8-KLeadership ChangesCorporate ChangesExhibits & Filings

ELI LILLY & Co 8-K Report, Executive Changes (Feb 9, 2021)

Filed February 9, 2021For Securities:LLY

Summary

Eli Lilly and Company (LLY) announced significant leadership changes within its finance department. Anat Ashkenazi has been appointed as the new Senior Vice President and Chief Financial Officer, effective February 9, 2021. Ms. Ashkenazi brings extensive experience within Lilly, having held various strategic and financial roles, most recently as Senior Vice President, Controller and Chief Financial Officer of Lilly Research Laboratories. Her compensation package includes a base salary of $900,000, an annual target bonus of $900,000, and substantial equity awards valued at $2.2 million. This appointment follows the resignation of the previous CFO, Joshua L. Smiley. Mr. Smiley resigned due to allegations of an inappropriate personal relationship with a Lilly employee, which was confirmed by an internal investigation revealing consensual but inappropriate communications and poor judgment. As part of his separation agreement, Mr. Smiley has forfeited significant bonuses and equity awards totaling over $20 million and will provide transition assistance through July 2021 under a reduced compensation arrangement. He is also subject to non-solicitation and non-competition clauses.

Key Highlights

  • 1Anat Ashkenazi appointed as new Chief Financial Officer (CFO) of Eli Lilly.
  • 2Ms. Ashkenazi's compensation includes a $900,000 base salary, $900,000 target bonus, and $2.2 million in equity awards.
  • 3Previous CFO, Joshua L. Smiley, resigned due to an investigation into inappropriate personal conduct.
  • 4Mr. Smiley forfeited over $20 million in bonuses and equity awards as part of his separation agreement.
  • 5Mr. Smiley will provide transition assistance through July 2021.
  • 6Eli Lilly amended its bylaws to remove a provision for temporary CEO authority to specific officers in cases of incapacity, with the Board of Directors now to exercise discretion.
  • 7The company's investigation into Mr. Smiley's conduct confirmed inappropriate communications and poor judgment, though not related to financial matters.

Frequently Asked Questions

Joshua L. Smiley resigned as CFO due to allegations of an inappropriate personal relationship with an employee. An investigation confirmed consensual but inappropriate communications and poor judgment, leading to his departure. Anat Ashkenazi has been appointed as his successor.

Ms. Ashkenazi will receive an annualized base salary of $900,000, is eligible for an annualized target bonus of $900,000, and received equity awards with an aggregate target grant date value of $2,200,000.

Mr. Smiley has forfeited all of his $1 million 2020 cash bonus, approximately $3 million of his 2018-2020 shareholder value award, and all other current and future equity incentive awards, totaling over $20 million at target value. He will receive reduced cash compensation for transition assistance.

Yes, Eli Lilly's Board of Directors approved an amendment to its bylaws that removes the provision for temporary CEO authority to be automatically granted to specific officers in the event of the CEO's sudden death or incapacity. The Board will now exercise its discretion to determine the appropriate course of action in such circumstances.