The top five executives at Eli Lilly and Co. took home 5 percent to 10 percent less in cash, stock and perks last year than the year before, according to a Monday securities filing.
But changes to how Lilly accounts for its executive pensions boosted the overall value of the compensation of four of the executives roughly 30 percent.
The Indianapolis-based drugmaker saw its revenue decline in 2014 by 15 percent, to $19.6 billion, due primarily to patent expirations on its best-selling drug Cymbalta.
But Lilly’s stock price had a phenomenal year, rising more than 35 percent, as Lilly launched several products and investors began to believe Lilly’s decade-long dearth of new drugs was finally ending. Its shares ended the year trading at $68.99 apiece.
That mixed overall performance led Lilly’s board to pay its executives smaller performance-based cash bonuses than it did in 2013.
CEO John Lechleiter received $10.1 million in cash, stock and perks last year, down 9.7 percent from 2013. But his pension rose nearly $4.4 million, pushing up the overall value of his compensation 29 percent, to $14.5 million.
Lilly’s proxy statement, filed Monday with the U.S. Securities & Exchange Commission, said higher pension values reflected an extra year of service with the company, but even more so, a change in actuarial assumptions. The actuaries that calculate the value of Lilly’s pensions are now assuming longer lifespans—so more years of pension benefits—and are using a different assumed interest rate to account for future inflation.
Chief Financial Officer Derica Rice was paid $4.7 million in cash, stock and perks, a decrease of 9 percent from the previous year. However, his pension rose $2 million in value, boosting Rice’s overall compensation 30 percent, to $6.7 million.
Michael Harrington, Lilly’s general counsel, received $2.7 million in cash, stock and perks, down 6.4 percent from the previous year. Including changes to the value of his pension, his overall compensation rose 28 percent in value, to nearly $4.1 million.
Enrique Conterno, president of Lilly’s diabetes division, received cash, stock and perks totaling $2.7 million, a decrease of 9 percent from the previous year. But factoring in a rise in his pension value, Conterno’s compensation totaled nearly $3.9 million, up 29 percent.
Jan Lundberg, Lilly’s chief of research and development, was paid $4.1 million in cash, stock and perks, down 10 percent from the previous year. Even including changes to his pension value, Lundberg’s overall compensation declined 3.5 percent, to $4.6 million.