ELI LILLY & Co LLY

13% shingled-prose overlap between the two filings.

2025: 43,585 chars · 2026: 34,236 chars

• Committee Report:12% overlap (6,000 → 6,000 chars)
• Pay Ratio (Item 402(u)):12% overlap (1,922 → 1,865 chars)
• Say-on-Pay proposal:24% overlap (24,999 → 21,777 chars)

• changedThis Compensation Discussion and Analysis (CD&A) outlines our executive compensation philosophy, as well as the processes and considerations employed by the Talent and Compensation Committee (the Committee) in determining executive compensation, and how our pay-for-performance culture links incentive payouts to company results. compensation.
• changedSpecifically,The CD&A provides compensation information for our named executive officers (NEOs) for 2025, including Chief Executive Officer, David Ricks; Chief Financial Officer, Lucas Montarce; and our next three most highly compensated executive officers: officersasofDecember31,2024:Daniel Skovronsky, Anat Hakim, and Jake Van Naarden.
• changedThe following section introduces each NEO ournamedexecutiveofficersand highlights 2025 provides2024performance achievements highlightsthat contributed to the incentive payouts payoutoutcomesdetailed in the “Compensation Results” section.
• newDave RicksChair, President, and Chief Executive Officer (2017 - Present)In 2025, under Mr. Ricks’ leadership, Lilly generated positive clinical data in more than 25 Phase 3 trials, and reached over 71 million people around the world with our medicines.
• newHighlights include: •Increased company revenue by 45% to $65 billion•Increased non-GAAP earnings per share by 86% to $24.21 per share.•Obtained FDA approvals for Omvoh for Crohn's disease, Inluriyo for ER+ breast cancer, Amyvid for Alzheimer’s disease diagnosis, and Kisunla for early symptomatic Alzheimer’s disease•Secured European Commission marketing authorizations for Jaypirca and Kisunla for the treatment of early symptomatic Alzheimer's disease•Oversaw major manufacturing investments including facilities in Texas ($6.5B), Alabama ($6B), Virginia ($5B), the Netherlands ($3B), Puerto Rico ($1.2B), and India ($1B)•Acquired Verve Therapeutics, Scorpion Therapeutics, SiteOne Therapeutics, and Adverum Biotechnologies•Expanded LillyDirect™, Lilly’s direct-to-patient platform, to reach over 1 million patients•Drove initiatives including NVIDIA AI supercomputer partnership, and U.S. government obesity medicine access agreement
• newLucas MontarceExecutive Vice President and Chief Financial Officer (2024 - Present)Mr. Montarce’s key 2025 highlights include:•Facilitated the company exceeding its revenue and non-GAAP earnings per share targets•Drove the company’s strategic planning process, focusing on current execution while also making necessary investments and provisions for the next decade•Engaged in all business development, balancing near-term risks with long-term outcomes•Continued to build credibility and trust with the investment communityDan Skovronsky, M.D., Ph.D.Executive Vice President, Chief Scientific and Product Officer and President, Lilly Research Labs (2018 - Present)Dr. Skovronsky’s key 2025 highlights include: •Directed the performance of Lilly’s R&D organization, which continues to perform above industry peers for clinical development speed, success rate, and the quality of the pipeline as valued by the external market.
• newLilly’s clinical development is among the fastest in the industry•Advanced obesity and diabetes pipeline with positive SURMOUNT-5 results (Zepbound: 20.2% weight loss vs. Wegovy's 13.7%), advancement of eloralintide to Phase 3, and eight positive Phase 3 trials for orforglipron for obesity leading to FDA submission •Oversaw positive SURPASS-CVOT results where Mounjaro demonstrated 8% lower MACE-3 events vs. Trulicity with greater reductions in A1C and weight outcomes•Presented long-term extension study data on Ebglyss, showing similar levels of skin clearance when administered as a single 250mg injection once every eight weeks•Opened Gateway Lab in Philadelphia and launched TuneLab for AI-enabled drug discovery Anat HakimExecutive Vice President, General Counsel and Secretary (2020 - Present)Ms. Hakim’s key 2025 highlights include: •Transformed Lilly’s enterprise risk strategy and structure, leading to a more focused and streamlined approach to risk and issue management•Navigated an evolving and complex litigation and enforcement environment, providing strategic counsel on legal matters critical to company interests and obtaining numerous favorable litigation outcomes•Engaged policymakers and industry partners to promote balanced reforms that strengthen U.S. markets and protect innovation•Led an initiative to combat counterfeiting and compounding across the globe•Provided strategic leadership on key business development initiatives and complex corporate transactions aimed at advancing long-term growth objectives
• newJake Van NaardenExecutive Vice President and President, Lilly Oncology and Head of Corporate Business Development (2021 - Present)Mr. Van Naarden’s key 2025 highlights include: •Gained FDA approvals for Jaypirca (EU for CLL) and Inluriyo for ER+ breast cancer.
• newSecured FDA Breakthrough Therapy designation for olomorasib in KRAS G12C-mutant lung cancers•Achieved EU approval for Jaypirca for adults with relapsed or refractory chronic lymphocytic leukemia (CLL) previously treated with a BTK inhibitor•Delivered positive survival data from monarchE trial showing Verzenio reduced death risk by 15.8% in HR+/HER2- early breast cancer•Expanded leadership scope to include corporate business development function
• changedOur Compensation Philosophy onCompensation
• changedLilly’s AtLilly,ourpurpose is to unite caring with discovery to create medicines that make life better for people around the world.
• changedTo achieve this, we must attract, engage, and retain highly talented individuals who deliver exceptional fromavarietyofbackgroundsandmotivatethemtocreatelong-termshareholdervaluebyachievingtop-tierperformance while upholding embracingour core values of integrity, excellence, and respect for people.
• changedOur compensation programs are designed to help us achieve these goals while balancing stakeholder interests. theinterestsofourshareholdersandcustomers.
• changed•Reward •ReflectIndividual and Company Performance: We link pay to withindividual and company performance to reinforce a high-performance culture.
• changedAs employees assume greater responsibilities, a greater theproportion of total compensation is tied to basedoncompany performance and shareholder returns. returnsincreases.
• changedAnnual reviews ensure our programs incentivize long-term, sustainable businessresults while discouraging excessive risk-taking. risk-takingorotheradversebehaviors.
• changed•Attract and Retain Talented Employees: Our compensation is opportunitiesaremarket-competitive and reflects reflectjob impact and responsibilities.
• changed•Implement Broad-Based Programs: While compensation varies, the overallstructure of our compensation and benefit programs is similar across the organization to align employees to company goals andencourageand reward all employeeswho contribute to our success.
• changed•Consider Shareholder Input: We consider theresultsofourannual say-on-pay results voteand other sourcesofshareholder feedback when designing executive compensation and benefit programs.
• changedAt our 2025 2024annual meeting, over 96 wewerepleasedthat95percent of thevotes cast were in favor of the company’s say-on-pay proposal.
• newManagement and the Committee view this result as broadly supportive of our compensation approach.
• new96%Support for Say-on-Pay
• changedThe Committee considers individual performance assessments, CEO recommendations (for (withrespecttoeachoftheother executives), executiveofficers),company performance, peer group data, input from its independent compensation consultant, shareholder feedback, and its own judgment when determining executive compensation.
• changed•CEO: –CEO:The independent directors, under the direction of the lead independent director, meet with the CEO at the beginning of each year to establish the CEO’s performance objectives.
• changedAt year end, theendoftheyear,the independent directors meettoassess the CEO’s achievement of those objectives along with other factors, including contributions contributionto the company’s performance, sustainability goals, ethics, and integrity.
• newThe evaluation informs the CEO’s total direct compensation target for the following year.
• changed•Other –OtherExecutives: The CEO provides the Committee with receivesperformance assessments and targetcompensation recommendations fromtheCEOfor other executive officers.
• newEach assessment is based on achievement of objectives
• changedEachexecutiveofficer’sperformanceassessmentisbasedontheachievementofobjectivesestablished at the start of the year year,as well as other factors, including contributions contributionto company thecompany’sperformance, sustainability goals, ethics, and integrity.
• changedThe Committee considers these inputs, its own knowledge of of,and interactions with with,each executive officer, and its judgment to finalize assessments. developafinalindividualperformanceassessment.
• newFor newly appointed executives, the Committee sets compensation at the time of appointment.
• changedLilly performance impacts compensation isconsideredin multiple ways:
• changed•Prior-year –Prioryearperformance influences target compensation for the upcoming year.
• new•Annual performance goals, established at the start of the year, determine short-term cash incentive payouts.
• new•Multi-year performance goals, set before annual stock grants, determine long-term incentive payouts.
• newPeer group data
• changedThe Committee uses peer group data as one aninput for compensation decisions but does not solelyrely on it exclusively. thisdataforsettingcompensation.
• changedThe Committee considers advice from its independent compensation consultant, FW Cook, when setting executive officercompensation.
• newBenchmarking Compensation
• newThis year, given Lilly's position as one of the largest companies in the world, we expanded our competitive benchmarking to include two peer groups: a group of companies with similar business models that require specialized skills for operating a global pharmaceutical company, and a group of large-cap general industry companies.
• newIn selecting the general industry group, we considered factors such as business models, revenue, market capitalization, and availability of compensation data.
• newThis approach provides a comprehensive view of the competitive landscape for both general and administrative talent and pharmaceutical-specific expertise.
• newThe Committee approved the following peer groups:
• newPharma Peer Group
• newAbbVieAmgenAstraZenecaBristol-Myers SquibbGileadGlaxoSmithKlineJohnson & JohnsonMedtronicMerckNovartisPfizerRocheSanofiStryker
• newGeneral Industry Peer Group
• new3MAbbott LaboratoriesAdobeAdvanced Micro DevicesAppleApplied MaterialsBroadcomCiscoCoca-ColaColgate-PalmoliveDanaherHoneywellIBMIntelMcDonald’sMicronNikeNVIDIAQualcommSalesforceTeslaThermo Fisher
• newThe Committee reviews and approves peer groups at least every three years.
• newThe Chair of the Committee and the Committee’s independent compensation consultant review the peer groups annually.
• newThe primary compensation components and award types remained unchanged.
• changedBase salaries are reviewed annually and may be adjusted based on performance, changes achangein job responsibilities, or to maintain market competitiveness.
• newSalaries deemed appropriate based on job responsibilities, performance, and market competitiveness remain unchanged.
• newThe Committee maintained the Bonus Plan’s three equally weighted measures for 2025: product revenue, EPS, and pipeline progress.
• changedThe product revenue metric focuses on newer newproducts, while andthe pipeline metric tracks enhancesvisibilityondeliverables by therapeutic area.
• newGoals and weightings are set annually based on the operating plan and pipeline objectives.
• newCertain product-specific revenue goals and internal pipeline objectives are not publicly disclosed to avoid competitive harm.
• newThe 2025 performance measures and weightings are:
• changedLilly 2025 2024GoalsWeightingProduct revenue33.3%EPS performance33.3%Pipeline progression33.3%Bonus multiple100%
• newTo incentivize swift delivery of breakthrough medicines, the Committee focused the revenue measure on seven key products: Kisunla, Ebglyss, Omvoh, Jaypirca, Verzenio, Mounjaro, and Zepbound.
• changedTogether, these newproducts represent significant patient outcomes forpatientsand support ourcontinuedlong-term company performance.
• newThe pipeline scorecard provides employees visibility into how their work impacts bonus payouts.
• changedFor 2025, 2024,the scorecard measures progress across four thefollowingcategories:
• changed•Discovery / andEarly Development: Output from discovery, entries into clinical development, and early-phase earlyphaseclinical readouts (e.g. Proof of Concept)
• changed•Late Development / andRegulatory: Entries into registrational studies, Phase 3 readouts, and regulatory outcomes
• changed•Business Development / Strategic Initiatives: Entries into Lilly R&D portfolio from business development and achievement of strategic priorities identifiedatthebeginningoftheyear
• changed•Game Changer Events: Study readouts (“events”)that achieve significant scientific advances and generate substantial value for Lilly and patients
• newThe Committee maintained the 250 percent maximum bonus payout to encourage outperformance of company goals and maintain market competitiveness.
• changedBonus targets are approved annually by the Committee for each executive officer. officeratthestartoftheyear.
• changedAll named executive officers participated in the Bonus Plan in 2025. 2024.
• changedThe cashBonus Plan payout is calculated as follows:
• newThe Science & Technology Committee may recommend that the Talent & Compensation Committee apply discretion to the pipeline metric result.
• newAdditionally, the Talent & Compensation Committee has the authority to apply discretion to any element of the bonus.
• newAside from the Committee’s financial result adjustments for incentive programs outlined in Appendix A, discretion was not applied to the bonus payout.
• changedFurther details regarding Lilly’s performance againstpre-establishedtargetsare detailed under “Compensation Results.”
• newStock Incentives
• newSVAs measure Lilly’s share price performance relative to its cost of capital over a three-year performance period.
• newPayouts range from 0-200% of target, with any earned shares subject to a one-year post-vesting holding requirement.
• changedNo dividends accrue areaccruedduring the performance period.
• newThe SVA target is calculated as follows:
• new•Starting Price: $787.73 (average closing price of November – December 2024)

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