David Ricks
About David Ricks
David A. Ricks is Chair, President, and CEO of Eli Lilly and Company. He has served as CEO since January 2017 and as Chair since June 2017; he joined Lilly in 1996 and became a director in 2017. He is 57 years old. Under his leadership, Lilly has experienced revenue growth of approximately 112% and a five-year total shareholder return (TSR) of 527% since he became CEO; in 2024, Lilly generated $45.0 billion in revenue, reported EPS of $11.71 (non-GAAP EPS $12.99), and delivered 33% TSR for the year .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Eli Lilly and Company | Chair, President, and Chief Executive Officer | 2017–present | Oversaw transformative growth; ~112% revenue growth and 527% five-year TSR; expanded affordability and access initiatives . |
| Eli Lilly and Company | SVP and President, Lilly Bio-Medicines | 2012–2016 | Led major therapeutic areas and pipeline execution . |
| Eli Lilly and Company | President, Lilly USA | 2009–2012 | Drove U.S. commercial operations and launches . |
| Eli Lilly and Company | International and commercial leadership roles (e.g., President & GM Lilly China; GM Lilly Canada) | 1996–2009 | Built global footprint; marketing, sales, drug development, and operations expertise . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Adobe Inc. | Director | Current | Cross-industry technology governance and digital strategy perspective . |
| IFPMA | Director | Current | Global biopharma policy and industry coordination . |
| PhRMA | Director | Current | U.S. biopharma advocacy and policy shaping . |
| U.S. Patent and Trademark Office Council for Inclusive Innovation | Member | Current | Innovation and inclusion in IP ecosystem . |
| Central Indiana Corporate Partnership | Director & Executive Committee Member | Current | Regional economic development leadership . |
| The Business Roundtable | Director | Current | National CEO policy forum . |
| Purdue University Board of Trustees | Trustee | Current | Higher education governance . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary (SCT) | $1,500,000 | $1,621,154 | $1,690,385 |
| Change in Pension Value | — | $1,439,822 | $1,746,483 |
| All Other Compensation (incl. security and aircraft personal use, tax reimbursements) | $216,885 | $263,073 | $351,685 (incl. $73,630 security; $114,159 personal aircraft; $35,374 ancillary travel; $27,099 tax reimbursements) |
| 2024 Annual Base Salary (Target) | — | — | $1,700,000 |
Performance Compensation
Annual Cash Bonus (2024)
| Item | Detail |
|---|---|
| Bonus target (% of salary) | 150% |
| 2024 performance metrics & weighting | Product revenue 33.3%; EPS 33.3%; Pipeline progression 33.3% |
| Committee adjustments | Excluded BD transactions, acquired IPR&D, FX impacts for bonus metrics |
| Company result | Bonus multiple 2.25x (225% of target) |
| CEO actual bonus paid | $5,705,049 |
Long-Term Incentives (Structure and 2024 Grants)
| Award | Metric | Grant Date | Target Shares | Payout Range | Grant-Date FV |
|---|---|---|---|---|---|
| Shareholder Value Award (SVA) 2024–2026 | Stock price vs cost of capital (start $587.42; CAPM 8.12% less 0.89% dividend) | 2/12/2024 | 9,579 | 0–200% | $9,874,704 |
| Relative Value Award (RVA) 2024–2026 | 3-year TSR vs peer median | 2/12/2024 | 8,925 | 0–200% | $9,874,620 |
| 2024 Annual Equity Grant (Target mix) | 50% SVA; 50% RVA | 2/12/2024 | — | — | $19,750,000 total |
Recent Payout Results (for context)
| Award | Performance Period | Payout | Ricks Shares Paid | Post-vesting hold |
|---|---|---|---|---|
| SVA | 2022–2024 | 175% | 56,651 | 1-year hold for execs |
| RVA | 2022–2024 | 175% (Lilly TSR 211.6% vs peer median 10.3%) | 43,274 | 1-year hold for execs |
| Performance Award (PA) (EPS growth vs peers) | 2023–2025 (two-year measurement ended 2024) | 200% (EPS growth 31.6%; Adj. EPS $26.93 vs target) | Issued as RSUs; 27,941 RSUs outstanding at 12/31/2024 for Ricks | 13-month service vesting (to 2/1/2026) |
Outstanding/Unvested Equity (as of 12/31/2024)
| Award | Unearned/Unvested Units | Value |
|---|---|---|
| 2024–2026 SVA | 19,158 (max basis disclosure) | $14,789,976 |
| 2023–2025 SVA | 39,024 (max basis disclosure) | $30,126,528 |
| 2024–2026 RVA | 17,850 (max basis disclosure) | $13,780,200 |
| 2023–2025 RVA | 31,442 (max basis disclosure) | $24,273,224 |
| 2023–2025 PA RSUs | 27,941 | $21,570,452 |
| 2022–2024 PA RSUs | 26,561 | $20,505,092 |
Vesting Schedules and Selling Pressure Indicators
- 2024–2026 SVA/RVA vest 12/31/2026; 2023–2025 SVA/RVA vest 12/31/2025; PA RSUs from 2023–2025 vest 2/1/2026; PA RSUs from 2022–2024 vested 2/1/2025 .
- Executives must hold net shares from SVA/RVA payouts for at least one year; PA awards include 13-month service vesting, reducing near-term selling pressure .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Shares owned (beneficial) | 757,308 (includes 81,943 held by a family foundation where he is a director) |
| Stock units not distributable within 60 days | 27,941 |
| Ownership % of outstanding | Less than 1% (company had 947,989,151 shares outstanding) |
| Pledged shares | None pledged |
| Executive ownership guideline | CEO required to hold 12x base salary |
| Compliance status | Mr. Ricks: 275x base salary (exceeds) |
| Hedging/pledging policy | Hedging and pledging prohibited for directors and employees |
Employment Terms
| Term | Detail |
|---|---|
| Employment agreement | Company does not enter into employment agreements with executive officers . |
| Change-in-control (CIC) | Double trigger required; no tax gross-ups; up to two-year pay protection; 18-month benefit continuation; accelerated vesting upon covered termination; awards convert to time-based RSUs at CIC and continue vesting or pay on earlier of original end date, covered termination, or if successor does not assume . |
| CIC severance (CEO) | Cash severance $8,500,000; benefits continuation PV $53,947; acceleration/continuation of equity $122,876,083; total $131,430,030 (as of 12/31/2024) . |
| Retirement/involuntary termination (non-CIC) | Equity acceleration value $45,156,596 (as of 12/31/2024) . |
| Clawback | Comprehensive recovery policy aligned with SEC/NYSE; recoupment for restatements and broad misconduct; applies up to three fiscal years preceding restatement; can act post-termination/retirement . |
| Non-compete/non-solicit | Annual awards typically include one-year non-compete/non-solicit covenants post-termination; breach results in immediate revocation/forfeiture . |
| Pension/SERP (present value at 12/31/2024) | Total $18,435,519 across qualified and nonqualified plans . |
| Perquisites | Security services, encouraged personal use of corporate aircraft; 2024 incremental personal aircraft cost $114,159; security $73,630; Paris Olympic ancillary travel costs and tax reimbursements detailed . |
Board Governance and Director Service
- Board service history: Director since 2017; currently combines Chair and CEO roles; he serves on no board committees; non-employee directors serve on fully independent committees .
- Dual-role implications: Board combines Chair/CEO, balanced by a strong Lead Independent Director (Juan Luciano) with clearly defined responsibilities (agenda approval, executive sessions, shareholder liaison, CEO evaluation and succession oversight); executive sessions of independent directors occur at every regular board meeting; annual performance evaluation of Chair/CEO is conducted by independent directors .
- Independence: Board is independent other than Mr. Ricks; all standing committees are composed solely of independent directors and led by independent chairs .
- Attendance: In 2024, the board met nine times; each director attended at least 75% of board/committee meetings; all directors attended the 2024 annual meeting .
- Director compensation (as employee director): Employees receive no additional compensation for board service .
Performance & Track Record
- 2024 operating and shareholder outcomes: $45.0B revenue; $11.71 reported EPS; $12.99 non-GAAP EPS; 33% TSR for 2024; exceeded S&P 500 and compensation peer group TSR over 1-, 3-, and 5-year periods .
- Strategic/innovation achievements: Multiple FDA approvals (Kisunla, Ebglyss, Zepbound indication), positive Phase 3 readouts (insulin efsitora alfa, tirzepatide programs), manufacturing and R&D capacity investments, Morphic acquisition; collaboration with OpenAI on generative AI for microbials .
- Pay-for-performance linkage: Bonus plan exceeded targets (2.25x multiple) and multi-year equity plans paid above target (SVA/RVA 175%; PA 200%) consistent with strong outcomes .
Compensation Committee, Peer Group, and Say-on-Pay
- Committee and consultant: Talent and Compensation Committee is fully independent; uses FW Cook as independent consultant; engages in robust risk assessment and retains downward discretion on payouts .
- Peer group (for benchmarking and RVA/PA metrics): AbbVie, Amgen, AstraZeneca, Biogen, Bristol-Myers Squibb, Gilead, GlaxoSmithKline, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Roche, Sanofi, Takeda .
- Say-on-Pay support: 95% approval at 2024 annual meeting; greater than 94% approval in each of last five years .
Equity Ownership & Director/Executive Stock Policies
- Executive and director ownership/retention requirements: Meaningful share ownership and retention guidelines; CEO 12x salary requirement; executives must retain 50% of net shares until guideline met; post-payout one-year holding for performance awards; non-employee directors 5x annual board retainer .
Performance Compensation Details (design table)
| Metric | Weighting | Target | Actual | Payout | Vesting/Hold |
|---|---|---|---|---|---|
| Product revenue (new products) | 33.3% | Company operating plan | Exceeded; adjusted for FX, BD, IPR&D | Contributed to 2.25x bonus multiple | Cash (annual) |
| EPS performance | 33.3% | Board-approved plan (non-GAAP) | Adjusted non-GAAP EPS $16.11 for bonus purposes | Contributed to 2.25x bonus multiple | Cash (annual) |
| Pipeline progression | 33.3% | Objectives set by Science & Technology Committee | Pipeline bonus multiple 250% | Included in 2.25x bonus multiple | Cash (annual) |
| SVA (2024–2026) | — | 3-year stock price vs cost of capital | In progress | 0–200% | 1-year post-vesting hold |
| RVA (2024–2026) | — | 3-year TSR vs peer median | In progress | 0–200% | 1-year post-vesting hold |
| PA (2023–2025) | — | 2-year EPS growth vs peer expectations | EPS growth 31.6%; Adj. EPS $26.93 | 200% | 13-month service vest to 2/1/2026 |
Investment Implications
- Alignment and incentives: Very high equity weighting and rigorous performance metrics (TSR, stock price vs cost of capital, EPS growth) tightly link pay to shareholder outcomes; one-year post-vesting holds and ownership multiples (Ricks at 275x salary) reduce near-term selling pressure and align long-term horizons .
- Governance mitigating dual-role risks: Combined Chair/CEO balanced by empowered Lead Independent Director, independent committees, and regular executive sessions; board independence (other than CEO) and robust assessments strengthen oversight quality .
- Retention and transition risk: No employment agreements; CIC protection uses double trigger with 2x salary+target bonus and equity continuity; clawback coverage is broad, reducing misconduct risk while ensuring recourse; non-compete/non-solicit on awards supports retention and protects franchise .
- Trading signals: Large unvested equity and scheduled vesting events (Dec 2025/Dec 2026; Feb 2026) create potential mechanical tax-related selling, but executive one-year holds and existing ownership multiples temper discretionary sales; prohibition on hedging/pledging is a positive alignment signal .
- Shareholder sentiment: Consistent 94%+ say-on-pay support and 95% in 2024 indicate broad investor endorsement of pay practices amid strong TSR and revenue growth; continued proposals to declassify board and eliminate supermajority requirements signal responsiveness to governance feedback .