Corporate weal: Samuel Johnson set example for private firms
Samuel Johnson was the kind of industrial tycoona humanitarian could love. He knew how to make money, and he loved to give it away.
Johnson was the head of SC Johnson of Racine, Wisc., which was known as Johnson’s Wax before it got involved in a line of products that range from mosquito spray to plastic bags. It began 118 years ago as a parquet flooring company. Then the original Johnson, who founded it, started making a wax to clean the floors. The wax became such a hit that the company dropped the flooring and focused on the cleaner.
Johnson’s was grossing $171 million a year when Samuel Johnson became its fourth-generation president in 1967. By the time he died recently of cancer, annual sales were $8 billion.
Those who think corporations should be more charitable could point to SC Johnson as anexample.
The company is good to its 28,000 employees because Samuel Johnson and his forebears knew they were essential to his success. It has given away, through its Johnson Fund, $120 million in the last10 years. Five percent of its own pre-tax profits are donated to charities.
But there is a difference in Johnson and most other global companies. Johnson has remained family owned. It does not have thousands of stockholders to whom it is obligated.
A publicly traded corporation cannot operate as a charity. Its first obligation is to shareholders, and no one should insist that it do anything that is not in their best interests. After all, many corporate stockholders are small investors who are dependent on the dividends from their investments.
Conversely, there is nothing to prevent a profitable privately held company from sharing its bounty, and many — including local companies — do so through their own charitable foundations.
Published in Editorials on June 11, 2004 12:05 PM