J&J CEO Weldon Has ‘No Plans’ to Retire, Focuses on Recalls
Johnson & Johnson (JNJ) Chief Executive Officer William Weldon said he has “no plans right now” to retire and is focused on fixing manufacturing problems that led the company to recall more than 40 consumer brands last year.
Weldon, 62, promoted the heads of his drug and medical- device divisions to corporate vice-chairmen in December. While analysts have described that as a prelude to Weldon’s departure, the CEO said in an interview that he has no timetable for leaving while the company grapples with its recalls and added scrutiny from U.S. regulators.
“That’s to me what is first and foremost in my mind,” Weldon, J&J’s chairman and CEO since 2002, said in the interview at company headquarters in New Brunswick, New Jersey. “People that know me said I’ll fix this problem and, you know, I will fix it.”
As for retirement, “It will be the right time” at some point, Weldon said. “When it is, I don’t know. I have no plans right now.”
J&J, the world’s second-biggest maker of health-care products, said March 11 that it had reached a consent decree with the Food and Drug Administration increasing agency oversight at three manufacturing plants that made recalled Tylenol, Rolaids, Motrin and other over-the-counter products. Recalls and plant shutdowns last year cost the company $900 million in lost sales, J&J’s vice-president for investor relations, Louise Mehrotra, said on a Jan. 25 conference call.
In the interview yesterday, Weldon said he doesn’t know when he will reopen a Fort Washington, Pennsylvania, plant closed in April, when the company pulled 136 million bottles of over-the-counter children’s medicines. Under the consent decree, the FDA and an outside quality consultant must approve upgrades at the plant before it can restart.
“We’ve basically torn everything down from that facility and we’re renovating,” Weldon said. “The important question is: ‘When will patients have their products?’ We expect that we will have all the products, we’re hoping, into the market by the end of this year.”
J&J rose 44 cents to $58.57 at 4 p.m. in New York Stock Exchange composite trading. The shares have fallen 10 percent in the past 12 months. New York-based Pfizer Inc. (PFE) is the world’s largest maker of medical products by sales.
J&J announced the promotion of Alex Gorsky, 50, who leads the devices business, and Sheri McCoy, 52, chief of pharmaceuticals, in a Dec. 16 statement that said they would lead remediation efforts tied to the recalls. McCoy will supervise the consumer business, and Gorsky the supply chain.
Gorsky and McCoy’s ascension sets up a contest to succeed Weldon, said Glenn Novarro, an RBC Capital Markets analyst in New York, in a March 2 interview. If J&J follows the timetable it did with Weldon’s appointment, a new CEO will be announced by early next year, he said.
J&J cut Weldon’s 2010 bonus by 45 percent, to $1.98 million, according to a March 16 company filing that cited the damage to sales and reputation caused by the recalls. Including a 3 percent salary increase and stock compensation, the CEO’s total pay for 2010 was valued at $28.7 million, a 7 percent drop from the previous year.
To contact the editor responsible for this story: Reg Gale in New York at Rgale5@bloomberg.net