September 21, 2007
Mr. Tim Buchmiller
Senior Attorney
U.S. Securities and Exchange Commission
Division of Corporation Finance
Mail Stop 6010
100 F Street, N.E.
Washington, DC 20549
Re: Johnson & Johnson Definitive Proxy Statement
Filed March 14, 2007 (File No. 001-03215)
Dear Mr. Buchmiller:
The following sets forth the responses of Johnson &
Johnson (the "Company") to the comments on the above
referenced proxy statement included in your letter of
August 21, 2007 to our Chairman and Chief Executive
Officer, Mr. William C. Weldon. For your convenience,
we have included your comments with this letter. Our
responses use the same numbering as your letter.
Compensation Discussion and Analysis, page 16
Comment 1: The Compensation Discussion and Analysis
should be sufficiently precise to capture material
differences in compensation policies with respect to
individual named executive officers. Refer to Section
II.B.1 of Commission Release No. 33-8732A. In this
regard, we note the significant disparity in the value
of the stock and option awards, and the amount awarded
under the non-equity incentive plan compensation, to
Mr. Weldon as compared to the similar types of awards
to your other named executive officers. Please expand
your Compensation Discussion and Analysis to include a
more detailed discussion of how and why the
compensation of your chief executive officers has
materially differed from that of the other named
executive officers. If policies or decisions relating
to a named executive officer are materially different
from those that apply to the other named executive
officers, please discuss those policies or decisions on
an individualized basis.
Response: The Company notes the Staff's comment. The
requested type of disclosure appears on page 21 of the
Company's Definitive Proxy Statement dated March 14,
2007 (the "2007 Proxy Statement") under the heading
"Executive Compensation Awarded in 2006 and 2007-
Performance Assessment Process." As requested, the
Company intends to expand the Compensation Discussion
and Analysis (the "CD&A") section in its proxy
statement for the 2008 Annual Meeting of Shareholders
(the "2008 Proxy Statement") to include a more detailed
discussion of how and why the compensation of the
Chairman/CEO has materially differed from that of the
other named executive officers (the "NEOs").
Comment 2: Please expand your Compensation Discussion
and Analysis to discuss how specific forms of
compensation are structured and implemented to reflect
your named executive officer's individual performance
and to describe the elements of individual performance
that are taken into account in determining
compensation. Refer to Item 402(b)(2)(vii) of
Regulation S-K.
Response: The Company notes the Staff's comment. The
requested type of disclosure appears throughout the
CD&A section of the 2007 Proxy Statement. For example,
see the description of the "business bonus multiplier"
under the heading "Annual Performance Bonus" on page
18. As requested, the Company intends to expand the
CD&A in the 2008 Proxy Statement to clarify how
specific forms of compensation are structured and
implemented to reflect each NEO's individual
performance and to describe the material elements of
individual performance that are taken into account in
determining compensation.
Comment 3: You disclose on page 11 that the Committee
has retained a representative of Towers Perrin as its
consultant for matters related to executive and
director compensation. Please provide the full
disclosure required by Item 407(e)(3)(iii) of
Regulation S-K including a description of the nature
and scope of the consultant's assignment or the
material elements of the instructions or directions
given to the consultant with respect to the performance
of its duties under the engagement.
Response: The Company notes the Staff's comment. The
requested type of disclosure appears in the "Corporate
Governance" section on page 12 and under the heading
"Target Pay Philosophy" on page 17 of the 2007 Proxy
Statement. As requested, the Company intends to expand
the CD&A in the 2008 Proxy Statement to include further
description of the nature and scope of the executive
compensation consultant's engagement.
Comment 4: We note your references to the Johnson &
Johnson Credo throughout your Compensation Discussion
and Analysis. Please clarify what the Credo values are
and how they specifically factor into your compensation
decisions.
Response: The Company notes the Staff's comment and
intends to expand the CD&A in the 2008 Proxy Statement
as requested to clarify what the Credo values are and
how they factor into compensation decisions, which are
described under the heading "Importance of Credo
Values" on page 16 of the 2007 Proxy Statement.
Annual Performance Bonus, page 18
Comment 5: You disclose that you have established
specific individual, business unit, and overall
corporate goals in connection with the calculation of
the amounts to be awarded as annual performance
bonuses, and that those amounts can be further
increased or decreased based upon performance measured
against preset financial and strategic objectives.
Please disclose the specific goals and the weighting
and measurement process associated with those goals.
See Item 402(b)(2)(v) and Instruction 2 to Item 402(b).
To the extent you believe that disclosure of the
information would result in competitive harm such that
the information could be excluded under Instruction 4
to Item 402(b), please provide us with a detailed
explanation supporting your conclusion. To the extent
that it is appropriate to omit specific targets or
performance objectives, you are required to provide
appropriate disclosure pursuant to Instruction 4 to
Item 402(b) of Regulation S-K. Refer also to Question
3.04 of the Item 402 of Regulation S-K Interpretations
available on our website at www.sec.gov. In discussing
how difficult or likely it will be for the registrant
to achieve the target levels or other factors, you
should provide as much detail as necessary without
disclosing information that poses a reasonable risk of
competitive harm.
Response: The Company notes the Staff's comment and
intends to expand the CD&A in the 2008 Proxy Statement
as requested to describe, in all material respects and
to the extent applicable, the goals and the weighting
and measurement process associated with those goals.
To the extent that the Company believes it is
appropriate to omit specific targets or performance
objectives, the Company will provide appropriate
disclosure pursuant to Instruction 4 to Item 402(b) of
Regulation S-K. As certain goals and measurements that
factor into compensation decisions are subjective and
within the discretion of the Compensation & Benefits
Committee and/or management (i.e., not formulaic), the
Company will also describe such goals and measurements
in all material respects.
2006 Bonus and Long-Term Incentive Awards..., page 22
Comment 6: Please identify the companies in your
financial peer group.
Response: The Company notes the Staff's comment. As
described on page 17 of the 2007 Proxy Statement, the
compensation of the Company's NEOs is benchmarked
against the compensation of executives with comparable
responsibilities at 12 companies, which comprise the
Company's Executive Peer Group. These 12 companies are
listed on page 17 of the 2007 Proxy Statement. As
described on pages 18-19 and 25 of the 2007 Proxy
Statement, the Company's performance against a
financial peer group is one of a number of factors
taken into consideration to determine the bonus for the
CEO and the "business bonus multiplier," for the other
NEOs. As discussed on page 17 under the heading
"Components of Executive Compensation," the annual
performance bonus is one of three major components of
the Company's executive compensation program. In
response to the Staff's comment, the Company intends to
expand the CD&A in the 2008 Proxy Statement to include
further description of the makeup of the financial peer
group and how the financial peer group is used as part
of the performance assessment of the NEOs.
Use of Tally Sheets, page 26
Comment 7: You disclose that the Compensation
Committee uses "tally sheets" to assist them in
making compensation decisions. Please add disclosure
addressing the extent to which the information
in the tally sheets comprised information in
addition to or different from the information presented
in your Summary Compensation Table and how and why the
Compensation Committee found the tally sheets useful
in determining the various elements of compensation
for the named executive officers. The information
contained in the tally sheets and how the
Committee's analysis of such information resulted in
specific awards should be described in complete
detail.
Response: The Company notes the Staff's comment and
respectfully submits that all material information
contained in the tally sheets referred to on page 26 of
the 2007 Proxy Statement have been disclosed in the
2007 Proxy Statement and that further details of the
tally sheets are not required to be disclosed.
Furthermore, tally sheets are provided to the
Compensation & Benefits Committee for its members to
see what each executive might receive upon a
hypothetical termination of employment with the Company
and are not used to determine the various elements of
compensation or the actual amounts of compensation to
be approved. Should the Committee continue to use
tally sheets, the Company intends to add disclosure to
the 2008 Proxy Statement to clarify these points.
Outstanding Equity Awards At Fiscal Year-End, page 34
Comment 8: Please disclose the vesting dates of the
options and stock awards held at fiscal-year end by
footnote to the applicable column. Refer to
Instruction 2 to Item 402(f)(2) of Regulation S-K.
Response: The Company notes the Staff's comment and,
as requested, intends to expand the Outstanding Equity
Awards at Fiscal Year-End Table in the 2008 Proxy
Statement to disclose the vesting dates of the options
and stock awards held at fiscal-year end.
Non-Qualified Deferred Compensation, page 37
Comment 9: As required by the Instruction to Item
402(i)(2) of Regulation S-K, please provide a footnote
quantifying the extent to which amounts reported in the
contributions and earnings columns are reported as
compensation in the last completed fiscal year in your
Summary Compensation Table.
Response: The Company notes the Staff's comment and,
as requested, intends to add disclosure in the 2008
Proxy Statement to quantify the extent to which amounts
reported in Columns B, C and D in the Non-Qualified
Deferred Compensation Table are reported as
compensation in the last completed fiscal year in the
Summary Compensation Table.
Director Compensation Table, page 38
Comment 10: Disclose the assumptions made in the
valuation of the stock awards by reference to a
discussion of those assumptions in your financial
statements, footnotes to the financial statements or
discussion in Management's Discussion and Analysis.
Refer to the Instruction to Item 402(k) of Regulation S-
K.
Response: The Company notes the Staff's comment and
respectfully submits that no assumptions are made in
the valuation of restricted stock awards to the
Company's NonEmployee Directors. In the past, Non-
Employee Directors received stock options and the
Company was required to make certain assumptions
regarding the present value of stock options in order
to determine the numbers of options to be awarded. The
Company's Non-Employee Directors now receive a
combination of cash and restricted stock. As described
in the second paragraph under the heading "Director
Fees and Equity Compensation" on page 29 of the 2007
Proxy Statement, those Directors are granted the number
of shares of restricted stock required to achieve a
predetermined dollar amount (currently $100,000) based
on the market price for the Company's stock on a
particular date.
The Company acknowledges that (a) it is
responsible for the adequacy and accuracy of the
disclosures in the above-referenced filing; (b) SEC
Staff comments or changes to disclosure in response to
comments do not foreclose the Commission from taking
any action with respect to the filing; and (c) it may
not assert SEC Staff comments as a defense in any
proceeding initiated by the Commission or any person
under the Federal securities laws of the United States.
If you have any questions or comments, please call
me at (732) 524-2452 or Douglas K. Chia, Senior Counsel &
Assistant Corporate Secretary at (732) 524-3292.
Sincerely,
/S/ STEVEN M. ROSENBERG
Steven M. Rosenberg
cc: W. C. Weldon
R. C. Deyo