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This excerpt taken from the JNJ DEF 14A filed Mar 11, 2009. Setting
Compensation Targets
Compensation targets are set to ensure the Company can compete
for talent in the competitive marketplace and to maintain
compensation equity and balance among positions with like
responsibilities. Neither individual nor Company performance is
a factor in setting compensation targets, however, they are key
drivers in determining actual compensation awards.
An annual review of publicly available information and executive
compensation surveys is conducted to determine current Executive
Peer Group pay levels. For each executive officer position,
50th and 75th percentile target and actual pay data is
gathered for each element of the Company’s executive
compensation program: Base Salary, Annual Performance Bonus,
Long-Term Incentives and Total Compensation. This data, along
with guidance from the Committee’s independent compensation
consultant, provides the Committee with an overall picture of
how existing targets compare to the Executive Peer Group. The
Committee also compares pay targets across positions to
determine whether the targets are both internally and externally
competitive.
Table of Contents
The following table shows the compensation targets approved by
the Committee for executive officers.
The Company believes targeting both base salary and annual
performance bonus targets at the 50th percentile
competitively positions the pay of its executives versus the
Executive Peer Group. While the Company believes cash-based
awards are important in motivating executives for the
short-term, targeting long-term incentives at the
75th percentile focuses its executives with the greatest
ability to impact business results on managing the business for
the long-term and reinforces the link between their earnings
opportunity and the long-term growth of the Company. The
Company’s target pay philosophy positions total
compensation for its executive officers between the
50th and 75th percentiles of the Executive Peer Group.
Actual compensation may fall outside that range based on a
variety of factors, including individual performance, additional
responsibilities and length of tenure in a particular position.
Maintaining a long-term perspective is a core part of the
Company’s business strategy, which allows management to
focus on shaping the Company’s future rather than simply
reacting to change. Given the currently volatile nature of the
health care industry, the Company has found success in
establishing thoughtful processes that focus on the ongoing,
future growth of the Company’s business. A long-term view
means placing greater emphasis on researching new products and
technologies that will enable future growth and looking at
investments that will deliver long-term shareholder value. This
strategy encourages employees to take calculated risks that
capitalize on anticipated changes in all segments of health
care. In summary, the long-term focus of the Company’s
compensation program is key to motivating the Company’s
employees to see the bigger picture and take the time to always
consider the future state of the Company when they conduct
business.
Table of Contents
This excerpt taken from the JNJ DEF 14A filed Mar 12, 2008. Setting
Compensation Targets
Compensation targets are set to ensure the Company can compete
for talent in the competitive marketplace and to maintain
compensation equity and balance among positions with like
responsibilities. Neither individual nor Company performance is
a factor in setting compensation targets, however they are key
drivers in determining actual compensation awards.
An annual review of proxy statements and executive compensation
surveys is conducted to determine current Executive Peer Group
pay practices and trends. For each executive officer position,
50th and 75th percentile target and actual pay data is
gathered for each element of the Company’s executive
compensation program: Base Salary, Annual Performance Bonus,
Long-Term Incentives and Total Compensation. This data, along
with guidance from the Board’s executive compensation
consultant, provides the Committee with an overall picture of
how existing targets compare to the Executive Peer Group. The
Committee also compares pay targets across positions to
determine whether the targets are both internally and externally
competitive.
Table of Contents
The following table shows the compensation targets approved by
the Committee for executive officers.
The Company believes targeting both base salary and performance
bonus targets at the 50th percentile competitively
positions the pay of its executives versus the Executive Peer
Group. While the Company believes cash-based awards are
important in motivating executives for the short-term, targeting
long-term incentives at the 75th percentile focuses its
executives on managing the business for the long-term and
reinforces the link between their earnings opportunity and the
long-term growth of the Company. The Company’s target pay
philosophy positions total compensation for its executive
officers between the 50th and 75th percentiles of the
Executive Peer Group. Actual compensation may fall outside that
range based on a variety of factors, including individual
performance, additional responsibilities and length of tenure in
a particular position.
Maintaining a long-term perspective is a core part of the
Company’s operating model, which allows management to focus
on shaping the Company’s future rather than simply reacting
to change. Given the currently volatile nature of the healthcare
industry, the Company has found success in establishing
thoughtful processes that focus on the ongoing, future growth of
the Company’s business. A long-term view means placing
greater emphasis on researching new products and technologies
that will enable future growth and looking at investments that
will deliver long-term shareholder value. This strategy
encourages employees to take calculated risks that capitalize on
anticipated changes in all segments of healthcare. In short, the
long-term focus of the Company’s compensation program is
key to motivating the Company’s employees to see the bigger
picture and take the time to always consider the future state of
the Company when they conduct business.
Table of Contents
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