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Note: Johnson & Johnson is represented on the Shareholder Forum's Program Panel addressing "Say on Pay" issues, and Pfizer had been represented on the Panel for the 2006-2007 Forum program that initiated the Advisory Voting project to consider US applications of "Say on Pay."


Wall Street Journal, April 23, 2009 article


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APRIL 23, 2009, 3:03 P.M. ET

Pfizer's Shareholders Approve Say-On-Pay; J&J's Say No Thanks

   By Peter Loftus 

Pfizer Inc.'s (PFE) shareholders voted Thursday in favor of giving themselves an advisory vote on executive compensation at the drug giant, while shareholders at rival Johnson & Johnson (JNJ) defeated a similar proposal.

The shareholder proposals were part of a push among some investors -- and lawmakers -- for "say on pay" at publicly traded companies. Advocates say such advisory, non-binding votes are needed to give voice to frustrations about hefty compensation packages awarded even when companies perform poorly.

At Pfizer's annual shareholders meeting in Atlanta, a say-on-pay proposal garnered support from 52.4% of shares voted, versus 47.6% against, according to a preliminary tally released by the company.

The proposal requests that Pfizer's board adopt a policy allowing shareholders to vote annually on an advisory resolution ratifying the compensation of top executives. The vote would be non-binding and wouldn't affect any compensation paid or awarded to the executives.

Pfizer's board had recommended against the proposal. Chief Executive Jeffrey Kindler said the New York company held regular discussions with shareholders about executive compensation. An advisory vote wouldn't provide the board with enough information to address specific concerns, he added.

Kindler also defended his and other top executives' compensation. He noted that his combined salary and bonus have been essentially frozen, and his long-term incentive compensation is tightly linked to increasing shareholder value.

Kindler's total compensation, as calculated under regulatory reporting requirements, rose to $13.8 million in 2008 from $9.5 million in 2007. But measured another way, which Pfizer called "total direct compensation," Kindler's pay package declined 5% to $13.1 million for 2008.

Pfizer shares declined 22% in 2008 and have fallen an additional 26% this year, trading recently at $13.05, weighed down by actions taken in connection with its planned acquisition of Wyeth (WYE), including a 50% dividend cut. Kindler on Thursday defended the dividend cut as necessary to help fund the Wyeth deal.

A majority of Pfizer shareholders also voted in favor of asking the board to give holders of 10% of shares outstanding the power to call special shareholder meetings, down from the 25% threshold adopted by the board last year.

"Certainly we understand that given the preliminary results, these topics are very important to shareholders," Pfizer spokeswoman Joan Campion said. "And our board will carefully consider these proposals and the appropriate actions."

The J&J say-on-pay proposal sought an advisory shareholder vote annually to ratify and approve a report from the board's compensation committee and executive compensation policies. The board opposed the measure. Some 46% of J&J shareholders approved the proposal, while 54% opposed it at an annual meeting near the company's New Brunswick, N.J., headquarters.

Though the proposal was defeated, J&J Chief Executive William Weldon acknowledged the level of support it received, and told shareholders that J&J would continue to monitor developments in say-on-pay policy.

J&J's compensation committee had recommended a merit salary raise for Weldon this year based on 2008 performance, but he recommended it stay unchanged due to the economic weakness. Weldon's total compensation as calculated under regulatory requirements declined by about 4% to $29.4 million for 2008 from $30.6 million the year before.

J&J shares fell 10% in 2008 and are off nearly 15% year-to-date, trading recently at $51.05.


-By Peter Loftus; Dow Jones Newswires; 215-656-8289;


Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved




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