Eli Lilly chief John Lechleiter's (photo) pay package has been stuck in neutral since 2009, and it will stay that way through this year. Lechleiter waived his raise and bonus for last year, and so, including accounting adjustments, his 2010 salary and incentive pay amounts to $11.1 million, exactly as it did in 2009, the company says. Total compensation was reported at $16.5 million, down from more than $20 million, but it was those pesky accounting adjustments that caused the change, Lilly told the Indianapolis Star.
For 2011, Lechleiter won't be in line for a raise or increased bonus once again. According to the company's proxy statement, Lechleiter waived the pay and bonus increase "in light of the business challenges the company faces." Also reflecting those business challenges? New incentive-pay provisions that tie compensation to drug development.
Specifically, Lilly's challenges include impending generic competition for the multibillion-dollar antipsychotic drug Zyprexa, which loses patent protection later this year. Indeed, all the company's "challenges" could be boiled down to this one; over the next three years, drug patents expire on drugs that account for 65 percent of Lilly's sales. Hence the bonuses tied to R&D: Lilly must overcome recent setbacks and kick its pipeline into gear quickly.
- see Lilly's proxy statement from the SEC
- get more from the IndyStar
- check out Bloomberg's coverage