William Weldon, the disgraced CEO of Johnson & Johnson, defiantly told reporters last week that he would not retire or step down, despite the growing calls for his immediate resignation. Weldon oversaw the dismantling of J&J’s quality control infrastructure as a means to reduce costs at the company, which has directly led to the company’s worldwide quality control problems – including a record-setting number of product recalls and an FDA-mandated consent decree for J&J’s three worst-performing manufacturing facilities. Basically, William Weldon has rode J&J’s reputation down the toilet.
Unfortunately for J&J and the consumers who once-relied on its products, J&J’s Board of Directors is just as clueless Weldon. The Board gave Weldon a nice, fat pay-raise and a whopping $29 million in compensation last year to reward him for his efforts. Shareholders who put their faith in the company have been rewarded with millions in destroyed value. J&J’s stock price the day William Weldon took over the company was $63.43. J&J’s closing price today was $58.83. It’s no wonder that shareholders are justifiably pissed and have filed lawsuits against the company.
Yet Weldon remains defiant. He told journalists, “People that know me said I’ll fix this problem and, you know, I will fix it.” Forgive me for snickering. J&J wouldn’t need to have Weldon fix the mess if he didn’t create it in the first place. It’s kind of like the fireman who is also an arsonist – he sets fire to the building and then rushes in to be the hero. One thing is for certain, William Weldon is no hero.
Disclosure: I have no financial position in J&J (either long or short). And I have no J&J products in my medicine cabinet.