Eli Lilly and Co. was among 40 companies cited in a study by Clarity! Communications of Canada Inc. for describing executive pay in prose that’s all but indecipherable to the common person.
As a result, the companies in the study violated new securities rules that prevent companies from using jargon to report how top executives are paid, Clarity said in the February study.
Lilly scored 16.07 on a readability scale where 17 is the worst possible score. Readers Digest magazine rates about 8 on the scale.
Lilly spokesman Phil Belt told Bloomberg that the company takes pride in meeting the letter and spirit of SEC reporting rules.
In early March, the Indianapolis drugmaker used the following language in a proxy to describe how directors set incentive pay for executives. Directors, “maintained the same total grant values but continued to place greater emphasis on performance-based equity incentives by increasing the performance award portion of executive officers’ equity grants from 40 percent to 50 percent of the total grant value.”