Eli Lilly 2007 Annual Report Download - page 87

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PROXY STATEMENT
8585
2007 sales and adjusted EPS multiples are illustrated by these charts:
2007 pro forma sales growth of 13.6 percent resulted in a sales multiple of 1.861.
2007 pro forma adjusted EPS growth of 16.8 percent resulted in an adjusted EPS multiple of 1.883.
Together, the sales multiple and the adjusted EPS multiple yielded a bonus multiple of 1.88:
(0.25 x 1.861) + (0.75 x 1.883) = 1.88 bonus multiple
See page 87 for a reconciliation of 2007 reported and pro forma sales and reported and pro forma adjusted EPS.
Equity Incentives—Total Equity Program
In 2007, we employed two forms of equity incentives granted under the 2002 Lilly Stock Plan: performance awards
and shareholder value awards. These incentives ensure that our leaders are properly focused on long-term share-
holder value.
• Target grant values. For 2007, the committee reduced aggregate grant values for management and executives
in order to manage overall compensation costs. The committee did not “make up” for the equity reductions by
signifi cantly increasing other elements of compensation. The specifi c reductions at different job levels were
determined by internal relativity. Consistent with the company’s compensation objectives, individuals at higher
levels received a greater proportion of total pay in the form of equity. The committee determined that a 50/50
split for executives between performance awards and shareholder value awards appropriately balances
the shorter- and longer-term incentives of the two programs. This is consistent with the 2006 grants,
which were split 50/50 between performance awards and stock options.
Target values for 2007 equity grants for the named executives were as follows:
Name
Performance
Awards
Shareholder Value
Awards
Mr. Taurel $3,060,000 $3,060,000
Dr. Lechleiter $1,989,000 $1,989,000
Dr. Paul $1,200,000 $1,200,000
Mr. Armitage $855,000 $855,000
Mr. Rice $855,000 $855,000
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