Jake Van Naarden
ELI LILLY &About Jake Van Naarden
Executive Vice President and President, Loxo@Lilly (Lilly Oncology). Promoted to senior vice president, CEO of Loxo Oncology at Lilly and president, Lilly Oncology, joining the Executive Committee effective September 5, 2021; currently leads Lilly Oncology and corporate business development . He joined Lilly via the 2019 acquisition of Loxo Oncology and has led modernization of Lilly’s oncology portfolio and strategy . 2024 company performance context: Lilly revenue $45.0B, reported EPS $11.71, non-GAAP EPS $12.99, with 2024 TSR of 33% and five-year TSR outperformance versus peers .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Loxo Oncology at Lilly | CEO | 2019 onward | Forged Loxo@Lilly R&D program; critical to oncology pipeline success |
| Lilly Oncology | President; joined Executive Committee | Effective Sept 5, 2021 | Unified Loxo@Lilly and Lilly Oncology; focus and agility for launches and growth |
| Lilly (Corporate) | EVP & President, Lilly Oncology; BD under his leadership | 2025 | Expanded scope to lead corporate business development |
External Roles
| Organization/Area | Role | Years | Strategic Impact |
|---|---|---|---|
| Biotechnology sector | Various investment, operations, advisory roles | Pre-Lilly | Brought investment and operating expertise to pipeline building |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $735,577 | $830,769 | $890,385 |
| Stock Awards – Grant Date FV ($) | $1,933,250 | $2,424,200 | $2,700,248 |
| Non-Equity Incentive (Bonus paid, $) | $882,692 | $1,503,692 | $2,003,366 |
| Target Bonus % of Salary | — | 100% | 100% (unchanged) |
Performance Compensation
Annual Bonus – 2024 Design and Outcome
| Metric | Weighting | Target | Actual/Assessment | Payout |
|---|---|---|---|---|
| Product Revenue (new products) | 33.3% | Internal plan (not disclosed) | Exceeded targets after adjustments | Included in 225% overall bonus multiple |
| EPS Performance (adjusted) | 33.3% | Internal plan (not disclosed) | Exceeded targets after adjustments | Included in 225% overall bonus multiple |
| Pipeline Progression | 33.3% | Scorecard (discovery, late dev, BD, game-changers) | 250% pipeline bonus multiple (no downward discretion) | Included in 225% overall bonus multiple |
Notes: 2024 total bonus payout = 225% of target for named executive officers, consistent with strong performance ; Jake’s bonus paid = $2,003,366 .
Long-Term Incentives – Structure and Recent Payouts
| Program | Metric | Performance Window | Design Details | Result/Payout |
|---|---|---|---|---|
| Shareholder Value Award (SVA) | Absolute stock price vs cost of capital | 2022–2024 | 3-year; payout 0–175%/200% range; 1-year holding after vest | 175% payout; Jake shares paid: 6,448.75 |
| Relative Value Award (RVA) | TSR vs peer median | 2022–2024 | 3-year; payout 0–175%/200% range; 1-year holding after vest | 175% payout; Jake shares paid: 4,926.25 |
| Performance Award (PA) | 2-year adjusted EPS growth vs peer median | 2023–2025 | Performance-adjusted; 13-month service vest; RSUs issued | 200% payout; Jake RSUs issued: 4,108 (vesting Feb 1, 2026) |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Shares Owned (Feb 26, 2025) | 28,206 |
| Stock Units not distributable within 60 days | 3,595 |
| Ownership % of outstanding | Less than 1% (947,989,151 shares outstanding) |
| Ownership guidelines | Executives must hold 6× base salary; retain 50% net shares until compliant; 1-year post-payout hold |
| Compliance status | 18× base salary holdings for Van Naarden (as of Dec 31, 2024) |
| Hedging/Pledging | Prohibited (no pledging reported) |
Employment Terms
| Provision | Detail |
|---|---|
| Employment agreements | Lilly does not enter into employment agreements with executive officers |
| Non-compete/non-solicit (equity & execs) | 1-year post-termination restrictive covenants; breach rescinds awards |
| Non-Compete Payment Agreement (potential) | Company may enforce non-compete payment agreement for Van Naarden up to $3,000,000 (less applicable reductions), up to 12 months post-termination |
| Change-in-Control Severance | Double trigger; cash severance equals 2× (base salary + target bonus); 18-month benefits continuation; equity converts/vests per plan; no tax gross-ups; excise tax cutback if beneficial |
| Jake CIC cash severance | $3,600,000 (2× $900,000 salary + 2× $900,000 target bonus) |
| Continuation of benefits (PV) | $65,124 (Jake) |
| Equity acceleration/continuation under CIC | $15,693,911 (Jake; as of 12/31/2024) |
| Clawback policy | Recoupment for restatements, misconduct, inaccurate performance; complies with SEC/NYSE |
Vesting Schedules and Realized Values
Upcoming Vesting
| Award | Shares/Units | Vest Date | Notes |
|---|---|---|---|
| 2023–2025 PA (RSUs) | 4,108 | Feb 1, 2026 | 13-month service vest after performance certification |
| 2024–2026 SVA | Target 1,310; Max 2,620 | Dec 31, 2026 | 0–200% payout; one-year holding |
| 2024–2026 RVA | Target 1,220; Max 2,440 | Dec 31, 2026 | 0–200% payout; one-year holding |
2024 Realizations
| Event | Shares Acquired on Vesting (#) | Value Realized ($) |
|---|---|---|
| 2022–2024 RVA payout | 4,926 | $4,280,320 |
| 2022–2024 SVA payout | 6,449 | $5,603,190 |
| RSUs from prior grants (e.g., Dec 2021) | 3,618 | $2,962,889 |
Performance & Track Record
- 2024 Oncology highlights: sustained Verzenio growth and strong Jaypirca launch; integrated POINT Biopharma to support radio-oncology; positive Phase 3 EMBER-3 (imlunestrant) .
- Portfolio strategy and modernization: rebuilt oncology team and pipeline; end-to-end span from discovery to commercial .
- Market perspective: confident Verzenio positioning; CYCLONE-2 registrational prostate cancer program described; disciplined boundaries and event-driven design .
- Company TSR and financials context: 2024 TSR 33%; five-year TSR outperformance; 2024 revenue $45.0B; adjusted non-GAAP EPS used in incentives .
Compensation Structure Analysis
- Equity-heavy pay mix with rising grant values: Stock awards increased from $1.93M (2022) to $2.70M (2024) for Van Naarden, reinforcing long-term alignment .
- Bonus design shifted to equal weighting of product revenue, EPS, and pipeline progression; raised maximum payout to 250% to incentivize delivery of breakthrough medicines .
- Strong pay-for-performance outcomes: 2024 bonus payout at 225% of target; 2022–2024 SVA and RVA both paid at 175%; 2023–2025 PA paid at 200% .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay received 95% support, indicating broad shareholder alignment with compensation practices .
Compensation Peer Group
- Peer group includes AbbVie, Amgen, AstraZeneca, Biogen, Bristol-Myers Squibb, Gilead, GSK, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Roche, Sanofi, Takeda; targets benchmarked to comparable market cap/revenue peers .
Equity Ownership & Alignment Details
| Aspect | Policy/Status |
|---|---|
| Stock ownership multiple | 6× base salary required; Van Naarden at 18× (Dec 31, 2024) |
| Retention | Must hold net shares at least one year; 13-month service vest for PA grants |
| Hedging/Pledging | Prohibited; none of executive stock pledged |
Employment & Contracts
| Aspect | Detail |
|---|---|
| Employment agreements | None for executives |
| Non-compete duration | Up to 12 months post-termination (for non-compete payment agreements); 1-year covenants on equity awards |
| Change-in-control | Double trigger; 2× salary+target bonus; 18-month benefits; equity treatment; no tax gross-ups |
Risk Indicators & Red Flags
- Clawback policy robust and compliant (recoupment for restatements/misconduct) .
- Hedging/pledging prohibited; no pledging reported for executives .
- No related party transactions required to be reported in 2024 .
- No routine tax gross-ups in change-in-control plans .
Investment Implications
- Compensation alignment: Equal-weighted annual metrics and outsized LTI payouts (175–200%) tie rewards to revenue/EPS delivery and pipeline/TSR, supporting long-term equity value creation .
- Retention risk: Absence of employment contracts is mitigated by robust CIC protections, non-compete enforceability (up to $3M), and significant unvested equity/holding requirements, lowering near-term departure risk .
- Insider selling pressure: Upcoming vesting (Feb 2026 and Dec 2026) may add supply, but one-year holding requirements and compliance with insider trading procedures temper near-term selling risk .
- Execution track record: Oncology growth (Verzenio, Jaypirca), portfolio integration (POINT Biopharma), and late-stage readouts position Oncology for continued value creation, with CYCLONE-2 and EMBER-3 milestones as watch items .