Johnson & Johnson’s shareholders voted in opposition to an offer on Thursday to discontinue gross sales of its talc child powder around the globe as the shopper items large tries to defend itself from tens of hundreds of proceedings over the product.
The proposal, which didn’t win a majority of votes on the corporate’s annual assembly, used to be fueled via considerations concerning the child powder’s doable hyperlinks to most cancers and claims that the talc within the product can also be infected via asbestos. Greater than 40,000 proceedings were filed in opposition to the corporate, some together with accusations that Johnson & Johnson advertised child powder to Black and overweight women regardless of understanding about imaginable asbestos contamination for many years.
The product is now not to be had in North The usa — Johnson & Johnson pulled it from shelves in 2020, a yr after recalling some of its baby powder in 2019. However the product, which the corporate has again and again insisted is secure and unfastened from contaminants, remains to be offered in markets comparable to Asia and South The usa.
Johnson & Johnson had steered shareholders to vote in opposition to the shareholder solution, announcing of child powder in its proxy commentary that “a long time of science have reaffirmed its protection.” The proxy advisory company Institutional Shareholder Services and products agreed, even if it defined in a observe that “shareholders must stay conscious about doable endured dangers from this factor globally.”
Glass Lewis, any other proxy advisory company, supported the proposal, writing in its advice that “preventing all gross sales of talc-based child powder may lend a hand to fix some harm to the corporate’s popularity and may save you doable proceedings, fines or consequences in markets out of doors North The usa.”
The proposal used to be submitted via Tulipshare, a British activist investor that has additionally focused corporations like Apple and Amazon and mentioned it appealed to Johnson & Johnson shareholders, comparable to Leading edge and State Boulevard, for fortify this week. The solution highlighted Johnson & Johnson’s felony and reputational burdens: Remaining yr, it confronted $1.6 billion in talc-related litigation bills, after atmosphere apart $3.9 billion for felony expenses the yr earlier than.
“That is now not a political or felony or shopper downside,” mentioned Antoine Argouges, the founding father of Tulipshare. “It is a shareholder downside.”
A separate shareholder proposal, submitted via the activist investor workforce Mercy Funding Services and products, additionally raised considerations about talc whilst asking Johnson & Johnson to rent out of doors auditors to evaluate the racial penalties of its insurance policies. The proposal, which handed, discussed “troubling” claims that the corporate “aggressively advertised” its talc merchandise to ladies of colour regardless of well being considerations.