2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 400 Ratio of the Annual Total Compensation of the Median-Paid Employee to the CEO The annual total compensation of our median-paid employee on a worldwide basis for 2017 was $66,000. The annual total compensation of our Chief Executive Officer for 2017 was $29,802,564. The ratio of the two amounts for 2017 is 452 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: • We gathered payroll data from 20 countries around the world, which account for 80% of our employees. • We assumed that 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. • We calculated the annual total compensation and ranked our employees using their taxable cash earnings, which includes: salary, wages (regular, hourly, overtime, shift differentials), commissions, bonuses, other miscellaneous cash earnings, and the estimated value of the company-provided pension earned during 2017 (using an estimated percentage of salary for each country where we have a company-provided pension). • 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 the amount shown in the table. • We rounded the annual total compensation of the median-paid employee to the nearest thousand dollars. The annual total compensation of our Chief Executive Officer for 2017 is as reported in the Summary Compensation Table on page 68. 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. 2018 Proxy Statement - 85 JOHNSON & JOHNSON