Eli Lilly 2013 Annual Report Download - page 135

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37
programs that reduce the likelihood of inappropriate risk-taking, including, but not limited to:
• Independent Compensation Committee members
• Compensation Committee engages independent compensation consultant
• Compensation Committee has downward discretion to lower compensation plan payouts
• Threshold levels below target that provide for payouts and maximums that cap payouts
• Different measures and metrics used across multiple incentive plans; appropriate balance of cash/stock,
fixed/variable pay, short-term/long-term incentives
• Performance objectives are appropriately achievable
• Programs with operational metrics that have a continuum of payout multiples based upon achievement of
performance milestones
• Negative compensation consequences for serious compliance violations and compensation recovery
policy in place for all members of senior management
• Meaningful share ownership requirements for all members of senior management
Compensation Committee Report
The Compensation Committee evaluates and establishes compensation for executive officers and oversees
the deferred compensation plan, the company’s management stock plans, and other management incentive
and benefit programs. Management has the primary responsibility for the company’s financial statements and
reporting process, including the disclosure of executive compensation. With this in mind, the Compensation
Committee has reviewed and discussed with management the CD&A above. The committee is satisfied that
the CD&A fairly and completely represents the philosophy, intent, and actions of the committee with regard to
executive compensation. The committee recommended to the Board of Directors that the CD&A be included
in this proxy statement for filing with the SEC.
Compensation Committee
Karen N. Horn, Ph.D., Chair
Ralph Alvarez
Ellen R. Marram
Kathi P. Seifert
Compensation Committee Interlocks and Insider Participation
None of the Compensation Committee members:
• Has ever been an officer of the company
• Has ever been an employee of the company
• Is or was a participant in a related-person transaction in 2013 (see “Review and Approval of Transactions
with Related Persons” for a description of our policy on related-person transactions).
None of our Board members or Compensation Committee members is an executive officer of another entity at
which one of our executive officers serves on the Board of Directors.
•
•
•
•
•
•
Risk Assessment Process
As a part of the overall enterprise risk management program, in 2013 the committee reviewed the company’s
compensation policies and practices for employees, including executive officers. The committee concluded
that the company’s compensation programs are not reasonably likely to have a material adverse effect on the
company. The committee noted numerous design features of the company’s cash and equity incentive