Things at Johnson & Johnson really can’t get much worse. The company was dragged before Congress yesterday to testify as to their failure to protect public health and manufacture children’s medicines that were free of contaminants. The embattled CEO, William C. Weldon, refused to testify, instead sending an underling, who will be the scapegoat for the whole unfortunate affair. Meanwhile, Mr. Weldon is recovering from his “back surgery,” which conveniently took place just days before his planned Congressional testimony (but after he received his Congressional summons).
Mr. William C. Weldon is one of the most highly compensated CEOs in the United States. In 2009, J&J paid him over $22.8 million in salary, stock and “other compensation.” Surely, Mr. Weldon has delivered exceptional value to J&J’s shareholders, right? Nope. Since being named CEO on April 25, 2002, J&J’s stock has been flat. Exactly flat. Closing price of J&J’s stock on April 29, 2002 was $63.43. Closing price of J&J’s stock on May 3, 2010 was $63.31. And J&J’s stock has continued to slide since May 3. Mr. Weldon isn’t exactly delivering shareholder value.
I don’t know Billy Boy Weldon. I’ve never met him and don’t know him from Peter Graves (the two look an awful lot alike in photos). However, I know a thing or two about leadership. He who heads the ship controls the direction. And Mr. Weldon clearly set the direction for J&J over the last decade. On Mr. Weldon’s watch, the company abandoned its famous Credo, instead, focusing on enriching the pockets of executives. On Mr. Weldon’s watch, the company decided to wage holy jihad against the American Red Cross. On Mr. Weldon’s watch, J&J has thwarted FDA oversight and shown a blatant disregard for patient safety.
There’s really only one way out of this mess for J&J and it starts with cleaning house. I don’t wish Mr. Weldon any ill will, but if J&J will ever recover, it needs ethical leadership, it needs to return to its core values (the infamous credo) and it needs to get Americans to believe in it again. A changing of the guard would go a long way to showing America that J&J is finally beginning to take this situation seriously.
