Eli Lilly CEO racked up $21.4M in 2022 pay as stock price hit all-time high

Under David Ricks’ leadership, Eli Lilly’s stock price reached a record high in 2022. But the CEO’s pay decreased slightly last year.

Indianapolis-based Eli Lilly granted its CEO a pay package worth $21.4 million in 2022, marginally down from $21.5 million in the prior year, according to a securities filing.

For the first time since he became Lilly’s helmsman in 2017, Ricks realized no additional value from his pension plan last year, compared with a $2.4 million gain in 2021. The lack of pension value growth weighed on Ricks’ 2022 compensation despite big increases in his stock and cash awards.

Ricks nabbed nearly $17 million in stock awards in 2022, his highest award so far in that category and around $2 million more than his equity pay in 2021. His cash bonus grew 9% to $2.7 million, while his salary remained the same at $1.5 million.

When evaluating Ricks’ cash bonus, Lilly’s board noted that the company’s 2022 adjusted revenue and pipeline progress exceeded internal targets. The company’s earnings per share result came in below, according to the proxy filing.

Lilly crossed several important milestones last year. The company’s GIP/GLP-1 dual receptor agonist Mounjaro won an FDA approval in Type 2 diabetes and reported positive data in obesity. Its Alzheimer’s candidate donanemab emerged successful from a phase 3 trial last year. The two drugs topped Evaluate Vantage’s most anticipated drug launches in 2022, with combined sales at that time projected to approach $11 billion by 2026.

But the FDA in January rejected an accelerated approval application for donanemab, citing the limited number of clinical trial patients who had taken the drug for at least a year. Ricks shrugged off the complete response letter, noting that a full approval is much more important for the launch given a restrictive Medicare coverage policy.

Meanwhile, fervent hopes for Mounjaro and donanemab drove Lilly’s stock price to an all-time high in 2022. Thanks to that strong performance, Ricks earned the maximum payouts from two shareholder value-related awards the company established back in 2020.

Based on a beginning stock price of nearly $120 per share, Lilly’s board in 2020 set a target stock price range of between $141 and $156 for Ricks’ shareholder value award for the 2020-22 period. Lilly’s actual average ending price in late 2022? About $363 per share.

As a result, Ricks last year took home $48.9 million worth of Lilly shares as payouts from his long-term incentive plan. Those awards were separate from his 2022 compensation package.