Form 4: J&J Executive Exercises Options, Sells Shares
Insider Transaction Report
Johnson & Johnson EVP Timothy Schmid exercised expiring stock options and subsequently sold shares to cover costs and taxes.
Summary
- Timothy Schmid, EVP, WW Chair, MedTech at Johnson & Johnson, exercised 15,571 employee stock options at an exercise price of $101.87 per share.
- The options were auto-exercised on February 6, 2026, immediately prior to their expiration on February 8, 2026.
- Following the exercise, 10,335 shares of common stock were disposed of at a price of $239.99 per share to cover the exercise price and associated taxes.
- After these transactions, Schmid directly owns 22,125 shares of Johnson & Johnson common stock.
- Additionally, Schmid indirectly holds 745 shares through a 401k plan and 46 shares through an ESOP, as of January 31, 2026.
Sentiment
Score: 7
Explanation: StockSavvy.ai views this as a positive indicator of executive compensation realization and a routine event, reflecting the executive monetizing long-held options rather than a negative signal about the company.
Positives
- Executive Timothy Schmid realized value from expiring employee stock options, indicating a benefit from the company's stock performance.
- The exercise price of $101.87 was significantly lower than the market price of $239.99 at the time of disposition, reflecting a substantial in-the-money gain on the options.
Negatives
- A significant number of shares (10,335) were sold to cover the exercise price and taxes, reducing the executive's direct beneficial ownership.
Future Outlook
The filing does not contain any forward-looking statements or guidance.
Industry Context
StockSavvy.ai notes that executive option exercises and subsequent share sales for tax purposes are routine events in publicly traded companies, particularly for mature firms like Johnson & Johnson. These transactions typically reflect an executive realizing compensation benefits rather than a change in strategic outlook or a signal about the company's future performance. The significant spread between the exercise price and the disposition price highlights the long-term value creation for JNJ shareholders and executives.
Comparison to Industry Standards
- Executive compensation structures, including stock options, are standard across the pharmaceutical and medical technology industries. Companies like Pfizer, Merck, and Medtronic also utilize similar equity-based incentives for their senior leadership.
- The practice of 'cashless exercise' where shares are sold to cover the exercise cost and taxes is a common and accepted mechanism for executives to monetize their equity compensation without needing personal funds upfront. The specific values here are consistent with a large-cap, established company's executive compensation.
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Power of Attorney | Timothy Schmid granted a Power of Attorney to several individuals, including legal counsel and Johnson & Johnson personnel, to complete and execute SEC Forms 3, 4, 5, and 144 on his behalf. This is a standard procedure to facilitate timely and accurate SEC filings for Section 16 insiders. | 2025-12-03 | This is a routine administrative measure to ensure compliance with SEC reporting requirements and does not indicate any substantive change in corporate governance or executive responsibilities. |
Related Party Transactions
- The reported transactions involve an executive (Timothy Schmid) and the company's equity securities, which falls under the scope of related party dealings as part of executive compensation. These are standard equity compensation events.
Stakeholder Impact
- Shareholders: The transaction is a routine executive compensation event and does not directly impact the company's operational performance or strategic direction. It reflects an executive realizing value from their equity holdings.
- Employees: No direct impact on employees is indicated.
- Customers/Suppliers/Creditors: No direct impact on these stakeholders is indicated.
Key Dates
| Date | Description |
|---|---|
| 2019-02-09 | Employee Stock Options became exercisable. |
| 2025-12-03 | Date Power of Attorney was executed by Timothy Schmid. |
| 2026-01-31 | Most recent reporting date for shares accrued in 401k and ESOP. |
| 2026-02-06 | Date of option exercise and share disposition. |
| 2026-02-08 | Expiration date of employee stock options. |
| 2026-02-10 | Date Form 4 was signed and filed. |
Recommendation
holdThis Form 4 filing reports a routine executive transaction involving the exercise of expiring stock options and a subsequent sale of shares to cover costs and taxes. Such transactions are common and do not typically signal a change in the company's fundamentals or future prospects. Therefore, it does not warrant a change in investment recommendation based solely on this filing.
Keywords
Johnson & Johnson, JNJ, Timothy Schmid, SEC Form 4, Insider Trading, Stock Options, Executive Compensation, Share Sale, MedTech
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