DEF 14A of Johnson & Johnson, Mar 16, 2022

DEF 14A of Johnson & Johnson

Filed Mar 16, 2022 · FY20210000200406-22-000026

Open on EDGAR

  1. Corporate Governance Highlights

    | Responsive and Accountable to Shareholders | | | Annual Election of Directors | Each Director is elected annually to ensure accountability to our shareholders. | | Majority Voting Standard for Director Elections | In an election where the number of Directors nominated does not exceed the total number of Directors to be elected, Director nominees must receive the affirmative vote of a majority of votes cast to be elected. If a Director nominee receives more votes “against” his or her election than votes “for” his or her election, the Director must promptly offer his or her resignation. | | One Class of Stock | Our common stock is the only class of shares outstanding. | | Proxy Access | Each shareholder or a group of up to 20 shareholders owning 3% or more of our common stock continuously for at least three years may nominate and include in our proxy materials Director nominees constituting up to 20% of the Board, in accordance with the terms set forth in our By-Laws. | | Director Overboarding Policy | A Director who serves as CEO at our or any other company should not serve on more than two public company boards. Other Directors should not serve on more than five public company boards. | | No Shareholder Rights Plan | We do not have a “poison pill” and have no intention of adopting one at this time. | | No Supermajority Requirements in Certificate of Incorporation or By-Laws | Our Amended and Restated Certificate of Incorporation and By-Laws contain majority standards for all actions requiring shareholder approval. | | Shareholder Right to Call a Special Meeting | Shareholders holding 10% of shares may call a special meeting for good cause, and shareholders holding 25% of shares may call a special meeting for any reason. | | Removal of Directors With or Without Cause | Directors may be removed by shareholders with or without cause. | | Active Shareholder Engagement | See pages 42 to 44 for more information on our shareholder engagement program. | | Annual Say on Pay Advisory Vote | Shareholders are asked to vote annually on our named executive officer compensation. |

  2. Our Shareholders

    Our Shareholders Despite continued and evolving impact from COVID-19 globally, Johnson & Johnson delivered another strong year of sales and earnings growth in 2021. As the world's largest healthcare company, we have established a sustainable and resilient business model that has enabled us to continue to meet the needs of our stakeholders and deliver value to our shareholders during these turbulent times. For more information about the Company's response to the COVID-19 pandemic, please see www.jnj.com/coronavirus.

  3. Our Shareholders

    | | 2022 Proxy Statement | 11 |

  4. Our Shareholders

    Item 1: Election of Directors

  5. Our Shareholders

    | Nominees |

  6. Our Shareholders

    There are 14 Director nominees for election at our 2022 Annual Meeting to hold office until the next Annual Meeting and until their successors have been duly elected and qualified. All of the Director nominees were elected to the Board at the last Annual Meeting and are currently serving as Directors of the Company except for Mr. Joaquin Duato, who was appointed to the Board on January 3, 2022, and Mr. Darius Adamczyk, who was appointed to the Board on February 15, 2022. Mr. Duato was initially identified as a potential nominee by members of the Board, and the Nominating & Corporate Governance Committee recommended Mr. Duato for appointment to the Board in connection with his appointment as CEO.

  7. Our Shareholders

    | New Independent Director Nominee |

  8. Our Shareholders

    Mr. Adamczyk was recommended for appointment by the Nominating & Corporate Governance Committee, in keeping with the Board’s commitment to refreshment and seeking out Director candidates who have been leaders of large, complex organizations, as well as candidates with diverse backgrounds, skills and experiences. Mr. Adamczyk was recommended for the Committee's consideration by an independent Director. The Nominating & Corporate Governance Committee conducted a thorough review of Mr. Adamczyk before recommending him for appointment to the Board and for nomination at the 2022 Annual Meeting. In keeping with the Board's policy on retirement of Directors, neither Mr. Charles Prince, appointed to the Board in 2006, nor Mr. Ronald A. Williams, appointed to the Board in 2011, will stand for re-election. We join the Board in thanking Mr. Prince and Mr. Williams for their service. In the pages that follow are summaries of the skills and qualifications, and a brief biography, of each of the Director nominees.

  9. Our Shareholders

    | Director Nomination Process |

  10. Our Shareholders

    Board refreshment and composition is a critical area of focus for the Board. The Board endeavors to strike a balance between retaining Directors who have deep institutional knowledge of Johnson & Johnson and the evolving healthcare environment, and electing new Directors with diverse backgrounds and skills. Our robust refreshment and composition strategy seeks to combine continuity of experience with the fresh perspectives provided by new Directors. The Nominating & Corporate Governance Committee annually considers the size, composition and needs of the Board, reviews potential candidates for the Board and recommends the Director nominees for approval. The Committee considers and evaluates suggestions from many sources, including shareholders, regarding potential candidates to serve on the Board. Such suggestions, together with appropriate biographical information, should be submitted to the Office of the Corporate Secretary at our principal office address as set forth on page 164. Potential candidates suggested by shareholders are evaluated by the Nominating & Corporate Governance Committee in the same manner as other potential candidates. The Board is committed to seeking out highly qualified women and minority candidates and candidates with diverse backgrounds, skills and experiences as part of the search process for each new Director. These criteria are incorporated into our Principles of Corporate Governance posted at https://www.investor.jnj.com/corporate-governance.

  11. Our Shareholders

    | General Criteria for Nomination to the Board |

  12. Our Shareholders

    | Candidates for the Board should meet the following criteria: | | | • | The highest ethical character and share Our Credo values | | • | Strong personal and professional reputation consistent with our image and reputation | | • | Proven record of accomplishment within candidate’s field, with superior credentials and recognition | | • | Leadership of a major complex organization, including scientific, government, educational and other non-profit institutions |

  13. Our Shareholders

    | 12 | 2022 Proxy Statement | |

  14. Our Shareholders

    | The Board also seeks Directors who: | | | • | Are widely recognized leaders in the fields of medicine or biological sciences, including those who have received the most prestigious awards and honors in their fields | | • | Have expertise and experience relevant to our business and the ability to offer advice and guidance to the CEO based on that expertise and experience | | • | Are independent, without the appearance of any conflict in serving as a Director, and independent of any particular constituency, with the ability to represent all shareholders | | • | Exercise sound business judgment | | • | Are diverse, reflecting differences in skills, regional and industry experience, background, race, ethnicity, gender and other unique characteristics |

  15. Our Shareholders

    | Board and Committee Evaluations |

  16. Our Shareholders

    Board and Committee self-evaluations are critical to help ensure the continued effective functioning of the Board. Our Principles of Corporate Governance also require that the Board and each Committee conduct an annual self-evaluation. These self-evaluations are intended to facilitate a candid assessment and discussion by the Board and each Committee of its effectiveness in fulfilling its responsibilities.

  17. Our Shareholders

    | Board Evaluations: At the end of 2021, the Executive Chairman and the Lead Director met with each Director individually to collect feedback on the Board’s responsibilities, structure, composition, procedures, priorities, culture and engagement. Directors also had the opportunity to provide anonymous written comments through secure technology to enable additional candid feedback, and a number of Directors chose to provide anonymous written comments. In all cases, input from the evaluations was summarized and discussed with the full Board. The results of the evaluations were positive and affirming, with only minor administrative action items and a continued focus on Board refreshment and composition to address. | | Committee Evaluations: Committee members complete a written questionnaire to facilitate self-evaluation during an Executive Session of each Committee. Upon completion of the self-evaluation, the Committee Chair shares the results and any follow-up actions with the full Board. |

  18. Our Shareholders

    | Board Refreshment and Board Nominee Composition |

  19. Our Shareholders

    Understanding the importance of Board composition and refreshment for effective oversight, the Nominating & Corporate Governance Committee strives to maintain a diverse Board of Directors, reflecting differences in skills, regional and industry experience, perspectives, background, race, ethnicity, gender and other characteristics that are applicable to our Company's business strategy. The Board has established a proven record of strategic and consistent refreshment, seeking new Directors with appropriate skills, qualifications and backgrounds consistent with the criteria established in our Principles of Corporate Governance. The Board also ensures that new Directors are able to dedicate sufficient time to the Board and deliver a high level of performance of their duties. The Board welcomed seven new directors in the past five years. Mr. Darius Adamczyk was appointed to the Board on February 15, 2022 after being recommended for appointment by the Nominating & Corporate Governance Committee. His appointment is in keeping with the Board’s commitment to refreshment and seeking out Director candidates with strategic leadership experience with large, complex organizations. Mr. Adamczyk was identified for consideration by an independent Director, and the Nominating & Corporate Governance Committee conducted a thorough review of Mr. Adamczyk before recommending him for appointment to the Board and for nomination at the 2022 Annual Meeting. Mr. Duato was recommended for nomination to the Board in connection with his appointment as CEO.

  20. Our Shareholders

    | | 2022 Proxy Statement | 13 |

  21. Our Shareholders

    Below are highlights of the composition of the Director nominees:

  22. Our Shareholders

    | Multidisciplinary Skills Categories | | | | | | | | | Academia/Government | Leadership or senior advisory position in government or with an academic institution (either in an administrative or faculty role) | | | | | | | Digital | Experience or expertise in the use and deployment of digital technologies to facilitate business objectives, including cybersecurity and data privacy | | | | | | | Executive Leadership | Senior management position, including as chief executive officer, at a large publicly-traded or private company, or other large complex organization (such as government, academic or not-for-profit) | | | | | | | Financial | Significant experience in positions requiring financial knowledge and analysis, including in accounting, corporate finance, treasury functions and risk management from a financial perspective | | | | | | | Healthcare Industry | Management-level experience in an industry involving healthcare products or services | | | International Business/Strategy | | | | | Leadership position in an organization that operates internationally, especially on a broad basis and/or in the geographic regions in which the company operates | | | | | | | Marketing/Sales | Strategic or management experience involving the marketing and branding of products, including for retail markets | | | | | | | Regulatory | Work experience within a government-regulated or in a heavily regulated industry | | | | | | | Science/Technology | Advanced scientific or technological degree and related work experience in a scientific or technological field |

  23. Our Shareholders

    | | The Board of Directors recommends a vote FOR election of each of the below-named Director nominees. |

  24. Our Shareholders

    | | | Darius Adamczyk | | | | Independent Director since 2022 | | Biography | | | | Mr. Adamczyk, age 56, has been the Chairman and Chief Executive Officer of Honeywell International Inc. since April 2018. Mr. Adamczyk was President and Chief Executive Officer from March 2017 to April 2018 and Chief Operating Officer from April 2016 to March 2017. From April 2014 to April 2016, Mr. Adamczyk served as President and CEO of Honeywell Performance Materials and Technologies (PMT). Prior to serving as President and CEO of PMT, Mr. Adamczyk served as President of Honeywell Process Solutions from 2012 to 2014 and as President of Honeywell Scanning and Mobility from 2008 to 2012. Mr. Adamczyk joined Honeywell in 2008 when Honeywell acquired Metrologic, Inc., where he was the Chief Executive Officer. Prior to Metrologic, Mr. Adamczyk held several general management assignments at Ingersoll Rand, served as a senior associate at Booz Allen Hamilton and started his career as an electrical engineer at General Electric. He is a member of the US-China Business Council, Business Roundtable and The Business Council. | | | | Skills & Qualifications | | | | • | Senior leadership roles in global organizations, both large and small | | | • | Deep understanding of software, both technically and commercially, and a proven track record in growing software-related businesses | | | • | Demonstrated ability to deliver financial results as a leader in a variety of different industries, with disparate business models, technologies and customers | | | • | Strategic leadership skills necessary to grow sales organically and inorganically while meeting the challenges of a constantly changing environment across a diverse portfolio | | | Other Public Board Service: | | | | • | Honeywell International Inc. (since 2016) | | | Recent Past Public Board Service: | | | | • | Garrett Motion Inc. (April 2021 - September 2021) | |

  25. Our Shareholders

    | | | Mary C. Beckerle, Ph.D. | | | | Independent Director since 2015 | | Biography | | | | Dr. Beckerle, age 67, has served as Chief Executive Officer of the Huntsman Cancer Institute at the University of Utah since 2006. She is the Associate Vice President for Cancer Affairs and a Distinguished Professor of Biology and Oncological Sciences at the University of Utah. Dr. Beckerle joined the faculty of the University of Utah in 1986 and currently holds the Jon M. Huntsman Presidential Endowed Chair. Dr. Beckerle has served on the National Institute of Health (NIH) Advisory Committee to the Director, on the Board of Directors of the American Association for Cancer Research, as President of the American Society for Cell Biology and as the Chair of the American Cancer Society Council for Extramural Grants. She currently serves on a number of scientific advisory boards, including the Medical Advisory Board of the Howard Hughes Medical Institute, the Board of Scientific Advisors of the National Cancer Institute (USA) and the External Advisory Board of the Dana Farber/Harvard Cancer Center. She is an elected Member of the National Academy of Sciences and the American Philosophical Society. | | | | Skills & Qualifications | | | | • | Expertise in scientific research and organizational management in the healthcare arena | | | • | Expertise in management, strategy, finance and operations | | | • | Strong focus on patient experience | | | Current Committees: | | | | • | Chair, Science, Technology & Sustainability | | | • | Member, Regulatory Compliance | | | Other Public Board Service: | | | | • | Huntsman Corporation (since 2011) | |

  26. Our Shareholders

    | 14 | 2022 Proxy Statement | |

  27. Our Shareholders

    | | | D. Scott Davis | | | | Independent Director since 2014 | | Biography | | | | Mr. Davis, age 70, served as Chairman and Chief Executive Officer of United Parcel Service, Inc. (UPS) (shipment and logistics) from 2008 to 2014 and as Chairman from 2014 to 2016. Previously, Mr. Davis held various leadership positions with UPS, primarily in the finance and accounting area, including as Vice Chairman and Chief Financial Officer. Mr. Davis is a Certified Public Accountant. He previously served on the Board of the Federal Reserve Bank of Atlanta from 2003 to 2009, serving as Chairman in 2009. | | | | Skills & Qualifications | | | | • | Deep understanding of emerging markets and international operations, public policy and global economic indicators | | | • | Expertise in management, strategy, finance and operations | | | • | Expertise in supply chain logistics at a time of rapid global expansion | | | Current Committees: | | | | • | Chair, Audit | | | • | Member, Compensation & Benefits | | | • | Member, Special Consumer Health | | | Other Public Board Service: | | | | • | Honeywell International Inc. (since 2005) | |

  28. Our Shareholders

    | | | Ian E. L. Davis | | | | Independent Director since 2010 | | Biography | | | | Mr. Davis, age 71, is the former non-executive Chairman, Rolls-Royce Holdings plc. Mr. Davis retired from McKinsey & Company (management consulting) in 2010 as a Senior Partner, having served as Chairman and Worldwide Managing Director from 2003 until 2009. In his more than 30 years at McKinsey, he served as a consultant to a range of global organizations across the public, private and not-for-profit sectors. Prior to becoming Chairman and Worldwide Managing Director, he was Managing Partner of McKinsey's practice in the United Kingdom and Ireland. His experience included oversight for McKinsey clients and services in Asia, Europe, the Middle East and Africa, and he has expertise in the consumer products and retail industries. Mr. Davis is a Director at Majid Al Futtaim Holding LLC, a Senior Advisor at Apax Partners, a private equity firm, and Chairman at Thoughtworks Inc. | | | | Skills & Qualifications | | | | • | Expertise in leading a broad global business | | | • | Deep understanding of global business trends | | | • | Expertise in finance, strategy and business transformation | | | Current Committees: | | | | • | Member, Audit | | | • | Member, Regulatory Compliance | | | Other Public Board Service: | | | | • | Thoughtworks Inc. (since 2021) | | | Recent Past Public Board Service: | | | | • | BP, plc (2010-2020) | | | • | Rolls-Royce Holdings, plc (2013-2021) | |

  29. Our Shareholders

    | | 2022 Proxy Statement | 15 |

  30. Our Shareholders

    | | | Jennifer A. Doudna, Ph.D. | | | | Independent Director since 2018 | | Biography | | | | Dr. Doudna, age 58, joined the faculty at University of California, Berkeley, as a Professor of Biochemistry & Molecular Biology in 2002. She directs the Innovative Genomics Institute, a joint UC Berkeley-UC San Francisco center, holds the Li Ka Shing Chancellor's Professorship in Biomedical and Health and is the Chair of the Chancellor's Advisory Committee on Biology at UC Berkeley. Dr. Doudna is Principal Investigator at the Doudna Lab at UC Berkeley and has founded and serves on the Scientific Advisory Boards of Caribou Biosciences, Inc. and Intellia Therapeutics, Inc., both leading CRISPR genome engineering companies. She has been an Investigator with the Howard Hughes Medical Institute since 1997. Dr. Doudna is the recipient of numerous scientific awards in biochemistry and genetics, including the Nobel Prize in Chemistry in 2020. Dr. Doudna is a Trustee for Pomona College. | | | | Skills & Qualifications | | | | • | Pioneer in the field of biochemistry, having co-discovered the simplified genome editing technique CRISPR-Cas9 | | | • | Expertise in scientific research and innovation | | | • | Leader in integration of scientific research and ethics | | | Current Committees: | | | | • | Member, Nominating & Corporate Governance | | | • | Member, Science, Technology & Sustainability | | | Other Public Board Service: | | | | • | None | |

  31. Our Shareholders

    | | | Joaquin Duato | | | | Management Director since 2022 | | Biography | | | | Mr. Duato, age 59, became the Company's Chief Executive Officer, Chairman of the Executive Committee and joined the Board of Directors in January 2022. He joined the Company in 1989 with Janssen-Farmaceutica S.A. (Spain), a subsidiary, and held executive positions of increasing responsibility in the pharmaceutical sector. In 2009, he was named Company Group Chairman, Pharmaceuticals, and in 2011, he was named Worldwide Chairman, Pharmaceuticals. In 2016, Mr. Duato became a member of the Executive Committee and was named Executive Vice President, Worldwide Chairman, Pharmaceuticals. In July 2018, Mr. Duato was promoted to Vice Chairman of the Executive Committee, with responsibility for the company's Pharmaceutical and Consumer Health sectors, supply chain, information technology, global services and the Health & Wellness groups. As a dual citizen of Spain and the United States, Mr. Duato’s international perspective and global lens gives him a deep appreciation of diverse thoughts and opinions. Mr. Duato serves on the Board of Directors of UNICEF USA and Pharmaceutical Research and Manufacturers of America (PhRMA), and he is an Advisory Board Member of Tsinghua University School of Pharmaceutical Sciences. | | | | Skills & Qualifications | | | | • | Decades of broad experience spanning multiple business sectors, geographies and functions at the world's largest and most broadly-based healthcare company | | | • | Globally minded, purpose-driven business leader with a deep commitment to Our Credo values | | | Other Public Board Service: | | | | • | Hess Corporation (since 2019) | |

  32. Our Shareholders

    | 16 | 2022 Proxy Statement | |

  33. Our Shareholders

    | | | Alex Gorsky | | | | Director since 2012 | | Biography | | | | Mr. Gorsky, age 61, has been Executive Chairman, Board of Directors since January 3, 2022 after serving since 2012 as Chairman, Board of Directors, and Chief Executive Officer, Chairman of the Executive Committee. Mr. Gorsky began his Johnson & Johnson career with Janssen Pharmaceutica Inc. in 1988. Over the next 15 years, he advanced through positions of increasing responsibility in sales, marketing and management. In 2001, Mr. Gorsky was appointed President of Janssen Pharmaceutical Inc., and in 2003 he was named Company Group Chairman of the Johnson & Johnson pharmaceutical business in Europe, the Middle East and Africa. Mr. Gorsky left Johnson & Johnson in 2004 to join Novartis Pharmaceuticals Corporation, where he served as head of the pharmaceutical business in North America. Mr. Gorsky returned to Johnson & Johnson in 2008 as Company Group Chairman for Ethicon. In early 2009, he was appointed Worldwide Chairman of the Surgical Care Group and member of the Executive Committee. In September 2009, he was appointed Worldwide Chairman of the Medical Devices and Diagnostics Group. Mr. Gorsky became Vice Chairman of the Executive Committee in January 2011. Mr. Gorsky serves on the Boards of the Travis Manion Foundation, the National Academy Foundation and the Wharton Board of Overseers. He was a Member of the Board of Business Roundtable and served as the Chairman of its Corporate Governance Committee, and he serves on the Board of Trustees for New York Presbyterian Hospital. | | | | Skills & Qualifications | | | | • | Leadership of global business in healthcare industry | | | • | Expertise in strategy and operations of our Company as well as its risks and challenges | | | • | Deep commitment to ethical, Credo-based leadership | | | Current Committees: | | | | • | Chair, Finance | | | Other Public Board Service: | | | | • | Apple Inc. (since 2021) | | | • | International Business Machines Corporation (since 2014) | | | Recent Past Public Board Service: | | | | • | None | |

  34. Our Shareholders

    | | | Marillyn A. Hewson | | | | Independent Director since 2019 | | Biography | | | | Ms. Hewson, age 68, served as the Executive Chairman of Lockheed Martin Corporation (aerospace) from June 2020 until March 2021, as Chairman, President and Chief Executive Officer from 2014 to June 2020 and held the positions of Chief Executive Officer and President from January to December 2013. Ms. Hewson served as a Director of Lockheed Martin Corporation from 2012 through March 2021. Ms. Hewson currently serves on the University of Alabama President’s Cabinet and the Culverhouse College of Business Board of Visitors. In addition, she is a fellow of the American Institute of Aeronautics and Astronautics and a member of the Trilateral Commission. Ms. Hewson has also served on several U.S. government advisory bodies, public company boards, and charitable organization boards. | | | | Skills & Qualifications | | | | • | Expertise in executive and operational leadership in a global, regulated industry | | | • | Insight and experience in global business management, strategic planning, cybersecurity, finance, supply chain, leveraged services and manufacturing | | | • | Expertise in government relations and human capital management | | | Current Committees: | | | | • | Member, Compensation & Benefits | | | • | Member, Regulatory Compliance | | | Other Public Board Service: | | | | • | Chevron Corporation (since 2021) | | | Recent Past Public Board Service: | | | | • | DuPont; DowDuPont Inc. (2007-2019) | | | • | Lockheed Martin Corporation (2012-2021) | |

  35. Our Shareholders

    | | 2022 Proxy Statement | 17 |

  36. Our Shareholders

    | | | Hubert Joly | | | | Independent Director since 2019 | | Biography | | | | Mr. Joly, age 62, served as the Executive Chairman of Best Buy Co., Inc. (consumer electronics) from June 2019 to June 2020, having joined the company in 2012 as President and Chief Executive Officer and becoming Chairman, President and Chief Executive in 2015. From 2004 to 2008, he was Global President and Chief Executive Officer, Carlson Wagonlit Travel, and then served as President and Chief Executive Officer of Carlson Companies from 2008 to 2012. In 1999, he joined Vivendi as Global Chief Executive Officer, Vivendi Universal Games, and was later appointed Executive Vice President of U.S. Assets and Deputy Chief Financial Officer of Vivendi Universal. Prior roles included, from 1996 to 1999, Vice President, Europe and President of Electronic Data Systems France and, from 1983 to 1996, McKinsey & Company, eventually serving as Partner. Mr. Joly is a Senior Lecturer of Business Administration at Harvard Business School and serves on the Board of Directors of Sciences Po Foundation, the Board of Trustees of the Minneapolis Institute of Art, the New York Public Library and the International Advisory Board of his alma mater, HEC Paris. | | | | Skills & Qualifications | | | | • | Extensive strategic, operational and financial expertise relevant to international corporations | | | • | Successfully led the digital transformation of consumer businesses, with focus on customer experience | | | • | Experience in business transformation and human capital management | | | Current Committees: | | | | • | Member, Compensation & Benefits | | | • | Member, Nominating & Corporate Governance | | | • | Member, Special Consumer Health | | | Other Public Board Service: | | | | • | Ralph Lauren Corporation (since 2009) | | | Recent Past Public Board Service: | | | | • | Best Buy Co., Inc. (2012-2020) | |

  37. Our Shareholders

    | | | Mark B. McClellan, M.D., Ph.D. | | | | Independent Director since 2013 | | Biography | | | | Dr. McClellan, age 58, became the inaugural Director of the Duke-Robert J. Margolis, MD, Center for Health Policy and the Margolis Professor of Business, Medicine and Policy at Duke University in January 2016. He is also a faculty member at Dell Medical School at The University of Texas in Austin. Previously, he served from 2007 to 2015 as a Senior Fellow in Economic Studies and as Director of the Initiatives on Value and Innovation in Health Care at the Brookings Institution. Dr. McClellan served as Administrator of the Centers for Medicare & Medicaid Services for the U.S. Department of Health and Human Services from 2004 to 2006 and as Commissioner of the U.S. Food and Drug Administration (FDA) from 2002 to 2004. He served as a Member of the President's Council of Economic Advisers and as Senior Director for Healthcare Policy at the White House from 2001 to 2002 and, during the Clinton administration, held the position of Deputy Assistant Secretary for Economic Policy for the Department of the Treasury. Dr. McClellan previously served as an Associate Professor of Economics and Medicine with tenure at Stanford University, where he also directed the Program on Health Outcomes Research. Dr. McClellan is the founding Chair and Senior Advisor to the Board of the Reagan-Udall Foundation, is a Member of the National Academy of Medicine and the Academy's Leadership Consortium for Value and Science-Driven Health Care, and Co-Chairs the Guiding Committee of the Health Care Payment Learning and Action Network. He sits on the Boards of Directors of ResearchAmerica!, Long Term Quality Alliance, Alignment Healthcare, National Alliance for Hispanic Health, PrognomIQ, Inc. and United States of Care. | | | | Skills & Qualifications | | | | • | Extensive experience in public health policy and regulation, including as Commissioner of the U.S. Food and Drug Administration and Administrator for the U.S. Centers for Medicare & Medicaid Services | | | • | Broad knowledge of, and unique insights into, the challenges facing the healthcare industry | | | Current Committees: | | | | • | Member, Regulatory Compliance | | | • | Member, Science, Technology & Sustainability | | | Other Public Board Service: | | | | • | Alignment Healthcare (since 2021) | | | • | Cigna Corporation (since 2018) | |

  38. Our Shareholders

    | 18 | 2022 Proxy Statement | |

  39. Our Shareholders

    | | | Anne M. Mulcahy | | | | Independent Director since 2009 Lead Director since 2012 | | Biography | | | | Ms. Mulcahy, age 69, was Chairman and Chief Executive Officer of Xerox Corporation (business equipment and services) until July 2009, when she retired as CEO after eight years in the position. Prior to serving as CEO, Ms. Mulcahy was President and Chief Operating Officer of Xerox. She also served as President of Xerox's General Markets Operations, which created and sold products for reseller, dealer and retail channels. Earlier in her career at Xerox, which began in 1976, Ms. Mulcahy served as Vice President for Human Resources with responsibility for compensation, benefits, human resource strategy, labor relations, management development and employee training; and as Vice President and Staff Officer for Customer Operations, covering South America and Central America, Europe, Asia and Africa. Ms. Mulcahy was the U.S. Board Chair of Save the Children from March 2010 to February 2017 and was appointed as a Trustee in February 2018. | | | | Skills & Qualifications | | | | • | Experience leading a large, global manufacturing and services company with one of the world's most recognized brands | | | • | Expertise in finance, organizational and operational management issues crucial to a large public company. | | | • | Deep commitment to business innovation and talent development | | | Current Committees: | | | | • | Chair, Nominating & Corporate Governance | | | • | Member, Audit | | | • | Member, Finance | | | • | Member, Special Consumer Health | | | Other Public Board Service: | | | | • | Graham Holdings Company (since 2008) | | | • | LPL Financial Holdings Inc. (since 2013) | | | • | Williams-Sonoma, Inc. (since 2018) | | | Recent Past Public Board Service: | | | | • | Target Corporation (1997-2017) | |

  40. Our Shareholders

    | | | A. Eugene Washington, M.D., M.Sc. | | | | Independent Director since 2012 | | Biography | | | | Dr. Washington, age 71, is Duke University's Chancellor for Health Affairs and the President and Chief Executive Officer of the Duke University Health System. Previously, he was Vice Chancellor of Health Sciences, Dean of the David Geffen School of Medicine at UCLA; Chief Executive Officer of the UCLA Health System; and Distinguished Professor of Gynecology and Health Policy at UCLA. Prior to UCLA, he served as Executive Vice Chancellor and Provost at the University of California, San Francisco (UCSF) from 2004 to 2010. Dr. Washington co-founded UCSF's Medical Effectiveness Research Center for Diverse Populations in 1993 and served as Director until 2005. He was Chair of the Department of Obstetrics, Gynecology, and Reproductive Sciences at UCSF from 1996 to 2004. Dr. Washington also co-founded the UCSF-Stanford Evidence-based Practice Center and served as its first Director from 1997 to 2002. Prior to UCSF, Dr. Washington worked at the Centers for Disease Control and Prevention. Dr. Washington was elected to the National Academy of Sciences' Institute of Medicine in 1997, where he served on its governing Council. He was founding Chair of the Board of Governors of the Patient-Centered Outcomes Research Institute, served as a member of the Scientific Management Review Board for the NIH and also served as Chairman of the Board of Directors of both the California Healthcare Foundation and The California Wellness Foundation. Dr. Washington serves on the Boards of Directors of the Kaiser Foundation Hospitals and Kaiser Foundation Health Plan, Inc. | | | | Skills & Qualifications | | | | • | Expertise in medicine, clinical research and healthcare innovation | | | • | Important customer, patient and healthcare provider perspective through leadership of complex health systems | | | • | Expertise in health policy | | | Current Committees: | | | | • | Member, Compensation & Benefits | | | • | Member, Science, Technology & Sustainability | | | Other Public Board Service: | | | | • | None | |

  41. Our Shareholders

    | | 2022 Proxy Statement | 19 |

  42. Our Shareholders

    | | | Mark A. Weinberger | | | | Independent Director since 2019 | | Biography | | | | Mr. Weinberger, age 60, served as the Global Chairman and Chief Executive Officer of EY (Ernst & Young) (professional services) from 2013 through June 2019, having served as Global Chairman and CEO-elect in the prior year. He was Assistant Secretary of the U.S. Treasury in the George W. Bush Administration and was appointed by President Bill Clinton to serve on the U.S. Social Security Administration Advisory Board. Mr. Weinberger serves as a Senior Advisor to Stone Canyon Industries Holdings Inc. and Teneo. He is an Executive Advisor to G100 and World 50. Mr. Weinberger also serves as a Strategic Advisor to the Board of FCLTGlobal, which focuses on long-term investing and corporate governance. Mr. Weinberger is on the CEO Advisory Council of JUST Capital. He sits on the Board of Directors of the National Bureau of Economic Research (NBER), is a Senior Advisor to Chief Executives for Corporate Purpose (CECP) and is a member of the Aspen Economic Strategy Group. He is a member of the Boards of Trustees for Emory University, Case Western Reserve University, The Concord Coalition, The Greater Washington Partnership and US Council for International Business. | | | | Skills & Qualifications | | | | • | Experience leading a business and working at the highest levels of government | | | • | Track record of driving transformative change in the public and private sectors during periods of unprecedented disruption | | | • | Expertise in accounting, compliance and corporate governance, with a strong commitment to corporate purpose | | | Current Committees: | | | | • | Chair, Regulatory Compliance | | | • | Member, Audit | | | • | Member, Special Consumer Health | | | Other Public Board Service: | | | | • | Accelerate Acquisition Corp. (since 2021) | | | • | MetLife Inc. (since 2019) | | | • | Saudi Aramco (since 2019) | |

  43. Our Shareholders

    | | | Nadja Y. West, M.D. | | | | Independent Director since 2020 | | Biography | | | | Dr. Nadja West, age 60, retired from the U.S. Army with the rank of Lieutenant General in October 2019. She served as the 44th Army Surgeon General and the Commanding General of the U.S. Army Medical Command from 2015 to 2019, overseeing the highest medical readiness and battlefield wound survival rates in history. As the Joint Staff Surgeon from 2013 to 2015, Dr. West was the principal medical advisor to the Chairman of the Joint Chiefs of Staff at the Pentagon, where she coordinated all related health services issues, including operational medicine, force health protection and readiness within the military. Her prior roles include Deputy Chief of Staff for Support, U.S. Army Medical Command from 2012 to 2013, ensuring proper resources and support for smooth operation of the entire command. From 2010 to 2012, Dr. West served as Commanding General of the Europe Regional Medical Command. She is the recipient of numerous U.S. military awards, including the Distinguished Service Medal, the Defense Superior Service Medal and the Legion of Merit with three Oak Leaf Clusters. Dr. West currently serves as Trustee of both the National Recreation Foundation and Mount St. Mary’s University; and board member of Americares and The Woodruff Foundation. | | | | Skills & Qualifications | | | | • | Proven executive and operational leadership, strategic planning and healthcare management | | | • | Expertise in government relations and human capital management | | | • | Operational crisis management and disaster response experience pertaining to global health issues | | | • | Extensive information security and cybersecurity experience | | | Current Committees: | | | | • | Member, Science, Technology & Sustainability | | | Other Public Board Service: | | | | • | Nucor Corporation (since 2019) | | | • | Tenet Healthcare Corporation (since 2019) | |

  44. Our Shareholders

    | 20 | 2022 Proxy Statement | |

  45. Oversight of Our Company

    | l | The Board conducts an extensive review of the Company's long-term strategic plans on an annual basis. The Board also reviews the long-term strategic plans of each business segment. | | l | Throughout the year, the Board reviews and discusses matters related to the Company's strategy with senior management to ensure our business activities are aligned with our short- and long-term strategy and that we are making progress toward our strategic goals. | | l | Independent Directors hold regularly scheduled Executive Sessions without management present to discuss Company performance and review long-term strategy. Certain Committees also meet in private session with senior management in our financial, legal, compliance and quality functions, among others. | | l | The Board regularly discusses and reviews global economic, geopolitical, social, industry and regulatory trends and the competitive environment. The Board also considers feedback from our shareholders and other stakeholders to ensure that our short- and long-term strategies are appropriately designed to promote sustainable growth. | | l | The Board consults with external advisors to understand outside perspectives on the risks and opportunities facing our Company. |

  46. Key Elements of Our Executive Compensation Programs

    | Balanced Performance-Based Awards | Performance-based awards are based on the achievement of strategic and leadership objectives in addition to financial metrics and relative shareholder returns versus peers | | Multi-Year Performance Period and Vesting | The performance period and vesting schedules for long-term incentives overlap and, therefore, reduce the motivation to maximize performance in any one period. Performance share units, restricted share units and options vest three years from the grant date | | Balanced Mix of Pay Components | The target compensation mix is weighted toward long-term equity compensation vesting over three years | | Capped Incentive Awards | Annual performance bonuses and long-term incentive awards are capped at 200% of target | | Stock Ownership Guidelines | Our CEO must directly or indirectly own equity in our Company equal to twelve times base salary, and the other members of our Executive Committee must own equity equal to six times base salary and retain this level of ownership at all times while serving as an Executive Committee member | | No Change-in-Control Arrangements | None of our executive officers have in place any change-in-control arrangements that would result in guaranteed payouts | | Compensation Recoupment Policy | The Board has the authority to recoup executive officers' past compensation in the event of a material restatement of our financial results and for significant misconduct of Company policy or laws relating to the manufacturing, sales or marketing of our products |

  47. Board-Driven Engagement

    | • | Board Composition and Diversity | • | Executive Compensation and Performance Metrics | | • | Board Evaluation Process | • | Lead Director Responsibilities | | • | Board Oversight of Risk | • | Litigation | | • | Board Tenure and Refreshment | • | Pharmaceutical Pricing Transparency and Access | | • | CEO Transition | • | Product Quality and Safety | | • | Consumer Health Separation | • | Separation of the Chairman and CEO Roles | | • | COVID-19 Response and Vaccine | • | Shareholder Engagement and Communication | | • | Culture and Human Capital Management | • | Shareholder Proposals | | • | Diversity, Equity and Inclusion | • | Succession Planning and Talent Development | | • | ESG Issues and Reporting | • | Tax Policy |

  48. Director Compensation

    Director Compensation The Compensation & Benefits Committee charter requires annual review of non-employee Director compensation, including total compensation and each element of our non-employee Director compensation program. During its annual review, the Committee analyzes the competitive position of our non-employee Director compensation program and each element of that program against the programs of the peer group used for executive compensation purposes (see pages 80 to 81 for information about the Executive Peer Group). Semler Brossy Consulting Group, the Committee’s independent consultant, provides an independent assessment of the competitive data provided to the Committee and advises the Committee on non-employee Director compensation. Decisions regarding the non-employee Director compensation program are approved by the full Board based on recommendations by the Committee.

  49. Fiscal 2021 Non-Employee Director Compensation

    Fiscal 2021 Non-Employee Director Compensation On September 14, 2020, the Compensation & Benefits Committee recommended no changes to the non-employee Director compensation program for 2021. The Board approved no changes to the non-employee Director compensation program for 2021. The overall 2021 compensation structure was below peer group median, and compensation had not been increased since 2019.

  50. Fiscal 2022 Non-Employee Director Compensation

    Fiscal 2022 Non-Employee Director Compensation The Compensation & Benefits Committee’s analysis in 2021 of the competitive position of our non-employee Director compensation program showed that overall compensation for non-employee Directors was below the peer group median. As a result, the Committee recommended, and the Board approved on September 14, 2021, the following non-employee Director compensation program for 2022 to achieve an overall compensation structure in line with the peer group median.

  51. Fiscal 2022 Non-Employee Director Compensation

    | 2022 Non-Employee Director Compensation | ($) | | Cash Compensation | $125,000 | | Lead Director Cash Retainer | 50,000 | | Audit Committee Chair Cash Retainer | 30,000 | | Committee Chair (other than Audit) Cash Retainer | 20,000 | | Value of Deferred Share Units | 195,000 |

  52. Fiscal 2022 Non-Employee Director Compensation

    | 50 | 2022 Proxy Statement | |

  53. Fiscal 2022 Non-Employee Director Compensation

    The compensation of our non-employee Directors for fiscal 2021 is set forth in the following table. Mr. Gorsky is an employee of the Company and, therefore, received no additional compensation for his service as a Director in 2021. For a complete understanding of the table, please read the accompanying footnotes and the narrative disclosures.

  54. Fiscal 2022 Non-Employee Director Compensation

    | 2021 Total Non-Employee Director Compensation | | | | | | | A | B | C | D | E | F | | Name | Role for Additional Cash Retainer | Fees Earned or Paid in Cash ($) | Stock Awards (DSUs) ($) | All Other Compensation ($) | Total ($) | | M. C. Beckerle | Committee Chair | $140,000 | $184,868 | $20,000 | $344,868 | | D. S. Davis | Audit Committee Chair | 145,000 | 184,868 | 0 | 329,868 | | I. E. L. Davis | | 120,000 | 184,868 | 0 | 304,868 | | J. A. Doudna | | 120,000 | 184,868 | 20,000 | 324,868 | | M. A. Hewson | | 120,000 | 184,868 | 11,000 | 315,868 | | H. Joly | | 120,000 | 184,868 | 20,000 | 324,868 | | M. B. McClellan | | 120,000 | 184,868 | 0 | 304,868 | | A. M. Mulcahy | Lead Director; Committee Chair | 175,000 | 184,868 | 20,000 | 379,868 | | C. Prince(1) | | 126,580 | 184,868 | 20,000 | 331,448 | | A. E. Washington | | 120,000 | 184,868 | 20,000 | 324,868 | | M. A. Weinberger(1) | Committee Chair | 133,861 | 184,868 | 0 | 318,729 | | N. Y. West | | 120,000 | 184,868 | 20,000 | 324,868 | | R. A. Williams | Committee Chair | 140,000 | 184,868 | 20,000 | 344,868 | | (1) Mr. Weinberger replaced Mr. Prince as Chair of the Regulatory Compliance Committee in April 2021. The Chair retainer payment was prorated accordingly. | | | | | |

  55. Additional Arrangements

    | Name | Stock Ownership Guideline as a Multiple of Annual Cash Retainer | 2021 Compliance with Stock Ownership Guidelines? | Ownership Threshold Met?(1) | | M. C. Beckerle | 5x | Yes | Yes | | D. S. Davis | 5x | Yes | Yes | | I. E. L. Davis | 5x | Yes | Yes | | J. A. Doudna | 5x | Yes | No(2) | | M. A. Hewson | 5x | Yes | No(2) | | H. Joly | 5x | Yes | No(2) | | M. B. McClellan | 5x | Yes | Yes | | A. M. Mulcahy | 5x | Yes | Yes | | C. Prince | 5x | Yes | Yes | | A. E. Washington | 5x | Yes | Yes | | M. A. Weinberger | 5x | Yes | No(2) | | N. Y. West | 5x | Yes | No(2) | | R. A. Williams | 5x | Yes | Yes | | (1)Non-employee Directors have five years after first becoming subject to the guidelines to achieve the required ownership threshold. (2)Joined Board within past five years. | | | |

  56. Additional Arrangements

    | | | The Board of Directors recommends that shareholders vote, in an advisory manner, FOR approval of the compensation of our named executive officers and the executive compensation philosophy, policies and procedures described in the Compensation Discussion and Analysis (CD&A) section of this Proxy Statement. | | | Before you vote, we urge you to read the following for additional details on our executive compensation | | When casting your 2022 Say on Pay vote, we encourage you to consider: | | | | | l | We continued to mitigate the impact of the pandemic on our patients, customers, communities, and employees, including the distribution of approximately 70% of our global vaccine supply to low- and middle-income countries. | | l | Compensation Discussion and Analysis on pages 56 to 87 | l | Our financial performance was strong despite continued uncertainty driven by the ongoing COVID-19 pandemic. | | | | l | Our named executive officers’ 2021 compensation is aligned with our 2021 performance, with annual incentives payouts aligned to business performance and performance share units (PSUs) paying out below target based on the impact of COVID-19 on financial results and our relative total shareholder return (TSR) performance during the performance period. | | l | Executive Compensation Tables on pages 88 to 110 | | | | | | l | We considered our 2021 Say on Pay vote results, engaged with our shareholders on our executive compensation program to understand their concerns, and made changes to our policies and procedures to incorporate the feedback. | | | | We believe our executive compensation programs promote long-term, sustainable value creation and are strongly aligned with the long-term interests of our shareholders. The guiding principles of our executive compensation program continue to be: pay for performance, accountability for short-term and long-term performance, alignment with shareholders’ interests, and market competitiveness. We assess performance by reviewing not only what financial and strategic objectives were achieved but also how those results were achieved and whether they were achieved consistent with the values embodied in Our Credo. As an advisory vote, the results of this vote will not be binding on the Board or the Company. However, the Board and the Compensation & Benefits Committee value the opinions of our shareholders. They will consider the outcome of the vote when making future decisions on the compensation of our named executive officers and our executive compensation philosophy, policies and procedures. Following our Annual Meeting of Shareholders on April 28, 2022, the next advisory vote on executive compensation is expected to occur at the 2023 Annual Meeting of Shareholders, unless the Board modifies its policy on the frequency of holding such advisory votes. | |

  57. A Message from Our Compensation & Benefits Committee

    Dear Fellow Shareholders: Despite continued COVID-19 related challenges, the Company delivered strong results in 2021. We rolled out our vaccine globally, with commitments to equitably supply the world’s most vulnerable populations. We had robust top- and bottom-line growth, and we increased our dividend for the 59th consecutive year. Our pipeline growth was also strong, and our continued investment in R&D and innovation will propel the Company’s long-term success. The planned separation of the Consumer Health business will allow the two new companies to harness growth opportunities and unlock value. Our 2021 Say on Pay vote won majority support at 57%. We discussed the vote result with our shareholders, considered the rationale for why we exclude special items from non-GAAP EPS and their impact on our long-term equity compensation, and enhanced our process for reviewing and considering items excluded from non-GAAP performance measures. We articulated the factors we consider in determining whether to adjust incentive payouts. For 2021 and prior years, we determined that no adjustments to incentive plan results were warranted, and the compensation program encompassed the effect of special items through their impact on our long-term equity compensation. Reflecting our strong 2021 results, the enterprise annual incentives paid out at 130.0% of target. The Committee used its discretion to lower the payout from 141.2% to 130.0% to align the payout more closely with the business units. Because we did not adjust our PSU goals due to COVID-19, our 2019-2021 PSUs paid out below target at 91.3%. Johnson & Johnson begins a new era in 2022 as Joaquin Duato assumed the role of Chief Executive Officer and Alex Gorsky transitioned to become our Executive Chairman. Effective January 3, 2022, we adjusted their compensation to reflect their new roles. Our Committee Chairman, Mr. Williams, will conclude his service to the Board this year. Through these transitions, we are confident that the future of the Company is strong and supported by a compensation program that rewards performance and aligns with shareholders. We thank you for your continued feedback and respectfully request your support for our 2022 Say on Pay proposal. Sincerely,

  58. What we did

    Process Improvements. Based on our shareholder feedback the Committee enhanced its process for reviewing and considering items excluded from non-GAAP performance measures for 2021 and future years. For 2021 performance and compensation, the Committee: 1.Formalized the collaboration with the Audit Committee by conducting a joint meeting to review all items excluded from non-GAAP performance measures for the purpose of measuring results under our annual and long-term incentive plans. 2.Considered whether any excluded item warranted consideration in the determination of payouts under the annual or long-term incentive plans. 3.Disclosed its decisions and a reconciliation of non-GAAP financial performance measures in this Proxy Statement. Committee Discretion. The Committee discussed the potential use of discretion and the actions it could consider related to adjustment items, including, but not limited to: •Including all or a part of the adjustment item in the calculation of incentive plan results; •Using discretion to reduce incentive plan payouts; and •Reducing the grant value of long-term incentive awards. Fiscal 2021 Committee Compensation Decisions. The Committee considered the impact of including litigation-related special items on incentive payouts and determined that no adjustments to 2021 incentive plan results were warranted. The Committee also reconsidered the decisions on 2020 incentive plan results. Based on the totality of the circumstances and the considerations outlined above, the Committee determined that no adjustments were warranted for prior year exclusions of litigation charges. The Committee believes this is appropriate because: •Litigation impacts management’s compensation through its effect on our share price and the value of their long-term, equity-based compensation. •No 2021 opioid-related charges were excluded from our 2021 adjusted operational earnings. •The events and decisions that resulted in the 2019 and 2020 opioid-related litigation charges occurred before our executives assumed their current roles. •The litigation charges relate to settlements that resolve proceedings efficiently and in the best interests of our stakeholders without any admission or finding of wrongdoing. •The Company was a responsible actor in the opioid market, with products that were designed to be abuse-resistant and accounted for less than 1% of the total opioid prescriptions in the U.S. Decisions in November 2021 by the Oklahoma Supreme Court and the Superior Court in California rejected claims that the Company caused or contributed to the opioid crisis.

  59. 2021 Annual Incentive Goals and Performance

    2021 Annual Incentive Goals and Performance

  60. Performance against our Enterprise 2021 Financial Goals (70% weight)

    Our enterprise financial targets align with the guidance we provided to the investment community. We believe this links our compensation to how effectively we deliver on our public commitments to our shareholders. We set our goals based on our objective of creating long-term sustainable value, our product portfolio and pipeline, and competitive benchmarking. See “Our Annual Incentive Goal Setting Process” on page 64 for details. We established maximum and threshold payout levels around the financial targets based on a review of historical performance for each metric. If performance falls between threshold and target or between target and maximum, we determine the payout factor using interpolation. If performance falls below threshold for a goal, the percentage earned for that goal is 0%. For the purposes of assessing performance under our annual incentive program, we make certain adjustments to our financial measures that have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP), as detailed on page 65.

  61. Performance against our Enterprise 2021 Financial Goals (70% weight)

    At the enterprise level, we exceeded our financial goals for operational sales, adjusted operational EPS, and free cash flow. Enterprise results were driven by overall strength in our business units. Strong financial management at the corporate level drove lower-than-expected consolidated tax expense and employee-related benefits costs that are not included in our business unit reporting. While our Pharmaceuticals and Consumer Health businesses showed strong year-over-year growth, continued COVID-related uncertainty in the market for elective medical procedures and operational headwinds in a key platform caused our MedTech business to underperform against its financial goals. As shown below, our overall enterprise financial performance resulted in a calculated financial payout factor of 161.0% under our annual incentive plan.

  62. Performance against our Enterprise 2021 Financial Goals (70% weight)

    | 2021 Financial Measures | Weight | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | Results | Calculated Payout | Weighted Payout | | Operational Sales ($ millions) | 1/3rd | $84,930 | $89,400 | $93,870 | $90,258 | 119.2% | 39.7% | | Adjusted Operational EPS | 1/3rd | $8.88 | $9.35 | $9.82 | $9.65 | 163.8% | 54.6% | | Free Cash Flow ($ millions) | 1/3rd | $13,860 | $15,400 | $16,940 | $17,074 | 200.0% | 66.7% | | Financial Payout Factor | | | | | | | 161.0% |

  63. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    Performance against our Enterprise Long-Term Strategic Goals (30% weight)

  64. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | 2021 Strategic Goals |

  65. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    The strategic payout factor is determined by the Committee within a range of 0% to 200% based on its evaluation of performance versus our strategic objectives. Our strategic objectives cover a range of items critical to both our short- and long-term success. We prioritize excellence in our operational execution, product development and pipeline growth, our employees, key strategic initiatives that enable our continued growth, and performance against our Environmental, Social, and Governance (ESG) objectives. Not all strategic goals are measured against quantitative performance criteria because some are qualitative. The Committee considers both quantitative and qualitative results and applies discretion when evaluating performance and determining the payout factor.

  66. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | 2021 Strategic Performance |

  67. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    In February 2021, the Committee approved strategic goals aligned with long-term, sustainable value creation. Based on its evaluation of our performance against our strategic goals, the Committee determined a payout factor of 95.0% appropriately recognized both the successes and disappointments we experienced during 2021. The Committee’s assessment of our strategic goals and results is shown in the following table.

  68. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | 2021 Strategic Goals | 2021 Assessment Highlights | | | | Critical Business Objectives | • | We increased our operations and capabilities as a digital organization, optimizing talent solutions, and activating an open-source learning community. | | | | • | We met our enterprise technology goals, leveraging digital technology to accelerate our Enterprise priorities. We also continued to modernize our technology ecosystem, expand our cybersecurity foundation, enhance our network performance, and diversify and increase our cloud adoptions. | | | | • | We successfully accelerated business outcomes through data science, intelligent automation, improving enterprise programs, and harnessing E-Commerce potential. | | | | • | We focused on convergence opportunities to meet our Lung Cancer and Eye Health goals. | | | | • | We partially met our supply chain improvement goals. We met our Consumer Health gross margin goal, but we missed our MedTech gross margin goal. | | | | • | We performed strongly against our product pipeline value and innovation platform goals. However, some new products experienced delays. | | | Environmental, Social, & Governance (ESG) | • | We achieved our diversity, equity and inclusion goals, meeting key representation levels for female VPs, Black and African-American Directors and VPs, and Hispanic Directors and VPs. | | | | • | We made substantial progress against our human capital management goals, including enhancing our talent pipeline and succession planning as well as retention of Executive Committee and business unit leaders. | | | | • | We met our quality and compliance objectives, closing audit remediation gaps and reducing the number of health authority actions. | | | | • | We achieved all our key safety goals. | | | | • | We achieved key milestones on plastics and renewable electricity initiatives. | | | Enterprise Strategic Payout Factor | | | 95% |

  69. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | | 2022 Proxy Statement | 61 |

  70. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | 2021 Annual Incentives |

  71. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    The 2021 annual incentive payouts for our CEO and other named executive officers were based 70% on financial goals and 30% on strategic goals. Messrs. Gorsky, Wolk, Stoffels, and Duato were measured at the enterprise level. Ms. Taubert's financial goals were weighted 75% Pharmaceuticals / 25% enterprise. Her strategic goals were aligned with the Pharmaceuticals business. Our financial goals are evaluated against identified threshold, target, and maximum levels of performance. Our strategic payout factors are determined by the Committee, in its sole discretion, based on its evaluation of performance versus our strategic goals. In addition, the Committee may adjust individual awards on an exception basis within a range of 0x to 1.2x (subject to the 200% of target maximum). The payouts can range from 0% to 200% of the target award as illustrated below.

  72. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | Target AwardX | Payout Factor (70% Financial / 30% Strategic) | = | Payout Range (0% to 200% of Target) |

  73. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | Summary of Named Executive Officer Annual Incentive Payouts |

  74. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    The final payout factor for Messrs. Gorsky, Wolk, Stoffels and Duato is shown in the table below.

  75. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | | Weight | 2021 Payout Factors | Weighted Payout | | Enterprise Financial | 70.0% | 161.0% | 112.7% | | Enterprise Strategic | 30.0% | 95.0% | 28.5% | | Calculated Enterprise Payout Factor | | | 141.2% | | Discretionary Reduction | | | (11.2%) | | Final Enterprise Payout Factor | | | 130.0% |

  76. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    The Committee used its discretion to reduce the annual incentive payouts for the named executive officers evaluated based on enterprise performance by 11.2% points to align the enterprise payouts more closely with those of the business units. Strong financial management at the corporate level drove lower-than-expected consolidated tax expense and employee-related benefits costs that are not reflected in business unit reporting. Ms. Taubert’s annual incentive payout factor of 141.8% was based on the performance in the Pharmaceuticals business. The financial component of Ms. Taubert's award included both enterprise (25%) and Pharmaceutical (75%) financial performance.

  77. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | 62 | 2022 Proxy Statement | |

  78. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | Our Annual Incentive Goal Setting Process |

  79. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    In the fall, we undertake a rigorous planning process to develop our goals for the coming year. Our financial goals are used to develop the estimates that we provide to the investment community, are aligned with our long-term strategic plan and promote long-term, sustainable value creation. The principles we follow in setting our financial targets are:

  80. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | l | Operational Sales: Align with our strategic objective to exceed market growth using the breadth of our portfolio. | | l | Adjusted Operational EPS: Consider our strategic plan, financial principles, competitive position, and investment strategies. | | l | Free Cash Flow: Target specific levels of productivity and adjust for significant events as needed. |

  81. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    We set our 2021 operational sales growth goal considering:

  82. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | l | Growth of key platforms across our portfolio and recovery from the COVID-19 pandemic partially offset by strategic SKU rationalization in our Consumer Health business and anticipated headwinds in our Pharmaceuticals business due to competition from biosimilars and generics. |

  83. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    We set our 2021 adjusted operational EPS growth goal considering:

  84. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | l | The planned 2021 operational sales items noted above and our financial principles. |

  85. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    We set our 2021 Free Cash Flow goal considering:

  86. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | l | Our productivity in generating free cash flow from net income. | | l | Adjustments for significant events. |

  87. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | | 2022 Proxy Statement | 63 |

  88. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | Details on Non-GAAP Performance Measures | | | | | | • | Operational Sales Growth: Operational sales growth is the sales change due to changes in volume and price, excluding COVID-19 vaccine sales and the effect of currency translation. The following is a reconciliation of operational sales to reported sales (the most directly comparable GAAP measure). | | | | | | | | | ($ millions) | | | | | 2021 Reported Sales | $93,775 | | | | | COVID-19 Vaccine Sales | (2,385) | | | | | Currency Translation | (1,132) | | | | | 2021 Operational Sales | $90,258 | | • | Free Cash Flow: Free Cash Flow is the net cash from operating activities less additions to property, plant and equipment. For 2021 annual incentive purposes, we adjusted enterprise Free Cash Flow downward approximately $2.7 billion to take out the impact of budgeted litigation-related payments that did not occur in 2021 and other adjustments. The figures are rounded for display purposes. | | | | | | | | | $(billions) | | | | | Cash flow from operating activities | $23.4 | | | | | Additions to Property, Plant and Equipment | (3.6) | | | | | Free Cash Flow | 19.8 | | | | | Adjustments | (2.7) | | | | | Adjusted Free Cash Flow | $17.1 | | • | Adjusted Operational EPS Growth: Adjusted EPS and adjusted operational EPS are non-GAAP financial measures. | | | | | | | • | See Exhibit 99.2 to the Company’s Current Report on Form 8-K dated January 25, 2022 and “Reconciliation of Non-GAAP Financial Measures” in our 2021 Annual Report included in our Proxy materials for a breakout of special items and intangible amortization expense. | | | | | • | Adjusted operational EPS growth also excludes the effect of currency translation. | | | | | • | Below is a reconciliation of diluted EPS (the most directly comparable GAAP measure) to adjusted EPS and adjusted operational EPS. | | | | | | | 2021 Actual $ per share | | | | | Diluted EPS as Reported | $7.81 | | | | | Special Items and Intangible Amortization Expense | 1.99 | | | | | Adjusted EPS | 9.80 | | | | | Currency Translation | (0.15) | | | | | Adjusted Operational EPS | $9.65 |

  89. Performance against our Enterprise Long-Term Strategic Goals (30% weight)

    | 64 | 2022 Proxy Statement | |

  90. 2019-2021 Performance Share Unit (PSU) Payout

    2019-2021 Performance Share Unit (PSU) Payout

  91. 2019-2021 Performance Share Unit (PSU) Payout

    | PSU Performance versus Goals for Performance Periods Completed in 2021 |

  92. 2019-2021 Performance Share Unit (PSU) Payout

    Our 2021 operational sales exceeded target. Due to the impact of COVID-19, our 2019-2021 adjusted operational EPS performance fell below target. Our 2019-2021 TSR compound annual growth rate also fell below target as shown in the table below.

  93. 2019-2021 Performance Share Unit (PSU) Payout

    | PSU Measure | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | Actual | Calculated Payout | | 2021 Operational Sales ($ millions) | $84,930 | $89,400 | $93,870 | $90,258 | 119.2% | | 2019-2021 Cumulative Adjusted Operational EPS | 24.90 | 27.67 | 30.44 | $26.98 | 87.5% | | 2019-2021 Relative TSR (CAGR) | 10% pts. below Composite | Equal to Composite | 10% pts. above Composite | (4.6) Pts | 77.0% |

  94. 2019-2021 Performance Share Unit (PSU) Payout

    Note: Operational sales and cumulative adjusted operational EPS are non-GAAP measures. See page 68 for details. If performance falls between threshold and target or between target and maximum, we determine the percentage of target earned using interpolation. If performance is below threshold for a goal, the percentage of target earned for that goal is 0%. If TSR is negative, the percentage of target earned based on TSR performance would be capped at 100%.

  95. 2019-2021 Performance Share Unit (PSU) Payout

    | 2019-2021 Operational Sales Performance versus PSU Goals |

  96. 2019-2021 Performance Share Unit (PSU) Payout

    Our 2019-2021 operational sales performance was measured against three equally weighted 1-year sales goals. The weighted 2019-2021 operational sales payout is shown in the table below. COVID-19 negatively impacted our 2020 results, but we did not make adjustments to performance or targets.

  97. 2019-2021 Performance Share Unit (PSU) Payout

    | 2019-2021 Operational Sales Payout | 2019 (1/3rd Weight) | 2020 (1/3rd Weight) | 2021 (1/3rd Weight) | Weighted Payout | | Payout (% of target) | 145.9% | 62.9% | 119.2% | 109.3% |

  98. 2019-2021 Performance Share Unit (PSU) Payout

    Note: Details on the 2019 and 2020 goals and performance are included on page 59 and page 57 of our 2020 and 2021 Proxy Statements, respectively.

  99. 2019-2021 Performance Share Unit (PSU) Payout

    | 2019-2021 PSU Payout as a Percent of Target |

  100. 2019-2021 Performance Share Unit (PSU) Payout

    Our 2019-2021 Performance Share Units (PSUs) paid out at 91.3% of target as shown in the table below.

  101. 2019-2021 Performance Share Unit (PSU) Payout

    | PSU Measure | Weight | Calculated Payout | Weighted Payout | | Operational Sales | 1/3rd | 109.3% | 36.4% | | 2019-2021 Cumulative Adjusted Operational EPS | 1/3rd | 87.5% | 29.2% | | 2019-2021 Relative TSR | 1/3rd | 77.0% | 25.7% | | PSU Payout Factor | | | 91.3% |

  102. 2019-2021 Performance Share Unit (PSU) Payout

    Note: Sum of individual components may not reflect total payout factor due to rounding.

  103. 2019-2021 Performance Share Unit (PSU) Payout

    | | 2022 Proxy Statement | 65 |

  104. 2019-2021 Performance Share Unit (PSU) Payout

    | Our PSU Goal Setting Process |

  105. 2019-2021 Performance Share Unit (PSU) Payout

    Our PSU goals are based on our long-term strategic plan, promote long-term, sustainable value creation, and take into account our product portfolio and pipeline, anticipated healthcare market growth, and other external factors, including the competitive landscape. Cumulative Adjusted Operational EPS: The EPS goal is set based on:

  106. 2019-2021 Performance Share Unit (PSU) Payout

    | l | The operational EPS guidance for the first year, which is provided to the investment community. | | l | Sales and EPS targets included in our strategic plan for the second and third years of the performance period. | | l | Analysts’ expectations for the Company and the Competitor Composite Peer Group. | | l | An EPS growth to sales growth multiple aligned with a long-term goal of growing net income faster than sales. |

  107. 2019-2021 Performance Share Unit (PSU) Payout

    Relative Total Shareholder Return (TSR): The 3-year relative TSR goal is set to meet the performance of our Competitor Composite Peer Group, which undergoes annual review. See page 82 for more information on our Competitor Composite Peer Group. Operational Sales: Beginning with awards made in February 2020, one-year operational sales is not a PSU performance measure. For PSUs granted prior to 2020, our annual operational sales goals were based on actual sales from the prior year and then aligned to the Company’s annual operational sales growth guidance. Currency had a negative impact of approximately $421 million on the 2020 sales base used to set the 2021 operational sales growth goal. The following table shows the 2020 operational and reported sales, the 2020 impact of currency, and the 2021 operational sales goal. We discuss our 2021 operational sales growth goal setting on page 64.

  108. 2019-2021 Performance Share Unit (PSU) Payout

    | | $(millions) | | Base Year Sales | | | 2020 Operational Sales | $83,005 | | 2020 Currency Translation | ($421) | | 2020 Reported Sales | $82,584 | | 2021 Operational Sales Goal | | | 2021 Operational Sales Growth Goal | 8.3% | | 2021 Operational Sales Goal | $89,400 |

  109. 2019-2021 Performance Share Unit (PSU) Payout

    | 66 | 2022 Proxy Statement | |

  110. 2019-2021 Performance Share Unit (PSU) Payout

    | Details on Non-GAAP PSU Performance Measures | | | | | 2021 Operational Sales Performance: Operational sales growth is the sales change due to changes in volume and price, excluding COVID-19 vaccine sales and the effect of currency translation. The following is a reconciliation of operational sales to reported sales (the most directly comparable GAAP measure). | | | | | $(millions) | | | 2021 Reported Sales | $93,775 | | | COVID-19 Vaccine Sales | (2,385) | | | Currency Translation | (1,132) | | | 2021 Operational Sales | $90,258 | | | 2019-2021 Cumulative Adjusted Operational EPS Performance: The following is a reconciliation of 2019-2021 cumulative reported EPS to cumulative adjusted operational EPS: | | | | | $ | | | Reported EPS | $18.95 | | | Special Items and Intangible Amortization Expense | 7.56 | | | Adjusted EPS | 26.51 | | | Currency Translation | 0.47 | | | Plan Adjustments | 0.00 | | | Adjusted Operational EPS | $26.98 | | | See Exhibit 99.2 to the Company’s Current Report on Form 8-K dated January 25, 2022 and “Reconciliation of Non-GAAP Financial Measures” in our 2021 Annual Report included in our Proxy materials for a breakout of special items and intangible amortization expense. There were no plan-level adjustments for the 2019-2021 PSU performance period. | | | | 2019-2021 Relative TSR Performance (calculated using trailing 20-day average closing stock prices): | | | | TSR from January 1, 2019 to December 31, 2021 | % | | | Johnson & Johnson | 10.3% | | | Competitor Composite Peer Group | 14.9% | | | Relative TSR Performance (J&J minus Competitor Composite) | (4.6)% points |

  111. 2019-2021 Performance Share Unit (PSU) Payout

    | | 2022 Proxy Statement | 67 |

  112. CEO Transition-Related Compensation Decisions

    CEO Transition-Related Compensation Decisions On August 19, 2021, we announced that Joaquin Duato, previously Vice Chairman of the Company’s Executive Committee, would assume the role of CEO and join the Company’s Board of Directors effective January 3, 2022. Alex Gorsky, previously Chairman and CEO of the Company, transitioned to Executive Chairman, also effective January 3, 2022. On January 4, 2022, the Board approved compensation changes for Mr. Duato and Mr. Gorsky in conjunction with their respective role changes. Upon his assumption of the CEO role, Mr. Duato’s annual compensation opportunities increased as follows: his annual base salary is $1,500,000, his annual incentive target is 175% of base salary, and his long-term incentive target is 820% of base salary. Actual annual and long-term incentive awards will be based on achievement of the business and individual performance objectives and subject to approval by the independent members of the Board. As an employee of the Company, Mr. Duato will receive no additional compensation for his service as a member of the Board. A description of Mr. Duato's 2021 performance and associated compensation decisions can be found on pages 71 to 73. Mr. Duato’s 2021 and 2022 target TDC is summarized below:

  113. CEO Transition-Related Compensation Decisions

    | Position | Cash | | | Equity | | Target Total Direct Compensation | | | Salary ($) | Annual Incentive Target | | LTI Target | | | | | | (%) | $ | (%) | $ | ($) | | Vice Chairman of the EC (2021) | $1,030,000 | 125% | $1,287,500 | 500% | $5,150,000 | $7,467,500 | | Chief Executive Officer (2022) | $1,500,000 | 175% | $2,625,000 | 820% | $12,300,000 | $16,425,000 |

  114. CEO Transition-Related Compensation Decisions

    In connection with his transition to Executive Chairman, Mr. Gorsky’s annual compensation opportunities were adjusted as follows: his annual base salary was decreased to $1,400,000, and his annual incentive target for 2022 was decreased to 150% of base salary. His actual annual incentive payout will be based on achievement of the applicable business and individual performance objectives and subject to approval by the independent members of the Board. Mr. Gorsky will not be eligible to receive future long-term incentive awards for his service as Executive Chairman. Mr. Gorsky’s 2021 and 2022 target TDC is summarized below:

  115. CEO Transition-Related Compensation Decisions

    | Position | Cash | | | Equity | | Target Total Direct Compensation | | | Salary ($) | Annual Incentive Target | | LTI Target | | | | | | (%) | $ | (%) | $ | ($) | | Chairman & CEO (2021) | $1,650,000 | 175% | $2,887,500 | 820% | $13,530,000 | $18,067,500 | | Executive Chairman (2022) | $1,400,000 | 150% | $2,100,000 | 0% | $0 | $3,500,000 |

  116. Compensation Decisions for 2021 Performance

    | l | Annual incentive payout for the prior year’s performance, | | l | Long-term incentives granted in the first quarter of the year based on the prior year's performance, and | | l | Salary rate for the upcoming year. |

  117. Compensation Decisions for 2021 Performance

    | A | B | C | D | E | | | Cash | | Equity | | | Name | Salary Earned ($) | Annual Incentive ($) | Long-Term Incentive ($) | Total Direct Compensation ($) | | A. Gorsky | $1,650,000 | $3,750,000 | $16,900,000 | $22,300,000 | | J. Wolk | 938,077 | 1,540,000 | 6,140,000 | 8,618,077 | | P. Stoffels | 1,222,500 | 1,990,000 | 0 | 3,212,500 | | J. Duato | 1,030,000 | 1,670,000 | 7,730,000 | 10,430,000 | | J. Taubert | 938,077 | 1,340,000 | 6,200,000 | 8,478,077 |

  118. Annual Incentive (Column C)

    Annual Incentive (Column C) The Board and the Committee approved 2021 annual incentives on February 14, 2022, at 130.0% of target for the enterprise-level named executive officers and 141.8% of target for Ms. Taubert as summarized under “2021 Annual Incentive Goals and Performance” on pages 61 through 65. See the “2021 Grants of Plan-Based Awards” table on page 97 for the target amounts.

  119. Long-Term Incentive Awards (for 2021 performance) (Column D)

    Long-Term Incentive Awards (for 2021 performance) (Column D) The Board and the Committee approved long-term incentive awards on February 14, 2022 (ranging from 125% to 155% of target) to the continuing named executive officers based on their 2021 performance, impact on the Company’s long-term results, competitive market data, and long-term potential within the organization. Dr. Stoffels retired from the Company effective January 3, 2022, and did not receive a long-term incentive award on February 14, 2022. The Board and the Committee recognized the named executive officers’ contributions in 2021 in executing the Company’s key strategic objectives, fulfilling Our Credo responsibilities to patients, doctors, nurses and employees, and helping the world battle the ongoing COVID-19 pandemic. The Board and Committee considered the following in their decisions:

  120. Long-Term Incentive Awards (for 2021 performance) (Column D)

    | | 2022 Proxy Statement | 71 |

  121. Long-Term Incentive Awards (for 2021 performance) (Column D)

    | l | These awards will further align executive and shareholder interests. | | l | Based on the recent CEO transition, these awards help secure our current executive leadership, whose contributions are critical to our continued growth and success. | | l | The Pharmaceuticals and Consumer Health businesses exceeded their financial goals despite the impact of COVID-19. |

  122. Long-Term Incentive Awards (for 2021 performance) (Column D)

    In the table below, we show: the total long-term incentive awards granted; the weighting of performance share units (PSUs), options, and restricted share units (RSUs); and the individual award values.

  123. Long-Term Incentive Awards (for 2021 performance) (Column D)

    | Name | PSUs ($) | Options ($) | RSUs ($) | Total Long-Term Incentives ($) | | Award Weight | 60% | 30% | 10% | 100% | | A. Gorsky | $10,140,000 | $5,070,000 | $1,690,000 | $16,900,000 | | J. Wolk | 3,684,000 | 1,842,000 | 614,000 | 6,140,000 | | J. Duato | 4,638,000 | 2,319,000 | 773,000 | 7,730,000 | | J. Taubert | 3,720,000 | 1,860,000 | 620,000 | 6,200,000 |

  124. Long-Term Incentive Awards (for 2021 performance) (Column D)

    In the table below, we show the number of shares of PSUs, options, and RSUs granted. We determine the number of units or options for each type of long-term incentive by dividing the dollar amount by the value per unit (or option) and rounding to the nearest whole unit or option. See the table on page 74 for details on the value of our 2022 long-term incentive awards.

  125. Long-Term Incentive Awards (for 2021 performance) (Column D)

    | Name | PSUs (#) | Options (#) | RSUs (#) | | Value Per Unit or Option | $152.983 | $23.234 | $152.983 | | A. Gorsky | 66,282 | 218,215 | 11,047 | | J. Wolk | 24,081 | 79,280 | 4,014 | | J. Duato | 30,317 | 99,811 | 5,053 | | J. Taubert | 24,316 | 80,055 | 4,053 |

  126. Long-Term Incentive Awards (for 2021 performance) (Column D)

    | 2022 Salary Rates |

  127. Long-Term Incentive Awards (for 2021 performance) (Column D)

    We do not guarantee annual salary increases and they are not automatic. The Board and the Committee reviewed performance, market data, responsibilities, and experience in determining the base salary rates for our named executive officers. The following table shows the 2022 annual base salary rate for each of the continuing named executive officers. The annual base salary rates for Messrs. Duato and Gorsky were approved by the Board to be effective January 3, 2022. The annual base salary rates for Mr. Wolk and Ms. Taubert were approved by the Committee to be effective as of February 21, 2022.

  128. Long-Term Incentive Awards (for 2021 performance) (Column D)

    | Name | 2021 Base Salary Rate ($) | 2022 Base Salary Rate ($) | | A. Gorsky | $1,650,000 | $1,400,000 | | J. Wolk | 945,000 | 1,020,000 | | J. Duato | 1,030,000 | 1,500,000 | | J. Taubert | 945,000 | 1,020,000 |

  129. Long-Term Incentive Awards (for 2021 performance) (Column D)

    | 72 | 2022 Proxy Statement | |

  130. Long-Term Incentive Awards (for 2021 performance) (Column D)

    | Details on 2022 Long-Term Incentive Value per Unit or Option | | | | | We used $152.983 per unit to determine the number of PSUs. This is the same as the RSU value and equals the value of a PSU assuming 100% of target performance is achieved. | | | | We determined the grant date value for the RSUs based on the average of the high and low prices of our common stock on the New York Stock Exchange (NYSE) on the grant date discounted by the expected dividend yield because dividends are not paid on RSUs prior to vesting. | | | | We valued the options using the Black-Scholes model with the assumptions below. | | | | We used the same grant date, common stock fair market value and dividend yield assumptions to calculate the values of the options and RSUs shown in the table below. | | | | Assumptions used for RSU and Option Calculations | | | | Grant Date | 2/14/2022 | | | Common Stock Fair Market Value (average of the high and low prices on the NYSE) | $165.89 | | | Dividend yield | 2.70% | | | Value per RSU | $152.983 | | | 2022 Option Value | | | | Exercise Price | $165.89 | | | Risk Free Rate (determined based on U.S. treasury rate of seven years) | 1.98% | | | Expected Volatility (calculated using blended historical average volatility and implied volatility on at-the-money, 2-year, traded options) | 18.00% | | | Expected Life in years (calculated based on historical data) | 7.00 | | | Value per Option | $23.234 |

  131. Long-Term Incentive Awards (for 2021 performance) (Column D)

    | | 2022 Proxy Statement | 73 |

  132. Key Features of our Executive Compensation Program

    | What We Do | | What We Don't Do | | | ü | Align CEO pay with Company performance | û | No automatic or guaranteed annual salary increases | | ü | Align the majority of named executive officer pay with shareholders through long-term incentives | û | No guaranteed annual or long-term incentive awards | | ü | Balance short-term and long-term incentives | û | No above-median targeting of executive compensation | | ü | Cap incentive awards | û | No change-in-control benefits | | ü | Require executives to own significant amounts of Company stock | û | No tax gross-ups (unless they are provided pursuant to our standard relocation practices) | | ü | Employ a compensation recoupment policy applicable to our named executive officers | û | No option repricing without shareholder approval | | ü | Actively engage with our shareholders | û | No hedging, pledging or short selling of Company stock | | ü | Engage an independent compensation consultant reporting directly to the Committee | û | No long-term incentive backdating | | | | û | No dividend equivalents on unvested long-term incentives |

  133. Guiding Principles

    | l | Pay for Performance: We tie annual incentive payouts and long-term incentive grants to the performance of: our Company, the individual’s business unit or function, and the individual. | | l | Accountability for Short-Term and Long-Term Performance: We structure performance-based compensation to reward an appropriate balance of short-term and long-term financial and strategic business results, with an emphasis on managing the business for long-term results. The Board is responsible for oversight of risk management (including product development, supply chain, and quality risks) as described under “Oversight of Our Company” on pages 31 through 41. Our compensation program’s emphasis on long-term value helps to reduce the possibility that our executives make excessively risky business decisions that could maximize short-term results at the expense of long-term value. | | l | Alignment to Shareholders’ Interests: We structure performance-based compensation to align the interests of our named executive officers with the long-term interests of our shareholders. | | l | Competitiveness: We compare our practices against appropriate peer companies that are of similar size and complexity, so we can continue to attract, retain, and motivate high-performing executives. |

  134. Base Salary, Annual Incentive, and Long-Term Incentives

    Base Salary, Annual Incentive, and Long-Term Incentives Below we describe the components of our total direct compensation, how we determine their size, and why we pay them.

  135. Base Salary, Annual Incentive, and Long-Term Incentives

    | Component | Form | Vesting / Performance Period | How Size is Determined | | | Why We Pay Each Component | | | Base Salary | Cash | Ongoing | l | We base salary rates on: | | l | Recognize job responsibilities | | | | | | l | Competitive data | | | | | | | | l | Scope of responsibilities | | | | | | | | l | Work experience | | | | | | | | l | Time in position | | | | | | | | l | Internal equity | | | | | | | | l | Individual performance | | | | Annual Incentive | Cash | 1 year | l | We set target awards as a percent of salary based on competitive data | | l | Motivate attainment of our near-term priorities, consistent with our long-term strategic plan | | | | | l | We determine award payouts based on business and individual performance | | | | | Long-Term Incentives | Equity | 3 years (options: 10-year term) | l | We set target awards as a percent of salary based on competitive data | | l | Motivate attainment of our long-term goals, TSR, and share price growth | | | | | l | We grant long-term incentives based on business and individual performance, contribution, and long-term potential | | l | Retain executives | | | | | l | We determine payouts based on achievement of long-term operational goals, TSR, and share price appreciation | | | |

  136. Base Salary, Annual Incentive, and Long-Term Incentives

    | | 2022 Proxy Statement | 75 |

  137. Long-Term Incentives

    Long-Term Incentives Below we describe the forms of long-term incentives we use for our named executive officers, their weighting, performance periods, how the payouts are determined, and why we use them.

  138. Long-Term Incentives

    | Long-Term Incentive Form | Mix | Vesting / Performance Period | | How Payouts are Determined | | Why We Use Them | | | Performance Share Units | 60% | l | 0% to 200% vested 3 years after grant | l | 1/2 Earnings per Share: 3-year Cumulative Adjusted Operational EPS | l | Aligns with our long-term objective of growing quality earnings | | | | | | l | 1/2 Relative Total Shareholder Return: 3-year Compound Annual Growth Rate versus the Competitor Composite Peer Group | l | Reflects overall TSR outcomes relative to our competitors | | | | | | l | Share price | l | Ties PSU value directly to the share price | | Options | 30% | l | 100% vested 3 years after grant | l | Share price appreciation | l | Motivates share price appreciation over the long-term | | | | l | 10-year term | | | l | Reinforces emphasis on long-term growth aligned with our objectives | | Restricted Share Units | 10% | l | 100% vested 3 years after grant | l | Share price | l | Ties RSU value directly to the share price |

  139. Long-Term Incentives

    Notes:

  140. Long-Term Incentives

    | l | PSU awards prior to February 2020 were based on 1/3 operational sales, 1/3 cumulative adjusted operational EPS, and 1/3 relative TSR. | | l | Operational sales and cumulative adjusted operational EPS are non-GAAP measures. See page 68 for details. | | l | No dividend equivalents are paid on our PSUs, options, or RSUs. |

  141. Long-Term Incentives

    | 76 | 2022 Proxy Statement | |

  142. Long-Term Incentives

    | Long-Term Incentive Vesting and Treatment upon Termination |

  143. Long-Term Incentives

    Our long-term incentives vest 100% on the third anniversary of the grant date. In addition, we do not pay out our PSUs until we determine the percent of target PSUs that have been earned based on performance. The treatment of our long-term incentives upon termination varies depending on the termination circumstances, as follows:

  144. Long-Term Incentives

    | Termination | Eligibility | | Eligible Named Executive Officers | Voluntary Termination | | Involuntary Termination Without Cause | Involuntary Termination with Cause | | Death | | Disability | | Qualifying Separation | l | Termination of employment at age 62 or later, or | Gorsky Wolk Stoffels Duato Taubert | l | Grants within 6 months prior to termination would be forfeited. | | l | All vested and unvested equity awards would be forfeited. | l | All equity awards would become vested on the termination date. | | | | l | Termination of employment after attainment of age 55 and at least 10 years of service with at least 5 years of consecutive service immediately before termination of employment. | | l | Other equity awards would become vested on their normal vesting dates. | | | | l | Options would remain exercisable for their remaining terms. | | | | | | | l | Options would remain exercisable for their remaining terms. | | | | l | Accelerated PSUs would be paid out at 100% of target with a “top up” at the end of the performance period if the payout exceeds target. | | | Non-Qualifying Separation (age 55-61) | l | Termination of employment after attainment of age 55, but before age 62 and without meeting the service requirements for Qualifying Separation. | | l | All unvested equity incentives would be forfeited. | | | | | | | | | | | | l | Vested options would remain exercisable for up to three years. | | | | | | | | Non-Qualifying Separation (Under age 55) | l | Termination of employment before attainment of age 55. | | l | All unvested equity incentives would be forfeited. | | | | | | | | | | | | l | Vested options would remain exercisable for up to three months. | | | | | | |

  145. Long-Term Incentives

    | Non-Competition and Non-Solicitation |

  146. Long-Term Incentives

    Long-term incentive awards are subject to forfeiture and repayment provisions if an employee violates non-competition or non-solicitation agreements, as follows:

  147. Long-Term Incentives

    | Competition with the Company | | Impact on Long-Term Incentive Awards | | | l | Violating the non-competition provisions of the award agreement during employment or within 18 months of termination and/or | l | Forfeit vested and unvested PSUs, options, and RSUs and | | l | Violating any other non-competition or non-solicitation agreement an employee has with the Company. | l | Repay any PSUs or RSUs vested or options exercised within the 12 months prior to the violation. |

  148. Long-Term Incentives

    | | 2022 Proxy Statement | 77 |

  149. Involuntary Termination due to Specified Divestiture or Reduction in Force

    | l | Pro-ration: Awards would be prorated in proportion to the time worked during the vesting period. | | l | Vesting: PSU and RSU awards would become available on their normal vesting dates. Option vesting would be accelerated as of the date of termination and the options would remain exercisable for up to three months. | | l | Coordination with Qualifying Separations: If an employee’s termination is also a Qualifying Separation, any of the employee’s awards that would have been forfeited because they were granted within 6 months prior to termination would receive the pro-ration and vesting treatment described above. |

  150. Involuntary Termination due to Specified Divestiture or Reduction in Force

    Before each year begins, we set compensation targets to ensure that we can compete for talent and to maintain internal equity among positions with similar responsibilities. We conduct an annual review of publicly available information and executive compensation surveys to determine current pay levels among the Executive Peer Group. The Committee reviews market data to understand how our target pay levels compare to benchmark positions, but does not target total compensation to a specific percentile of the Executive Peer Group.

  151. Peer Groups for Pay and Performance

    Peer Groups for Pay and Performance We use two peer groups for executive compensation:

  152. Peer Groups for Pay and Performance

    | l | Executive Peer Group: We use the Executive Peer Group to assess the competitiveness of the compensation of our named executive officers. | | l | Competitor Composite Peer Group: We use the Competitor Composite Peer Group to evaluate the relative performance of our Company. |

  153. Peer Groups for Pay and Performance

    As described below, the two peer groups vary because executive compensation levels and practices are influenced by business complexity and company size. Most of our business competitors are smaller than Johnson & Johnson or even each of our individual businesses.

  154. Peer Groups for Pay and Performance

    | | 2022 Proxy Statement | 79 |

  155. Peer Groups for Pay and Performance

    | Executive Peer Group |

  156. Peer Groups for Pay and Performance

    The Committee compares our executive compensation levels and practices to those of the Executive Peer Group companies. It consists of companies that generally: are similar to Johnson & Johnson's size and scope; have executive positions similar to ours; and compete with us for executive talent. The Committee reviews the composition of the Executive Peer Group annually. We compare our salaries, annual incentives, long-term incentives, total direct compensation, benefits, perquisites and other compensation to the Executive Peer Group companies. We do not include non-U.S. companies because comparable compensation data for the named executive officers is not available. We also do not include companies in industries whose compensation programs are not comparable to our programs, such as the financial services or oil and gas industries. The following table lists the 2021 Executive Peer Group companies, their business characteristics, and Johnson & Johnson’s rankings among these companies. Each company’s figures are for the most recent four fiscal quarters. Market capitalization is as of December 31, 2021. Johnson & Johnson ranks in the top quartile of the peers for revenue, net income, and market capitalization.

  157. Peer Groups for Pay and Performance

    | Company (Ticker Symbol) | Revenue ($ millions) | Net Income ($ millions) (1) | Market Cap ($ billions) (2) | Common Industry (3) | Gross Margin (>40%) | EBIT Margin (>10%)(4) | Inter-national Sales (> 33%) | Business Complexity(5) | R&D % of Sales (>or = 5%) | | 3M Company (MMM) | $35,355 | $5,921 | $102 | ü | ü | ü | ü | ü | ü | | Abbott Laboratories (ABT) | 43,075 | 7,071 | 249 | ü | ü | ü | ü | ü | ü | | Abbvie Inc. (ABBV) | 56,197 | 11,542 | 239 | ü | ü | ü | | ü | ü | | AT&T Inc. (T)(8) | 168,864 | 20,081 | 176 | | ü | ü | | ü | | | The Boeing Company (BA) | 62,286 | (4,202) | 118 | | | | ü | ü | | | Bristol Myers Squibb Company (BMY) | 46,385 | 6,994 | 138 | ü | ü | ü | ü | ü | ü | | Cisco Systems, Inc. (CSCO)(6) | 51,549 | 11,825 | 267 | | ü | ü | ü | ü | ü | | The Coca-Cola Company (KO) | 38,655 | 9,771 | 256 | | ü | ü | ü | | ND(9) | | General Electric Company (GE) | 74,196 | (6,520) | 104 | ü | | | ü | ü | | | Intel Corporation (INTC) | 79,024 | 19,868 | 209 | | ü | ü | ü | ü | ü | | Intl Business Machines Corporation (IBM)(8) | 57,350 | 5,743 | 120 | | ü | ü | ü | ü | ü | | Medtronic plc (MDT)(6) | 31,785 | 4,915 | 139 | ü | ü | ü | ü | ü | ü | | Merck & Co., Inc. (MRK) | 48,704 | 12,345 | 194 | ü | ü | ü | ü | ü | ü | | Microsoft Corporation (MSFT)(7) | 184,903 | 71,185 | 2,525 | | ü | ü | ü | ü | ü | | PepsiCo, Inc. (PEP) | 79,474 | 7,618 | 240 | | ü | ü | ü | ü | | | Pfizer Inc. (PFE) | 81,288 | 21,979 | 331 | ü | ü | ü | ü | ü | ü | | The Procter & Gamble Company (PG)(7)(8) | 78,346 | 14,510 | 396 | ü | ü | ü | ü | ü | | | Raytheon Technologies Corporation (RTX) | 64,388 | 3,864 | 129 | | | | | ü | | | Johnson & Johnson (JNJ) | 93,775 | 20,878 | 450 | ü | ü | ü | ü | ü | ü | | Johnson & Johnson's Ranking | 3rd | 3rd | 2nd | | | | | | | | Johnson & Johnson's Percentile Rank | 89% | 89% | 94% | | | | | | |

  158. Peer Groups for Pay and Performance

    (1) Net Income reflects Net Income (Loss) attributable to company shareholders. (2) Market Caps are derived from Bloomberg as of December 31, 2021. (3) Common Industry means that the company is in an industry similar to one of Johnson & Johnson’s business segments: Pharmaceuticals, MedTech, or Consumer Health. (4) Earnings Before Interest and Tax (EBIT) is calculated as Income Before Tax (IBT) minus Net Interest Expense. (5) Business Complexity means the company is a complex organization with multiple product lines. (6) Used last four calendar quarters ending January 28, 2022 for Medtronic plc and January 29, 2022 for Cisco Systems, Inc. (7) Used last four calendar quarters ending December 31, 2021 for The Procter & Gamble Company and Microsoft Corporation. (8) Prior year data is used as an alternative for AT&T Inc. international sales, AT&T Inc. R&D spend, International Business Machines Corporation's international sales, and The Procter & Gamble Company's R&D spend due to lack of availability at the time of sourcing. (9) ND represents "Not Disclosed" as The Coca-Cola Company does not disclose R&D data.

  159. Peer Groups for Pay and Performance

    | 80 | 2022 Proxy Statement | |

  160. Peer Groups for Pay and Performance

    | Competitor Composite Peer Group |

  161. Peer Groups for Pay and Performance

    The Committee compares overall Company performance to the weighted performance of the Competitor Composite Peer Group companies. For example, when we set the sales goals for our businesses, we compare the sales of our individual businesses to the total sales of their industry competitors. For the TSR component of our PSUs, we weight the TSR within the three business groups by market capitalization and weight the three business groups using our sales mix each year. We include each of the peer companies in only one of the business groups in calculating the Competitor Composite TSR for our PSU program. These companies compete with one or more of our three business segments. We evaluate the peer group on an ongoing basis and update it as necessary. We select the companies based on the following criteria and financial metrics:

  162. Peer Groups for Pay and Performance

    | l | Product Relevance | | l | Financial Comparison: Sales growth, net income growth and margin, EPS growth, and TSR | | l | Global Presence | | l | Market Leadership | | l | Strength and consistency in financial outlook |

  163. Peer Groups for Pay and Performance

    The following table lists the 2021 Competitor Composite Peer Group companies by business.

  164. Peer Groups for Pay and Performance

    | Pharmaceuticals | | MedTech | | Consumer Health | | | l | AbbVie Inc. | l | Alcon, Inc. | l | Beiersdorf AG | | l | Amgen Inc. | l | Boston Scientific Corporation | l | Bayer AG** | | l | AstraZeneca PLC | l | The Cooper Companies, Inc | l | Colgate-Palmolive Company | | l | Bristol-Myers Squibb Company | l | Intuitive Surgical, Inc. | l | GlaxoSmithKline plc** | | l | Eli Lilly and Company | l | Medtronic plc | l | L'Oréal Company | | l | GlaxoSmithKline plc | l | Smith & Nephew plc | l | The Procter & Gamble Company | | l | Merck & Co., Inc. | l | Stryker Corporation | | | | l | Novartis AG | l | Zimmer Biomet Holdings, Inc. | l | Reckitt Benckiser Group plc | | l | Pfizer Inc. | | | l | Sanofi** | | l | Roche Holding Ltd* | | | l | Unilever PLC | | l | Sanofi | | | | | | * | Pharm Sales, SG&A, R&D, and Operating Profit only | | | | | | ** | OTC Sales only | | | | |

  165. Peer Groups for Pay and Performance

    | | 2022 Proxy Statement | 81 |

  166. Governance of Executive Compensation

    | Independence of Compensation Consultant |

  167. Additional Information Concerning Executive Compensation

    Our Severance Pay Plan provides benefits to certain full-time U.S. employees who are involuntarily terminated. We provide two weeks base salary for each year of service, with guaranteed minimums based on an employee’s level. The minimum for our named executive officers is 52 weeks of base salary. We pay severance according to our normal payroll cycle. We do not pay severance as a lump-sum payment. We do not have employment arrangements or agreements with any of our named executive officers.

  168. Additional Information Concerning Executive Compensation

    | Name | Stock Ownership Guideline as a Multiple of Base Salary | 2021 Compliance with Stock Ownership Guidelines? | Ownership Threshold Met?(1) | | A. Gorsky | 12x | Yes | Yes | | J. Wolk | 6x | Yes | Yes | | P. Stoffels | 6x | Yes | Yes | | J. Duato | 6x | Yes | Yes | | J. Taubert | 6x | Yes | Yes | | (1) Executive officers have five years after first becoming subject to the guidelines to achieve the required ownership thresholds. | | | |

  169. Additional Information Concerning Executive Compensation

    Each of our named executive officers was in compliance with our stock ownership requirement as of January 2, 2022. We believe the ownership levels in the graph below illustrate our senior executives' commitment to our Company and our shareholders. We do not count shares underlying options or unearned PSUs as owned shares for these guidelines. A named executive officer cannot sell the after-tax shares received from long-term incentives until his or her ownership threshold is met. The Nominating & Corporate Governance Committee monitors compliance with these guidelines on an annual basis.

  170. Additional Information Concerning Executive Compensation

    | l | 2021 PSU and RSU awards included in the “Stock Awards” column | | l | The 2021 option award included in the "Option Awards" column |

  171. Reconciliation of our CEO's 2021 Total Direct Compensation to the 2021 Summary Compensation Table

    | l | Long-Term Incentive (LTI) Timing and Accounting Differences: | | | | l | LTI Timing Difference: We consider an executive's LTI award granted based on a year's performance to be part of his or her total direct compensation for that year along with his or her salary earned during that year and annual incentive earned for that year's performance. In contrast, the Summary Compensation Table total includes LTI granted during the year - not the LTI granted based on that year's performance. Since we vary the size of our LTI awards based on performance in the prior year, this timing difference results in differences that obscure the decisions of the Committee to align pay with performance for a given year. For example, the LTI awards granted on February 14, 2022 based on 2021 performance are included in our named executive officers' 2021 total direct compensation. However, the Summary Compensation Table's 2021 totals include amounts considered granted in 2021 (mostly based on 2020 performance). | | | l | LTI Accounting Difference: We include the value of the LTI at grant in an executive's total direct compensation. However, the Summary Compensation Table total includes the PSUs considered granted in a year according to U.S. accounting rules which includes a portions of a PSU grant that were tied to that year's sales objective. This LTI accounting difference adds to the LTI timing difference. For example, the value of the PSUs granted on February 14, 2022 based on 2021 performance are included in our named executive officers' 2021 total direct compensation. However, the PSUs included in the Summary Compensation Table 2021 totals were granted based on performance in 2019 and 2021. Also, the per unit value used to determine the number of PSUs granted assumes 100% of target performance is achieved. This PSU unit value is lower than the value included in the Summary Compensation Table. The difference is due to the TSR-based part of the PSUs being valued at more than 100% of target performance according to U.S. accounting rules. | | l | Change in Pension Present Value: The pension is only paid after retirement and we do not consider it to be part of total direct compensation for any given year. In contrast, the Summary Compensation Table total includes positive changes in the present value of an executive's pension benefit during the year. On pages 90 and 94 we show the breakout of the impacts of service, pay, and age and changes in assumptions on our named executive officers' changes in pension values. The "noise" created by changes in assumptions introduces significant year-on-year volatility to our Summary Compensation Table totals and does not reflect decisions on compensation by the Committee. | |

  172. Reconciliation of our CEO's 2021 Total Direct Compensation to the 2021 Summary Compensation Table

    | l | Other: We do not include amounts related to our legacy cash-based long-term incentives and benefits and perquisites in total direct compensation for a year. However, these amounts are included in the Summary Compensation Table total as follows: | | | | l | Legacy cash-based long-term incentives: Dividend equivalent payments on, and the growth in value above a reference rate of, our legacy cash-based long-term incentive plans (included in Columns F and G). We stopped granting cash-based long-term incentives in 2012. | | | l | Benefits and perquisites: Perquisites and other personal benefits, Company contributions to our 401(k) and Excess Savings Plans, and insurance premiums (included in Column H). |

  173. Reconciliation of our CEO's 2021 Total Direct Compensation to the 2021 Summary Compensation Table

    | CEO Compensation: LTI Timing & Accounting Differences | 2019 | 2020 | 2021 | | LTI Value included in Total Direct Compensation | $14,610,000 | $16,900,000 | $16,900,000 | | Value of Timing Differences | (1,110,000) | (2,290,000) | 0 | | Value of Accounting Differences | 506,362 | 3,530,649 | 2,959,172 | | LTI Value included in Summary Compensation Table | 14,006,362 | 18,140,649 | 19,859,172 |

  174. Reconciliation of our CEO's 2021 Total Direct Compensation to the 2021 Summary Compensation Table

    | l | Service: Each year of additional year of service increases the pension benefits. | | l | Five-Year Average Pay: Increases in an executive's five-year average pay increase the pension benefits. | | l | Age: Each year an executive is one year closer to retirement results in an increase in the present value solely due to the passage of time. |

  175. 2021 Summary Compensation Table

    2021 Summary Compensation Table In the table below, we show the compensation of our Chief Executive Officer, Chief Financial Officer and the three other most highly compensated executive officers for 2021. We show the compensation of executive officers listed in the table below for 2020 and 2019 if they were also named in the 2021 and 2020 Proxy Statements. For a complete understanding of the table, please read the descriptions of each column that follow the table.

  176. 2021 Summary Compensation Table

    | A | B | C | D | E | F | G | H | I | | Name and Principal Position | Year | Salary ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | Alex Gorsky Chairman/CEO | 2021 | $1,650,000 | $14,789,176 | $5,069,996 | $4,252,800 | $702,916 | $277,071 | $26,741,959 | | | 2020 | 1,650,000 | 13,757,654 | 4,382,995 | 3,148,515 | 6,436,000 | 200,810 | 29,575,974 | | | 2019 | 1,650,000 | 9,956,365 | 4,049,997 | 3,690,971 | 5,775,000 | 243,444 | 25,365,777 | | Joseph Wolk EVP, CFO | 2021 | 938,077 | 4,877,538 | 1,688,997 | 1,560,863 | 1,809,897 | 78,243 | 10,953,615 | | | 2020 | 885,385 | 4,163,841 | 1,448,997 | 1,044,179 | 2,607,000 | 46,636 | 10,196,038 | | | 2019 | 796,538 | 2,379,419 | 1,182,003 | 1,132,914 | 1,925,000 | 81,818 | 7,497,692 | | Paulus Stoffels VC of the Executive Committee, CSO | 2021 | 1,222,500 | 7,487,478 | 2,567,995 | 2,660,400 | 966,888 | 102,189 | 15,007,450 | | | 2020 | 1,222,500 | 6,871,123 | 2,202,001 | 2,056,395 | 4,005,000 | 82,949 | 16,439,968 | | | 2019 | 1,222,500 | 4,824,472 | 2,040,008 | 2,388,631 | 3,519,000 | 73,238 | 14,067,849 | | Joaquin Duato Vice Chairman of the Executive Committee | 2021 | 1,030,000 | 7,001,281 | 2,393,998 | 2,319,450 | 875,767 | 184,796 | 13,805,292 | | | 2020 | 1,021,538 | 6,798,093 | 2,193,000 | 1,820,403 | 3,746,000 | 45,969 | 15,625,003 | | | 2019 | 969,615 | 4,622,787 | 1,974,005 | 2,295,437 | 3,469,000 | 88,458 | 13,419,302 | | Jennifer Taubert EVP, Worldwide Chair Pharmaceuticals | 2021 | 938,077 | 4,947,245 | 1,713,005 | 1,510,314 | 1,067,411 | 49,707 | 10,225,759 | | | 2020 | 884,615 | 4,468,928 | 1,499,997 | 990,058 | 1,642,000 | 46,871 | 9,532,469 | | | 2019 | 796,154 | 2,625,279 | 1,200,004 | 1,179,065 | 1,237,000 | 59,798 | 7,097,300 |

  177. 2021 Summary Compensation Table

    Note: VC means Vice Chairman. CSO means Chief Scientific Officer. EVP means Executive Vice President. On January 3, 2022, Mr. Gorsky transitioned to Executive Chairman, Mr. Duato assumed the role of CEO, and Dr. Stoffels retired from the Company.

  178. Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G)

    Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G) Column G includes the increase in the present value of the accrued pension benefit and the above-reference-rate non-qualified deferred compensation earnings. The table below shows the change in pension values and above-reference-rate amounts for vested CLCs and CLPs.

  179. Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G)

    | Change in Pension Value and Non-Qualified Deferred Compensation Earnings | | | | | | | Name | Fiscal Year | Change in Pension Value ($) | Above Reference-Rate Calculation for Vested CLCs ($) | Above Reference-Rate Calculation for Vested CLPs ($) | Total ($) | | A. Gorsky | 2021 | $676,000 | $26,916 | $0 | $702,916 | | | 2020 | 6,436,000 | 0 | 0 | 6,436,000 | | | 2019 | 5,775,000 | 0 | 0 | 5,775,000 | | J. Wolk | 2021 | 1,809,000 | 897 | 0 | 1,809,897 | | | 2020 | 2,607,000 | 0 | 0 | 2,607,000 | | | 2019 | 1,925,000 | 0 | 0 | 1,925,000 | | P. Stoffels | 2021 | 931,000 | 35,888 | 0 | 966,888 | | | 2020 | 4,005,000 | 0 | 0 | 4,005,000 | | | 2019 | 3,519,000 | 0 | 0 | 3,519,000 | | J. Duato | 2021 | 841,000 | 34,767 | 0 | 875,767 | | | 2020 | 3,746,000 | 0 | 0 | 3,746,000 | | | 2019 | 3,469,000 | 0 | 0 | 3,469,000 | | J. Taubert | 2021 | 1,059,000 | 8,411 | 0 | 1,067,411 | | | 2020 | 1,642,000 | 0 | 0 | 1,642,000 | | | 2019 | 1,237,000 | 0 | 0 | 1,237,000 |

  180. Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G)

    | 92 | 2022 Proxy Statement | |

  181. Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G)

    The change in pension present value is not a current cash payment. The pensions are only paid after retirement. See “2021 Pension Benefits” on page 104 for details on the pension. See Note 10 to the Consolidated Financial Statements of the 2021 Form 10-K for details on the discount rate.

  182. Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G)

    | l | Impact of Service, Pay, and Age: The following factors increased the present values: | | | | l | Service: An additional year of completed service was included in the calculation of benefits. | | | l | Five-Year Average Pay: The five-year average pay increased since the previous fiscal year-end. | | | l | Age: Each executive is one year closer to the age when we assume the pension payments will begin. | | l | Impact of Changes in Assumptions: The change in present value is highly sensitive to changes in mortality and interest rate assumptions which can increase or decrease the values. The following table details the changes in actuarial assumptions and their net effect on the change in pension value. | |

  183. Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G)

    | Effect of Change in Actuarial Assumptions on Pension Present Value | | | | | Year | Mortality Table | Discount Rate | Net Effect of Changes on Pension Present Value | | 2021 | PRI-2012 Table, Generational Mortality Projection with Scale MMP-2021 | 2.89% | Decrease | | 2020 | PRI-2012 Table, Generational Mortality Projection with Scale MMP-2019 | 2.55% | Increase | | 2019 | PRI-2012 Table, Generational Mortality Projection with Scale MMP-2019 | 3.46% | Increase | | 2018 | RP-2014 Table, Generational Mortality Projection with Scale MMP-2018 | 4.47% | N/A |

  184. Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G)

    In the table below, we show the 2019-2021 changes in pension value and the impacts of: (i) service, pay and age; and (ii) changes in assumptions. Negative figures are not included in the Summary Compensation Table (according to SEC rules).

  185. Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G)

    | Change in Pension Value | | | | | | | Name | Year | Impact of Service, Pay, and Age ($) | Impact of Changes in Assumptions ($) | Total Change in Pension Value ($) | Amount Reported in Summary Compensation Table ($) | | A. Gorsky | 2021 | $2,286,000 | $(1,610,000) | $676,000 | $676,000 | | | 2020 | 2,236,000 | 4,200,000 | 6,436,000 | 6,436,000 | | | 2019 | 2,274,000 | 3,501,000 | 5,775,000 | 5,775,000 | | J. Wolk | 2021 | 2,365,000 | (556,000) | 1,809,000 | 1,809,000 | | | 2020 | 1,508,000 | 1,099,000 | 2,607,000 | 2,607,000 | | | 2019 | 1,176,000 | 749,000 | 1,925,000 | 1,925,000 | | P. Stoffels | 2021 | 1,926,000 | (995,000) | 931,000 | 931,000 | | | 2020 | 1,541,000 | 2,464,000 | 4,005,000 | 4,005,000 | | | 2019 | 1,396,000 | 2,123,000 | 3,519,000 | 3,519,000 | | J. Duato | 2021 | 1,812,000 | (971,000) | 841,000 | 841,000 | | | 2020 | 1,341,000 | 2,405,000 | 3,746,000 | 3,746,000 | | | 2019 | 1,379,000 | 2,090,000 | 3,469,000 | 3,469,000 | | J. Taubert | 2021 | 1,430,000 | (371,000) | 1,059,000 | 1,059,000 | | | 2020 | 814,000 | 828,000 | 1,642,000 | 1,642,000 | | | 2019 | 672,000 | 565,000 | 1,237,000 | 1,237,000 |

  186. Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G)

    | | 2022 Proxy Statement | 93 |

  187. Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G)

    | Above-Reference-Rate Non-Qualified Deferred Compensation Earnings |

  188. Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G)

    Any above-reference-rate returns on vested CLCs and CLPs are deferred and not paid in the current year.

  189. Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G)

    | l | The change in the values of the CLCs and CLPs depends on our long-term operational performance. | | l | We use 120% of the December applicable federal long-term interest rate (AFR) as the reference rate. | | l | Negative figures are not included in the Summary Compensation Table (according to the SEC’s rules). |

  190. Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G)

    The following table details the calculation of the above-reference-rate returns on CLCs and CLPs.

  191. Change in Pension Value and Non-Qualified Deferred Compensation Earnings (Column G)

    | Above-Reference-Rate Return | CLC | CLP | | Beginning of Year Unit Value | $50.25 | $5.65 | | End of Year Unit Value | $51.62 | $5.70 | | Change in Unit Value ($) | $1.37 | $0.05 | | Change in Unit Value (%) | 2.73% | 0.88% | | Reference-Rate | 2.28% | 2.28% | | Above-Reference-Rate Return | 0.45% | (1.40)% | | Above Reference-Rate Return Included in the Summary Compensation Table | 0.45% | 0.00% |

  192. 2021 Grants of Plan-Based Awards

    2021 Grants of Plan-Based Awards In the table below, we show the potential ranges of the 2021 annual incentive and the PSUs considered granted in 2021. We also show the RSUs and options granted in 2021. We include the grant date fair values of the stock awards and option awards in columns D and E of the Summary Compensation Table on page 91. For a complete understanding of the table, please read the descriptions of each column that follow the table.

  193. 2021 Grants of Plan-Based Awards

    | A | B | C | D | E | F | G | H | I | J | K | L | M | N | | Name | Award | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (Annual Incentive) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (Performance Share Units) | | | All other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/sh) | Closing Market Price on the Grant Date ($) | Grant Date Fair Value of Stock and Option Awards ($) | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | | A. Gorsky | Annual Incentive | | $0 | $2,887,500 | $5,775,000 | | | | | | | | | | | 2021-2023 PSU | 2/8/2021 | | | | 0 | 66,396 | 132,792 | | | | | $11,908,056 | | | 2019-2021 PSU | 2/8/2021 | | | | 0 | 7,419 | 14,838 | | | | | 1,191,120 | | | RSU | 2/8/2021 | | | | | | | 11,066 | | | | 1,690,000 | | | Stock Awards Total | | | | | | | | | | | | 14,789,176 | | | Option | 2/8/2021 | | | | | | | | 243,072 | $164.62 | $164.92 | 5,069,996 | | J. Wolk | Annual Incentive | | 0 | 1,181,250 | 2,362,500 | | | | | | | | | | | 2021-2023 PSU | 2/8/2021 | | | | 0 | 22,119 | 44,238 | | | | | 3,967,021 | | | 2019-2021 PSU | 2/8/2021 | | | | 0 | 2,165 | 4,330 | | | | | 347,591 | | | RSU | 2/8/2021 | | | | | | | 3,686 | | | | 562,926 | | | Stock Awards Total | | | | | | | | | | | | 4,877,538 | | | Option | 2/8/2021 | | | | | | | | 80,976 | 164.62 | 164.92 | 1,688,997 | | P. Stoffels | Annual Incentive | | 0 | 1,528,125 | 3,056,250 | | | | | | | | | | | 2021-2023 PSU | 2/8/2021 | | | | 0 | 33,630 | 67,260 | | | | | 6,031,507 | | | 2019-2021 PSU | 2/8/2021 | | | | 0 | 3,737 | 7,474 | | | | | 599,975 | | | RSU | 2/8/2021 | | | | | | | 5,605 | | | | 855,996 | | | Stock Awards Total | | | | | | | | | | | | 7,487,478 | | | Option | 2/8/2021 | | | | | | | | 123,118 | 164.62 | 164.92 | 2,567,995 | | J. Duato | Annual Incentive | | 0 | 1,287,500 | 2,575,000 | | | | | | | | | | | 2021-2023 PSU | 2/8/2021 | | | | 0 | 31,351 | 62,702 | | | | | 5,622,770 | | | 2019-2021 PSU | 2/8/2021 | | | | 0 | 3,616 | 7,232 | | | | | 580,549 | | | RSU | 2/8/2021 | | | | | | | 5,225 | | | | 797,962 | | | Stock Awards Total | | | | | | | | | | | | 7,001,281 | | | Option | 2/8/2021 | | | | | | | | 114,776 | 164.62 | 164.92 | 2,393,998 | | J. Taubert | Annual Incentive | | 0 | 945,000 | 1,890,000 | | | | | | | | | | | 2021-2023 PSU | 2/8/2021 | | | | 0 | 22,433 | 44,866 | | | | | 4,023,336 | | | 2019-2021 PSU | 2/8/2021 | | | | 0 | 2,198 | 4,396 | | | | | 352,889 | | | RSU | 2/8/2021 | | | | | | | 3,739 | | | | 571,020 | | | Stock Awards Total | | | | | | | | | | | | 4,947,245 | | | Option | 2/8/2021 | | | | | | | | 82,127 | 164.62 | 164.92 | 1,713,005 |

  194. 2021 Grants of Plan-Based Awards

    | 96 | 2022 Proxy Statement | |

  195. 2021 Outstanding Equity Awards at Fiscal Year-End

    2021 Outstanding Equity Awards at Fiscal Year-End In the table below, we show the outstanding options, RSUs, and PSUs as of fiscal year-end 2021.

  196. 2021 Outstanding Equity Awards at Fiscal Year-End

    | A | B | C | D | E | F | G | H | I | J | K | | Name | Grant Date | Vesting Date | Options | | | | Stock Awards | | | | | | | | Number of Securities Underlying Unexercised Options (#) | | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | Equity Incentive Plans: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | | | | Exercisable | Unexercisable | | | | | | | | A. Gorsky | Options | | | | | | | | | | | | 1/17/2012 | 1/17/2015 | 231,951 | | $65.37 | 1/17/2022 | | | | | | | 1/16/2013 | 1/17/2016 | 547,692 | | 72.54 | 1/13/2023 | | | | | | | 2/10/2014 | 2/11/2017 | 495,146 | | 90.44 | 2/9/2024 | | | | | | | 2/9/2015 | 2/10/2018 | 427,127 | | 100.06 | 2/9/2025 | | | | | | | 2/8/2016 | 2/9/2019 | 411,264 | | 101.87 | 2/8/2026 | | | | | | | 2/13/2017 | 2/13/2020 | 377,673 | | 115.67 | 2/13/2027 | | | | | | | 2/12/2018 | 2/12/2021 | 239,519 | | 129.51 | 2/12/2028 | | | | | | | 2/11/2019 | 2/11/2022 | | 227,464 | 131.94 | 2/11/2029 | | | | | | | 2/10/2020 | 2/10/2023 | | 266,849 | 151.41 | 2/10/2030 | | | | | | | 2/8/2021 | 2/8/2024 | | 243,072 | 164.62 | 2/8/2031 | | | | | | | RSUs | | | | | | | | | | | | 2/11/2019 | 2/11/2022 | | | | | 11,129 | $1,903,838 | | | | | 2/10/2020 | 2/10/2023 | | | | | 10,432 | 1,784,602 | | | | | 2/8/2021 | 2/8/2024 | | | | | 11,066 | 1,893,061 | | | | | 2019 - 2021 PSU Award | | | | | | | | | | | | 2/11/2019 | 2/11/2022 | | | | | 47,441 | 8,115,732 | | | | | 2/10/2020 | 2/11/2022 | | | | | 4,667 | 798,384 | | | | | 2/8/2021 | 2/11/2022 | | | | | 8,843 | 1,512,772 | | | | | 2020 - 2022 PSU Award | | | | | | | | | | | | 2/10/2020 | 2/10/2023 | | | | | 0 | 0 | 55,991 | $9,578,380 | | | 2021 - 2023 PSU Award | | | | | | | | | | | | 2/8/2021 | 2/8/2024 | | | | | 0 | 0 | 75,193 | 12,863,267 | | J. Wolk | Options | | | | | | | | | | | | 1/16/2013 | 1/17/2016 | 1,855 | | 72.54 | 1/13/2023 | | | | | | | 2/10/2014 | 2/11/2017 | 12,926 | | 90.44 | 2/9/2024 | | | | | | | 2/9/2015 | 2/10/2018 | 13,015 | | 100.06 | 2/9/2025 | | | | | | | 2/8/2016 | 2/9/2019 | 16,820 | | 101.87 | 2/8/2026 | | | | | | | 2/13/2017 | 2/13/2020 | 19,241 | | 115.67 | 2/13/2027 | | | | | | | 2/12/2018 | 2/12/2021 | 12,066 | | 129.51 | 2/12/2028 | | | | | | | 2/11/2019 | 2/11/2022 | | 66,386 | 131.94 | 2/11/2029 | | | | | | | 2/10/2020 | 2/10/2023 | | 88,219 | 151.41 | 2/10/2030 | | | | | | | 2/8/2021 | 2/8/2024 | | 80,976 | 164.62 | 2/8/2031 | | | | | | | RSUs | | | | | | | | | | | | 2/11/2019 | 2/11/2022 | | | | | 3,248 | 555,635 | | | | | 2/10/2020 | 2/10/2023 | | | | | 3,449 | 590,020 | | | | | 2/8/2021 | 2/8/2024 | | | | | 3,686 | 630,564 | | | | | 2019 - 2021 PSU Award | | | | | | | | | | | | 2/11/2019 | 2/11/2022 | | | | | 13,846 | 2,368,635 | | | | | 2/10/2020 | 2/11/2022 | | | | | 1,362 | 232,997 | | | | | 2/8/2021 | 2/11/2022 | | | | | 2,581 | 441,532 | | | | | 2020 - 2022 PSU Award | | | | | | | | | | | | 2/10/2020 | 2/10/2023 | | | | | 0 | 0 | 18,510 | 3,166,506 | | | 2021 - 2023 PSU Award | | | | | | | | | | | | 2/8/2021 | 2/8/2024 | | | | | 0 | 0 | 25,050 | 4,285,304 |

  197. 2021 Outstanding Equity Awards at Fiscal Year-End

    | | 2022 Proxy Statement | 99 |

  198. 2021 Outstanding Equity Awards at Fiscal Year-End

    | A | B | C | D | E | F | G | H | I | J | K | | Name | Grant Date | Vesting Date | Options | | | | Stock Awards | | | | | | | | Number of Securities Underlying Unexercised Options (#) | | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | Equity Incentive Plans: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | | | | Exercisable | Unexercisable | | | | | | | | P. Stoffels | Options | | | | | | | | | | | | 2/9/2015 | 2/10/2018 | 170,668 | | $100.06 | 2/9/2025 | | | | | | | 2/8/2016 | 2/9/2019 | 174,787 | | 101.87 | 2/8/2026 | | | | | | | 2/13/2017 | 2/13/2020 | 138,982 | | 115.67 | 2/13/2027 | | | | | | | 2/12/2018 | 2/12/2021 | 111,816 | | 129.51 | 2/12/2028 | | | | | | | 2/11/2019 | 2/11/2022 | | 114,575 | 131.94 | 2/11/2029 | | | | | | | 2/10/2020 | 2/10/2023 | | 134,064 | 151.41 | 2/10/2030 | | | | | | | 2/8/2021 | 2/8/2024 | | 123,118 | 164.62 | 2/8/2031 | | | | | | | RSUs | | | | | | | | | | | | 2/11/2019 | 2/11/2022 | | | | | 5,606 | $959,018 | | | | | 2/10/2020 | 2/10/2023 | | | | | 5,241 | 896,578 | | | | | 2/8/2021 | 2/8/2024 | | | | | 5,605 | 958,847 | | | | | 2019 - 2021 PSU Award | | | | | | | | | | | | 2/11/2019 | 2/11/2022 | | | | | 23,896 | 4,087,889 | | | | | 2/10/2020 | 2/11/2022 | | | | | 2,351 | 402,186 | | | | | 2/8/2021 | 2/11/2022 | | | | | 4,455 | 762,117 | | | | | 2020 - 2022 PSU Award | | | | | | | | | | | | 2/10/2020 | 2/10/2023 | | | | | 0 | 0 | 28,130 | $4,812,199 | | | 2021 - 2023 PSU Award | | | | | | | | | | | | 2/8/2021 | 2/8/2024 | | | | | 0 | 0 | 38,086 | 6,515,372 | | J. Duato | Options | | | | | | | | | | | | 1/17/2012 | 1/17/2015 | 84,423 | | 65.37 | 1/17/2022 | | | | | | | 1/16/2013 | 1/17/2016 | 148,538 | | 72.54 | 1/13/2023 | | | | | | | 2/10/2014 | 2/11/2017 | 130,969 | | 90.44 | 2/9/2024 | | | | | | | 2/9/2015 | 2/10/2018 | 126,369 | | 100.06 | 2/9/2025 | | | | | | | 2/8/2016 | 2/9/2019 | 125,824 | | 101.87 | 2/8/2026 | | | | | | | 2/13/2017 | 2/13/2020 | 123,291 | | 115.67 | 2/13/2027 | | | | | | | 2/12/2018 | 2/12/2021 | 105,307 | | 129.51 | 2/12/2028 | | | | | | | 2/11/2019 | 2/11/2022 | | 110,868 | 131.94 | 2/11/2029 | | | | | | | 2/10/2020 | 2/10/2023 | | 133,516 | 151.41 | 2/10/2030 | | | | | | | 2/8/2021 | 2/8/2024 | | 114,776 | 164.62 | 2/8/2031 | | | | | | | RSUs | | | | | | | | | | | | 2/11/2019 | 2/11/2022 | | | | | 5,424 | 927,884 | | | | | 2/10/2020 | 2/10/2023 | | | | | 5,220 | 892,985 | | | | | 2/8/2021 | 2/8/2024 | | | | | 5,225 | 893,841 | | | | | 2019 - 2021 PSU Award | | | | | | | | | | | | 2/11/2019 | 2/11/2022 | | | | | 23,123 | 3,955,652 | | | | | 2/10/2020 | 2/11/2022 | | | | | 2,274 | 389,013 | | | | | 2/8/2021 | 2/11/2022 | | | | | 4,310 | 737,312 | | | | | 2020 - 2022 PSU Award | | | | | | | | | | | | 2/10/2020 | 2/10/2023 | | | | | 0 | 0 | 28,015 | 4,792,526 | | | 2021 - 2023 PSU Award | | | | | | | | | | | | 2/8/2021 | 2/8/2024 | | | | | 0 | 0 | 35,505 | 6,073,840 |

  199. 2021 Outstanding Equity Awards at Fiscal Year-End

    | 100 | 2022 Proxy Statement | |

  200. 2021 Outstanding Equity Awards at Fiscal Year-End

    | A | B | C | D | E | F | G | H | I | J | K | | Name | Grant Date | Vesting Date | Options | | | | Stock Awards | | | | | | | | Number of Securities Underlying Unexercised Options (#) | | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | Equity Incentive Plans: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | | | | Exercisable | Unexercisable | | | | | | | | J. Taubert | Options | | | | | | | | | | | | 1/16/2013 | 1/17/2016 | 76,923 | | $72.54 | 1/13/2023 | | | | | | | 2/10/2014 | 2/11/2017 | 59,397 | | 90.44 | 2/9/2024 | | | | | | | 2/9/2015 | 2/10/2018 | 58,504 | | 100.06 | 2/9/2025 | | | | | | | 2/8/2016 | 2/9/2019 | 56,471 | | 101.87 | 2/8/2026 | | | | | | | 2/13/2017 | 2/13/2020 | 43,712 | | 115.67 | 2/13/2027 | | | | | | | 2/12/2018 | 2/12/2021 | 43,391 | | 129.51 | 2/12/2028 | | | | | | | 2/11/2019 | 2/11/2022 | | 67,397 | 131.94 | 2/11/2029 | | | | | | | 2/10/2020 | 2/10/2023 | | 91,324 | 151.41 | 2/10/2030 | | | | | | | 2/8/2021 | 2/8/2024 | | 82,127 | 164.62 | 2/8/2031 | | | | | | | RSUs | | | | | | | | | | | | 2/11/2019 | 2/11/2022 | | | | | 3,297 | $564,018 | | | | | 2/10/2020 | 2/10/2023 | | | | | 3,570 | 610,720 | | | | | 2/8/2021 | 2/8/2024 | | | | | 3,739 | 639,631 | | | | | 2019 - 2021 PSU Award | | | | | | | | | | | | 2/11/2019 | 2/11/2022 | | | | | 14,057 | 2,404,731 | | | | | 2/10/2020 | 2/11/2022 | | | | | 1,383 | 236,590 | | | | | 2/8/2021 | 2/11/2022 | | | | | 2,620 | 448,203 | | | | | 2020 - 2022 PSU Award | | | | | | | | | | | | 2/10/2020 | 2/10/2023 | | | | | 0 | 0 | 19,162 | $3,278,043 | | | 2021 - 2023 PSU Award | | | | | | | | | | | | 2/8/2021 | 2/8/2024 | | | | | 0 | 0 | 25,405 | 4,346,033 |

  201. 2021 Outstanding Equity Awards at Fiscal Year-End

    Grant Date (Column B) PSUs are considered granted when the performance goals are approved (according to U.S. accounting rules). Since we used three 1-year sales goals prior to the 2020 awards, we grouped the PSU awards based on their vesting date. Vesting Date (Column C) Our options, RSUs and PSUs vest 100% 3-years from the date of grant. PSUs are not distributed until the percent of target vested based on performance is certified by the Committee at the end of the 3-year performance period. Please see "Grant Date (Column B)" for when the PSUs tied to operational sales in the second and third years of the 3-year performance period are considered granted for accounting purposes. Number of Shares or Units of Stock that Have Not Vested (Column H) The PSUs that have been earned based on performance to date are included in column H. See "2019-2021 Performance Share Unit (PSU) Payout" on page 66 for details. Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights that Have Not Vested (Column J) We calculated the estimated number of PSUs to vest in the future assuming:

  202. 2021 Outstanding Equity Awards at Fiscal Year-End

    | l | 2020-2022 PSUs tied to (i) Relative TSR performance vest at 98.00% of target and (ii) cumulative adjusted EPS performance vest at 80.90% of target. | | l | 2021-2023 PSUs tied to (i) Relative TSR performance vest at 88.00% of target and (ii) cumulative adjusted EPS performance vest at 138.50% of target. |

  203. 2021 Outstanding Equity Awards at Fiscal Year-End

    Market Value of Shares or Units of Stock That Have Not Vested (Columns I and K) We calculated the market values of unvested RSUs and PSUs included in columns I and K using the closing price of our common stock on the NYSE on December 31, 2021, which was the last business day of fiscal 2021, of $171.07.

  204. 2021 Outstanding Equity Awards at Fiscal Year-End

    | | 2022 Proxy Statement | 101 |

  205. 2021 Option Exercises and Stock Vested

    2021 Option Exercises and Stock Vested None of our named executive officers exercised options during 2021. The table below shows how many PSUs and RSUs vested in 2021 and their value when they vested.

  206. 2021 Option Exercises and Stock Vested

    | Name | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) | Value Realized Upon Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized Upon Vesting ($) | | A. Gorsky | 0 | $0 | 75,105 | $12,433,633 | | J. Wolk | 0 | 0 | 5,086 | 841,987 | | P. Stoffels | 0 | 0 | 35,062 | 5,804,514 | | J. Duato | 0 | 0 | 33,021 | 5,466,627 | | J. Taubert | 0 | 0 | 13,606 | 2,252,473 |

  207. 2021 Option Exercises and Stock Vested

    | 102 | 2022 Proxy Statement | |

  208. 2021 Pension Benefits

    2021 Pension Benefits In the table below, we show the present value of pension benefits as of year-end 2021 and payments during 2021. For a complete understanding of the table, please read the description of the pension benefits that follow the table.

  209. 2021 Pension Benefits

    | Name | Number of Years Credited Service (#) | Normal Retirement Age | Present Value of Accumulated Benefits | | | Payments During Last Fiscal Year ($) | | | | | Salaried Pension Plan ($) | Excess Pension Plan ($) | Total ($) | | | A. Gorsky | 29.42 | 62 | $1,994,000 | $36,810,000 | $38,804,000 | $0 | | J. Wolk | 23.58 | 62 | 1,338,000 | 7,487,000 | 8,825,000 | 0 | | P. Stoffels | 28.33 | 62 | 1,810,000 | 18,931,000 | 20,741,000 | 0 | | J. Duato | 32.25 | 62 | 2,067,000 | 18,012,000 | 20,079,000 | 0 | | J. Taubert | 16.92 | 62 | 1,033,000 | 6,010,000 | 7,043,000 | 0 |

  210. 2021 Pension Benefits

    We calculated the present values in the table using the same assumptions we used for the pension liabilities included in our 2021 Annual Report. The named executive officers participate in the same defined benefit pension plan formula that applies to other eligible U.S. non-union employees hired before January 1, 2015 (the Final Average Pay formula). Starting on January 1, 2026, all eligible U.S. non-union employees (regardless of hire date) will accrue benefits under the defined benefit pension plan that applies to employees hired on or after January 1, 2015. We provide pension benefits to our employees to provide retirement income, facilitate succession, and motivate long-service. Our pension benefits are paid through our Salaried Pension Plan and Excess Pension Plan as described below. We offset the benefits from these plans for amounts earned from our non-U.S. pension plans.

  211. 2021 Pension Benefits

    | l | U.S. Final Average Pay Pension Formula: This formula determines a monthly annuity amount payable for life. | | | | | l | Retirement Age: At age 62 employees can begin receiving unreduced pension payments. At age 55 they can begin receiving reduced pension benefits. If an employee begins receiving his or her pension before age 62, the pension is reduced by 4% per year for each year before age 62. | | | | l | Monthly Annuity Amount: We calculate the monthly annuity amount as: | | | | | (1) | Final average earnings multiplied by 1.667%, multiplied by years of service prior to 2005, plus | | | | (2) | Final average earnings multiplied by 1.55%, multiplied by years of service after 2004, minus | | | | (3) | Age 65 Social Security benefits multiplied by 1.429%, multiplied by total years of service, plus | | | | (4) | Frozen grandfathered benefits related to pre-2009 dividend equivalents on unvested CLCs (less than 2% of the total pension benefit for each named executive officer). | | | l | Final Average Earnings: Final average earnings is the average of the highest consecutive 60 months out of the last 120 months of pay. Earnings include base salary and annual incentive payouts. | | | | l | Benefits Paid as an Annuity: Pension benefits must be taken in the form of an annuity, except the Belgian portion of Dr. Stoffels’ benefit which is payable as a lump sum at retirement. | | | l | Pension Plans: We pay our U.S. pensions from the Salaried and Excess Pension Plans as follows: | | | | | l | Salaried Pension Plan: The Salaried Pension Plan applies the U.S. pension formula to pay up to the IRS’s covered compensation limit. The limit was $290,000 in 2021. | | | | l | Excess Pension Plan: The Excess Pension Plan uses the U.S. pension formula without applying the IRS pay limits. Its payments are reduced by amounts paid from the Salaried Pension Plan. U.S. non-union employees participate in the Excess Pension Plan if their covered compensation exceeds the IRS limit. | | | | l | Offset for non-U.S. Pensions: Because Dr. Stoffels has worked in both Belgium and the U.S., his pension includes benefits from both the U.S. and Belgian Plans. The U.S. portion is calculated using the U.S. formula above for all service and subtracting the amount earned in the Belgian Plan. This treatment of service rendered outside the U.S. applies to all participants in the Salaried Pension Plan who were hired before January 1, 2015 and who earned Company service outside the U.S. before joining the U.S. pension plan on, or before, July 1, 2015. | |

  212. 2021 Pension Benefits

    | | 2022 Proxy Statement | 103 |

  213. 2021 Non-Qualified Deferred Compensation

    2021 Non-Qualified Deferred Compensation In the table below, we show our named executive officers’ year-end non-tax-qualified compensation deferral plan balances. We also show how much they and the Company contributed to the plans, the earnings on the deferred compensation, and withdrawals and distributions during the year. For a complete understanding of the table, please read the descriptions of the columns that follow the table.

  214. 2021 Non-Qualified Deferred Compensation

    | A | B | C | D | E | F | | Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at Last FYE ($) | | A. Gorsky | $0 | $61,200 | $266,260 | $2,246,525 | $7,416,563 | | J. Wolk | 0 | 29,164 | 24,932 | 148,256 | 541,402 | | P. Stoffels | 0 | 41,963 | 296,710 | 1,460,243 | 9,052,570 | | J. Duato | 0 | 33,300 | 277,508 | 1,235,599 | 8,667,213 | | J. Taubert | 1,247,971 | 29,164 | 665,055 | 449,316 | 6,422,243 |

  215. 2021 Potential Payments Upon Termination

    2021 Potential Payments Upon Termination We pay earned and unpaid compensation to our employees upon termination as described below. In addition, depending upon the circumstances of the termination and the employee’s age and years of service, we pay severance, provide continued health benefit coverage, and provide continued vesting in equity incentives as described below. We have no change-in-control benefits.

  216. 2021 Potential Payments Upon Termination

    | l | Earned but Unpaid Compensation: Upon any termination of employment as of year-end 2021, employees would receive their 2021 annual incentive and vested non-qualified deferred compensation. They would also be entitled to their pension benefits upon retirement. If a named executive officer had terminated as of year-end 2021, he or she would have received his or her: | | | | l | Earned but Unpaid Annual Incentives for 2021. An employee must be employed through the end of the year to be eligible for a non-pro-rated annual incentive payout. However, in case of involuntary termination for cause, these amounts would be forfeited. See the “Non-Equity Incentive Plan Compensation” table on page 93 for the annual incentive amounts. | | | l | Vested Non-Qualified Deferred Compensation Balances. See the “Non-Qualified Deferred Compensation — Aggregate Balance at Last Fiscal Year-End (Column F)” table on page 106 for the year-end balances. | | | l | Pension Benefits upon Retirement. See “2021 Pension Benefits” on page 104 for details. | | l | Severance, Healthcare Coverage, and Equity Incentives: In the table below, we show the value of cash severance, continued healthcare coverage, and continued vesting in equity incentives as if the named executive officers had terminated as of year-end 2021 under the circumstances shown below. For a complete understanding of the table please read the descriptions of the types of payments that follow the table. | | | l | No Change-in-Control Benefits: We do not have any change-in-control agreements or arrangements in place for any of our named executive officers. In addition, there are no change-in-control provisions in any of our compensation plans or instruments. | |

  217. 2021 Potential Payments Upon Termination

    | Name | Type of Payment | Voluntary Termination ($) | Involuntary Termination Without Cause ($) | Involuntary Termination with Cause ($) | Death ($) | Disability ($) | | A. Gorsky | Cash Severance | $0 | $1,650,000 | $0 | $0 | $0 | | | Healthcare Coverage | 211,000 | 212,000 | 211,000 | 107,000 | 276,000 | | | Equity Incentives | 54,164,767 | 54,164,767 | 0 | 54,164,767 | 54,164,767 | | | Total | 54,375,767 | 56,026,767 | 211,000 | 54,271,767 | 54,440,767 | | J. Wolk | Cash Severance | 0 | 945,000 | 0 | 0 | 0 | | | Healthcare Coverage | 199,000 | 207,000 | 199,000 | 104,000 | 350,000 | | | Equity Incentives | 17,125,558 | 17,125,558 | 0 | 17,125,558 | 17,125,558 | | | Total | 17,324,558 | 18,277,558 | 199,000 | 17,229,558 | 17,475,558 | | P. Stoffels | Cash Severance | 0 | 1,222,500 | 0 | 0 | 0 | | | Healthcare Coverage | 175,000 | 180,000 | 175,000 | 91,000 | 285,000 | | | Equity Incentives | 27,307,334 | 27,307,334 | 0 | 27,307,334 | 27,307,334 | | | Total | 27,482,334 | 28,709,834 | 175,000 | 27,398,334 | 27,592,334 | | J. Duato | Cash Severance | 0 | 1,267,692 | 0 | 0 | 0 | | | Healthcare Coverage | 175,000 | 180,000 | 175,000 | 91,000 | 285,000 | | | Equity Incentives | 26,366,547 | 26,366,547 | 0 | 26,366,547 | 26,366,547 | | | Total | 26,541,547 | 27,814,239 | 175,000 | 26,457,547 | 26,651,547 | | J. Taubert | Cash Severance | 0 | 945,000 | 0 | 0 | 0 | | | Healthcare Coverage | 138,000 | 147,000 | 138,000 | 74,000 | 306,000 | | | Equity Incentives | 17,490,363 | 17,490,363 | 0 | 17,490,363 | 17,490,363 | | | Total | 17,628,363 | 18,582,363 | 138,000 | 17,564,363 | 17,796,363 |

  218. 2021 Potential Payments Upon Termination

    Note: Dr. Stoffels retired from the Company effective January 3, 2022.

  219. 2021 Potential Payments Upon Termination

    | 106 | 2022 Proxy Statement | |

  220. 2021 Potential Payments Upon Termination

    | Terminations Due to a Reduction in Force or Specified Divestiture |

  221. 2021 Potential Payments Upon Termination

    All of our unvested outstanding long-term incentive awards are subject to special provisions in the event of a termination due to a Reduction in Force (RIF) or Specified Divestiture (as detailed on page 79). As of December 31, 2021, each named executive officer was eligible for Qualifying Separation treatment of their long-term incentives. For these executives:

  222. 2021 Potential Payments Upon Termination

    | l | Termination due to a RIF would result in amounts equal to those in the "Involuntary Termination Without Cause" column of the Potential Payments Upon Termination table on page 107, and | | l | Termination due to a Specified Divestiture would result in amounts equal to those in the "Involuntary Termination Without Cause" column, except they would not receive severance. |

  223. 2021 Potential Payments Upon Termination

    | Cash Severance |

  224. 2021 Potential Payments Upon Termination

    Our Severance Pay Plan provides benefits to certain full-time U.S. employees who are involuntarily terminated. We provide two weeks base salary for each year of service, with guaranteed minimums based on an employee’s level. The minimum for our named executive officers is 52 weeks of base salary. We pay severance according to our normal payroll cycle. We do not pay severance as a lump-sum payment. In order to receive the full number of weeks of base salary under our Severance Pay Plan, U.S. employees must sign a release agreement and comply with the conditions set forth in the agreement which may include: compliance with non-competition provisions, release of all claims and rights, and any other terms set forth in the agreement. If U.S. employees do not sign the release agreement, the severance amount is four weeks of base salary. In the table below, we show how the “Cash Severance” amounts in the table on page 107 were calculated.

  225. 2021 Potential Payments Upon Termination

    | Name | Salary Rate as of Year-End ($) | Years of Eligible Service (#) | Weeks of Base Salary Continuation | | | Total Amount of Cash Severance ($) | | | | | Accrued (#) | Minimum (#) | Final (#) | | | A. Gorsky | $1,650,000 | 13 | 26 | 52 | 52 | $1,650,000 | | J. Wolk | 945,000 | 23 | 46 | 52 | 52 | 945,000 | | P. Stoffels | 1,222,500 | 24 | 48 | 52 | 52 | 1,222,500 | | J. Duato | 1,030,000 | 32 | 64 | 52 | 64 | 1,267,692 | | J. Taubert | 945,000 | 16 | 32 | 52 | 52 | 945,000 |

  226. 2021 Potential Payments Upon Termination

    Note: Dr. Stoffels retired from the Company effective January 3, 2022 and did not receive cash severance.

  227. 2021 Potential Payments Upon Termination

    | | 2022 Proxy Statement | 107 |

  228. 2021 Potential Payments Upon Termination

    | Healthcare Coverage |

  229. 2021 Potential Payments Upon Termination

    Upon termination of employment, all non-union U.S. employees receive continued healthcare coverage that varies based upon the termination circumstances. The “Healthcare Coverage” amounts in the table on page 107 are the present values of continued healthcare coverage. The values vary based upon the termination circumstances as follows:

  230. 2021 Potential Payments Upon Termination

    | Healthcare Coverage | Eligibility | Eligible Named Executive Officers | Voluntary Termination | Involuntary Termination Without Cause | Involuntary Termination with Cause | Death | Disability | | Retiree | Employees age 55 with ten years of service | Gorsky Wolk Duato Stoffels Taubert | ü | ü Begins at the end of the cash severance period | ü | ü Coverage for dependents | ü | | Active-employee | All Employees | | No continued coverage | ü While on severance - up to 52 weeks | No continued coverage | ü Coverage for dependents for 6 months | ü While on long-term disability |

  231. 2021 Potential Payments Upon Termination

    Note: "ü" means eligible for coverage.

  232. 2021 Potential Payments Upon Termination

    | Equity Incentives |

  233. 2021 Potential Payments Upon Termination

    The “Equity Incentives” amounts in the table on page 107 are the value of unvested equity incentives as of year-end 2021. The values vary based upon the termination circumstances as described under “Long-Term Incentive Vesting and Treatment upon Termination” on page 78.

  234. 2021 Potential Payments Upon Termination

    | 108 | 2022 Proxy Statement | |

  235. 2021 Potential Payments Upon Termination

    | Ratio of the Annual Total Compensation of the Median-Paid Employee to the CEO |

  236. 2021 Potential Payments Upon Termination

    The annual total compensation of our median-paid employee on a worldwide basis for 2021 was $90,000. The annual total compensation of our Chief Executive Officer for 2021 was $26,757,015. The ratio of the two amounts for 2021 is 297 to 1. For a complete understanding of these amounts, please read the descriptions below. We used the following methodology and assumptions to calculate the annual total compensation of the median-paid employee:

  237. 2021 Potential Payments Upon Termination

    | l | We included 100% of our employees in the calculation of median, as follows: | | | | l | We gathered payroll data from 24 countries around the world, which account for 91% of our employees. | | | l | We assumed that the remaining 9% of our employees (not included in this database) are paid less than the median. This is a conservative assumption. If any of the employees assumed to be below the median were paid higher than the calculated median, the actual median would be higher. | | l | We calculated the annual total compensation and ranked our employees using: (i) taxable cash earnings, which includes salary, wages (regular, hourly, overtime, shift differentials), commissions, annual incentives, and other miscellaneous cash earnings; (ii) the estimated value of the Company-provided pension earned during 2021 and Company contributions to defined contribution retirement plans during 2021 (using an estimated percentage of salary for each country where we have a Company-provided retirement plan); and (iii) the estimated value of company provided medical and dental insurance coverage (using an estimated per-employee amount for each country where we have Company-provided medical and dental plans). | | | l | Using our year-end 2021 total employee count, we counted down from the top to identify the median-paid employee. At least 50% of our employees have annual total compensation amounts higher than $90,000. | | | l | We rounded the annual total compensation of the median-paid employee to the nearest thousand dollars. | |

  238. 2021 Potential Payments Upon Termination

    The annual total compensation of our Chief Executive Officer for 2021 is the $26,741,959 total as reported in the Summary Compensation Table on page 91 plus healthcare benefits of $15,056. The ratio of the Annual Total Compensation of the Median-Paid Employee to the CEO is calculated by dividing the annual total compensation of our Chief Executive Officer by that of our median-paid employee. Because the annual total compensation of the median-paid employee is a conservative estimate (as described above), the pay ratio is also a conservative estimate - the actual ratio could be lower, but not higher.

  239. 2021 Potential Payments Upon Termination

    | Comparison to 2020 Median-Paid Annual Total Compensation |

  240. 2021 Potential Payments Upon Termination

    The annual total compensation of our median-paid employee for 2020 was $81,000. The median for 2021 is $90,000. Salary increases and other increases in compensation contributed to the increase in the median. The net effect of changes in currency exchange rates on the year-on-year increase in the median was minimal. If the exchange rates had not changed during 2021, the median would have been $88,000

  241. 2021 Potential Payments Upon Termination

    | | 2022 Proxy Statement | 109 |

  242. 2021 Potential Payments Upon Termination

    Item 3: Approval of the Company's 2022 Long-Term Incentive Plan

  243. 2021 Potential Payments Upon Termination

    | | The Board of Directors recommends that shareholders vote FOR approval of the Company's 2022 Long-Term Incentive Plan |

  244. 2021 Potential Payments Upon Termination

    | Overview The Board believes that granting long-term incentives in the form of equity-based awards is crucial in promoting our long-term financial growth and stability, thereby enhancing shareholder value. The 2022 Long-Term Incentive Plan (the “2022 Plan”) provides for the grant of non-qualified stock options, incentive stock options, stock appreciation rights (“SARs”), restricted shares, restricted share units (“RSUs”), performance shares, performance share units (“PSUs”), other stock-based awards and cash awards to our employees (including our executive officers) and Directors. The Board approved the 2022 Plan on March 7, 2022, subject to shareholder approval, and the 2022 Plan will become effective on the date that it is approved by the shareholders. The 2022 Plan will not become effective if it is not approved by the shareholders. Why You Should Vote to Approve the 2022 Plan We are asking the shareholders to approve the 2022 Plan so that we can continue to provide long-term incentives in the form of equity-based awards to our employees and Directors. We annually grant long-term incentives to over 25,000 employees (including our executive officers) and Directors as part of our equity-based compensation programs. As of March 1, 2022, approximately 197,579,124 shares were available for new grants under our current shareholder-approved 2012 Long-Term Incentive Plan (the “2012 Plan”). The 2012 Plan will expire on April 26, 2022, and no shares will be available for new grants under the 2012 Plan after its expiration. If the 2022 Plan is not approved by the shareholders, we will be unable to adequately incentivize our employees and Directors in connection with services to be performed after the scheduled expiration date of the 2012 Plan. We are therefore requesting that the shareholders approve the 2022 Plan at the 2022 Annual Meeting. Under the 2022 Plan, we will be able to grant up to 150 million shares of our common stock, par value $1.00 per share, in the form of new awards, of which (i) up to 110 million shares may be granted in the form of stock options and SARs and (ii) up to 40 million shares may be granted in the form of full value awards (i.e., restricted shares, RSUs, performance shares, PSUs and other-stock based awards). Notwithstanding the foregoing, more than 40 million shares may be granted in the form of full value awards, provided that each share granted in the form of full value awards in excess of 40 million will be counted against the number of shares that may be granted under the 2022 Plan as 5 shares for every 1 share granted in the form of full value awards. If only full value awards are granted under the 2022 Plan (i.e., no stock options or SARs), we will be able to grant up to 62 million shares in the form of full value awards. The 2022 Plan will expire on the tenth anniversary of the date it becomes effective. As of March 1, 2022, the closing price per share on the NYSE was $164.00. We have relied on the advice of Semler Brossy, the Committee’s independent compensation consultant, as well as consulting services and data modeling tools made available by certain proxy advisory services, to assist us in developing the size of the share reserve for the 2022 Plan. Based on this advice, we believe that our share reserve request is appropriate and within industry standards. We expect that the share reserve will allow us to continue to grant long-term incentives in the form of equity-based awards for four to five years. |

  245. 2021 Potential Payments Upon Termination

    | 110 | 2022 Proxy Statement | |