7 ms·

Using revenue doesn't make sense here, because the level of "hurt" would vary wildly if they had 90% margins or 0.9% margins. In their case, $9 billion wipes o

Using revenue doesn't make sense here, because the level of "hurt" would vary wildly if they had 90% margins or 0.9% margins. In their case, $9 billion wipes out about three years of profit.

marricks 4y ago
“Three years of profit” over 25 years, not accounting for inflation. Perhaps the first comment was too harsh but let’s not be overly generous.
- JumpCrisscross 4y ago
  > “Three years of profit” over 25 years, not accounting for inflation It looks like an $8.9bn settlement after $7.4bn in litigation expenses [1]. I would guess that is a substantial portion of J&J's total profits from talc-based products, inflation adjusted. Were that product an independent company, this would have bankrupted it. That's decent deterrence. [1] https://njbiz.com/jj-offers-8-9b-to-settle-claims-talc-products-caused-cancer/ https://njbiz.com/jj-offers-8-9b-to-settle-claims-talc-produ...
  - goldfeld 4y ago
    If they spent such an inordinate amount trying to escape, that is not part of deterrence, it is a gamble that big boys can take and they took and it didn't go as well. That gamble, or at least a good part of 7 billion, is their own fault and doing and not an external punishment, and importantly, doesn't absolve the final punishment, not even morally. Even more crucial, that money went to the dirtiest type of rich law firms (it is kind of an offence on its own!) and not to settling the damages at all.
    - JumpCrisscross 4y ago
      > spent such an inordinate amount trying to escape, that is not part of deterrence, it is a gamble that big boys can take You’re claiming a tougher penalty would be fought less vigorously?
      - goldfeld 4y ago
        No, but it is always a moral decision somewhere to fight vigorously, and it is money thrown not at making things right. Oh but it is always done, it is routine, etc. Well? If a company is built to act, on behalf of board, as selfish as actually spending as much with lawyers (of course, because they want to make their point and hope to set a precedent that says: executives, do not refrain to do evil for a good buck! we can deal with that crapp later--and should we as a society find it okay that corporate america works like that, or can work like that?) as the amount they were finally charged, then we can reason that if they spent that much (almost the full penalty amount!) on a gamble, then the amount is not really a worthy punishment at all! Seen another way, almost as much cash flowed to faceless lawyer gentry as to making up for the thousands who had cancer! And is this supposed to be a healthcare company today? J&J laughs at the face of law-abiding society who is apparently powerless to deter, that is my thinking.
      - vxNsr 4y ago
        If you screw up you should stand up and take responsibility over that screw up. Not shy away and try to claim innocence. Honestly there should be a punishment on top of the actual penalty for a company that is proven to have intentionally done something like this. If you know you screwed up and instead of taking ownership you play the blame game, if you lose the lawsuit, you should be responsible not just for the actual damages but also you should be required to payout 100% of your own lawyer fees to the defendant as well.
  - runarberg 4y ago
    I’m not happy with a company causing provable harm with criminal negligence simply being deterred from doing it again. No, I want justice, I want them to be punished, because I want to see justice. I want all their profits taken away from them, and possibly even more. I’m not even convinced this is actually a good deterrence. Companies have been criminally negligent since the birth of capitalism. They have caused immeasurable harm in multiple schemes in many ill guided attempts of making more and more money. These companies have gotten several fines, some CEOs have even been imprisoned, others have been forced into bankruptcy, and yet we see companies being criminally negligent, causing more harm, starting new malicious schemes, again and again. If these fines are supposed to be a deterrence, they are obviously not working.
    - vxNsr 4y ago
      I agree that we should find a better deterrence, but can we cool it with blaming “capitalism”? Is socialism some new drug that will suddenly eradicate selfishness? Has there ever been a documented case of a society that went socialist and no one did anything selfish? The problem isn’t the system, it’s the people. There is no amount of “process improvement” that is gonna change basic human nature.
      - runarberg 4y ago
        I never blamed capitalism for this. I merely stated that this happens under capitalism, and it keeps happening, even when the justice system is applied in an effort of deterrence. Now I do believe that capitalism is a bad system that should be abolished. However I am aware that that isn’t going to happen any time soon. In the meantime I’ll settle for companies and CEOs being held responsible for the crimes they commit under the influence of the profit motive. I’d also be happy if we would do something to abolish the class of ultra-wealthy, or at the very least strip them off their influence over our democracy.
        vxNsr 4y ago
        You are explicitly blaming capitalism for this, as you seem to imply some other system wouldn't allow for human greed and selfishness, but my point was that those are natural human traits and every single societal system ever conceived must deal with them. There is no system that can be created that will somehow magically remove those traits. If you wanna abolish capitalism, what system do you think should take it's place that wouldn't have human selfishness? Just to be clear: > I merely stated that this happens under capitalism, and it keeps happening, even when the justice system is applied in an effort of deterrence. is an explicit accusation against capitalism in exclusion of some other system. As I said, above, humans have been negligent since time immemorial. People put in charge of companies in socialist systems are also criminally negligent, usually though there are even fewer consequences for them.
chadash 4y ago
The overall point holds, but this is more like 0.75 years of profit, or less ($424B market cap x 2.76% dividend yield is a basic calculation, but there's all sorts of accounting reasons why this might underestimate actual profit).
- cma 4y ago
  How much goes to lawyers?
  - delecti 4y ago
    Wouldn't a company like J&J have lawyers on retainer? If so, then their salary is already factored into their baseline annual costs.
    - SoftTalker 4y ago
      They would likely engage outside counsel for something like this.
    - cma 4y ago
      Isn't the biggest lawyer payout likely going to the plaintiffs' laywers?
    - celestialcheese 4y ago
      > An annual filing with the SEC shows that J&J paid $7.4 billion in litigation expenses between 2020 and 2021, with the majority spent on legal costs related to talc claims. https://njbiz.com/jj-offers-8-9b-to-settle-claims-talc-products-caused-cancer/ https://njbiz.com/jj-offers-8-9b-to-settle-claims-talc-produ... This is in addition to the settlement deal discussed here.
- missedthecue 4y ago
  They've had a boost in recent years from COVID vaccines which will not be material over the coming years.
somenameforme 4y ago
First off, no it doesn't. Their profit for 2022 is $18 billion. This is less than half of one year of profit even, again spread out over 25 years. During which inflation + revenue growth will further dilute it. They even have $23 billion cash on hand. [1] I'd also add income is a regularly gamed metric for tax avoidance purposes. But really the whole point here is that without painful penalties, there is no deterrence whatsoever. Seeing 'megacorp knowingly sold asbestos tainted product for decades' is not even going to elicit a 'omg I can't believe it' from anybody not born yesterday. Nor will the fact that they faced a civil penalty that was but the mildest of prods on the wrist, and 0 criminal penalties. We seemingly have a government completely incapable of holding large corporations accountable for their actions. And that is seriously not normal, nor acceptable. [1] - https://www.macrotrends.net/stocks/charts/JNJ/johnson-johnson/cash-on-hand https://www.macrotrends.net/stocks/charts/JNJ/johnson-johnso...
- refurb 4y ago
  You realize J&J is a massive company with a huge range of products? Imagine if Google was fined 50% of a year’s revenue because of Google Voice. That’s a massive penalty by any measure.
  - dzader 4y ago
    Imagine if google was knowingly killing people with google voice for decades
  - arrosenberg 4y ago
    I would imagine Google as a corporation would be more careful about giving people cancer. “We are too big for accountability” has been a bad idea every time it has been used in America.
    - evilduck 4y ago
      More importantly, Google's competitors would also be more careful about it too. Kill a giant after it steps on people and other giants will learn to tiptoe.
goldfeld 4y ago
Well, you know I really like your username!
throwayyy479087 4y ago
Profit is an accounting illusion. Use free cash flow to see reality.
sidewndr46 4y ago
If you base it off profit, I can just adjust any companies profit down to zero with a shell company.

Using revenue doesn't make sense here, because the level of "hurt" would vary wildly if they had 90% margins or 0.9% margins. In their case, $9 billion wipes out about three years of profit.

marricks 4y ago

“Three years of profit” over 25 years, not accounting for inflation. Perhaps the first comment was too harsh but let’s not be overly generous.

JumpCrisscross 4y ago
> “Three years of profit” over 25 years, not accounting for inflation It looks like an $8.9bn settlement after $7.4bn in litigation expenses [1]. I would guess that is a substantial portion of J&J's total profits from talc-based products, inflation adjusted. Were that product an independent company, this would have bankrupted it. That's decent deterrence. [1] https://njbiz.com/jj-offers-8-9b-to-settle-claims-talc-products-caused-cancer/ https://njbiz.com/jj-offers-8-9b-to-settle-claims-talc-produ...
- goldfeld 4y ago
  If they spent such an inordinate amount trying to escape, that is not part of deterrence, it is a gamble that big boys can take and they took and it didn't go as well. That gamble, or at least a good part of 7 billion, is their own fault and doing and not an external punishment, and importantly, doesn't absolve the final punishment, not even morally. Even more crucial, that money went to the dirtiest type of rich law firms (it is kind of an offence on its own!) and not to settling the damages at all.
  - JumpCrisscross 4y ago
    > spent such an inordinate amount trying to escape, that is not part of deterrence, it is a gamble that big boys can take You’re claiming a tougher penalty would be fought less vigorously?
    - goldfeld 4y ago
      No, but it is always a moral decision somewhere to fight vigorously, and it is money thrown not at making things right. Oh but it is always done, it is routine, etc. Well? If a company is built to act, on behalf of board, as selfish as actually spending as much with lawyers (of course, because they want to make their point and hope to set a precedent that says: executives, do not refrain to do evil for a good buck! we can deal with that crapp later--and should we as a society find it okay that corporate america works like that, or can work like that?) as the amount they were finally charged, then we can reason that if they spent that much (almost the full penalty amount!) on a gamble, then the amount is not really a worthy punishment at all! Seen another way, almost as much cash flowed to faceless lawyer gentry as to making up for the thousands who had cancer! And is this supposed to be a healthcare company today? J&J laughs at the face of law-abiding society who is apparently powerless to deter, that is my thinking.
    - vxNsr 4y ago
      If you screw up you should stand up and take responsibility over that screw up. Not shy away and try to claim innocence. Honestly there should be a punishment on top of the actual penalty for a company that is proven to have intentionally done something like this. If you know you screwed up and instead of taking ownership you play the blame game, if you lose the lawsuit, you should be responsible not just for the actual damages but also you should be required to payout 100% of your own lawyer fees to the defendant as well.
- runarberg 4y ago
  I’m not happy with a company causing provable harm with criminal negligence simply being deterred from doing it again. No, I want justice, I want them to be punished, because I want to see justice. I want all their profits taken away from them, and possibly even more. I’m not even convinced this is actually a good deterrence. Companies have been criminally negligent since the birth of capitalism. They have caused immeasurable harm in multiple schemes in many ill guided attempts of making more and more money. These companies have gotten several fines, some CEOs have even been imprisoned, others have been forced into bankruptcy, and yet we see companies being criminally negligent, causing more harm, starting new malicious schemes, again and again. If these fines are supposed to be a deterrence, they are obviously not working.
  - vxNsr 4y ago
    I agree that we should find a better deterrence, but can we cool it with blaming “capitalism”? Is socialism some new drug that will suddenly eradicate selfishness? Has there ever been a documented case of a society that went socialist and no one did anything selfish? The problem isn’t the system, it’s the people. There is no amount of “process improvement” that is gonna change basic human nature.
    - runarberg 4y ago
      I never blamed capitalism for this. I merely stated that this happens under capitalism, and it keeps happening, even when the justice system is applied in an effort of deterrence. Now I do believe that capitalism is a bad system that should be abolished. However I am aware that that isn’t going to happen any time soon. In the meantime I’ll settle for companies and CEOs being held responsible for the crimes they commit under the influence of the profit motive. I’d also be happy if we would do something to abolish the class of ultra-wealthy, or at the very least strip them off their influence over our democracy.
      - vxNsr 4y ago
        You are explicitly blaming capitalism for this, as you seem to imply some other system wouldn't allow for human greed and selfishness, but my point was that those are natural human traits and every single societal system ever conceived must deal with them. There is no system that can be created that will somehow magically remove those traits. If you wanna abolish capitalism, what system do you think should take it's place that wouldn't have human selfishness? Just to be clear: > I merely stated that this happens under capitalism, and it keeps happening, even when the justice system is applied in an effort of deterrence. is an explicit accusation against capitalism in exclusion of some other system. As I said, above, humans have been negligent since time immemorial. People put in charge of companies in socialist systems are also criminally negligent, usually though there are even fewer consequences for them.

chadash 4y ago

The overall point holds, but this is more like 0.75 years of profit, or less ($424B market cap x 2.76% dividend yield is a basic calculation, but there's all sorts of accounting reasons why this might underestimate actual profit).

cma 4y ago
How much goes to lawyers?
- delecti 4y ago
  Wouldn't a company like J&J have lawyers on retainer? If so, then their salary is already factored into their baseline annual costs.
  - SoftTalker 4y ago
    They would likely engage outside counsel for something like this.
  - cma 4y ago
    Isn't the biggest lawyer payout likely going to the plaintiffs' laywers?
  - celestialcheese 4y ago
    > An annual filing with the SEC shows that J&J paid $7.4 billion in litigation expenses between 2020 and 2021, with the majority spent on legal costs related to talc claims. https://njbiz.com/jj-offers-8-9b-to-settle-claims-talc-products-caused-cancer/ https://njbiz.com/jj-offers-8-9b-to-settle-claims-talc-produ... This is in addition to the settlement deal discussed here.
missedthecue 4y ago
They've had a boost in recent years from COVID vaccines which will not be material over the coming years.

somenameforme 4y ago

First off, no it doesn't. Their profit for 2022 is $18 billion. This is less than half of one year of profit even, again spread out over 25 years. During which inflation + revenue growth will further dilute it. They even have $23 billion cash on hand. [1] I'd also add income is a regularly gamed metric for tax avoidance purposes. But really the whole point here is that without painful penalties, there is no deterrence whatsoever. Seeing 'megacorp knowingly sold asbestos tainted product for decades' is not even going to elicit a 'omg I can't believe it' from anybody not born yesterday. Nor will the fact that they faced a civil penalty that was but the mildest of prods on the wrist, and 0 criminal penalties. We seemingly have a government completely incapable of holding large corporations accountable for their actions. And that is seriously not normal, nor acceptable. [1] - https://www.macrotrends.net/stocks/charts/JNJ/johnson-johnson/cash-on-hand https://www.macrotrends.net/stocks/charts/JNJ/johnson-johnso...

refurb 4y ago
You realize J&J is a massive company with a huge range of products? Imagine if Google was fined 50% of a year’s revenue because of Google Voice. That’s a massive penalty by any measure.
- dzader 4y ago
  Imagine if google was knowingly killing people with google voice for decades
- arrosenberg 4y ago
  I would imagine Google as a corporation would be more careful about giving people cancer. “We are too big for accountability” has been a bad idea every time it has been used in America.
  - evilduck 4y ago
    More importantly, Google's competitors would also be more careful about it too. Kill a giant after it steps on people and other giants will learn to tiptoe.

goldfeld 4y ago

Well, you know I really like your username!

throwayyy479087 4y ago

Profit is an accounting illusion. Use free cash flow to see reality.

sidewndr46 4y ago

If you base it off profit, I can just adjust any companies profit down to zero with a shell company.