Joshua Smiley, who resigned as chief financial officer of Eli Lilly and Co. on Tuesday after the company said he had an “inappropriate personal relationship” with an employee, will lose compensation worth millions of dollars under a separation agreement.
In a government filing this week, the Indianapolis-based drugmaker said Smiley will forgo all of his $1 million cash bonus from 2020 and approximately $3 million of his 2018-2020 shareholder value award.
In addition, Smiley will give up “all other current and future equity incentive awards,” which Lilly said totaled more than $20 million at target value, calculated on the company’s most recent closing stock price.
Smiley also will take a reduced cash compensation of $9,000 every two weeks—the equivalent of $234,000 a year—to help the company through July. Smiley’s annual base salary was $900,000 in 2019.
He was Lilly’s second-highest-paid employee, receiving total compensation of $7.35 million in 2019.
Smiley, Lilly’s CFO since 2018, did not return several calls this week to his cell phone seeking comment.
Lilly said on Tuesday that Smiley had resigned after the company became aware of an improper personal relationship with an employee.
The company said that, after learning of allegations of Smiley’s behavior, it immediately hired external lawyers to conduct a thorough, independent investigation.
“That investigation revealed consensual though inappropriate personal communications between Mr. Smiley and certain Lilly employees and behavior that Lilly leadership concluded exhibited poor judgment by Mr. Smiley,” the company said in a statement. “Lilly holds all employees accountable to its core values and strongly believes its executive officers carry an even higher burden in ensuring those values are upheld. Mr. Smiley did not meet that standard.”
The separation agreement included provisions regarding confidentiality and a release of claims against Lilly, as well as a 24-month non-solicitation agreement and an 18-month non-competition agreement.
The filing also laid out compensation for Smiley’s successor, Anat Ashkenazi. She will get an annualized base salary of $900,000 and will be eligible for an annualized target bonus of $900,000.
She will also receive stock awards with an aggregate target grant date value of $2.2 million, the company said.
Ashkenazi, 48, previously served as senior vice president, controller and chief financial officer of Lilly Research Laboratories.