JOHNSON & JOHNSON 10-K 2006
Documents found in this filing:
Summary of Compensation Arrangements for
Named Executive Officers and Directors
Following is a description of the compensation arrangements that have been approved by the Compensation & Benefits Committee of the Board of Directors of Johnson & Johnson (the Compensation Committee) on February 13, 2006 for the Companys Chief Executive Officer and the other four most highly compensated executive officers in 2005 (the Named Executive Officers).
The Compensation Committee approved the following base salaries, effective February 27, 2006, for the Named Executive Officers:
The Compensation Committee has approved the following bonus payments for performance in 2005 (divided at the discretion of the Compensation Committee between cash and the fair market value of Common Stock awards on February 17, 2006):
The Compensation Committee approved the following stock option and Restricted Share Unit (RSU) grants under the Companys 2005 Long-Term Incentive Plan. The stock options were granted at an exercise price of $58.34, which was the fair market value of the Companys Common Stock on the date of grant. The options will become exercisable on February 13, 2009
and expire on February 12, 2016. The RSUs were granted at the fair market value of the Companys Common Stock on the date of grant. The RSUs will vest on February 13, 2009, upon which for each RSU, the holder, if still employed by the Company on such date, will receive one share of the Companys Common Stock.
The Compensation Committee approved the following long-term incentive plan awards on February 13, 2006 in recognition of performance during 2005 under the Companys Certificate of Extra Compensation (CEC) program. Awards are not paid out until retirement or other termination of employment. As of the end of fiscal year 2005, the CEC value per unit was $23.16. The value of the CEC units is preliminary and is subject to increase or decrease based on the performance of the Company.
Each Non-Employee Director receives an annual fee of $85,000 for his or her services as director. In addition, directors receive $5,000 for service on a committee of the Board of Directors or $15,000 if chairperson of the committee. The Presiding Director is paid an annual fee of $10,000.
Under the 2005 Long-Term Incentive Plan, each Non-Employee Director receives non-retainer equity compensation each year in the form of restricted or deferred stock having a value of $100,000. Each Non-Employee Director received a grant of 1,714 shares of restricted stock, based upon the fair market value of the Common Stock of the Company on February 13, 2006, for service on the Board in 2005, except for Mr. Charles Prince, who was elected to the Board on that date. Each director receives a one-time grant of 1,000 shares of Company Common Stock upon first becoming a member of the Board of Directors.