Eli Lilly 2012 Annual Report Download - page 124

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Independent Auditor Fees
The following table shows the fees incurred for services rendered on a worldwide basis by the company’s
independent auditor in 2012 and 2011. All such services were preapproved by the committee in accordance with the
preapproval policy.
2012
(millions) 2011 (millions)
Audit Fees $8.8 $8.8
•Annual audit of consolidated and subsidiary financial statements, including Sarbanes-Oxley 404
attestation
• Reviews of quarterly financial statements
• Other services normally provided by the auditor in connection with statutory and regulatory filings
Audit-Related Fees $0.7 $1.5
•Assurance and related services reasonably related to the performance of the audit or reviews of
the financial statements
– 2012 and 2011: primarily related to employee benefit plan and other ancillary
audits, and due diligence services on potential acquisitions
Tax Fees $2.2 $3.4
• 2012 and 2011: primarily related to consulting and compliance services
All Other Fees $0.4 $0.5
• 2012 and 2011: primarily related to compliance services outside the U.S.
Total $12.1 $14.2
Compensation Committee Matters
Scope of Authority
The compensation committee oversees the company’s
global compensation philosophy and policies, as well as
establishes the compensation of executive officers. The
committee also acts as the oversight committee with
respect to the company’s deferred compensation plans,
management stock plans, and other management
incentive compensation programs. The committee
delegates authority to the appropriate company
management for day-to-day plan administration and
interpretation, including selecting participants,
determining award levels within plan parameters, and
approving award documents. However, the committee
may not delegate any authority for matters affecting the
executive officers.
The Committee’s Processes and Procedures
The committee’s primary processes for establishing and
overseeing executive compensation can be found in the
“Compensation Discussion and Analysis” section and in
the summary below.
The committee's key processes and procedures for
setting and overseeing executive compensation include:
Meetings. The committee meets several times each year
(7 times in 2012). Committee agendas are approved by
the committee chair in consultation with the
committee’s independent compensation consultant. The
committee meets in executive session after each
regular meeting.
Retention of independent consultant. The committee
has retained Cimi B. Silverberg of Frederic W. Cook &
Co., Inc., as its independent compensation consultant to
assist the committee. Ms. Silverberg reports directly to
the committee. Neither she nor her firm is permitted to
have any business or personal relationship with
management or the members of the compensation
committee. The consultant’s duties include the
following:
• reviewing committee agendas and supporting
materials in advance of each meeting and raising
questions with the company’s global compensation
group and the committee chair as appropriate
• reviewing the company’s total compensation
philosophy, peer group, and target competitive
positioning for reasonableness and appropriateness
• reviewing the company’s executive compensation
program and advising the committee of evolving
best practices
• providing independent analyses and
recommendations to the committee on the CEO’s
pay
• reviewing draft “Compensation Discussion and
Analysis” and related tables for the proxy statement
• proactively advising the committee on best
practices for board governance of executive
compensation
• undertaking special projects at the request of the
committee chair.
The consultant interacts directly with members of
company management only on matters under the
committee’s oversight and with the knowledge and
permission of the committee chair.
Role of executive officers and management. With the
oversight of the CEO and the senior vice president of