2010 compensation fell about 20 percent for top Lilly execs

Compensation for Eli Lilly and Co.’s top executives fell last year due to a change to its stock award program and as the company struggled to bring new medicines to market.

The Indianapolis-based drugmaker reported its 2010 executive compensation Friday afternoon in a securities filing.

All executives stock awards were lower in 2010 compared with previous year because the company decided in 2009 to switch from stock awards based on one year of Lilly's financial performance to awards based on two yers of performance. It issued each executive both a one- and a two-year stock award in 2009, which boosted compensation during that year. In 2010, each executive received only one stock award, bringing compensation back down.

Lilly CEO John Lechleiter received salary, perks and stock awards valued at $12.7 million last year, down more than 22 percent from his compensation in 2009.

Likewise Derica Rice, Lilly’s chief financial officer, saw his compensation fall more than 17 percent to $5.5 million.

Compensation for Bryce Carmine, head of Lilly’s biomedicines business unit, received a 20 percent cut, to $5.5 million.

And Lilly General Counsel Bob Armitage took a 19 percent cut in pay, receiving a total of $4 million last year.

All four executives did receive bumps to their salaries, even though their stock awards came in for lower amounts.

IBJ reports executive compensation without including changes in the value of each officer’s pension plan, which were also disclosed in Friday’s securities filing.

Jan Lundberg, who joined Lilly in early 2010 as its executive vice president of science and technology, earned $8.5 million.

Lilly’s profit in 2010 jumped 17 percent to $5.1 billion. But investors shrugged because, in November, Lilly began a string of five patent expirations on blockbuster drugs that will likely sap roughly $10 billion from its current annual revenue of $23 billion.

After a string of pipeline failures, Lilly has no new products positioned to fill that yawning gap. Meanwhile, its stock price has been stuck, falling 1.9 percent last year. Shares closed the year at $35.04 apiece.

Lilly’s annual dividend of $1.96 per share has helped keep stock price from falling further.