Eli Lilly 2012 Annual Report Download - page 129

25
• Company performance. In 2011, the company performed in the upper tier of the peer group in one-year TSR, in
the middle tier in revenue growth, and in the lower tier in adjusted non-GAAP EPS and five-year TSR. Company
performance against corporate operating goals was slightly above target for adjusted non-GAAP EPS growth
and slightly below target for return on assets. Growth in adjusted revenue, adjusted non-GAAP EPS, net cash
flow, operating income per employee, and pipeline progress exceeded corporate goals.
• Individual performance. In assessing the 2011 performance of executive officers, the independent directors (for
the CEO) and the compensation committee (with regard to all executive officers) considered the company’s and
the executive officer’s accomplishment of objectives established at the beginning of the year and their own
subjective assessment of the executive officer’s performance.
— In assessing Dr. Lechleiter's performance, the independent directors noted that under Dr. Lechleiter's
leadership in 2011, the company:
• Delivered above-plan growth in revenue, EPS, and cash flow.
• Achieved the infrastructure reduction goals set in 2009 of elimination of 5,500 positions and
reduction of $1 billion in costs from the 2009 plan, excluding acquisitions and strategic additions in
Japan and key emerging markets.
• Continued to advance the product pipeline, with 11 molecules in late-stage development.
The directors also noted Dr. Lechleiter's strong leadership in establishing and executing the company's
strategy to weather the period of patent expirations through 2014 and return to long-term growth following
2014. Dr. Lechleiter continued to set a clear tone throughout the organization emphasizing integrity, ethics,
compliance, and quality. In addition, he continued his effective public advocacy on behalf of the company,
especially in the areas of FDA and patent reform, and oversaw smooth transitions of two critical leadership
roles in the organization.
Dr. Lechleiter requested that his base salary and incentive targets not be increased for 2012, as most
employees worldwide did not receive increases. Despite his strong performance, the committee agreed to
Dr. Lechleiter’s request and his 2012 target compensation remained the same as 2011.
— Mr. Rice assumed expanded operational responsibilities. He demonstrated effective leadership during the
implementation of the global financial shared services centers, which will enable the company to
streamline and standardize key global financial operations. Mr. Rice also showed continued strong financial
stewardship and oversight of investor relations.
— Dr. Lundberg's leadership was a key factor in very strong pipeline progress in 2011. He enhanced Lilly
Research Laboratories' focus on achieving key pipeline milestones, made strong gains in employee
engagement scores, and recruited key scientific talent.
— Mr. Armitage is broadly recognized for his critical role in helping to reform the U.S. patent laws to better
protect innovators, culminating in the America Invents Act of 2011. He also led the company to excellent
results across a broad spectrum of Hatch-Waxman litigation. Mr. Armitage retired from the company on
December 31, 2012.
— Mr. Conterno provided key leadership to improve the company’s competitive position in markets for our
diabetes business products with the successful consummation of the Boehringer-Ingelheim partnership
and the termination of the Amylin commercial partnership and settlement of related issues. He
collaborated effectively with manufacturing personnel to improve gross margins on these products. His
organization reported high employee-engagement scores and strong commitment to ethics and
compliance.
• Pay relative to peer group. The company’s total compensation to executive officers, in the aggregate, for 2011
was in the broad middle range of the peer group.