Filing Gives A Glimpse of Lilly Executives' Pay
Filing gives a glimpse of Lilly executives' pay [The Indianapolis Star]
From Indianapolis Star (IN) (February 5, 2011)
Feb. 05--The top executive of Eli Lilly and Co. saw his total compensation last year fall by 21 percent, to $16.5 million, but the Indianapolis drug maker attributed the decrease to accounting adjustments and said his actual pay package remained flat.
Without adjustment the past two years, John C. Lechleiter’s salary, target stock awards and cash incentive bonus would have been $11.1 million, the same effective amount as in 2009, according to a preliminary version of Lilly’s proxy statement, which was filed Friday with the Securities and Exchange Commission.
At his request, Lechleiter received no raise in salary or bonus last year and will not get either of those increases this year, the company said.
The company’s second-highest-paid executive, Jan M. Lundberg, president of Lilly Research Laboratories, received a $1 million signing bonus to join Lilly last year. He had previously been head of research at competitor AstraZeneca. Lundberg’s salary last year was $946,401. His total compensation, including stock and bonus, was $8.5 million.
The third-highest-paid executive, Derica W. Rice, chief financial officer, received a 6 percent salary increase, to $955,000, which the company attributed to additional responsibilities in connection with his promotion to executive vice president for global services. His total compensation was $6.5 million.
Two other top executives -- Bryce D. Carmine, executive vice president and president of Lilly BioMedicines, and Robert Armitage, senior vice president and general counsel -- got 3 percent salary increases, to $947,083 and $836,817, respectively. Total compensation packages were $7.7 million for Carmine and $4.5 million for Armitage.
Lilly handed out the raises in a challenging year in which the company continued to cut jobs worldwide to cope with the upcoming patent expirations of several leading products.
To reflect the challenge in launching new drugs, Lilly is adding a new component to determining executive bonuses: a measurement of the company’s pipeline progress and quality. The category will be measured by product approvals and new compounds that enter late-stage clinical trials, among other things.
Changes in accounting affected two categories of executive compensation this year: change in pension value and stock awards.
Lechleiter’s stock awards, on paper, decreased by $3.1 million, to $8.2 million. Lilly attributed the decrease to an accounting adjustment and said Lechleiter’s stock award actually remained at an effective payment of $7.5 million.
The unusual accounting, Lilly said, reflected the fact that the board’s compensation committee changed how it is paying stock awards. Two years ago, Lilly paid out the award twice, in 2009 and 2010. But under accounting rules, Lilly was required to recognize both stock awards in the year they were granted.
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Posted: February 2011