1944: From Private to Public
Johnson & Johnson Chairman and Chief Executive Officer William Weldon rang the closing bell at the New York Stock Exchange this week (on Monday, August 3rd) to commemorate a big upcoming anniversary: our becoming a publicly traded company. On September 24th, it will be 65 years ago that Johnson & Johnson went from a privately held company to a publicly traded one, with a listing on a famous institution that was started in the 1700s by a bunch of men meeting under a tree in New York City: the New York Stock Exchange.
Pages 4 and 5 of 1944 Johnson & Johnson Annual Report – our first ever Annual Report
The year of the Johnson & Johnson initial public offering of stock – 1944 -- was toward the end of World War II, the year in which the tide of the war had continued to turn, leading to the Allied victory the following year. It was an election year, with President Franklin Delano Roosevelt decisively winning re-election for an unprecedented fourth term against Thomas E. Dewey. Kidney dialysis and sunscreen were invented that year, gasoline cost an average of 15 cents a gallon, and a loaf of bread was ten cents. In the U.S., people were still growing victory gardens to help ease shortages in the public food supply due to the war effort, and popular films out that year starred Humphrey Bogart (To Have and To Have Not), Edward G. Robinson (Double Indemnity) and Judy Garland (Meet Me in St. Louis).
JOHNSON’S® Baby Lotion -- Introduced in 1944
In 1944, Johnson & Johnson had 31 operating companies (compared with the more than 250 that we have today), with 17 of them outside of the U.S. We had just launched JOHNSON’S® Baby Lotion, which came in a clear glass bottle. Earle Dickson, the inventor of BAND-AID® Brand Adhesive Bandages, was on our board of directors as vice president in charge of the Hospital Division. The Company was still involved in wartime production during World War II in 1944, and just two years earlier had invented a waterproof cloth tape that was requested by the military, as part of the products we produced for the war effort: that tape, believe it or not, was duct tape. (Yes, the duct tape, which I promise will be the subject of a future post.)
Wartime packaging -- cardboard instead of the familiar tin
Oh, and by the way, our iconic BAND-AID® Brand Adhesive Bandage tins had temporarily given way to cardboard packaging to conserve metal for the war effort. In the midst of all of this, Johnson & Johnson went public with an initial stock price of $37.50 per share.
General Robert Wood Johnson, in uniform
General Robert Wood Johnson, who had led Johnson & Johnson since 1932, had served for several months during the war in Washington, D.C. as head of the Smaller War Plants Corporation, and was back at Johnson & Johnson in 1944. That year, he published But, General Johnson, a book about his experiences in Washington. (The title referred to the most common phrase he had heard in response to his many ideas during his tenure as head of the SWPC.) A year earlier, in 1943, Johnson had codified his philosophy about running a business into Our Credo, which still guides Johnson & Johnson today.
Signature of General Robert Wood Johnson
At a December 12, 1943, board of directors meeting, Johnson told the members of the board (back then our directors were all Company employees) that in 1944 Johnson & Johnson would become publicly traded. But Johnson emphasized that the Company’s management philosophy – Our Credo -- would stay exactly the same under public ownership: our first responsibility would continue to be to patients, consumers and customers, then to employees, then the community and last, to shareholders.
So in 1944, as a publicly traded company, Johnson & Johnson had to issue – for the first time – an annual report. Here’s the cover of our very first Annual Report.
Compared to today’s full-sized annual reports, the 1944 report was small, measuring just a little less than six by nine inches and, as befits a wartime publication, a little on the plain side. The report contained a letter to shareholders from Robert Wood Johnson, a brief description of the Company and some of its major affiliate companies, financial information and a list of members of the Board of Directors and officers of the Company. The publication started with a letter from chairman Robert Wood Johnson, that began “During 1944 securities of Johnson & Johnson were offered to the public for the first time since incorporation in 1887. This is the first consolidated annual report published by the Company.” [Johnson & Johnson Annual Report, 1944] The concisely worded letter mentioned new products introduced that year and highlighted the Company’s conservative financial management (which had allowed the Johnson & Johnson to weather economic depressions in 1893, 1907 and 1929). Finally, Johnson closed with “I express for the Board of Directors and for myself sincere appreciation for the loyalty of the men and women of Johnson & Johnson. Their performance was the significant factor in the development of the Company in 1944, as in all prior years.” [Johnson & Johnson Annual Report, 1944]
Our 1944 Annual Report was succinct and spare, as befitting the year in which it was published. By the following year, the 1945 Annual Report would expand its coverage of Johnson & Johnson, talking about the Company's business philosophy, highlighting its products, and discussing the year more in depth, features that continue in our Annual Reports today, well over half a century later.