Eli Lilly to freeze salaries for most employees, executives in 2012

In a preliminary proxy filed with the US Securities and Exchange Commission, Eli Lilly said it will freeze salaries for most employees worldwide this year, including those of high-level executives, as sales of its antipsychotic drug Zyprexa (olanzapine) declined after losing patent protection.

CEO John Lechleiter requested that he receive no increase to his $1.5 million base salary or incentive targets in 2012 “in light of the business challenges the company faces,” his total compensation being worth about $16.4 million, according to the filing. Company spokesman Mark Taylor said there would be no change in how bonuses are structured.

Among other executives, CFO Derica Rice received a 3-percent raise in his base salary last year, to $984,167, but the value of his stock awards, incentive compensation and pension all fell, resulting in an 8.5-percent drop in total compensation, to $5.9 million. Bryce Carmine, who recently retired as president of the bio-medicines division, had total compensation of $6.6 million, down from $7.7 million a year earlier.

Total compensation for Jan Lundberg, president of Eli Lilly Research Laboratories, decreased from $9.5 million in 2010 to $4.4 million last year, while Robert Armitage, the company’s general counsel, received total compensation of $3.8 million, down from $4.5 million a year earlier.

Last week, the drugmaker recorded a 27-percent drop in fourth-quarter profits to $858.2 million.