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William Weldon will retire this year as chief executive of Johnson & Johnson, marking an end to a tenure that has been marred by an embarrassing string of product recalls.
The US healthcare company said on Tuesday that Mr Weldon, 63, will be replaced by Alex Gorsky, a J&J veteran currently serving as executive vice-chairman of medical devices and diagnostics. Mr Gorsky will take over the top job after the company’s shareholder meeting in April.
J&J said the decision to replace Mr Weldon was part of a multi-year succession planning process. The selection was widely considered a two-person race since December 2010, when Mr Gorsky and Sheri McCoy, head of pharmaceuticals, were named to serve alongside Mr Weldon in an expanded chairman’s office.
“I look forward to the transition of leadership and to a bright future for Johnson & Johnson,” Mr Weldon said in a statement.
Mr Weldon has been J&J’s chief executive since 2002 and his two most recent predecessors retired by the age of 64. The last several years have been especially challenging because of recalls and lawsuits that have tarnished the company’s reputation.
In 2010, the company’s sales were cut by $900m because of problems with its over-the-counter drugs. Lawsuits related to its marketing of an anti-psychotic drug and faulty hip replacement devices continue to weigh on its results.
Mr Weldon has been criticised for being overly aggressive in cutting costs and for a decentralised approach to management.
Les Funtleyder, analyst and fund manager at Miller Tabak, said he did not think Mr Weldon would have retired so soon if the over-the-counter drug problems were behind the company.
“This was expected though it seems a bit earlier than the Street assumed,” Mr Funtleyder said.
Mr Gorsky joined J&J in 1988 as a sales representative and worked his way up through marketing in the drugs business. 2004, he joined Novartis as chief operating officer, where he worked for four years before returning to J&J.
Analysts at Barclays Capital said Mr Gorsky’s background could signal that J&J will put more emphasis on medical devices and diagnostics. J&J said Ms McCoy will report to Mr Gorsky and be responsible for pharmaceuticals, consumer groups and information technology and that Mr Weldon will remain as chairman of the board.
In an interview with the Financial Times last summer, Mr Weldon signalled that he was nearly ready to retire but still had some unfinished business. “There are certain things that I want to make sure we’re doing and getting done that I wouldn’t want to burden somebody with,” he said. “But at the right time, I’ll be ready to move on and someone else will be ready to move up.”
J&J shares rose 0.11 per cent to $65.15 in after-hours trading.