Directors that will replace stock option grants with annual equity awards (restricted or deferred stock) valued at $100,000, subject to shareholder approval of the 2005 Long Term Incentive Plan. Additionally, the Deferred Fee Plan was amended to remove the mandatory deferral of $20,000 of director fees. New directors will receive a one-time grant of 1,000 shares of common stock.

Johnson & Johnson expects to file its Proxy Statement for the 2005 Annual Meeting of Shareholders on or about March 16, 2005. This document will contain additional comprehensive information regarding the compensation arrangements for the company's executive officers.