Eli Lilly 2010 Annual Report Download - page 122

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PROXY STATEMENT
management of capital expenditures, and the successful refinancing (in a difficult financial market) of the
short-term debt incurred in 2008 to acquire ImClone. Mr. Rice maintained proper internal controls and
financial compliance, drove business transformation efforts, demonstrated his commitment to diversity
and succession management, and took a leadership role in the design of the company’s new global shared
services function.
—Under Mr. Carmine’s leadership of the sales and marketing organization, worldwide revenue growth of
5 percent exceeded plan, as noted above, with all geographic regions contributing to above-plan growth,
although initial Effient®sales were slower than expected. Cost-containment measures led to sales and
marketing expenses growing only 1 percent, slightly below plan. Mr. Carmine reinforced a culture of high
performance with high integrity in the sales and marketing organization and demonstrated strong
leadership in the company’s organizational redesign efforts.
—Mr. Armitage successfully mitigated the company’s risks related to several legal matters, including
Zyprexa®-related litigation matters, the defense of the company’s worldwide patents, and the
implementation of the company’s Corporate Integrity Agreement. In addition, Mr. Armitage continued to
provide industry leadership in shaping intellectual property laws and policies to foster pharmaceutical
innovation, supported diversity and succession management initiatives, and demonstrated his commitment
to ethics and integrity.
•Pay relative to peer group. The company’s total compensation to executive officers, in the aggregate, for 2009
was in the broad middle range of the peer group.
The committee determined the following:
•Program elements. The 2010 program consisted of base salary, a cash incentive bonus, and two forms of
performance-based equity grants: PAs and SVAs. Executives also received the company employee benefits
package. This total compensation program balances the mix of cash and equity compensation, the mix of
current and longer-term compensation, the mix of financial and market goals, and the security of foundational
benefits in a way that furthers the compensation objectives discussed above.
•Targets. The company generally maintained pay ranges and a balance of pay elements similar to 2009. The
committee believes this overall program continues to provide cost-effective delivery of total compensation that:
—encourages employee retention and engagement by delivering competitive cash and equity components
—maintains a strong link to company performance and shareholder returns through a balanced equity
incentive program without encouraging excessive risk-taking
—maintains appropriate internal pay relativity
—provides opportunity for total pay within the broad middle range of expected peer-group pay given company
performance comparable to that of our peers.
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