Summary
Eli Lilly and Company (LLY) filed an 8-K on February 18, 2008, primarily to announce changes within its Board of Directors and executive leadership. George M.C. Fisher, a director since 2000, announced his intention to retire from the board effective April 21, 2008. In a related move, Michael L. Eskew, former CEO of UPS, was elected to the board for an interim term and nominated for a full three-year term at the upcoming annual meeting. Mr. Eskew's appointment brings valuable experience from another major public company. More significantly for investors, the filing details compensation arrangements for John C. Lechleiter, who is set to become President and CEO on April 1, 2008. This transition follows the previously announced retirement of current CEO Sidney Taurel. Dr. Lechleiter's compensation package includes an annualized base salary of $1,400,000 and a target annualized non-equity incentive compensation of $1,960,000, with actual payouts dependent on corporate performance metrics including sales growth and adjusted earnings per share growth. The report also confirms the timeline for Sidney Taurel's retirement as CEO and Board Chairman.
Key Highlights
- 1George M.C. Fisher, a long-serving board member, announced his retirement from the Board of Directors, effective April 21, 2008.
- 2Michael L. Eskew, former Chairman and CEO of UPS, has been elected to the Board of Directors for an interim term and nominated for a three-year term.
- 3Mr. Eskew will bring extensive leadership experience and will serve on the Audit and Compensation committees.
- 4John C. Lechleiter is confirmed to assume the role of President and CEO on April 1, 2008, succeeding Sidney Taurel.
- 5Sidney Taurel's retirement as CEO is set for March 31, 2008, and as Chairman and Board member on December 31, 2008.
- 6Dr. Lechleiter's annualized base salary will be $1,400,000, and his target annualized non-equity incentive compensation is $1,960,000.
- 7Executive compensation for Dr. Lechleiter will be tied to corporate performance, specifically sales growth (25%) and adjusted earnings-per-share growth (75%).