Eli Lilly 2011 Annual Report Download - page 119

PROXY STATEMENT
The graph below shows the balance of fixed and performance-based target compensation determined by the committee
and actual compensation received for 2011. The target compensation reflects decisions made by the compensation com-
mittee for 2011. This includes the 2011-2012 PA and the 2011-2013 SVA. For comparison purposes, actual compensation
includes base salary and cash incentive bonus earned in 2011 and the equity awards that completed their performance
periods in 2011: the 2010-2011 PA and the 2009-2011 SVA.
2011 Target and Actual Compensation (millions)
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Actual
$5.7
Lechleiter
Rice
Carmine
Lundberg
Armitage
$11.1
$13.2
$5.7
$4.8
$5.6
$4.6
$5.0
$3.5
$4.1
Fixed Performance based One-time
Long-term equityCash
PA SVABonusBase salary RSU upon hire
Actual base salary and bonus amounts are shown in the “Summary Compensation Table.” The PA payout for 2010-2011
performance period paid out at 109 percent of target, as shown in the “Outstanding Equity Awards at December 31, 2011”
table. The SVA payout for 2009-2011 performance was 80 percent of target for all participants as shown in the “Options
Exercised and Stock Vested in 2011” table. Since Dr. Lundberg joined the company after the SVA award was granted, he
was not eligible for the payout. The graph above includes the vesting of one-third of the award of restricted stock units that
Dr. Lundberg received upon joining the company.
Base Salary
In setting base salaries for 2011, in addition to the considerations described above,
the committee considered the corporate budget for salary increases, which was
established at 3 percent based on company performance for 2010, expected per-
formance for 2011, and general external trends. The objective of the budget is to
allow salary increases to retain, motivate, and reward successful performers while
maintaining affordability within the company’s business plan. Individual pay
increases can be more or less than the budget amount depending on individual
performance, but aggregate increases must stay within the budget. The aggregate
increases for the named executive officers and the other executive officers were
Annualized Base Salary
(thousands)
Name 2010 2011 Percentage Increase
Dr. Lechleiter $1,500 $1,500 0%
Mr. Rice $955 $990 4%
Mr. Carmine $952 $952 0%
Dr. Lundberg $950 $979 3%
Mr. Armitage $841 $841 0%
within this budget. Mr. Rice’s base salary reflects his increased responsibilities. In setting 2011 compensation, peer-
group data confirmed that the proposed salaries were within the broad middle range of competitive pay.
Cash Incentive Bonuses
The company’s annual cash bonus program aligns employees’ goals with the
company’s financial plans and pipeline delivery objectives for the current year. For
executive officers, cash incentive bonuses are made under the Executive Officer
Incentive Plan (EOIP), which operates by establishing a maximum annual incentive
bonus and granting the committee discretion to reduce the bonus from the max-
imum. Under the EOIP, the maximum bonuses are based on non-GAAP net income
(as defined under “Non-GAAP Results” below) for the year. For the chief executive
officer, chief operating officer (if any), and executive chairman (if any), the maximum
Bonus Weighting:
• 25% revenue goals
• 50% non-GAAP EPS goals
• 25% pipeline progress
2011 Targets:
• $23.2 billion revenue
• $4.31 adjusted non-GAAP EPS
• achievement of pipeline milestones
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