Lilly to freeze pay for executives, most workers
Eli Lilly & Co. will freeze pay for most of its workers this year, the company announced Wednesday.
A spokesman for the company told our partners at Inside Indiana Business the pay freeze, which will take effect in 2014 and include executives, supervisors and most workers, will save $400 million through 2016. Some bonuses will also be reduced.
"This is a difficult, but necessary decision," spokesman Ed Sagebiel wrote in an email. "While we remain confident in our future, we continue to face the most significant challenges in our history."
Base pay increases for employees will return in 2015.
Bloomberg News reported two of the company's biggest-selling drugs, - depression pill Cymbalta and Evista, which is used to treat osteoporosis and breast cancer patients - will lose patent protection in the next 18 months. Cymbalta accounts for $5 billion a year in sales for Lilly and Evista generated more than $1 billion last year.
"We expect to lose about 20 percent of our global revenue in 2014 because of the expiration of the Cymbalta and Evista patents in the U.S.," Sagebiel wrote. "While we've taken many actions to reduce costs and become a leaner organization, we must do more."
Bloomberg reports Lilly CEO John Lechleiter hasn't received a pay raise since 2010 and hasn't been paid a bonus since he became CEO in 2008.