- Johnson & Johnson's CEO Alex Gorsky made $25 million last year—a 48% increase over 2013, largely thanks to a stock and option bonus.
- According to J&J's board, the increase in compensation was based on performance and the fact that Gorsky led the way as the company hit certain target goals.
- Gorsky has been at J&J since 1988 and became CEO in 2012. He is also Chairman of the Board.
Performance-based compensation makes sense and represents an ethical and rational approach to remunerating executives. In 2014 J&J executed successfully on near-term priorities while exceeding financial goals, with an 18.2% increase in profit.
Moreover, the company's stock was up 14.2% during the 52-week period for calendar year 2014. Shareholders shared in the benefits in the form of a $2.76-per-share dividend, representing a 6.5% increase from 2013. For all of these things, Gorsky (and presumably others at J&J) were well rewarded. In this case, it's true: A rising tide lifts all boats.