ELI LILLY & Co PRE 14A, filed Mar 7, 2025

ELI LILLY & Co (LLY)

PRE 14A 2025-03-07 For: 2025-03-07

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x						Preliminary Proxy Statement
o						Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o						Definitive Proxy Statement
o						Definitive Additional Materials
o						Soliciting Material Pursuant to §240.14a-12


Notice of 2025 Annual Meeting of Shareholders		1
Proxy Statement Summary		2
Governance		10
	Director Qualifications	10
	Director Nominations	24
	Director Compensation	26
	Item 1 - Election of Directors	29
	Leadership Structure	29
	Board Structure	32
	Governance Practices	35
	Board Alignment	40
	Communication with the Board of Directors	42
	Shareholder Engagement on Governance Issues	42
Ownership of Company Stock		43
Compensation		44
	Item 2 - Approval, on an Advisory Basis, of the Compensation Paid to the Company’s Named Executive Officers	44
	Talent and Compensation Committee Matters	45
	Compensation Discussion and Analysis	46
	Executive Compensation Tables	61
	CEO Pay Ratio	71
	Pay versus Performance	72
Audit Matters		76
	Item 3 - Ratification of the Appointment of the Independent Auditor	76
Management Proposals		79
	Item 4 - Proposal to Amend the Company’s Articles of Incorporation to Eliminate the Classified Board Structure	79
	Item 5 - Proposal to Amend the Company’s Articles of Incorporation to Eliminate Supermajority Voting Provisions	80
Shareholder Proposals		81
	Item 6 and Item 7
Other Information		87
	Meeting and Voting Logistics	87
	Other Matters	90
Appendix A - Summary of Adjustments Related to the Annual Cash Bonus and Performance Award		A-1
Appendix B - Proposed Amendments to the Company’s Articles of Incorporation		B-1



	Frequently Referenced Topics


Director Biographies		13
Director Skills Matrix		11
Director Compensation		26
Board Leadership Structure		29
Board and Committee Oversight of:
Sustainability		37
Cybersecurity		37
Human Capital Management		39
Political Activities		38
Transactions with Related Persons		40
Share Ownership and Retention Guidelines		59
Compensation Recovery Policy (Clawback)		60


ITEMS OF BUSINESS
Item 1			Election of each of the four director nominees to serve three-year terms
Item 2			Approval, on an advisory basis, of the compensation paid to the company’s named executive officers
Item 3			Ratification of the appointment of Ernst & Young LLP as the independent auditor for 2025
Item 4			Approval of amendments to the company’s articles of incorporation to eliminate the classified board structure
Item 5			Approval of amendments to the company’s articles of incorporation to eliminate supermajority voting provisions
Item 6			Shareholder proposal to publish a human rights impact report
Item 7			Shareholder proposal to eliminate supermajority voting provisions


ADMISSION									WHEN 8:30 a.m. EDT Monday, May 5, 2025
The 2025 annual meeting of shareholders (the Annual Meeting) of Eli Lilly and Company will be held virtually via live webcast. The webcast is designed to provide shareholders the opportunity to participate virtually to facilitate shareholder attendance and to provide a consistent experience to all shareholders, regardless of location. You will be able to attend the Annual Meeting, vote, and submit questions virtually via webcast by visiting virtualshareholdermeeting.com/LLY2025 and entering the 16-digit control number found on the proxy card, voting instruction form, or notice you received. For further information on Annual Meeting logistics, see the section titled “Other Information—Meeting and Voting Logistics.” This proxy statement is dated March 21, 2025. We mailed a notice of internet availability of proxy materials on or about that date to our shareholders of record as of February 26, 2025 (other than those who previously requested electronic or paper delivery of our proxy materials and certain participants in The Lilly Employee 401(k) plan (401(k) Plan)).
									WHERE Virtually at www.virtualshareholder meeting.com/LLY2025
									RECORD DATE February 26, 2025
YOUR VOTE IS IMPORTANT
Every shareholder vote is important. Even if you plan to attend the Annual Meeting, we encourage you to vote promptly online, by telephone, or, if you received or requested paper copies of your proxy materials, by signing, dating, and returning your proxy card or voting instruction form by mail, so that a quorum may be represented at the meeting.


ELI LILLY AND COMPANY
(Name of Registrant as Specified In Its Charter)


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)


Dear Fellow Shareholders, Thank you for your continued support of Eli Lilly and Company. 2024 was a year of significant progress for Lilly, as we delivered life-changing medicines to more patients, advanced exciting new research in areas of unmet medical need, and invested in our supply chain to meet the increasing demand for our medicines. Key regulatory achievements included FDA approval of Kisunla for the treatment of Alzheimer's disease, Ebglyss for patients with moderate-to-severe atopic dermatitis, and Zepbound as the first prescription medicine for moderate-to-severe obstructive sleep apnea in adults with obesity. We announced positive Phase 3 results for imlunestrant, insulin efsitora alfa, and three additional tirzepatide trials. Based on early phase data, we started Phase 3 programs for lepodisiran, remternetug, and olomorasib. We also delivered strong total shareholder returns through December 31, 2024, in both share price appreciation and dividends. Our commitment to people, the planet, and society remains integral to our purpose. Our most profound impact is reflected in the number of patients who benefit from our medicines – more than 58 million in 2024. We have established bold sustainability objectives and are making steady progress toward our 2030 climate goals. We signed a renewable power purchase agreement for a new large-scale wind farm, which will generate approximately 450,000 megawatt hours per year, representing over 90% of our electrical demand in North America. Global health is also an important focus. Through investments in medicines and health systems, we made strides toward our 30x30 goal of improving quality health care for 30 million people living in resource-limited settings annually by 2030. At this writing, Lilly’s 30x30 reach is estimated to be approximately 20 million patients in 2024. Our company continues to work diligently to meet the needs of vulnerable communities around the world.
The board values your engagement, and we’ve spoken with many fellow shareholders on a range of topics, including pricing and access, enterprise risks, and sustainability. We welcome this dialogue, and investor input will be reflected again this year in management proposals to eliminate from our articles of incorporation the classified board structure and supermajority voting requirements. Lilly is a medicine company committed to improving human health for nearly 150 years. With your support, we will continue to invest in innovation, make meaningful scientific advancements, and deliver medicines that help more people around the world. We look forward to welcoming you to the annual meeting.


IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD MAY 5, 2025: The annual report to shareholders and proxy statement are available at ProxyVote.com as well as on our website at lilly.com/policies-reports/annual-report.


	Operating Performance
$45.0 billion in 2024 revenue		$11.71 earnings per share (EPS) in 2024 on a reported basis	$12.99 EPS on a non-GAAP basis in 2024
Reported results were prepared in accordance with U.S. generally accepted accounting principles (GAAP) and include all revenue and expenses recognized during the periods. A reconciliation of EPS on a reported basis to EPS on a non-GAAP basis is included in Appendix A.


Name	Age	Director Since	Other Public Boards	Principal Occupation		Committee Membership
Ralph Alvarez Independent Director	69	2009	3	Operating Partner, Advent International Corporation	Audit Talent and Compensation (Chair)
Mary Lynne Hedley Independent Director	62	2022	2	Senior Scientific Fellow, Broad Institute of Harvard and MIT and Venture Partner, Third Rock Ventures	Ethics and Compliance Science and Technology
Kimberly Johnson Independent Director	52	2021	0	Vice President and Chief Operating Officer, T. Rowe Price Group, Inc.	Talent and Compensation Ethics and Compliance
Juan Luciano Lead Independent Director	63	2016	1	Chairman, Chief Executive Officer and President, Archer-Daniels-Midland Company	Directors and Corporate Governance (Chair) Talent and Compensation


•Bonus Plan Result: In 2024, the company exceeded its annual cash bonus targets for product revenue and EPS. We also made significant pipeline advances. For purposes of the bonus, the Talent and Compensation Committee adjusted product revenue and non-GAAP EPS to exclude the impact of business development transactions and acquired in-process research and development (IPR&D) charges, both of which were not included in 2024 bonus targets. Foreign exchange impact was also neutralized. See the CD&A for further discussion of the Eli Lilly and Company Bonus Plan (Bonus Plan).			2.25 Bonus Plan Multiple
•2023-2025 Performance Award (PA) Result: We exceeded the two-year EPS growth target set for our PA program. The PA target is based on expected EPS growth of peer companies over a two-year period. As a result of exceeding the EPS growth target set for our PA program, the PA payout was above target. See the CD&A for further discussion on the PA program.			200% 2023-2025 PA Payout
•2022-2024 Shareholder Value Award (SVA) Result: Our total stock price growth exceeded the target range in our SVA program. This performance resulted in a SVA payout above target. See the CD&A for further discussion on the SVA program.			175% 2022-2024 SVA Payout
•2022-2024 Relative Value Award (RVA) Result: The RVA measures Lilly’s relative total shareholder return (TSR) against its peers. Lilly’s TSR performance exceeded the peer median TSR over the three-year performance period, resulting in a payout above target. See the CD&A for further discussion on the RVA program.			175% 2022-2024 RVA Payout



ONLINE	BY TELEPHONE	BY MAIL	AT THE MEETING
Visit the website listed on your notice, proxy card, or voting instruction form	Call 1-800-690-6903 and follow the instructions provided	If you received or requested paper copies of your proxy materials, sign, date, and return your proxy card or voting instruction form	Attend the Annual Meeting, online by live webcast at virtualshareholdermeeting.com/LLY2025 on Monday, May 5, 2025, at 8:30 a.m. EDT


Our directors are elected by the company’s shareholders to oversee the actions and results of the company’s management. The Directors and Corporate Governance Committee, which is chaired by the lead independent director, regularly assesses the effectiveness of the board to ensure that directors reflect the skill sets, experiences, diverse viewpoints and characteristics necessary to oversee our complex and evolving business. Execution of our robust assessment and refreshment process, guided by key governance guidelines, has resulted in a mix of directors that balances experienced institutional knowledge and fresh perspectives, and reflects a broad range of backgrounds and viewpoints.


			In addition, the board considered that some of the current non-employee directors are affiliated with companies or entities to which the company sold products or made payments, or from which the company purchased products or services during the year. Drs. Baicker, Kaelin and Hedley are employed at medical or academic institutions with which the company engages in clinical research, provides research grants, and/or engages in commercial transactions in the ordinary course of business. Mr. Luciano is employed by Archer-Daniels-Midland Company and Mr. Fyrwald is employed by International Flavors & Fragrances Inc.


9 Years Average Director Tenure						Tenure: Our director composition reflects a mix of tenure on the board, which provides an effective balance of historical perspective and an understanding of the evolution of our business with fresh perspectives and insights.


67% amount of board service annual retainer linked to the long-term performance of Lilly stock			5x required multiple of the annual board retainer in share ownership for non-employee directors			CAPPED total annual compensation for non-employee directors


Compensation Element	Payment or Value
Board Service1
Annual board retainer	$110,000
Annual equity grant2	$220,000 in deferred stock units
Lead independent director	$40,000
Committee Service3
Annual Committee Retainer	Chair	Member
Audit Committee4	$26,000	$6,000
Science and Technology Committee	$23,000	$6,000
Talent and Compensation Committee	$22,000	$3,000
Ethics and Compliance Committee	$22,000	$3,000
Directors and Corporate Governance Committee	$22,000	$3,000
Total Compensation Value Cap of $800,0005


Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)1	All Other Compensation and Payments ($)2	Total ($)3
Mr. Alvarez	$141,000	$220,000	$0	$361,000
Dr. Baicker	$141,000	$220,000	$0	$361,000
Mr. Fyrwald	$119,000	$220,000	$47,552	$386,552
Dr. Hedley	$119,000	$220,000	$0	$339,000
Mr. Jackson	$145,000	$220,000	$0	$365,000
Ms. Johnson	$116,000	$220,000	$0	$336,000
Dr. Kaelin	$142,000	$220,000	$38,150	$400,150
Mr. Luciano	$178,000	$220,000	$0	$398,000
Mr. Moeller	$9,917	$0	$0	$9,917
Ms. Sulzberger	$119,000	$220,000	$27,750	$366,750

Former Director:
Dr. Runge4	$79,333	$146,667	$10,000	$236,000
Ms. Walker4	$119,000	$220,000	$0	$339,000


Nominees

Ralph Alvarez Independent Director	Mary Lynne Hedley Independent Director	Kimberly Johnson Independent Director	Juan Luciano Lead Independent Director


We believe that high board effectiveness promotes the long-term interests of our shareholders, strengthens the accountability of the board of directors and management, and improves our standing as a trusted member of the communities we serve. In addition to having the right mix of directors, there are many factors involved in operating an effective board.


Members: •Mr. Alvarez* •Mr. Jackson* (Chair) •Mr. Moeller* •Ms. Sulzberger* * Financial Experts Meetings in 2024: 7			Key responsibilities and areas of risk oversight: •oversees integrity of financial information provided to our shareholders and others •oversees management’s systems of internal controls and disclosure controls •oversees performance of internal and independent audit functions •establishes qualifications and determines independence of the company’s independent auditor •has sole authority to appoint or replace the independent auditor •oversees compliance with legal and regulatory requirements •oversees processes and procedures related to identifying and mitigating enterprise-level risks •oversees the company’s programs, policies, procedures, and risk management activities related to information security, cybersecurity and data protection •together with the ethics and compliance committee, oversees the company’s compliance with the company’s code of ethics


Members: •Mr. Alvarez (Chair) •Mr. Fyrwald •Ms. Johnson •Mr. Luciano Meetings in 2024: 6			Key responsibilities and areas of risk oversight: •establishes the compensation of the CEO (in consultation with independent directors and external compensation consultant) and other executive officers •oversees global compensation philosophy, human capital management, and inclusion efforts •has authority to appoint or replace the compensation consultant •acts as the oversight committee with respect to the company’s deferred compensation plans, management stock plans, and other management incentive and benefit programs •reviews succession plans for the CEO and other key senior leadership positions, including a broad review of our succession management •advises management and the board regarding other employee compensation and benefits matters •reviews, monitors, and oversees stock ownership guidelines for executive officers •oversees the company’s executive compensation recovery policy •oversees the company’s engagement with shareholders regarding executive compensation matters, including reviewing and evaluating the results of advisory votes on executive compensation


Members: •Mr. Jackson •Dr. Kaelin •Mr. Luciano (Chair) •Mr. Moeller •Ms. Sulzberger Meetings in 2024: 3			Key responsibilities and areas of risk oversight: •reviews and recommends to the board the size and composition of the board and its committees •leads the process for director recruitment, together with the lead independent director •reviews recommendations for nominees for the board of directors •oversees matters of corporate governance, including board performance, non-employee director independence and compensation, corporate governance guidelines, and shareholder engagement on governance matters •identifies and brings to the attention of the board, as appropriate, current and emerging environmental, social, political, and governance trends and public policy issues that may affect the business operations, performance, or reputation of the company •annually assesses the performance of the board, board committees and board processes, and reviews such findings with the board


Members: •Dr. Baicker (Chair) •Dr. Hedley •Ms. Johnson Meetings in 2024: 4			Key responsibilities and areas of risk oversight: •reviews, identifies and, when appropriate, brings to the attention of the board legal and regulatory trends and issues, and compliance and quality matters that may have an impact on the business operations, financial performance, or reputation of the company •reviews, monitors, and makes recommendations to the board on corporate policies and practices related to compliance, including those related to employee health and safety •together with the audit committee, assists the board in its oversight of legal and regulatory compliance and oversees the company’s compliance with its code of ethics


Members: •Dr. Baicker •Mr. Fyrwald •Dr. Hedley •Dr. Kaelin (Chair) •Meetings in 2024: 5			Key responsibilities and areas of risk oversight: •reviews and advises the board regarding the company’s long-term strategic goals and objectives and the quality and direction of the company’s research and development programs •reviews and advises the board and management on the company’s major technology positions and strategies relative to emerging technologies, emerging concepts of therapy and health care, and changing market requirements •monitors and evaluates developments, technologies, and trends in pharmaceutical research and development (including those related to artificial intelligence) •regularly reviews the company’s product pipeline •assists the board with its oversight responsibility for enterprise risk management in areas affecting the company’s research and development


We are committed to ensuring pay is administered equitably across our workforce. For more than 20 years, we have regularly conducted pay equity studies of our workforce in the United States and have more recently started conducting studies of our workforce outside of the United States. Where appropriate, we have made pay adjustments as warranted and expect to continue to do so moving forward.						20+
						Years
						of pay equity studies in the U.S.


	Common Stock1
Beneficial Owners	Shares Owned2	Stock Units Distributable Within 60 Days3	Percent of Class	Stock Units Not Distributable Within 60 Days4
Ralph Alvarez	—	—	*	54,719
Anat Ashkenazi	42,524	—	*	—
Katherine Baicker, Ph.D.	—	—	*	23,156
Gordon Brooks	19,914	—	*	5,719
J. Erik Fyrwald	118	—	*	72,565
Anat Hakim	43,538	—	*	5,863
Mary Lynne Hedley	346	—	*	1,656
Jamere Jackson	—	—	*	9,168
Kimberly H. Johnson	—	—	*	3,032
William G. Kaelin, Jr., M.D.	—	—	*	21,499
Juan R. Luciano	—	—	*	16,229
Jonathan Moeller	71	—	*	—
Lucas Montarce	13,973	—	*	2,349
David A. Ricks5	757,308	—	*	27,941
Daniel Skovronsky, M.D., Ph.D.	212,276	—	*	11,099
Gabrielle Sulzberger	—	—	*	2,545
Jake Van Naarden	28,206	—	*	3,595
All directors and current executive officers as a group (22 people):	1,280,628	—	*	290,195


Name and Address		Number of Shares Beneficially Owned	Percent of Class*
Lilly Endowment Inc. (the Endowment) 2801 North Meridian Street Indianapolis, IN 46208	1	96,891,978	10.2%
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355	2	71,604,696	7.6%
BlackRock, Inc. 55 East 52nd Street New York, NY 10055	3	64,376,027	6.8%
The PNC Financial Services Group, Inc. 300 Fifth Avenue Pittsburgh, PA 15222	4	51,153,837	5.4%


		Dave Ricks Chair, President, and CEO Mr. Ricks assumed the role of Chief Executive Officer in January 2017 and was elected chair of the company’s board of directors in June 2017. In 2024, Mr. Ricks led the company to deliver strong company performance for patients and for shareholders that resulted in above target payouts for incentive programs. See the “Compensation Results” section of the CD&A for details. In 2024, under Mr. Ricks’ leadership, Lilly had patients in over 140 clinical trials (phase 1-4), launched five new medicines in up to 74 countries, and reached 58 million people around the world with our medicines. Additional highlights include: •Increased company revenue by 32% to $45 billion and non-GAAP earnings per share by 106% to $12.99. •Delivered US FDA approval of Kisunla for treatment of Alzheimer’s disease and Ebglyss for the treatment of moderate-to-severe atopic dermatitis; submitted mirikizumab in the US and EU for moderate-to-severe active Crohn’s disease; and received UK and EU approval of the multi-dose Kwikpen delivery device for Mounjaro, for type 2 diabetes and chronic weight management indications.
•Oversaw positive data readouts, including: (i) QWINT-2 and QWINT-4 Phase 3 clinical trials for insulin efsitora alfa in adults with type 2 diabetes; (ii) SURMOUNT-1 176-week study of tirzepatide, showing 94% reduction in risk of developing type 2 diabetes in adults with pre-diabetes and obesity or overweight; (iii) SUMMIT Phase 3 trial showing tirzepatide significantly reduced the risk of worsening heart failure events in adults with heart failure with preserved ejection fraction and obesity; and (iv) AK-OTOF Gene Therapy Phase 1/2 interim study, which demonstrated pharmacologic hearing restoration. •Completed multiple strategic business development transactions, including the acquisition of Morphic Holding to expand Lilly’s immunology pipeline with oral integrin therapies for treatment of serious chronic diseases. •Invested in new R&D facilities and manufacturing sites to accelerate product development and to quickly deliver life-improving medicines to patients. In addition, launched LillyDirect, a new digital healthcare experience offering disease management resources for patients, including access to independent healthcare providers, tailored support, and direct home delivery of select Lilly medicines.
	Lucas Montarce Executive Vice President and Chief Financial Officer Mr. Montarce was named Executive Vice President and Chief Financial Officer and member of the Lilly Executive Committee as of September 9, 2024. Since joining Lilly in 2001, Mr. Montarce has contributed to the company’s success through various leadership positions. Since becoming the CFO, Mr. Montarce led the 2025 business planning process and began establishing connections with the investment community.
	Dan Skovronsky, M.D., Ph.D. Executive Vice President, Chief Scientific Officer and President, Lilly Research Laboratories and Lilly Immunology Dr. Skovronsky’s key 2024 highlights include: •Directed the performance of Lilly’s Research and Development organization, which continues to perform above industry peers for clinical development speed, success rate, and the quality of the pipeline as valued by the external market. Lilly’s clinical development is among the fastest in the industry. •Continued to expand Lilly’s pipeline with innovative medicines achieving significant data readouts throughout 2024, including FDA approval of Kisunla and the continued expansion of our incretin portfolio. •Led the Immunology business unit with strong Omvoh launch performance and US approval for Ebglyss. •Completed business development transactions that enrich our pipeline assets and research infrastructure.
	Anat Hakim Executive Vice President, General Counsel and Secretary Ms. Hakim’s key 2024 highlights include: •Transformed Legal into a proactive, forward-thinking organization that helps shape the company agenda. •Actively partnered to develop a comprehensive strategy and approach to mitigate compounding, counterfeiting, and fraud associated with tirzepatide. •Assumed oversight of Lilly’s Global Public Policy group and the development and implementation of global policy strategies. •Led initiative to reshape our enterprise risk strategy and assumed oversight of Lilly’s Ethics and Compliance group.


			Jake Van Naarden Executive Vice President and President, Loxo@Lilly Mr. Van Naarden’s key 2024 highlights include: •Delivered robust financial performance, sustaining Verzenio’s growth and delivering a strong Jaypirca launch. •Completed the POINT Biopharma integration, which added substrate to support radio oncology efforts. •Maintained key R&D projects across the Oncology portfolio, including positive Phase 3 EMBER-3 study evaluating imlunestrant oral SERD in patients with second-line ER+, HER2- metastatic breast cancer.


At our 2024 annual meeting, we were pleased that 95 percent of the votes cast were in favor of the company’s say-on-pay proposal. Management and the Committee view this vote as supportive of the company’s overall approach to executive compensation.			95% Support for Say-On-Pay


Lilly 2024 Goals			Weighting
Product revenue			33.3%
EPS performance			33.3%
Pipeline progression			33.3%
Bonus multiple			100%


Name	2023 Annual Base Salary	2024 Annual Base Salary	Increase
Mr. Ricks	$1,650,000	$1,700,000	3.0%
Mr. Montarce1	N/A	$1,000,000	N/A
Dr. Skovronsky	$1,350,000	$1,450,000	7.4%
Ms. Hakim	$1,000,000	$1,000,000	0.0%
Mr. Van Naarden	$850,000	$900,000	5.9%
Mr. Brooks2	N/A	$563,419	N/A
Ms. Ashkenazi3	$1,050,000	$1,050,000	0.0%


Name	2023 Bonus Target		2024 Bonus Target
Mr. Ricks	150	%	150	%
Mr. Montarce1	N/A		100	%
Dr. Skovronsky	100	%	100	%
Ms. Hakim	100	%	100	%
Mr. Van Naarden	100	%	100	%
Mr. Brooks2	N/A		55	%
Ms. Ashkenazi3	100	%	100	%


Name	2023 Annual Equity Grant	2024 Annual Equity Grant
Mr. Ricks	$17,875,000	$19,750,000
Mr. Montarce1	N/A	$800,000
Dr. Skovronsky	$7,100,000	$7,500,000
Ms. Hakim	$3,750,000	$3,950,000
Mr. Van Naarden	$2,300,000	$2,700,000
Mr. Brooks2	N/A	$600,000
Ms. Ashkenazi3	$3,500,000	$3,750,000