Eli Lilly 2012 Annual Report Download - page 113

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series of marketing positions at Nabisco/Standard
Brands, Johnson & Johnson, and Lever Brothers.
Ms. Marram is a member of the board of directors of
Ford Motor Company and The New York Times
Company, as well as several private companies. She
previously served on the board of Cadbury plc. She also
serves on the boards of Wellesley College, Institute for
the Future, New York-Presbyterian Hospital, Lincoln
Center Theater, and Families and Work Institute.
Qualifications: Ms. Marram is a former CEO with a
strong marketing and consumer-brand background.
Through her nonprofit and private company activities,
she has a special focus and expertise in wellness and
consumer health. Ms. Marram has extensive corporate
governance experience through service on other public
company boards in a variety of industries.
Board committees: compensation; directors and
corporate governance (chair)
Douglas R. Oberhelman, Age 60, Director since 2008
Chairman and Chief Executive Officer, Caterpillar Inc.
Mr. Oberhelman has been chairman of the board of
Caterpillar Inc. since November 2010 and chief
executive officer since July 2010. He previously served
as vice chairman and chief executive officer-elect of
Caterpillar. He joined Caterpillar in 1975 and has held a
variety of positions, including senior finance
representative based in South America for Caterpillar
Americas Co., regional finance manager and district
manager for the company's North American
commercial division, and managing director and vice
general manager for strategic planning at Caterpillar
Japan Ltd. Mr. Oberhelman was elected a vice president
in 1995, serving as Caterpillar's chief financial officer
from 1995 to November 1998. In 1998, he became vice
president with responsibility for the engine products
division and he was elected a group president and
member of Caterpillar's executive office in 2002.
Mr. Oberhelman serves on the boards of Caterpillar, the
Wetlands America Trust, and is chairman of the
National Association of Manufacturers. He previously
served on the board of Ameren Corporation. He is a
member of the Executive Committee of the Business
Roundtable and a member of the Business Council.
Qualifications: Mr. Oberhelman has a strong strategic
and operational background as a senior executive (and
currently as chairman and CEO) of Caterpillar, a leading
manufacturing company with worldwide operations and
a special focus on emerging markets. He is an audit
committee financial expert as a result of his prior
experience as CFO of Caterpillar and as a member and
chairman of the audit committee of another U.S. public
company.
Board committees: audit; finance
Director Compensation
Director compensation is reviewed and approved
annually by the board, on the recommendation of the
directors and corporate governance committee.
Directors who are employees receive no additional
compensation for serving on the board.
Cash Compensation
In 2012, the company provided nonemployee directors
with an annual retainer of $100,000 (payable in monthly
installments). In addition, certain board roles receive
additional annual retainers:
• $3,000 for audit committee and science and
technology committee members
• $12,000 for committee chairs ($18,000 for audit
committee chair and $15,000 for science and
technology committee chair)
• $30,000 for the lead director.
Directors are reimbursed for customary and usual travel
expenses. Directors may also receive additional retainer
amounts for serving on ad hoc committees that may be
assembled from time-to-time.
Stock Compensation
Stock compensation for nonemployee directors consists
of shares of company stock equaling $145,000,
deposited annually in a deferred stock account in the
Lilly Directors’ Deferral Plan (as described below),
payable after service on the board has ended.
Lilly Directors’ Deferral Plan
This plan allows nonemployee directors to defer receipt
of all or part of their cash compensation until after their
service on the board has ended. Each director can
choose to invest the funds in one or both of two
accounts:
• Deferred Stock Account. This account allows the
director, in effect, to invest his or her deferred cash
compensation in company stock. In addition, the
annual award of shares to each director noted
above (3,083 shares in 2012) is credited to this
account on a pre-set annual date. The number of
shares credited is calculated by dividing the
$145,000 annual compensation figure by the closing
stock price on that date. Funds in this account are
credited as hypothetical shares of company stock
based on the market price of the stock at the time
the compensation would otherwise have been
earned. Hypothetical dividends are “reinvested” in
additional shares based on the market price of the
stock on the date dividends are paid. Actual shares
are issued or transferred after the director ends his
or her service on the board.
• Deferred Compensation Account. Funds in this
account earn interest each year at a rate of
120 percent of the applicable federal long-term
rate, compounded monthly, as established the