Large Johnson & Johnson Shareholder Just Revealed 8 Major Concerns

Artisan Partners, a global investment management firm and large shareholder of Johnson & Johnson (NYSE: JNJ), delivered a letter to the company's Board of Directors on Thursday.

Daniel J. O'Keefe, Artisan Partners' Managing Director and Portfolio Manager, said in his letter to the health care giant that "my concerns today are as great as they were almost six months ago, perhaps greater."

Artisan Partners held approximately $445 million worth of Johnson & Johnson stock as of September 30, 2015.

O'Keefe noted several main concerns:

1. Johnson & Johnson acquired Pfizer Inc. (NYSE: PFE)'s consumer business in 2006 for $17 billion and the profits from the segment are "smaller today than before the acquisitions."

2. Johnson & Johnson spent $19 billion to acquire Synthes 2012 and poured in an additional $5 billion to restructure the company. However, the segment's adjusted EBITDA today is roughly the same level it has been in 2010.

3. Since 2006, Johnson & Johnson has spent more than $150 billion in M&A activity, integration & restructuring, capital expenditures and research and development. However, the company's EBITDA has only increased by $7 billion over the same time period -- that return on capital investment is "unacceptable."

4. Commentary from Johnson & Johnson's CEO, Alex Gorsky, regarding further large acquisitions is "extremely troubling."

5. Management's compensation is based on a "flawed measure of value creation" at "real costs to shareholders."

6. There is "no evidence" that Johnson & Johnson's conglomerate structure creates value for shareholders.

7. The company's 2015 adjusted earnings per share figure includes one-time gains but excludes extraordinary (yet chronically recurring) charges - "clearly not a credible measure of business performance."

8. "It is difficult to understand" how the company's Board of Directors awarded its current CEO and predecessor a compensation package of more than $200 million from 2007 through 2014.