Empower a Diverse Workforce

~~Empower a Diverse Workforce~~

DEI is at the core of how we do business. Our long-standing values of integrity, excellence, and respect for people foster an environment where team members are encouraged to speak up, share ideas, and be fully engaged in our work, while bringing their full authentic selves to work every day. By doing so, we help innovate, accelerate, and deliver life-changing medicines that make a difference for people around the world. See below under “—“—Human Capital ~~Management”~~Management” for additional information regarding our DEI efforts and progress.

Operate Ethically and Responsibly

touched by our work. Our actions are grounded in our company’s core values of integrity, excellence, and respect for people. See “Key Are a s of Oversi ght by the Board and Its Committees —Governance” for additional information.

Minimize our Environmental Impact

We believe that making life better means protecting and preserving the world in which we live. While making medicines requires the use of valuable resources, including energy, water, and raw materials, we remain committed to improving our environmental impact across our product life cycles and supply chain. We have set ~~new~~ 2030 sustainability goals to reduce our emissions and waste and to continue using water responsibly and efficiently.

Recognizing our responsibility to reduce our carbon footprint to help fight climate change, we have set new targets and have an established global energy-management program. Our 2030 climate goals include:

•~~Sourcing 100% of our purchased electricity from renewable sources.~~

•~~Becoming carbon neutral in our own operations.~~

•~~Enhancing the tracking and reporting of emissions from our full value chain.~~

We are committed to minimizing waste and conserving energy, resources, and landfill space. We have enhanced our commitment to reduce landfill waste and have introduced new goals focused on addressing plastic waste from our operations and integrating sustainability into the designs of our products. Our 2030 waste goals include:

•~~Zero waste to landfill from routine operations.~~

•~~Repurposing 100% of plastic waste for beneficial use, with at least 90% recycled or reused.~~

•~~Integrating sustainability-focused design principles into product and packaging design processes.~~

Water is essential to both our operations and the facilities where we discover and manufacture our medicines, and we are committed to using this critical resource more efficiently. We have set new water-related goals for 2030 that include establishing and implementing water management plans for all Lilly sites in water-stressed areas, as well as working to ensure our internal and external manufacturing operations do not adversely impact our waterways as a result of discharges of pharmaceuticals. These goals include:

•~~Establishing and implementing water management plans for Lilly sites in water-stressed areas.~~

•~~Ensuring 100% of Lilly sites meet predicted no-effect concentrations (PNEC) for Pharmaceuticals in the Environment.~~

•~~Ensuring appropriate controls are in place by Lilly contract manufacturers to prevent discharge of pharmaceuticals in wastewater above applicable PNEC values.~~

~~Operate Ethically and Responsibly~~

We strive to earn and maintain the trust of people we serve by acting ethically and responsibly. We set high standards for our products, operations and performance, and we show caring and respect for those touched by our work. Our actions are grounded in our company’s core values of integrity, excellence and respect for people. See “Board Oversight of Strategy, Compliance, and Risk Management—Code of Ethics” for additional information.

Human Capital Management

Overview ~~and Oversight~~

At Lilly, dedication to human capital management is a core component of our corporate governance and culture. Our comprehensive approach to human capital management is grounded in our core values of integrity, excellence, and respect for people, which reflect our commitment to creating a safe, supportive, ethical, and rewarding work environment.

The board exercises active oversight over our overall talent management process, including human capital management strategies, corporate culture, and DEI programs. The board also oversees the work of its committees in developing corporate policies and frameworks designed to attract, retain, engage, and develop a workforce that aligns with our values and mission. The Compensation Committee advises the board and management on and is responsible for oversight of human capital management, DEI efforts, and employee compensation and benefits matters, and annually reviews our leadership development and succession planning practices. The Directors and Corporate Governance Committee is responsible for identifying and bringing to the attention of the board, as appropriate, current and emerging environmental, social, political, and governance trends and public policy issues that may affect our business operations, performance, or reputation.

The board also oversees human capital management by regularly engaging with management and facilitating a system of reporting that highlights the importance of DEI to Lilly. For example, as part of our commitment to DEI, our board considers the contributions related to DEI of our CEO and other executive committee members when determining their compensation.

Our board also oversees the activities of our CEO and executive committee in setting expectations for inclusive leadership and holding leaders accountable for building diverse and inclusive teams. Our CEO receives regular reports from Lilly’s senior vice president for human resources and diversity. In addition, our chief DEI officer is a vice president who also has responsibility for all aspects of talent management in the company, which enables full integration of DEI into our talent systems. The vice president of DEI and talent managementreports to the senior vice president for human resources and diversity, who is a member of our executive committee. We believe this system of oversight and reporting by the board and our key executives is critical to our success in fostering an inclusive, supportive, and rewarding workplace.


Measuring Progress on Diversity, Equity, and Inclusion

We are committed to fairness and nondiscrimination in our employment practices, and we deeply value diverse backgrounds, skills, and global perspectives. To fulfill our purpose, we believe we must look at challenges from multiple viewpoints and understand the diverse experiences of the patients who depend on us. In short, ~~our differences make~~we believe that diverse representation at all levels makes Lilly a ~~difference—to patients~~stronger and ~~to our business.~~more innovative company.


						Employee Journeys

We believe that fostering DEI begins with understanding, and we have approached DEI with the same rigor as our other business-critical priorities. Our Employee Journeys research has yielded important insights about the experiences of women, Black/African American, Latinx, Asian, and LGBTQ+ employees at Lilly. In response to insights from our Employee Journeys research, we developed, among others, an education and awareness program to help build cultural literacy and foster an understanding of employee expectations for feeling psychologically safe at work. More than 3,500 leaders and more than 13,000 employees have participated in required training to gain greater awareness of how unconscious bias and microaggressions can harm team cohesiveness and hurt employee engagement. Our Employee Journeys research has also resulted in growing energy around DEI, with a company-wide network of DEI champions, initiatives, and teams across business areas—and an expanding appreciation of the value of different perspectives. The results of this research are reviewed by our senior leadership, and we deploy actions and activities in response to these insights to improve our workplace and corporate culture.


						Racial Justice Commitment

In 2020, ~~as part of our DEI and community initiatives,~~ Lilly and the Lilly Foundation launched the Racial Justice Commitment, ~~and pledged $25 million and~~with Lilly pledging 25,000 volunteer hours over five years and the Lilly Foundation committing $25 million over five years to help decrease the burden of racial injustice and its effects on communities of color. The Racial Justice Commitment aims to drive change across five areas: internal people development, health equity, social impact, diversity partners, and family sustaining jobs, through the use of financial and people resources. ~~In 2021,~~From 2020 through 2022, we have made progress in these efforts, including ~~through the development of two apprenticeship programs~~nearly tripling our spend with Black-owned businesses, committing over $98 million to minority-led venture capital firms, serving over 30,000 volunteer hours to advance racial justice initiatives, and expanding our Skills First Program at Lilly for individuals without four-year college degrees.


						Workforce Diversity

Since 2017, we have committed to increasing ~~the number of~~ women, Black/African American, Latinx, and Asian ~~populations~~representation in leadership roles, and we actively monitor our progress. From the end of ~~2017~~2018 through the end of ~~2021,~~2022, we increased the percentage of women in management globally from 4142 percent to 4849 percent. For MGM in the ~~U.S.~~United States, over the same period, we increased management representation from 1619 percent to 2425 percent. Across all levels of our workforce, from the end of ~~2017~~2018 through the end of ~~2021,~~2022, we have seen increased representation for MGMs in the ~~U.S.~~United States and women globally.

Our focus on DEI is also a critical component of our broader corporate governance. Five of fifteen current members (approximately 33 percent) of our executive committee (which includes our CEO) are women and two are MGM. In addition,


5	3	5	6
Women	MGMs	Women	MGMs
out of 15 current executive committee members	out of 15 current executive committee members	out of 13 current directors on our board	out of 13 current directors on our board

~~as of the date of this proxy statement, the company's 13 directors range in age from 49 to 72 and include four women and six members who are MGMs.~~

Spotlight on Level Up!

In 2022 Lilly hosted our biggest ever Global DEI conference, ‘Level Up’, with approximately 6,000 employees attending virtually and in person. The conference brought together employees and leaders across the company to embrace the rich dimensions of difference that exist across Team Lilly and to help become advocates for equity and inclusion through a variety of interactive workshops and external speakers.

Recognition

At Lilly we strive to be leaders in DEI and workplace benefits, and we are honored when we receive recognition for our efforts to improve the lives of our employees. Below are some of our accolades for ~~2021:~~2022:

DiversityInc:

Top 50 Companies for Diversity: No. 5

DiversityInc:

Top Companies for Board of Directors: No. 2

DiversityInc:

Top Companies for Supplier Diversity: No. 8

DiversityInc:

Top Companies for ESG: No. 15

Ethisphere:

World’s Most Ethical Companies

Forbes:

America’s Best Employers for Women

Zero Project:

Zero Project Award for Access Lilly

Disability:IN

Disability Equity Index Best Places to Work — Perfect Score

Human Rights Campaign Foundation:

Corporate Equality Index — Perfect Score

Fortune and IDEA Pharma:

Pharmaceutical Innovation Index: No. 19

Seramount:

Top Companies for Executive Women

Seramount:

Best Companies for Multicultural Women, Best Companies for Dads, 70% and Higher Inclusion Index

Employee Development

Hiring: We believe attracting and retaining the best, diverse talent begins with the hiring process. We therefore require hiring managers to consider a diverse pool of candidates, and we strive to provide a diverse panel of interviewers for open positions. We believe that hiring in this way helps ensure that people from all backgrounds have equal opportunity to advance their careers.

Onboarding: In early 2022, we launched Discover, a 12-month new employee onboarding program with multiple touchpoints designed to foster integration into the Lilly culture, to accelerate learning in their new roles and to create connections to further a sense of belonging at Lilly. Discover was shaped in part by external benchmarking, feedback from employees and learnings from onboarding remotely during the COVID-19 pandemic.

Continuing Education: We offer training to enable our employees to perform their duties in our highly regulated industry. We also strive to cultivate a culture that promotes ongoing learning by encouraging employees to seek further education and growth experiences, helping them build rewarding careers. We have introduced online programming to facilitate access to our learning and development ~~offerings.~~offerings in addition to our in-person programs. Many training courses are designed to improve accessibility for people with disabilities and other unique needs. Across Lilly, we are continuously working to design learning experiences to be more inclusive and effective. In addition, we have implemented development tools and resources ~~and~~for all employees, improved our talent programs and processes to provide ~~broad~~broader access to information, and increased transparency regarding career development and advancement at Lilly.

~~In early 2022 we launched~~ ~~Discover~~, a 12-month new employee onboarding program with multiple touchpoints designed to foster integration into the Lilly culture, to accelerate learning in their new roles and to create connections to further a sense of belonging at Lilly. Discover was shaped in part by external benchmarking, feedback from employees and learnings from onboarding remotely during the COVID-19 pandemic.

Employee ~~resource groups~~Resource Groups (ERGs): Our ERGs are another important component of developing talent at Lilly. We currently have 11 ERGs representing groups including women, MGMs, LGBTQ+ individuals, veterans, and people with disabilities. ERGs offer our diverse workforce opportunities to build relationships, engage with senior leaders, advance our caring community, and offer unique insights and perspectives to improve our business.

Make it Safe to Thrive:We have continued our efforts to create an inclusive workplace with the goal of ensuring that all employees feel safe to speak up and share their ideas at work.OurMake it Safe to Thriveeducation and awareness program is designed to help employees and leaders understand how individual psychological safety can be created and enhanced and includes live and online ~~training~~training. In late 2022, we introduced a new version of Make it Safe to Thrive for leaders that continues to focus on psychological safety and ~~a monthly video series.~~creating an inclusive environment, but it provides leaders with the opportunity to work through challenging conversations and situations currently being navigated in the workplace.

Cultural Foundation: Lilly is committed to fostering a culture of diversity and respect in the workplace—an environment free of discrimination, harassment, or retaliation of any kind. In 2022, as part of our annual review of The Red Book and related policies and procedures, we revised the Global Conduct in the Workplace procedure to continue to help ensure that we maintain a respectful, safe, inclusive, and professional workplace.

Compensation, Benefits, and Pay Equity

While our rewards programs vary around the world, we take a holistic approach to employee benefits. These may include flexible work arrangements, on-site conveniences, such as cafes, fitness centers and child development centers, competitive time-off programs, retirement benefits, and health and disability programs that are available to eligible employees when they need support. We are committed to rewarding, supporting, and developing our employees who make it possible to fulfill our mission to unite caring with discovery to create medicines that make life better for people around the world.

We are also committed to ensuring pay is administered equitably across our workforce. For more than 20 years, we have regularly conducted pay equity studies of our workforce in the U.S. and have more recently started conducting studies of our workforce outside of the U.S. While infrequent, we have made pay adjustments as warranted based on these analyses. We believe that pay equity is critical to our success in supporting a global, diverse, and inclusive workforce.

3140


We are also committed to ensuring pay is administered equitably across our workforce. For more than 20 years, we have regularly conducted pay equity studies of our workforce in the United States and have more recently started conducting studies of our workforce outside of the United States. While minimal, we have made pay adjustments as warranted based on these analyses. We believe that pay equity is critical to our success in supporting a global, diverse, and inclusive workforce.						20
						Years
						of pay equity studies in the U.S.

Employee Health and Safety

We strive to foster a healthy, vibrant work environment, which includes keeping our employees safe. We seek to create a companywide culture where best-in-class safety practices are consistently followed. To do this, we assess and continuously attempt to improve our companywide safety performance to promote the well-being of employees and to help safeguard communities where we operate. As the COVID-19 pandemic has evolved, we have ~~taken~~continued to take various measures (as necessary) to protect and support the health and safety of our employees globally, including instituting travel restrictions and work-from-home arrangements, offering onsite testing and vaccination options where possible, and instituting safety precautions such as masking, social distancing, and enhanced cleaning practices. To support employee well-being in the U.S., we also enhanced local benefits related to health care, childcare, and time off.globally. We believe ~~this~~a holistic approach and dedication to safety helps us be our best as we deliver on our company purpose to improve lives around the world.

Political and Policy Participation

As a biopharmaceutical company that develops ~~treatment~~treatments for serious diseases, we believe it is important for our company to be a responsible participant in global political and public policy debates. Our engagement in the political arena helps ensure that patients have access to needed medications. Through public policy engagement, we provide a way for all our locations globally to offer Lilly’s perspective on the political environment in a manner that supports access to innovative medicines and a way to engage on issues specific to local business environments.

~~The~~As discussed in “Governance —How We Operate an Effective Board —Governance Practices —Board Oversight”, the board exercises governance oversight of our political expenditures and lobbying ~~activities, ensuring our commitment to stewardship of corporate funds and risk minimization with respect to such~~ activities. The Directors and Corporate Governance Committee is responsible for identifying current and emerging environmental, social, political and governance trends and public policy issues that may affect the business operations, performance, or reputation of the company. In addition, the board receives regular updates at board meetings from our senior vice president, corporate affairs, and communications, which include updates on public policy issues and the company’s political corporate activity, as needed. The board also receives semi-annual updates on political engagement, including information on the contributions made by our employee political action committee (LillyPAC) and the company, as well as trade association memberships.

In particular, our board is deeply engaged in oversight over Lilly’s approach to drug pricing and access. Guided by this active oversight, Lilly has taken numerous steps to address drug pricing and access concerns. For example, Lilly introduced two additional lower-priced versions of Humalog in January 2020 and added the Lilly Insulin Value Program to Lilly’s comprehensive suite of insulin affordability solutions in September 2020, which now enables customers with commercial insurance or no insurance to purchase their monthly prescription of all Lilly insulins for $35. In addition, in September 2021, the company announced that it lowered the list price of all Lilly’s non-branded insulins, including Insulin Lispro Injection, by an additional 40% in the U.S. effective January 1, 2022, effectively reducing its list price to 2008 levels. These examples, among others, demonstrate Lilly’s commitment to providing effective oversight over drug pricing and access.

We provide information on our website related to direct company contributions and LillyPAC contributions to support candidates for political office, political parties, officials, or committees in the ~~U.S.,~~United States, as well as information regarding our trade association memberships and the ~~company's~~company’s oversight of these activities. In response to input from our stakeholders, we have reviewed and enhanced the information available on our corporate website and plan to continue to engage with stakeholders on this topic.

Board ~~Education and Annual Performance Assessment~~Alignment

The company provides a comprehensive orientation process for incoming directors. Directors also attend regular continuing education sessions on areas of relevance or importance to our company, and we hold periodic mandatory training sessions for the Audit Committee.

Every year, the Directors and Corporate Governance Committee, together with the chair and the lead independent director, conducts a robust assessment of the performance of the board and board committees, and of all board processes, based on input from all directors. We also conduct an annual assessment of each director's performance, and every three years we conduct a detailed review of individual director performance when considering whether to nominate the director to a new three-year term.

Conflicts of Interest and Transactions with Related Persons

Conflicts of Interest

Occasionally, a ~~director's~~director’s business or personal relationships may give rise to an interest that conflicts, or appears to conflict, with the interests of the company. As outlined in the ~~company's~~company’s corporate governance guidelines, directors must disclose to the company all relationships that could create a conflict or an appearance of a conflict. The board, after consultation with counsel, takes appropriate steps to identify actual or apparent conflicts and ensure that all directors voting on an issue are disinterested with respect to that issue. A director may be excused from board discussions and decisions on an issue related to an actual or apparent conflict, as appropriate.

In addition, a director’s relationship with Lilly may give rise to an interest that conflicts, or appears to conflict, with the interests of another company, institution, or other stakeholder. A director must disclose his or her relationship with Lilly in connection with any scientific publication, using the International Committee of Medical Journal Editors (ICMJE) conflict of interest form for this purpose when possible. Each director must disclose his or her service on the board to his or her employer and any other organization with which the director has a relationship of trust and where the relationship with ~~the~~

~~company~~Lilly is relevant. In addition, directors must follow the internal conflict of interest policies and procedures of each such organization.

Review and Approval of Transactions with Related Persons

The board has adopted a written policy and procedures for review, approval, and monitoring of transactions involving the company and related persons (including current executive officers, directors, or director nominees and persons who served in those roles at any time since the beginning of our last fiscal year, greater than five percent shareholders of the company, immediate family members of such persons, and related entities of such persons, including entities in which any of such persons is employed, is a general partner or principal or in which

such person has a 10 percent or greater beneficial ownership interest). The policy covers any related person transaction that meets the minimum threshold for disclosure in this proxy statement under relevant SEC rules (generally, transactions involving amounts exceeding $120,000 in which a related person has a direct or indirect material interest).

Policy:

Related person transactions must be preapproved by the Directors and Corporate Governance Committee of the board or another independent body of the board, who will approve the transaction only if the Directors and Corporate Governance Committee or such independent body determines it to be consistent with the interests of the company and its shareholders. In considering the transaction, the Directors and Corporate Governance Committee or such independent body will consider all relevant factors, including:

•the company’s business rationale for entering into the transaction;

•the purpose of, and potential benefits to the company of, the transaction;

•the alternatives to entering into a related person transaction;

•whether the transaction is on terms comparable to those available to third parties, or in the case of employment relationships, to employees generally;

•the potential for the transaction to lead to an actual or apparent conflict of interest and any safeguards imposed to prevent such actual or apparent conflicts;

•the overall fairness of the transaction to the company;

•the approximate dollar value of the amount involved in the transaction, particularly as it relates to the related person;

•the related person’s interest in the transaction; and

•any other information regarding the transaction or the related person that would be material to the company’s shareholders in light of the circumstances of the particular transaction.

Procedures:

•Prior to entering into a transaction that may be a related person transaction, the related person (or the appropriate executive officer or director, in the case of immediate family members) is required to bring the matter to the attention of the chair of the board or the lead independent director, or alternatively, the ~~Senior Vice President,~~ General Counsel and Secretary.

•The chair of the board and the lead independent director jointly determine (or, if either is involved in the transaction, the other determines in consultation with the chair of the Directors and Corporate Governance Committee) whether the matter should be considered by the Directors and Corporate Governance Committee or another independent body of the board.

•If a director is involved in the transaction, he or she will be recused from all discussions and decisions relating to the transaction.

•The Directors and Corporate Governance Committee or such other independent body may approve the related person transaction only if the Directors and Corporate Governance Committee or such other independent body determines in good faith that, under all of the circumstances, the transaction is consistent with the interests of the company and its shareholders.

•The Directors and Corporate Governance Committee or such other independent body may impose such conditions as it deems appropriate on the company or the related person in connection with the approval of the related person transaction.

•If the transaction is recurring and is approved, the Directors and Corporate Governance Committee or such other independent body will review the related person transaction annually to determine whether it continues to be consistent with the interests of the company and its shareholders.

The Directors and Corporate Governance Committee or another independent body of the board retains the right to review and ratify related person transactions. In addition, the Directors and Corporate Governance Committee ~~or such other~~

or such other independent body may take or cause to be taken additional actions including, but not limited to, immediate discontinuation or rescission of the transaction, or modification of the transaction.

~~On August 23, 2021,~~In 2022, there were no related party transactions required to be reported pursuant to relevant SEC rules in this proxy statement.

Board and Director Assessment

Reexamine Evaluation Process

Questionnaire

One-On-One Discussions

Evaluation Summary

Closed Session Discussions

Follow Through

Our lead independent director and Directors and Corporate Governance Committee reviewed the evaluation process.

Directors provided written feedback on an unattributed basis.

Each director had one-on-one discussions with the lead independent director and with the board chair.

A summary of board and committee evaluations results was provided to the board and its committees.

Closed session evaluation discussions of the board and committees were led by our lead independent director and independent committee chairs.

Incorporated feedback into nomination process and the 2023 board and committee planning process, as applicable.

Every year, the Directors and Corporate Governance Committee, together with the chair and the lead independent director, conducts a robust assessment of the performance of the board and board committees, and of all board processes, based on input from all directors. We also conduct an annual assessment of each director’s performance, and every three years we conduct a detailed review of individual director performance when considering whether to nominate the director to a new three-year term.

The results of these assessments inform the board’s recommendations on nominations for directors at the annual meeting of shareholders each year and help provide us with insight on the types of experiences, skills, perspectives, and other characteristics we should be seeking for future director candidates. Together with our lead independent director, the Directors and Corporate Governance Committee performs periodic assessments of the overall composition and skills of the board to ensure that the board is actively engaged in succession planning for directors, and that our board reflects the diversity of viewpoints and expertise necessary to support our complex and evolving business.

Board Education

Periodic briefing sessions are provided to members of the board and committees on subjects that would assist them in discharging their duties. Directors also attend regular continuing education sessions on areas of relevance or importance to our company, ~~entered into~~and we hold periodic mandatory training sessions for the Audit Committee.

Beyond the Boardroom

Director Orientation

Each new director participates in an orientation program upon joining the board. The program includes presentations by senior management to familiarize new directors with, among other things, Lilly’s ethics, compliance and governance programs, business units, financial position, strategic plans, and human capital management programs.

Business Deep Dive

Periodically, directors will be invited or may request “deep dive” educational sessions with respect to a ~~multi-year research collaboration and licensing agreement with Lycia Therapeutics, Inc. (Lycia). Dr. Bertozzi, a former member~~particular business unit or other aspect of our business.

Site Visits

Periodically, directors will be invited or may request to visit the company’s manufacturing or other operating sites, and management will prepare educational sessions for the directors relevant to the location’s business and culture.

Diversity and Inclusion Events

Directors have the opportunity to participate in a variety of Lilly diversity and inclusion events, both as presenters and as participants. This offers a chance for directors to connect with Lilly employees, show their support for these activities and see our diversity and inclusion strategies in action.

Shareholder Engagement

The board receives periodic updates on shareholder engagement led by management, and is directly involved in responding to and participating in communications where appropriate. From time to time, directors participate in direct engagement with shareholders to discuss specific matters of mutual importance.

Director Compensation

Directors who are employees receive no additional compensation for serving on the board. Non-employee director compensation is reviewed and approved by the board, on the recommendation of the Directors and Corporate Governance Committee.


62% Board Service Compensation linked to the long-term performance of Lilly stock			5x Annual Board Retainer share ownership requirement for non-employee directors			CAP on total annual compensation for non-employee directors

Director Compensation Governance

The Directors and Corporate Governance Committee performs an annual in-depth review of non-employee director compensation, including considerations such as:

ü general industry and pharmaceutical company peer group analysis conducted with the assistance of an outside compensation consultant,

ü the desire to have non-employee director compensation positioned near the market median when compared against the general industry peer group,

ü the desire to avoid excess compensation, and

ü a focus to link a significant portion of compensation to the long-term performance of Lilly stock.

If the Directors and Corporate Governance Committee determine adjustments to non-employee director compensation are warranted, it will make recommendations to the full board for consideration.

Compensation Elements

The following table shows the compensation elements in effect for all non-employee directors:


Compensation Element	Payment or Value		Changes for 20232
Board Service1
Annual board retainer	$110,000		$110,000
Annual equity grant3	$180,000 in deferred stock units		$200,000 in deferred stock units
Lead independent director	$35,000		$40,000
Committee Service1
Annual Committee Retainer2	Chair	Member	Chair	Member
Audit Committee	$22,000	$6,000	$26,000	$6,000
Science and Technology Committee	$18,000	$6,000	$18,000	$6,000
Talent and Compensation Committee	$17,000	$3,000	$17,000	$3,000
Ethics and Compliance Committee	$17,000	$3,000	$17,000	$3,000
Directors and Corporate Governance Committee	$17,000	$3,000	$17,000	$3,000
Total Compensation Value Cap of $800,0004

1Expenses and Ad Hoc Committees. Directors are reimbursed for customary and usual travel expenses in connection with their travel to and from board meetings and other company events. Non-employee directors may also receive additional cash compensation for serving on ad hoc committees that may be formed by the board from time to time. Committee chair retainers are in addition to member retainers.

2Changes for 2023. Following the Directors and Corporate Governance Committee’s in-depth review of non-employee director compensation (as further described above) related to 2023 non-employee director compensation, the board approved increases to the annual equity grant, lead independent director retainer and audit committee chair retainer, effective January 1, 2023.

3Stock Compensation. Non-employee directors received an annual equity-based award that was credited to each non-employee director’s deferred stock account established under the Lilly Directors’ Deferral Plan as a number of units calculated by dividing $180,000 by the closing stock price on a pre-set annual date (approximately 498 units). When applicable, the annual equity-based award is prorated for time served. See “Lilly Directors’ Deferral Plan —Deferred Stock Account”.

4 Annual Compensation Cap for Directors. In 2018, the board approved an annual cap to the total annual compensation (cash and equity compensation) for non-employee directors of $800,000. The cap is intended to avoid excessive director compensation and is included in both the Lilly Directors’ Deferral Plan and in the Amended and Restated 2002 Lilly Stock Plan approved by shareholders at the 2018 annual meeting of shareholders.

Share Ownership Guidelines

Non-employee directors are required to hold Lilly stock, directly or through units representing the right to receive shares of Lilly stock under the Lilly Directors’ Deferral Plan, valued at not less than five times their annual board retainer. New non-employee directors are allowed five years to reach the required ownership level. All non-employee directors serving at least five years have satisfied these guidelines. All other non-employee directors are, or in the case of recently elected directors, are expected to begin, making progress toward these requirements.

Lilly Directors’ Deferral Plan

In addition to the annual equity-based grants credited to each non-employee director’s deferred stock account as described above, the Lilly Directors’ Deferral Plan allows non-employee directors to defer receipt of all or part of their cash compensation until after their service on the board has ended. Each director can choose to invest any amounts deferred in one or both of the following two accounts:

•Deferred Stock Account.This account allows the non-employee director, in effect, to invest his or her deferred cash compensation in company stock. Funds in this account are credited as units representing the right to receive shares of company stock based on the closing stock price on pre-set monthly dates. Hypothetical dividends are deemed “reinvested” in additional units based on the market price of the stock on the date dividends are paid. The units become issuable to the non-employee director as shares of company stock commencing on the second January following the director’s departure from board service (either in a lump sum or installments as described below). The deferral stock account is the ~~academic founder~~same account where the annual equity awards for board service are credited using the same conversion timing and procedure.

•Deferred Compensation Account.Deferred cash compensation in this account earns interest each year at a rate of ~~Lycia~~120 percent of the applicable federal long-term rate, compounded monthly, as established the preceding December by the U.S. Treasury Department under Section 1274(d) of the Internal Revenue Code of 1986 (the Internal Revenue Code). The aggregate amount of interest that accrued in 2022 for the participating directors was $91,920, at a rate of 2.3 percent. The rate for 2023 is 5.1 percent.

Both accounts may be paid out in a lump sum or in annual installments for up to 10 years based on individual director annual elections. All payments begin the second January following the director’s departure from board service. Amounts in the deferred stock account are paid in shares of company stock.

2022 Compensation for Non-Employee Directors


Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)1	All Other Compensation and Payments ($)2	Total ($)3
Mr. Alvarez	$136,000	$180,000	$0	$316,000
Dr. Baicker	$136,000	$180,000	$0	$316,000
Mr. Fyrwald	$119,000	$180,000	$24,882	$323,882
Dr. Hedley	$74,855	$120,000	$0	$194,855
Mr. Jackson	$141,000	$180,000	$0	$321,000
Ms. Johnson	$116,000	$180,000	$0	$296,000
Dr. Kaelin	$137,000	$180,000	$9,500	$326,500
Mr. Luciano	$162,288	$180,000	$0	$342,288
Dr. Runge	$119,000	$180,000	$0	$299,000
Ms. Sulzberger	$119,000	$180,000	$0	$299,000
Mr. Tai	$119,000	$180,000	$30,000	$329,000
Ms. Walker	$119,000	$180,000	$20,000	$319,000

Former Director:
Mr. Eskew4	$46,065	$75,000	$27,500	$148,565

1 Each non-employee director received an equity-based award of units valued at $180,000 (approximately 498 units) except Dr. Hedley, and ~~held an approximate 10.1 percent ownership interest therein~~Mr. Eskew who both received a pro-rated award for a partial year of service. These units, and all prior awards of such units, are fully vested; however, the shares subject to such awards of units are not issued until the second January following the director’s departure from board service when, as described above under “Lilly Directors’ Deferral Plan,” the units are converted into shares of ~~August 23, 2021.~~company stock and distributed to the former director. The ~~transaction was approved~~column shows the grant date fair value for each director’s equity-based award computed in accordance with ~~Lilly’s related persons transactions policy and Dr. Bertozzi did not participate~~FASB ASC Topic 718, based on the closing stock price on the grant date. See Note 12 of the consolidated financial statements in ~~any discussions or votes relating to the transaction. Immediately upon~~ the company’s ~~entry into~~Annual Report on Form 10-K for the ~~collaboration and licensing agreement, Dr. Bertozzi resigned from our board. Lycia received an upfront payment of $35 million during the~~fiscal year ended December 31, ~~2021~~2022, for additional detail regarding assumptions underlying the valuation of equity awards. Aggregate outstanding stock awards are shown in the “Common Stock Ownership by Directors and Executive Officers” table in the “Stock Units Not Distributable Within 60 Days” column.

2 The amount for Mr. Eskew includes a $10,000 donation by the Foundation to a charity of Mr. Eskew's choosing in honor of his retirement from the board, consistent with the company’s traditional practice for retiring directors. This column includes amounts donated by the Eli Lilly and Company Foundation, Inc. (the Foundation) under its matching gift program, which is ~~eligible~~generally available to ~~receive over $1.6 billion in potential milestone payments based on the achievement of prespecified preclinical, development and commercial milestones,~~U.S. employees as well as ~~tiered royalties from mid-single~~non-employee directors. Under this program, the Foundation matched 100 percent of charitable donations over $25 made to ~~low double-digits on sales resulting from~~eligible charities, up to a maximum of $30,000 per year for each individual. The Foundation matched these donations via payments made directly to the ~~agreement.~~recipient charity. The expected payments in 2023 related to matching contributions for donations made by non-employee directors at the end of 2022 include for Mr. Fyrwald - $25,884; Mr. Tai - $30,000; Ms. Sulzberger - $16,500 and Ms. Walker - $20,000.

3 Non-employee directors do not participate in a company pension plan or non-equity incentive plan.

4 Mr. Eskew retired following the 2022 annual meeting.

Communication with the Board of Directors

You may send written communications to members of the board, including independent directors, addressed to:

Board of Directors

Eli Lilly and Company

c/o General Counsel and Secretary

Lilly Corporate Center

Indianapolis, IN 46285

Shareholder Engagement on Governance Issues

To ensure that a variety of perspectives are thoughtfully considered on several issues, each year the company engages large shareholders and other key constituents to discuss areas of interest or concern related to corporate governance, as well as any specific issues for the coming proxy season. Since our ~~2021~~2022 annual meeting of shareholders, we have spoken with a number of investors on an array of subjects, including board leadership; environmental, social and governance ~~topics;~~matters; drug pricing transparency and global access to our products; product quality and safety; key enterprise risks; executive compensation; DEI; and human capital management. We appreciate the thoughtful and constructive feedback that we receive from our stakeholders. While a few shareholders communicated differing views on some of our governance practices, the investors with whom we spoke were generally supportive of our performance and overall compensation and governance policies. This feedback has been discussed with our chair and CEO, the lead independent director, our Talent and

Compensation Committee, and our Directors and Corporate Governance Committee, and it was a key input into board discussions on corporate governance topics. As a result of these discussions and its own deliberations, the board decided to recommend in favor of the ~~three~~two management proposals described below. We are committed to continuing to engage with our investors to ensure that their diverse perspectives on corporate governance and other issues are thoughtfully considered.

Management Proposals to Eliminate Classified Board and Supermajority Voting Requirements ~~and to GiveShareholders the Ability to Amend the Company's Bylaws~~

Each year between 2007 and 2012, and again from ~~2019~~2018 through ~~2021,~~2022, our management put forward proposals to eliminate the ~~company's~~company’s classified board structure. The proposals did not pass because they failed to receive a ~~"supermajority vote"~~“supermajority vote” of 80 percent of the outstanding shares of our common stock, as required in the ~~company's~~company’s articles of incorporation. In addition, each year from ~~2010~~2011 through ~~2012,~~2013, and again from ~~2018~~2019 through ~~2021~~, 2023, we submitted management proposals to eliminate the supermajority voting requirements. Those proposals also did not receive the required 80 percent vote.

Prior to 2012, these proposals received support ranging from 72 to 77 percent of our outstanding shares. In 2012, the vote in support of these proposals was approximately 63 percent of our outstanding shares, driven in part by a 2012 NYSE rule revision prohibiting brokers from voting their ~~clients'~~clients’ shares on corporate governance matters absent specific instructions from such clients. In 2018, 2019, 2020, 2021 and ~~2021,~~2022, the vote in support was approximately 62, 66, 69, 70 and 70 percent of our outstanding shares, respectively.

After considering the interests of the company and our shareholders, we have resubmitted for consideration at the Annual Meeting management proposals to eliminate the classified board structure and supermajority voting requirements ~~(see~~(see Items 4 5 and 5)6).

Our articles of incorporation and bylaws currently do not allow shareholders to amend the bylaws. This position reflects the default under Indiana law, which reserves the exclusive authority to amend the bylaws to the board of directors. After considering feedback from our shareholders, we are submitting a management proposal to amend our articles of incorporation to give shareholders the ability to amend our bylaws (see Item 6).

We will continue to engage with our shareholders on these and other topics to ensure that we continue to demonstrate strong corporate governance and accountability to shareholders.

Shareholder Proposals

Shareholder Proposals under Rule 14a-8

Shareholders interested in submitting a proposal considered for inclusion in the proxy statement for the ~~2023~~2024 annual meeting must follow the procedures set forth in Rule 14a-8 under the Securities Exchange Act of 1934. Proposals should be addressed to the General Counsel and Secretary and mailed to Lilly Corporate Center, Indianapolis, IN 46285. For convenience, emailed copies may also be sent toshareholderproposals@lilly.com. In general, to be eligible for inclusion in the proxy statement for the ~~2023~~2024 annual meeting, shareholder proposals must be received no later than November 18, ~~2022.~~2023.

Other Shareholder Proposals

In addition, under section 1.8 of the company’s bylaws, any shareholder of record wishing to propose ~~any other~~ business ~~(i.e., not~~(other than pursuant to Rule ~~14a-8)~~14a-8 or related to the nomination of directors) at the ~~2023~~2024 annual meeting of shareholders, must give the company written notice no later than the close of business on November 18, ~~2022,~~2023, and no earlier than the close of business on September 19, ~~2022.~~2023. However, if the date of the ~~2023~~2024 annual meeting is changed by more than 30 days from May 1, ~~2023~~2024 (the date contemplated for the ~~2023~~2024 annual meeting as set forth in this proxy statement), a shareholder must give the company written notice no later than the close of business on the later of 120 days in advance of the ~~2023~~2024 annual meeting or 10 days following the date we first publicly announce the date of ~~2023~~the 2024 annual meeting. Any such notice must also comply with the timing, disclosure, procedural and other requirements as set forth in the bylaws. A copy of the bylaws is available online at lilly.com/leadership/governance.

~~Shareholder Recommendations and Nominations for Director Candidates~~

~~Shareholder Recommendations of Director Candidates~~

~~A shareholder who wishes to recommend a director candidate for evaluation should forward the candidate's name and information about the candidate's qualifications to:~~

~~Chair of the Directors and Corporate Governance Committee~~

~~c/o General Counsel and Secretary~~

~~Lilly Corporate Center~~

~~Indianapolis, IN 46285~~

The candidate must meet the selection criteria described above under "Governance—Director Qualifications and Nomination Process—Director Qualifications" and must be willing and expressly interested in serving on the board.

~~Shareholder Nominations for Director Candidates for Inclusion in the Proxy Statement (“Proxy Access”)~~

If a shareholder or group of shareholders wishes to nominate one or more director candidates to be included in the proxy statement for the 2023 annual meeting pursuant to the “proxy access” provisions of the company’s bylaws (section 1.10), such shareholder or group of shareholders must give the company written notice no later than the close of business on November 18, 2022 and no earlier than the close of business on October 19, 2022. However, if the date of the 2023 annual meeting is changed by more than 30 days from May 1, 2023 (the date contemplated for the 2023 annual meeting as set forth in this proxy statement), a shareholder must give the company written notice no earlier than 150 days in advance of the date of the 2023 meeting and no later than the close of business on the later of 120 days in advance of the 2023 annual meeting or 10 days following the date we first publicly announce the date of 2023 annual meeting. Any such notice must also comply with the timing, disclosure, procedural and other requirements as set forth in the bylaws.

~~Other Shareholder Nominations for Director Candidates~~

In addition, under Section 1.9 of the company’s bylaws, any shareholder of record wishing to directly nominate a director candidate at the 2023 annual meeting of shareholders (i.e., to propose a candidate for election who is not otherwise nominated by the board through the recommendation process described above and not pursuant to the “proxy access” provisions described above) must give the company written notice no later than the close of business on November 18, 2022 and no earlier than the close of business on September 19, 2022. However, if the date of the 2023 annual meeting is changed by more than 30 days from May 1, 2023 (the date contemplated for the 2023 annual meeting as set forth in this proxy statement), a shareholder must give the company written notice no later than the close of business on the later of 120 days in advance of the 2023 annual meeting or 10 days following the date we first publicly announce the date of 2023 annual meeting. Any such notice must also comply with the timing, disclosure, procedural and other requirements as set forth in the bylaws. A copy of the bylaws is available online at ~~lilly.com/leadership/governance~~.

~~We know of no other matters to be submitted to shareholders at the Annual Meeting other than the proposals referred to in this proxy statement.~~

Ownership of Company Stock

Common Stock Ownership by Directors and Executive Officers

The following table sets forth the number of shares of company common stock beneficially owned by ~~the~~ directors, ~~the~~ named executive officers, and all directors and executive officers as a group, as of February ~~22, 2022.~~21, 2023. On February ~~22, 2022,~~21, 2023, there were ~~952,347,126~~950,296,153 shares of the company’s common stock outstanding. None of the stock or stock units owned by any of the listed individuals has been pledged as collateral for a loan or other obligation.


Beneficial Owners		Common Stock1
								Common Stock1
Beneficial Owners	Beneficial Owners	Shares Owned2		Stock Units Distributable Within 60 Days3	Percent of Class	Stock Units Not Distributable Within 60 Days4	Beneficial Owners	Shares Owned2	Stock Units Distributable Within 60 Days3	Percent of Class	Stock Units Not Distributable Within 60 Days4
		—		—	*	51,142	Ralph Alvarez	—	—	*	52,772
Anat Ashkenazi	Anat Ashkenazi	31,603		—	*	11,499	Anat Ashkenazi	38,305	—	*	11,499
Katherine Baicker, Ph.D.	Katherine Baicker, Ph.D.	—		—	*	21,381	Katherine Baicker, Ph.D.	—	—	*	22,154
Michael L. Eskew		—		—	*	45,237
J. Erik Fyrwald	J. Erik Fyrwald	100		—	*	68,742	J. Erik Fyrwald	100	—	*	70,539
Anat Hakim							Anat Hakim	22,189	—	*	4,442
Mary Lynne Hedley							Mary Lynne Hedley	—	—	*	623
Jamere Jackson	Jamere Jackson	—		—	*	7,793	Jamere Jackson	—	—	*	8,392
Kimberly H. Johnson	Kimberly H. Johnson	—		—	*	1,093	Kimberly H. Johnson	—	—	*	2,010
Patrik Jonsson							Patrik Jonsson	43,417	—	*	4,124
William G. Kaelin, Jr., M.D.	William G. Kaelin, Jr., M.D.	—		—	*	19,772	William G. Kaelin, Jr., M.D.	—	—	*	20,525
Juan R. Luciano	Juan R. Luciano	—		—	*	13,537	Juan R. Luciano	—	—	*	14,783
Diogo Rau		—		—	*	20,160
David A. Ricks	David A. Ricks	561,433	5	—	*	47,786	David A. Ricks	644,144	—	*	29,611
Marschall S. Runge, M.D., Ph.D.	Marschall S. Runge, M.D., Ph.D.	—		—	*	15,234	Marschall S. Runge, M.D., Ph.D.	202	—	*	15,928
Daniel Skovronsky, M.D., Ph.D.	Daniel Skovronsky, M.D., Ph.D.	148,559		—	*	15,675	Daniel Skovronsky, M.D., Ph.D.	175,587	—	*	9,941
Joshua L. Smiley		75,865	6	—	*	—
Gabrielle Sulzberger	Gabrielle Sulzberger	—		—	*	720	Gabrielle Sulzberger	—	—	*	1,614
Jackson P. Tai	Jackson P. Tai	46,936		—	*	15,159	Jackson P. Tai	47,592	—	*	15,864
Jacob Van Naarden		12,309		—	*	6,403
Karen Walker	Karen Walker	—		—	*	4,967	Karen Walker	—	—	*	5,529
All directors and current executive officers as a group (27 people):	All directors and current executive officers as a group (27 people):	1,171,778		7,929	*	424,724	All directors and current executive officers as a group (27 people):	1,212,249	5,271	*	341,071

* Less than 1.0 percent of the outstanding common stock of the company.

1 The sum of the ~~"Shares Owned"~~“Shares Owned” and ~~"Stock~~“Stock Units Distributable Within 60 ~~Days"~~Days” columns represents the shares considered ~~"beneficially owned"~~“beneficially owned” for purposes of disclosure in this proxy statement. Unless otherwise indicated in a footnote, each person listed in the table possesses sole voting and sole investment power with respect to their shares.

2 This column includes the number of shares of common stock held directly or indirectly, including the number of 401(k) Plan shares held by the beneficial owners indirectly through the 401(k) Plan.

3 This column sets forth restricted stock units that vest within 60 days of February ~~22, 2022.~~21, 2023.

4 For the executive officers, this column reflects restricted stock units that will not vest within 60 days of February ~~22, 2022.~~21, 2023. For the non-employee directors, this column reflects the number of units representing the right to receive shares of company stock credited to the ~~directors'~~directors’ accounts in the Lilly ~~Directors'~~Directors’ Deferral Plan.

5 The shares shown for Mr. Ricks include ~~23,030~~55,497 shares that are owned by a family foundation for which he is a director. Mr. Ricks has shared voting power and shared investment power with respect to the shares held by the foundation.

6 Mr. Smiley resigned from his officer position on February 9, 2021. His share information is as of December 31, 2021, and his shares are excluded in the total for all directors and current executive officers as a group.

Common Stock Ownership of Certain Beneficial Holders

The following table sets forth the number of shares of company common stock beneficially owned as of December 31, ~~2021,~~2022, unless otherwise indicated, by each person known to the company to beneficially own more than 5 percent of the outstanding shares of the company’s common stock:

Name and Address Number of Shares
Beneficially Owned
Percent of Class*
Lilly Endowment Inc. (the Endowment)
2801 North Meridian Street
Indianapolis, IN 46208 1 107,463,810 11.3%
The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355
2 69,261,754 7.3%
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
3 63,877,023 6.7%
The PNC Financial Services Group, Inc.
300 Fifth Avenue
Pittsburgh, PA 15222 4 51,888,455 5.4%


Name and Address		Number of Shares Beneficially Owned	Percent of Class*
Lilly Endowment Inc. (the Endowment) 2801 North Meridian Street Indianapolis, IN 46208	1	102,948,810	10.8%
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355	2	73,429,863	7.7%
BlackRock, Inc. 55 East 52nd Street New York, NY 10055	3	65,467,793	6.9%
The PNC Financial Services Group, Inc. 300 Fifth Avenue Pittsburgh, PA 15222	4	51,829,873	5.5%

*Percent of class is calculated based on the shares of our common stock outstanding as of February ~~22, 2022.~~21, 2023.

1 Based on information provided to Lilly by the Endowment as of January ~~11, 2022~~6, 2023, and a Schedule 13G/A filed by the Endowment with the SEC on January ~~27, 2022,~~25, 2023, the Endowment has sole voting and sole dispositive power with respect to all of its shares. The board of directors of the Endowment is composed of N. Clay Robbins, chairman & chief executive officer; Mary K. Lisher; William G. Enright; Daniel P. Carmichael; Charles E. Golden; Eli Lilly II; David N. Shane; Craig Dykstra; Jennett M. Hill, president; John C. Lechleiter; and Clarence Crain.

2 Based solely on the Schedule 13G/A filed with the SEC on February 9, ~~2022~~2023, by The Vanguard Group, it beneficially owns ~~69,261,754~~73,429,863 shares altogether. It does not have sole voting power with respect to any of its shares and it has shared voting power with respect to ~~1,357,292~~1,190,462 of its shares. It has sole dispositive power with respect to ~~65,918,837~~70,058,275 of its shares and shared dispositive power with respect to ~~3,342,917~~3,371,588 of its shares.

3 Based solely on the Schedule 13G/A filed with the SEC on February ~~8, 2022~~1, 2023, by BlackRock, Inc., it has sole voting power with respect to ~~55,682,054~~58,947,344 of its shares and sole dispositive power with respect to ~~63,877,023~~65,467,793 of its shares.

4 Based solely on the Schedule 13G/A filed with the SEC on February ~~11, 2022~~10, 2023, by The PNC Financial Services Group, Inc.; PNC Bancorp, Inc.; PNC Bank, National Association (PNC Bank); PNC Delaware Trust Company; and PNC Investments LLC (collectively, PNC), PNC beneficially owns ~~51,888,455~~51,829,873 shares altogether. PNC has sole voting power with respect to ~~1,848,764~~1,795,248 of its shares and shared voting power with respect to ~~50,005,199~~50,007,832 of its shares. PNC has sole dispositive power with respect to ~~1,515,580~~1,472,029 of its shares and shared dispositive power with respect to ~~50,333,641~~50,311,228 of its shares. Of the total shares of common stock reported for PNC above, 50,000,000 shares are held in the Eli Lilly and Company Compensation Trust account for which PNC Bank serves as directed trustee. As directed trustee, PNC Bank is deemed to share both voting power and investment discretion with respect to those 50,000,000 shares.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors and executive officers and persons who own more than 10% of a registered class of our equity securities to file reports of ownership of, and transactions in, our equity securities with the SEC. Based on a review of the copies of these reports, and on written representations from our reporting persons, we believe that all such reports were timely filed, except that, due to administrative error, Marschall Runge was four days late in reporting an open market purchase of common stock.

Compensation

Item 2. Advisory Vote on Compensation Paid to Named Executive Officers

Section 14A of the Securities Exchange Act of 1934 provides the ~~company's~~company’s shareholders with the opportunity to approve, on an advisory basis, the compensation of the ~~company's~~company’s named executive officers as disclosed in ~~the~~this proxy statement. Our compensation philosophy is designed to attract, engage, and retain highly talented individuals from a variety of backgrounds and motivate them to create long-term shareholder value by achieving top-tier corporate performance while embracing the company’s core values of integrity, excellence, and respect for people.

The Talent and Compensation Committee and the board believe that our executive compensation aligns well with our philosophy and with corporate performance. Executive compensation is an important matter for our shareholders. We routinely review our compensation practices and engage in ongoing dialogue with our shareholders to ensure our practices are aligned with stakeholder interests and reflect best practices.

We request shareholder approval, on an advisory basis, of the compensation of the company’s named executive officers as disclosed in this proxy statement. As an advisory vote, this proposal is not binding on the company.

However, the Talent and Compensation Committee values input from shareholders and will consider the outcome of the vote when making future executive compensation decisions. At our 2017 annual meeting of shareholders, our shareholders expressed a preference that advisory votes on executive compensation occur every year, as recommended by our board. Consistent with this preference, the board determined that the company would hold advisory votes on executive compensation on an annual basis until the next advisory vote on the frequency of advisory votes on executive compensation, which will occur no later than our 2023 annual meeting of shareholders.

~~Board Recommendation on Item 2~~

~~The board recommends that you vote~~ ~~FOR~~ ~~the approval, on an advisory basis, of the compensation paid to the named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the CD&A, the compensation tables, and~~

~~related narratives provided below in this proxy statement.~~

RECOMMENDATION FOR

The board recommends that you vote FOR the approval, on an advisory basis, of the compensation paid to the named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the CD&A, the compensation tables, and related narratives provided below in this proxy statement.

Talent and Compensation Committee Matters

Background

Role of the Independent Consultant in Assessing Executive Compensation

The Talent and Compensation Committee has retained Frederic W. Cook & Co., Inc. (FW Cook) as its independent compensation consultant. FW Cook reports directly to the Talent and Compensation Committee, and it is not permitted to have any business or personal relationship with management or members of the Talent and Compensation Committee. FW Cook’s responsibilities are to:

•review the company’s total compensation philosophy, peer group, and target competitive positioning for reasonableness and appropriateness;

•review the company’s executive compensation program and advise the Talent and Compensation Committee of evolving best practices;

•provide independent analyses and recommendations to the Talent and Compensation Committee on the CEO’s pay;

•review the draft CD&A and related tables for the proxy statement;

•proactively advise the Talent and Compensation Committee on best practices for board governance of executive compensation; and

•undertake special projects at the request of the Talent and Compensation Committee or its chair.

FW Cook interacts directly with members of company management only on matters under the Talent and Compensation Committee’s oversight and with the knowledge and permission of the Talent and Compensation Committee chair.

Role of Executive Officers and Management in Assessing Executive Compensation

With the oversight of the CEO and the ~~senior~~executive vice president of human resources and diversity, the company’s global compensation group formulates recommendations on compensation philosophy, plan design, and compensation for executive officers (other than the CEO, as noted below). The CEO provides the Talent and Compensation Committee with a performance assessment and compensation recommendation for each of the other executive officers. The Talent and Compensation Committee considers those recommendations with the assistance of its compensation ~~consultant.~~consultant FW Cook. The CEO and the ~~senior~~executive vice president of human resources and diversity attend Talent and Compensation Committee meetings; however, they are not present for executive sessions or any discussion of their own compensation. Only non-employee directors and the Talent and Compensation Committee’s consultant attend executive sessions.

The CEO does not participate in the formulation or discussion of his pay recommendations. He has no prior knowledge of the recommendations that FW Cook makes to the Talent and Compensation Committee.

Risk Assessment Process

As part of the ~~company's~~company’s overall enterprise risk management program, in ~~2021~~2022 (consistent with prior years), the Talent and Compensation Committee reviewed the company’s compensation policies and practices and concluded that the programs and practices are not reasonably likely to have a material adverse effect on the company. The Talent and Compensation Committee noted numerous policy and design features of the company’s compensation programs and governance structure that reduce the likelihood of inappropriate or excessive risk-taking, including, but not limited to:

•Only independent directors serve on the Talent and Compensation ~~Committee~~Committee.

•The Talent and Compensation Committee engages its own independent compensation ~~consultant~~consultant.

•The Talent and Compensation Committee has downward discretion to lower compensation plan ~~payouts~~payouts.

•The Talent and Compensation Committee approves all adjustments to financial results that affect compensation ~~calculations~~calculations.

•Different measures and metrics are used across multiple incentive plans that appropriately balance cash/stock, fixed/variable pay, and short-term/long-term ~~incentives~~incentives.

•Incentive plans have predetermined maximum ~~payouts~~payouts.

•Performance objectives are challenging but ~~achievable~~achievable.

•Programs with operational metrics have a continuum of payout multiples based upon achievement of performance milestones, rather than ~~"cliffs"~~“cliffs” that might encourage suboptimal or improper ~~behavior~~behavior.

•A compensation recovery policy is in place for all members of senior management; negative compensation consequences can result in cases involving serious compliance ~~violations~~violations.

•Meaningful share ownership and retention requirements are in place for all members of senior management and the board.

Talent and Compensation Committee Report

The Talent and Compensation Committee evaluates and establishes compensation for executive officers and oversees the deferred compensation plan, management stock plans, and other management incentive and benefit programs. Management has the primary responsibility for the company’s financial statements and reporting process, including the disclosure of executive compensation in the CD&A. With this in mind, the Talent and Compensation Committee has reviewed and discussed the CD&A with management. Based on this discussion, the Talent and Compensation Committee recommended to the board that the CD&A be included in this proxy statement and the ~~company's~~company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021,~~2022, for filing with the SEC.

Talent and Compensation Committee

Ralph Alvarez, Chair

J. Erik Fyrwald

Kimberly H. Johnson

Juan R. Luciano

Karen Walker

Compensation Discussion and Analysis

This CD&A describes our executive compensation philosophy, the Talent and Compensation Committee’s process for setting executive compensation, the elements of our compensation program, the factors the Talent and Compensation Committee considered when setting executive compensation for ~~2021,~~2022, and how the company’s results affected incentive payouts. This CD&A provides compensation information for our chief executive officer, David Ricks, our chief financial officer, Anat Ashkenazi, and our next three most highly compensated executive officers who were serving as executive officers on December 31, ~~2021,~~2022, Daniel Skovronsky, ~~Jacob Van Naarden~~Anat Hakim, and ~~Diogo Rau. The CD&A also includes our former chief financial officer, Joshua Smiley, who resigned from his officer position on February 9, 2021.~~Patrik Jonsson.


Name and principal occupation
			David A. Ricks Chair, President, and CEO
			Anat Ashkenazi ~~Senior~~Executive Vice President and Chief Financial Officer
			Daniel Skovronsky, M.D., Ph.D. ~~Senior~~Executive Vice President, Chief Scientific and Medical Officer and President, Lilly Research Laboratories
			~~Jacob Van Naarden~~Anat Hakim ~~Senior~~Executive Vice President, ~~CEO Loxo Oncology at Lilly~~General Counsel and Secretary
			Patrik Jonsson Executive Vice President and President, Lilly ~~Oncology~~
			~~Diogo Rau~~ ~~Senior Vice President~~Immunology, Lilly USA and Chief ~~Information and Digital~~Customer Officer

Four of our named executive officers, Ms. Ashkenazi, Mr. Van Naarden, Mr. Rau and Mr. Smiley, served in their respective roles for a portion of 2021. Ms. Ashkenazi succeeded Mr. Smiley as senior vice president and CFO on February 9, 2021. Prior to becoming CFO, Ms. Ashkenazi served as senior vice president, controller and chief financial officer, Lilly Research Laboratories.

Mr. Van Naarden became senior vice president, CEO of Loxo Oncology at Lilly and President of Lilly Oncology on September 5, 2021. He previously served as CEO of Loxo Oncology at Lilly. Mr. Rau joined Lilly as senior vice president and chief

~~information and digital officer on May 17, 2021. Prior to joining Lilly, Mr. Rau served as senior director, information systems and technology for retail and online stores at Apple, Inc.~~

Our Philosophy on Compensation

At Lilly, our purpose is to unite caring with discovery to create medicines that make life better for people around the world. To do this, we must attract, engage, and retain highly talented individuals from a variety of backgrounds and motivate them to create long-term shareholder value by achieving top-tier corporate performance while embracing the ~~company's~~company’s core values of integrity, excellence, and respect for people. Our compensation programs are designed to help us achieve these goals while balancing the long-term interests of our shareholders and customers.

Objectives

Our compensation and benefits programs are based on the following objectives:

•Reflect individual and company performance:We reinforce a high-performance culture by linking pay with individual and company performance. As employees assume greater responsibilities, the proportion of total compensation based on absolute company performance, relative company performance and shareholder returns increases. We perform annual reviews to ensure our programs provide an incentive to deliver long-term, sustainable business results while discouraging excessive risk-taking or other adverse behaviors.

•Attract and retain talented employees:Compensation opportunity is market competitive and reflects the level of job impact and responsibilities. Retention of talent is an important factor in the design of our compensation and benefit programs.

•Implement broad-based programs:While the amount of compensation paid to employees varies, the overall structure of our compensation and benefit programs is broadly similar across the organization to encourage and reward all employees who contribute to our success.

•Consider shareholder input:Management and the Talent and Compensation Committee consider the results of our annual say-on-pay vote and other sources of shareholder feedback when designing executive compensation and benefit programs.

Say-on-Pay Results

At our ~~2021~~2022 annual meeting of shareholders, greater than 9594 percent of the ~~shares~~votes cast ~~voted~~were in favor of the ~~company's~~company’s say-on-pay proposal on executive compensation. Management and the Talent and Compensation Committee view this vote as supportive of the ~~company's~~company’s overall approach toward executive compensation.

Talent and Compensation ~~Committee's~~Committee’s Processes and Analyses

Setting Compensation

The Talent and Compensation Committee considers individual performance assessments, compensation recommendations from the CEO (with respect to each of the other executive officers), company performance, peer group data, input from its compensation consultant, feedback from shareholders, and its own judgment when determining compensation for the ~~company's~~company’s executive officers.

•Individual performance:

–CEO:Generally, 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~~CEO’s performance objectives. At the end of the year, the independent directors meet to assess the ~~CEO's~~CEO’s achievement of those objectives along with other factors, including contribution to the company’s performance, ~~diversity,~~environmental, social (DEI) and governance matters, ethics, and integrity. This evaluation is used in setting the ~~CEO's~~CEO’s compensation opportunity for the next year.

–Other Executives: The Talent and Compensation Committee receives individual performance assessments and target compensation recommendations from the CEO for each of the remaining executive officers. Each executive officer’s performance assessment is based on the achievement of objectives established at the start of the year, as well as other factors, including contribution to the ~~company's~~company’s performance, ~~diversity,~~environmental, social (DEI) and governance matters, ethics, and integrity. The Talent and Compensation Committee considers these inputs, its knowledge of and interactions with each executive officer, and its judgment to develop a final individual performance assessment. For new executive officers, target compensation is set by the Talent and Compensation Committee at the time of promotion or ~~offer.~~appointment.

•Company performance:Lilly performance is considered in multiple ways:

•–Overall prior year performance is a factor in setting target compensation for the ~~coming~~upcoming year.

•–At the beginning of each calendar year, annual performance goals are established and approved by the ~~compensation committee.~~Talent and Compensation Committee. Performance against these annual goals is used to determine the short-term cash incentive payout.

•–Prior to the annual equity grant, multi-year performance goals are established and approved by the ~~compensation committee.~~Talent and Compensation Committee. Performance against these multi-year objectives is used to determine the long-term incentive equity payout.

•Peer group analysis: The Talent and Compensation Committee uses data from the peer group described below as a market check for compensation decisions but does not use ~~this~~these data as the sole basis for its compensation targets and does not target a specific position within that range of market data.

•Input from independent compensation consultant:The Talent and Compensation Committee considers the advice of its independent compensation consultant, FW Cook, when setting executive officer compensation.

Competitive Pay Assessment

Lilly’s peer group is composed of companies that directly compete with Lilly, use a similar business model, and employ people with the unique skills required to operate an established biopharmaceutical company. The Talent and Compensation Committee selects a peer group whose median market cap and revenue are broadly like ~~Lilly's.~~Lilly’s. The Talent and Compensation Committee reviews and approves the peer group at least every three ~~years.~~years, and the Chair and independent compensation consultant review the peer group annually. The Talent and Compensation Committee established the following peer group in May ~~2018~~2021 for purposes of assessing competitive pay:

AbbVie

Bristol-Myers Squibb

Merck

~~Sanofi~~Roche

Allergan*Amgen

Celgene*Gilead

Novartis

Shire*Sanofi

~~Amgen~~AstraZeneca

~~Gilead~~GlaxoSmithKline

Novo Nordisk

Takeda

~~AstraZeneca~~Biogen

~~GlaxoSmithKline~~

~~Pfizer~~

~~Biogen~~

Johnson & Johnson

~~Roche~~Pfizer

*Market data unavailable for assessing competitive 2021 pay due to business mergers.

At the time of the review in May ~~2018,~~2021, all peer companies were no greater than two times our revenue or market cap except Johnson & Johnson ~~Novartis, Pfizer,~~ and Roche. The Talent and Compensation Committee included these ~~four~~two companies despite their size because they compete directly with Lilly, have similar business models, and seek to hire from the same pool of management and scientific talent.

When determining pay levels for target compensation, the Talent and Compensation Committee considers an analysis of market competitive pay for each executive officer position (except CEO), along with internal factors such as the performance and experience of each executive officer. The independent compensation consultant for the Talent and Compensation Committee provides a similar analysis when recommending pay levels for the CEO. The CEO analysis includes a comparison of our ~~CEO~~CEO’s actual total direct compensation in the prior year to company performance on an absolute and relative basis. The analysis also includes a comparison of current target total direct compensation for our CEO to ~~the most~~ recently available data on CEO target total direct compensation for our peer group with an emphasis on peers that are headquartered in the ~~U.S.~~United States. On average, the named executive ~~officers'~~officers’ target total direct compensation for ~~2021~~2022 was comparable to the median of the peer group.

Components of Our Compensation

Our ~~2021~~2022 executive compensation was primarily composed of three components:

•base ~~salary~~salary;

•annual cash bonus, which is generally based on company performance relative to internal targets for revenue, EPS, and the progress of our ~~pipeline~~pipeline; and

•three different forms of equity incentives:

◦–performance award, which is a performance-based equity award that vests over three years. Payout is based on the ~~company's~~company’s two-year growth in EPS relative to the median external analyst anticipated peer group EPS growth. ~~The earned~~After the two-year performance period, the performance-adjusted shares are then subject to a 13-month service-vesting period

◦–shareholder value award, which is a performance-based equity award that pays out based on absolute company stock price growth measured over a three-year period, followed by a one-year holding period

◦–relative value award, which is a performance-based equity award that pays out based on company TSR results relative to peers measured over a three-year period, followed by a one-year holding period.

Executives also receive a company benefits package, described below under ~~"Other~~“Other Compensation Practices and Information—Employee ~~Benefits."~~Benefits.”

Adjustments to Reported Financial Results

The Talent and Compensation Committee has the authority to adjust the ~~company's~~company’s reported revenue and EPS upon which incentive compensation payouts are determined to eliminate the distorting effect of unusual income or expense items. The adjustments are intended to:

•align award payments with the underlying performance of the core ~~business~~business;

•avoid volatile, artificial inflation or deflation of awards due to unusual items ~~in any year in~~during the performance ~~period~~period;

•eliminate certain counterproductive short-term incentives—for example, incentives to refrain from acquiring new technologies, to defer disposing of underutilized assets, or to defer settling legacy legal proceedings to protect current bonus ~~payments~~payments; and

•facilitate comparisons with peer companies.

The Talent and Compensation Committee considers the adjustments approved by the Audit Committee for reporting non-GAAP EPS and other adjustments, based on guidelines approved by the Talent and Compensation ~~Committee prior to the performance period.~~Committee. The Talent and Compensation Committee reviews and approves adjustments on a quarterly basis and may adjust payouts for items, including but not limited to, the impact of significant acquisitions or divestitures, the impact of share repurchases that differ significantly from business plan, and large swings in foreign exchange rates. Further details on the adjustments for ~~2021~~2022 and the rationale for making these adjustments are set forth in

“Appendix A, ~~"Summary~~Summary of Adjustments Related to the Annual Cash Bonus and Performance ~~Award."~~Award.” For ease of reference, throughout the CD&A and the other compensation disclosures, we refer ~~simply~~ to ~~"revenue"~~“revenue”, “EPS”, and ~~"EPS,"~~“adjusted non-GAAP EPS,” but we encourage you to review the information in Appendix A toto understand the adjustments from reported revenue and EPS that were approved.

The Talent and Compensation Committee ~~also~~ has general authority to apply downward discretion to bonus, performance award, shareholder value award, and relative value award payouts for individual or all executive officers.

1.Base Salary

In setting salaries, Lilly seeks to retain, motivate, and reward successful performers while maintaining affordability within the ~~company's~~company’s business plan. Base salaries are reviewed and established annually and may be adjusted upon promotion, following a change in job responsibilities, or to maintain market competitiveness. Salaries are compared annually with peer group data and are based on each ~~person's~~person’s level of contribution, responsibility, expertise, ~~and competitiveness and are compared annually with peer group data.~~

~~Base salary increases for 2021 were based on competitiveness. Generally, executive base salaries are positioned against market salaries, considering~~ experience, ~~and~~ performance over ~~time.~~ time, and competitiveness.

If an ~~executive's~~executive officer’s salary is deemed competitive given their experience and performance, no salary increase is provided.

2.Annual Cash Bonus (Bonus Plan)

The Bonus Plan is designed to reward the achievement of the company’s annual financial and innovation objectives. All the named executive officers participated in the Bonus Plan during 2021. Mr. Van Naarden's participation in the Bonus Plan commenced at the time of his promotion on September 5, 2021. For the portion of the 2021 performance year prior to his promotion, Mr. Van Naarden participated in The Loxo Oncology, Inc. Bonus Plan (Loxo Bonus Plan), and in lieu of the payments he would have been eligible to receive thereunder, the Company paid Mr. Van Naarden a one-time payment, as further described below in the Summary Compensation Table.

~~Bonus Plan~~2022.

The Talent and Compensation Committee sets Bonus Plan performance goals and individual bonus targets ~~for the Bonus Plan~~ at the beginning of each year. The bonus is based on three areas of company performance measured relative to internal targets: revenue, EPS, and pipeline progress. The annual cash bonus payout is calculated as follows:

base salary earnings

individual bonus target

bonus multiple

Actual payouts can range from 0 to 200 percent of an ~~individual's~~individual’s bonus target. The Talent and Compensation Committee references the annual operating plan and pipeline objectives to establish performance targets and to assess the relative weighting for each objective. In ~~2021,~~2022, the performance measures and weightings ~~remain~~remained unchanged from the prior year:


Lilly Goals			Weighting
Revenue performance			25%
EPS performance			50%
Pipeline progress			25%

Based on this weighting, the company bonus multiple is calculated as follows:

25% x revenue multiple

50% x EPS multiple

25% x pipeline multiple

bonus multiple

~~Loxo Bonus Plan~~

Performance goals for the Loxo Bonus Plan are determined by a committee consisting of senior company leadership (the Loxo Oncology Steering Committee) and mirror the goals under the Bonus Plan; provided, however, that eligible employees have an additional bonus opportunity that may be awarded for the attainment of other goals specific to oncology research and development (Additional Cash Award). These other goals can vary annually, but typically include preclinical, clinical, regulatory actions, external innovation and scientific publication milestones. These additional goals associated with molecule advancement and proof of concept milestones typically carry more weight in the Additional Cash Award results.

~~The annual Loxo Bonus Plan payout is calculated by multiplying a participant's base earnings, the individual bonus target and the sum of the Bonus Plan and Additional Cash Award payout multiples.~~

~~Base Earnings x Individual Bonus Target x (Bonus Plan Multiple + Additional Cash Award Multiple)~~

Actual payouts for the Loxo Bonus Plan can range from 0 to 400 percent of an individual's bonus target (0 to 200 percent for the Bonus Plan performance and 0 to 200 percent for the Additional Cash Award). Goal attainment is determined by the Loxo Oncology Steering Committee.

3.Equity Incentives

The company grants three types of equity incentives to executives and certain other employees: performance awards that are designed to focus leaders on multi‑year operational performance relative to peer companies, shareholder value awards that are intended to align earned compensation with long-term growth in shareholder value, and relative value awards which encourage TSR outperformance compared to our peer group. These awards, when considered together, align with shareholder interests by incenting long-term operational excellence, shareholder return and peer company outperformance without encouraging excessive risk-taking behaviors. ~~The Compensation Committee has the discretion to adjust payout from an equity award granted to an executive officer downward from the amount yielded by the applicable formula.~~

Performance Awards

Performance awards vest ~~over~~after three years. Payouts are based on achieving EPS growth targets over a two-year performance period, followed by an additional 13-month service-vesting period for executive officers. During the service-vesting period, the award is held in the form of restricted stock units. The growth-rate targets are set relative to the median external analyst anticipated EPS growth for our peer group over the same performance period. These awards do not accumulate dividends during the two-year performance period, but they do

accumulate dividend equivalent units during the service-vesting period.

The Talent and Compensation Committee believes EPS growth is an effective measure of operational performance because it is closely linked to shareholder value, is broadly communicated to the public, is understood by Lilly employees, and allows for ~~objective~~ comparisons to the performance of ~~Lilly's~~Lilly’s peer group. Consistent with the objectives established by the Talent and Compensation Committee, Lilly company performance exceeding the expected peer group median results in above‑target payouts, while Lilly company performance lagging the expected peer group median results in below‑target payouts. Possible payouts range from 0 percent to 175 percent of the target number of shares, depending on Lilly EPS growth over the performance period.

The measure of EPS used in the performance award program differs from the measure used in the Bonus Plan in two ways. First, the EPS goal in the Bonus Plan is set with reference to internal goals that align to our annual operating plan, while the EPS goal in the performance award program is set based on the external analyst anticipated EPS growth rates of our peer group. Second, the Bonus Plan measures EPS over a one-year period, while the performance award program measures EPS over a two-year period. In any given year, the Bonus Plan may pay above target while the performance award pays below target (or vice versa).

Shareholder Value Awards

Shareholder value awards are earned based on ~~Lilly's~~Lilly’s share price performance. Shareholder value awards pay above target if ~~Lilly's~~Lilly’s stock outperforms an expected rate of return and below target if Lilly's stock underperforms that expected rate of return. The expected rate of return is based on the three-year TSR that a reasonable investor would consider appropriate when investing in a basket of large-cap U.S. companies, as determined by the Talent and Compensation Committee. The minimum price to achieve target is calculated by multiplying the starting share price of ~~Lilly's~~Lilly’s stock by the three-year compounded expected rate of return less ~~Lilly's~~Lilly’s dividend yield. Shareholder value awards have a three-year performance period, and any shares paid are subject to a one-year holding requirement. No dividends are accrued during the performance period. Possible payouts are based on share price growth and range from 0 to 175 percent of the target number of shares. Executive officers receive no payout if ~~Lilly's~~Lilly’s TSR for the three-year period is zero or negative.

Relative Value Awards

Relative value awards are earned based on ~~Lilly's~~Lilly’s TSR performance relative to our peer group. The minimum performance to achieve target is a TSR that is equal to the median TSR performance for the peer group. Relative value awards have a three-year performance period, and any shares paid are subject to a one-year holding requirement. No dividends are accrued during the performance period. Executive officers receive no payout if ~~Lilly's~~Lilly’s TSR for the three-year period is 30 or more percentage points below the median TSR performance for the peer group over the same time period. Possible payouts range from 0 to 175 percent of the target number of shares.

Pay for Performance

The mix of compensation for our named executive officers reflects Lilly’s desire to link executive compensation with individual and company performance. As reflected in the charts below, a substantial portion of the target pay for executive officers is performance-based. The annual cash bonus and equity payouts are contingent upon company performance, with the bonus factoring in performance over a one-year period, and equity compensation factoring in performance over multi-year periods. The charts ~~below~~ depict the annualized mix of target compensation for Lilly’s CEO and the annualized average for ~~the~~Ms. Ashkenazi, Dr. Skovronsky, Ms. Hakim and Mr. Jonsson.

~~other named executive officers annualized for Ms. Ashkenazi, Mr. Van Naarden and Mr. Rau. The Other Named Executive Officers chart below excludes Mr. Smiley.~~

Target Total Compensation

Performance Review Process

In setting ~~2021~~2022 target compensation for the named executive officers, the Talent and Compensation Committee considered individual contributions, ~~Lilly's~~Lilly’s performance during ~~2020,~~2021, internal relativity, peer group data, and input from the CEO for named executive officers other than himself.

Evaluation of Individual Named Executive Officer Performance

A summary of the Talent and Compensation ~~Committee's~~Committee’s review of individual named executive officer performance in ~~2020~~2021 that influenced decisions on ~~2021~~2022 target compensation ~~for these executives~~ is provided below:

David Ricks, Chair, President, and CEO:

In accordance with the company’s corporate governance guidelines, the independent directors conducted an assessment of Mr. Ricks’ performance led by the lead independent director. The independent directors believe the company largely met or exceeded its combined financial and strategic goals for ~~2020~~2021 under Mr. Ricks’ leadership. In ~~2020,~~2021, Mr. Ricks and his team:

•Launched ~~several innovative medicines to patients globally. Additionally, 25~~18 new indications for already marketed medicines ~~were launched~~ to patients around the world including Verzenio in certain people with high-risk early breast cancer and Jardiance in heart failure which reduced ejection fraction.

•Progressed 1712 and 10 potential new medicines into Phase I and Phase II clinical development respectively from both internal research and external ~~sources~~sources.

•~~Initiated actions~~Advanced tirzepatide and donanemab, two promising pipeline assets, both having significant data releases and initiating the regulatory review process.

•Contributed towards the fight against the global COVID-19 pandemic, including ~~(1) implementing diagnostic testing in our community, (2)~~ discovering and developing SARS-CoV-2 neutralizing antibodies ~~leading to the Emergency Use Authorization for bamlanivimab,~~ and ~~(3)~~ striving to protect the health and safety of Lilly employees ~~while continuing~~who continued to provide ~~life saving~~lifesaving medicines to people around the world.

•Completed numerous pre-clinical and new modality business development transactions to complement and expand internal research efforts.

•~~Completed the acquisition of Dermira, expanded Lilly's strategic collaboration with Innovent for Tyvyt globally and completed seven preclinical asset transactions~~

•Continued to drive a cross-company productivity agenda resulting in savings that funded increased investment in research and development and commercialization of key medicines.

•~~Implemented~~Continued execution of a comprehensive strategy that improved ~~diversity, equity and inclusion~~DEI across the company, increased the representation of women and minorities in management and conducted pay equity studies to promote equality in pay. The company was ranked #3 on the DiversityInc. top 50 companies ~~list and received Women Business Collaborative CEO recognition for excellence in gender diversity~~

•~~Led~~list. Additionally, led the ~~development of Lilly's~~company’s comprehensive Racial Justice Commitment to help improve equity within Lilly and the communities in which it ~~operates~~operates.

•~~Achieved certain 2020~~Established new 2030 environmental performance goals to be carbon neutral in our own operations, purchase 100% renewable electricity, have zero waste to landfill from routine operations and continue our water stewardship. Held the company’s first ~~established in 2013, such as greenhouse gas emissions, energy efficiency, waste efficiency~~ESG investor meeting and ~~wastewater~~published Lilly’s comprehensive ESG report.

•~~Established new long-term goals for environmental, safety and governance goals for 2030~~

In addition, the company was named one of the world’s most ethical companies by the Ethisphere ~~Institute.~~Institute.

Anat Ashkenazi, ~~Senior~~Executive Vice President and Chief Financial Officer:

Ms. Ashkenazi ~~became Senior Vice President and Chief Financial Officer (CFO) on February 9, 2021. Prior~~contributed to ~~becoming CFO,~~the strong financial performance of the company in her first year as chief financial officer. Ms. ~~Ashkenazi served as senior vice president and controller, and led corporate strategy at Lilly Research Laboratories. As controller, Ms. Ashkenazi:~~Ashkenazi’s 2021 accomplishments included:

•Played a key role in the company achieving its financial targets in ~~2020 and in~~2021.

•Drove the company’s ~~efforts to reallocate financial resources in~~2022 strategic planning and business planning process.

•Championed the ~~fight against COVID-19~~company’s productivity agenda throughout 2021 and during the company’s strategic and operational planning processes.

•Led the ~~company’s broad productivity agenda~~capital allocation process allowing for investment in several ~~years, having been~~in-licensing deals and increased funding for the advancement of new medicines through clinical development.

•Continued to build excellent rapport and represent the company with the investment community.

•Was a ~~key~~strong partner towith the ~~operating units across the value cycle~~business unit presidents, chief scientific and ~~played a key role in all business development activities~~medical officer, and president of manufacturing operations.

•~~Led the company’s 2021 strategic plan and 2021 operating plan~~

•◦Sponsors Lilly’s Veteran Network, an employee resource group focused on recruiting and advancing people who served in the country’s ~~military~~military.

Daniel Skovronsky, M.D., Ph.D., ~~Senior~~Executive Vice President, Chief Scientific and Medical Officer and President, Lilly Research Laboratories:

Dr. Skovronsky advanced innovation for patients as the ~~company's~~company’s chief scientific and medical officer. His contributions in ~~2020 include:~~2021 included:

•Advanced innovative medicines through the product pipeline leading to ~~numerous first approvals, including bamlanivimab (under Emergency Use Authorization from the FDA) in partnership with AbCellera. Additionally, 25~~18 new indications for already-marketed medicines that were launched to patients globally, including Verzenio in certain people with high-risk early breast cancer and Jardiance in heart failure which reduced ejection fraction in the United States and other key markets.

•Achieved industry leading speed across preclinical and clinical development, clinical success rates above the industry peer average, and sellside consensus as the highest valued pipeline in the industry.

•Delivered several significant positive data readouts including for ~~Verzenio (Phase III in the adjuvant setting), LOXO-305 (advanced b-cell malignancies), Jardiance (cardiovascular outcomes in heart failure with reduced ejection fraction),~~tirzepatide, donanemab, mirikizumab, ~~(psoriasis head-to-head versus secukinumab)~~ and ~~tirzepatide (type 2 diabetes)~~pirtobrutinib.

•~~Co-led the acquisition of Dermira, expanded Lilly's strategic collaboration with Innovent for Tyvyt globally,~~Led numerous pre-clinical and ~~completed seven preclinical asset~~new modality business development transactions to complement and expand internal research efforts.

•Sped research resulting in 1712 and 10 potential new medicines ~~advancing to~~into Phase I and Phase II clinical development ~~including~~respectively from both ~~internally discovered molecules~~internal research and ~~molecules sourced externally~~external sources via business ~~development~~development.

•Led the company’s efforts in the fight against SARS-CoV-2 including ~~(1) implementing diagnostic testing at our headquarters in Indianapolis, Indiana and (2)~~ discovering and developing SARS-CoV-2 neutralizing ~~antibodies leading to the Emergency Use Authorization for bamlanivimab~~antibodies.

•~~Enhanced strategies to further reduce drug discovery and development timelines, leading to earlier product launch~~

•Led DEI strategies in research and development to improve innovation and ~~productivity.~~productivity and sponsored Lilly’s Chinese Culture Network.

~~Jacob Van Naarden, Senior~~

Anat Hakim, Executive Vice President, ~~CEO Loxo Oncology at Lilly~~General Counsel and ~~President, Lilly Oncology:~~Secretary:

~~Mr. Van Naarden served~~Ms. Hakim was effective and influential in her second year as ~~chief operating officer~~general counsel in 2021, and she was a productive partner with the executive team. In 2021, she:

•Continued to build even stronger credibility with the company’s board as Corporate Secretary.

•Defended several key patents, including patents for Alimta and Taltz.

•Developed and implemented legal strategies in the areas of ~~Loxo Oncology at Lilly when~~M&A, intellectual property protection, product liability, regulatory reform and pharmaceutical pricing. Drove a transformation effort to increase the ~~company acquired Loxo Oncology, Inc. in 2019 and was later named CEO~~capability of ~~Loxo Oncology at Lilly in January 2021. Mr. Van Naarden played an integral role with numerous oncology assets including~~ the ~~approval of Retevmo. As CEO of Loxo Oncology at Lilly, Mr. Van Naarden has built a science-first drug discovery and development organization. He has led~~company’s law division.

•Provided sound legal counsel through numerous business development ~~transactions and contributed to~~activities.

•Influenced the company’s ~~scientific efforts in other therapeutic areas.~~ethics and compliance programs globally to ensure the company realizes its long-standing value of integrity.

~~Diogo Rau, Senior Vice President~~•Led a company initiative to increase protection of Lilly’s intellectual property assets and ~~Chief Information and Digital Officer:~~

~~Mr. Rau joined Lilly as senior vice president and~~partnered with the chief information and digital officer ~~in May 2021. Prior~~ to ~~joining Lilly, Mr. Rau~~improve cybersecurity.

•Led and served as ~~senior director~~an executive sponsor of ~~information systems~~the company’s Women Leading in Lilly, an employee resource group focused on supporting and ~~technology~~advancing women within Lilly.

Patrik Jonsson, Executive Vice President, President, Lilly Immunology and Lilly USA, and Chief Customer Officer:

Mr. Jonsson demonstrated strong leadership of Lilly Immunology, Lilly USA and across the company. In 2021, he:

•Drove volume growth within the immunology business unit and delivered financial results.

•Championed the development of potential new medicines with significant data readouts for ~~retail~~mirikizumab and ~~online stores and most recently served as the top executive of information technology for retail and online stores at Apple, Inc. (Apple). During his 10 years at Apple, he~~Olumiant.

•Successfully led the ~~development and implementation~~company’s commercial business in the United States, which is the company’s largest market.

•As the company’s chief customer officer, led the continued transformation of the ~~technology supporting the Apple Online Store~~company’s go-to-market strategies in preparation for potential launches of tirzepatide, donanemab, mirikizumab and ~~Apple retail stores,~~pirtobrutinib.

~~including e-commerce platform, mobile point~~•Served as executive sponsor of ~~sale, the Apple Store App, and systems used by store team members. Prior to joining Apple, Mr. Rau was a partner with McKinsey & Company.~~

In connection with Mr. Smiley’s resignation as an officer on February 9, 2021, the Compensation Committee took action to reduce his 2020 Bonus Plan payout to zero, reduce his 2018-2020 shareholder value award and cancel all his other outstanding equity incentive awards granted in 2019 and 2020. The foregoing terms were agreed to by Mr. Smiley pursuant to his release agreement effective as of February 9, 2021. The material terms of the agreement were previously disclosed inOLA, the company’s ~~2021 proxy statement.~~employee resource group focused on supporting and advancing the development of Latin and Hispanic employees across the company.

Target Compensation

The information below reflects total compensation at target for named executive officers for ~~2021.~~2022. The actual compensation received is summarized below in ~~"Compensation Results."~~“Compensation Results.”

Rationale for Changes to Named Executive Officer Target Compensation

The Talent and Compensation Committee established the ~~2021~~2022 target total compensation for each named executive officer ~~except Ms. Ashkenazi, Mr. Van Naarden and Mr. Rau,~~ based on the named executive ~~officer's 2020~~officer’s 2021 performance, internal relativity, and peer group data. The Compensation Committee approved target total compensation for Ms. Ashkenazi, Mr. Van Naarden and Mr. Rau upon their promotion or hire, as applicable, based on job scope, market data, experience, and internal relativity.

Base Salary

The following table shows the approved annualized salary for each named executive officer. Mr. Ricks ~~and Dr. Skovronsky~~ did not receive ~~an adjustment to~~a base pay adjustment in ~~2021,~~2022; however, other named executive officer base pay amounts were adjusted to align pay with their level of experience, internal relativity, peer group market data and ~~the remaining executive officers' 2021 annualized salaries were effective on the day they assumed their new responsibilities.~~individual performance. Each named executive ~~officer's~~officer’s actual base salary earned during ~~2021~~2022 is reflected in the Summary Compensation Table in the ~~"Executive Compensation"~~“Executive Compensation” section of this proxy statement.


Name2		2020 Annual Base Salary Effective March 1, 2020		2021 Annual Base Salary Effective March 7, 2021	Increase
Name							Name	2021 Annual Base Salary Effective March 7, 2021		2022 Annual Base Salary Effective March 6, 2022	Increase
Mr. Ricks	Mr. Ricks	$1,500,000		$1,500,000	0	%	Mr. Ricks	$1,500,000		$1,500,000	0	%
Ms. Ashkenazi	Ms. Ashkenazi	N/A	1	$900,000	N/A		Ms. Ashkenazi	$900,000		$950,000	5.6	%
Dr. Skovronsky	Dr. Skovronsky	$1,000,000		$1,000,000	0	%	Dr. Skovronsky	$1,000,000		$1,250,000	25.0	%
Mr. Van Naarden		N/A	1	$675,000	N/A
Mr. Rau		N/A	1	$670,000	N/A
Ms. Hakim							Ms. Hakim	$775,000		$900,000	16.1	%
Mr. Jonsson							Mr. Jonsson	N/A	1	$750,000	N/A		1

1 ~~Ms. Ashkenazi,~~ Mr. ~~Van Naarden and Mr. Rau were~~Jonsson was not a named executive ~~officers~~officer in ~~2020.~~2021.

2 For the period beginning on January 1, 2021 through February 8, 2021, Mr. Smiley's annual base salary was $1,000,000, and for the transition period beginning on February 9, 2021 through July 31, 2021, Mr. Smiley earned a biweekly base salary of $9,000.

Annual Cash Bonus Targets

Based on a review of internal relativity, peer group market data, and individual performance, the Talent and Compensation Committee retained the same percent-of-salary bonus ~~target~~targets as in ~~2020~~2021 for Mr. Ricks, ~~increased the~~Ms. Ashkenazi, Dr. Skovronsky and Ms. Hakim. Mr. Jonsson’s bonus target ~~for Dr. Skovronsky to 100 percent,~~was set ~~Ms. Ashkenazi's bonus target~~ at 100 percent ~~and set Mr. Van Naarden's and Mr. Rau's bonus targets at 80 percent.~~for the 2022 performance year. 2022 Bonus targets ~~are shown in the table below as~~were:


Name	2021 Bonus Target			2022 Bonus Target
Mr. Ricks	150	%		150	%
Ms. Ashkenazi	100	%		100	%
Dr. Skovronsky	100	%		100	%
Ms. Hakim	100	%		100	%
Mr. Jonsson	N/A		1	100	%

1 Mr. Jonsson was not a ~~percentage of each~~ named executive ~~officer’s earnings from base salary~~officer in ~~2021:~~2021.

Name3
2020 Bonus Target 2021 Bonus Target
Mr. Ricks 150 % 150 %
Ms. Ashkenazi N/A 1 100 %
Dr. Skovronsky 95 % 100 %
Mr. Van Naarden N/A 1 80 % 2
Mr. Rau N/A 1 80 % 2

1 ~~Ms. Ashkenazi, Mr. Van Naarden and Mr. Rau were not named executive officers in 2020.~~

2 Mr. Van Naarden's Bonus Plan participation was initiated upon his promotion on September 5, 2021. Prior to his promotion, Mr. Van Naarden participated in the Loxo Bonus Plan, which entitled him to a target bonus equal to 60% of base salary.

3 Pursuant to the terms of his separation agreement with the company, Mr. Smiley was not entitled to an annual bonus for the 2020 and 2021 calendar years. See "Agreement with Former Chief Financial Officer" for additional information.

Equity Incentives - Target Grant Values

For ~~2021~~2022 equity grants, the Talent and Compensation Committee set the total target values for named executive officers based on internal relativity, peer group market data and individual ~~performance, and internal relativity.~~performance. Named executive officers have 35 percent of their equity target allocated to shareholder value awards and relative value awards, respectively, and 30 percent to performance awards. Total target values for the ~~2020~~2021 and ~~2021~~2022 equity grants to the named executive officers were as follows:


Name5		2020 Annual Equity Grant		2021 Annual Equity Grant
Name						Name	2021 Annual Equity Grant		2022 Annual Equity Grant
Mr. Ricks	Mr. Ricks	$12,500,000		$14,000,000		Mr. Ricks	$14,000,000		$16,250,000
Ms. Ashkenazi	Ms. Ashkenazi	N/A	1	$2,200,000	2	Ms. Ashkenazi	$2,200,000		$3,000,000
Dr. Skovronsky	Dr. Skovronsky	$4,100,000		$4,700,000		Dr. Skovronsky	$4,700,000		$5,500,000
Mr. Van Naarden		N/A	1	$1,300,000	3
Mr. Rau		N/A	1	N/A	4
Ms. Hakim						Ms. Hakim	$2,100,000		$3,000,000
Mr. Jonsson						Mr. Jonsson	N/A	1	$2,100,000


x						Preliminary Proxy Statement
o						Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o						Definitive Proxy Statement
o						Definitive Additional Materials
o						Soliciting Material Pursuant to §240.14a-12


	Item 8 - Proposal to Eliminate Supermajority Voting Requirements	92
	Item 9 - Proposal to Establish and Report on a Process by which the Impact of Extended Patent Exclusivities on Product Access Would be Considered in Deciding Whether to Apply for Secondary and Tertiary Patents	94
	Item 10 - Proposal to Report on Risks of Supporting Abortion	97
	Item 11 - Proposal to Disclose Lobbying Activities and Alignment with Public Policy Positions and Statements	99
	Item 12 - Proposal to Report on Effectiveness of the Company’s Diversity, Equity, and Inclusion Efforts	102
	Item 13 - Proposal to Adopt a Policy to Require Certain Third-Party Organizations to Annually Report Expenditures for Political Activities before Lilly Contributes to an Organization	104
Other Information		107
	Meeting and Voting Logistics	107
	Other Matters	111
Appendix A - Summary of Adjustments Related to the Annual Cash Bonus and Performance Award		A-1
Appendix B - Proposed Amendments to the Company’s Articles of Incorporation		B-1

	Frequently Referenced Topics


Board Diversity		11
Board Skills Matrix		12
Board and Committee Oversight of:
ESG		33
Cybersecurity		36
Human Capital Management		33
Political Activities		36
Lead Independent Director Duties		28
Share Ownership and Retention Guidelines		68
Compensation Recovery Policy (Clawback)		69
Hedging and Pledging Restrictions		69
Transactions with Related Persons		41


ITEMS OF BUSINESS
Item 1			Election of each of the four director nominees to serve three-year terms
Item 2			Approval, on an advisory basis, of the compensation paid to the company’s named executive officers
Item 3			Advisory vote on frequency of future advisory votes on named executive officer compensation
Item 4			Ratification of the appointment of Ernst & Young LLP as the independent auditor for 2023
Item 5			Approval of amendments to the company’s articles of incorporation to eliminate the classified board structure
Item 6			Approval of amendments to the company’s articles of incorporation to eliminate supermajority voting provisions
Item 7			Shareholder proposal to publish an annual report disclosing lobbying activities
Item 8			Shareholder proposal to eliminate supermajority voting requirements
Item 9			Shareholder proposal to establish and report on a process by which the impact of extended patent exclusivities on product access would be considered in deciding whether to apply for secondary and tertiary patents
Item 10			Shareholder proposal to report on risks of supporting abortion
Item 11			Shareholder proposal to disclose lobbying activities and alignment with public policy positions and statements
Item 12			Shareholder proposal to report on effectiveness of the company’s diversity, equity, and inclusion efforts
Item 13			Shareholder proposal to adopt a policy to require certain third-party organizations to annually report expenditures for political activities before Lilly contributes to an organization


ADMISSION									WHEN 8:30 a.m. EDT Monday, May 1, 2023
The 2023 annual meeting of shareholders (the Annual Meeting) of Eli Lilly and Company will be held virtually via live webcast. The webcast is designed to provide shareholders the opportunity to participate virtually to facilitate shareholder attendance and to provide a consistent experience to all shareholders, regardless of location. You will be able to attend the Annual Meeting, vote, and submit questions virtually via live webcast by visiting virtualshareholdersmeeting.com/LLY2023. To be admitted to the Annual Meeting webcast, you must enter the 16-digit control number found on the proxy card, voting instruction form, or notice you received. For further information on Annual Meeting logistics, see the section titled “O ther Information —Meeting and Voting Logistics.” This proxy statement is dated March 17, 2023. We mailed a notice of internet availability of proxy materials on or about that date to our shareholders of record as of February 21, 2023 (other than those who previously requested electronic or paper delivery of our proxy materials and certain participants in The Lilly Employee 401(k) plan (401(k) Plan)).
									WHERE Virtually at www.virtualshareholder meeting.com/LLY2023
									RECORD DATE February 21, 2023
YOUR VOTE IS IMPORTANT
Every shareholder vote is important. Even if you plan to attend the Annual Meeting, we encourage you to vote promptly online, by telephone, or, if you received or requested paper copies of your proxy materials, by signing, dating, and returning your proxy card or voting instruction form by ~~mail.~~mail, so that a quorum may be represented at the meeting.


Name	Age	Director Since	Other Public Boards	Principal Occupation		Committee Membership
William G. Kaelin, Jr., M.D. Independent Director	65	2012	0	Sidney Farber professor of Medicine, Harvard Medical School; Professor, Dana-Farber Cancer Institute and Brigham and Women’s Hospital; Investigator, Howard Hughes Medical Institute	Science & Technology Directors & Corporate Governance
David A. Ricks Chair of the Board	55	2017	1	Chair, President and Chief Executive Officer, Eli Lilly and Company	None
Marschall S. Runge, M.D., Ph.D. Independent Director	68	2013	0	CEO, Michigan Medicine, Executive Vice President for Medical Affairs and Dean, Medical School, University of Michigan	Ethics & Compliance Science & Technology
Karen Walker Independent Director	61	2018	1	Operating Partner, The Goldman Sachs Group, Inc.	Talent and Compensation Audit


ELI LILLY AND COMPANY
(Name of Registrant as Specified In Its Charter)


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)


~~Please~~ Dear Fellow Shareholders, Thank you for your continued support of, and investment in, Eli Lilly and Company. We are proud of Lilly’s achievements in 2022. We made several key regulatory and pipeline advancements with the potential to help people with diabetes, immune disorders, neurodegenerative conditions, and cancer. In particular, we introduced an important new type 2 diabetes treatment and added new indications to currently marketed products. And finally, we worked hard to deliver value to you, our shareholders. We delivered strong total shareholder returns through December 31, 2022, in terms of both total share price appreciation and dividends. We also strengthened our initiatives in support of patients and communities, including collaborating to enhance sustainable access to affordable insulin in Africa, expanding our use of solar energy at global facilities, and partnering with UNICEF to help improve health outcomes for 10 million children and adolescents. Our board continues to prioritize meaningful engagement with our shareholders and other key stakeholders. Since our 2022 annual meeting, we have spoken with a number of investors on an array of subjects, including: drug pricing transparency and global access to our products; product quality and safety; key enterprise risks and environmental, social and governance topics. We appreciate the thoughtful and constructive feedback that we receive from our stakeholders. As a result of this input, and as in past years, the board is putting forward management proposals at the 2023 annual meeting of shareholders (the Annual Meeting) to eliminate the classified board structure and supermajority voting requirements in our articles of incorporation.
We remain committed to serving you and making life better for millions of people around the world. We look forward to welcoming you to the Annual Meeting.


Notice of 2023 Annual Meeting of Shareholders		1
Proxy Statement Summary		2
Governance		10
	Director Qualifications	1 0
	Director Nominations	2 6
	Item 1 - Election of Directors	28
	Working Dynamics	28
	Board Structure	30
	Governance Practices	33
	Board Alignment	41
	Communication with the Board of Directors	46
	Shareholder Engagement on Governance Issues	46
Ownership of Company Stock		48
Compensation		49
	Item 2 - Approval, on an Advisory Basis, of the Compensation Paid to the Company’s Named Executive Officers	49
	Talent and Compensation Committee Matters	49
	Compensation Discussion and Analysis	51
	Executive Compensation	70
	CEO Pay Ratio	79
	Pay versus Performance	80
	Item 3 - Advisory Vote on Frequency of Future Advisory Votes on Named Executive Officer Compensation	84
Audit Matters		85
	Item 4 - Ratification of the Appointment of the Independent Auditor	84
Management Proposals		87
	Item 5 - Proposal to Amend the Company’s Articles of Incorporation to Eliminate the Classified Board Structure	87
	Item 6 - Proposal to Amend the Company’s Articles of Incorporation to Eliminate Supermajority Voting Provisions	88
Shareholder Proposals		89
	Item 7 - Proposal to Publish an Annual Report Disclosing Lobbying Activities	89


~~Important notice regarding the availability of proxy materials for the shareholder meeting to be held May 2, 2022:~~ IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD MAY 1, 2023: The annual report to shareholders and proxy statement are available at ProxyVote.com as well as on our website at lilly.com/policies-reports/annual-report.


~~Notice of~~ ~~2022Annual Meeting of Shareholders~~		1
~~Proxy Statement Summary~~		3
~~Governance~~		11
	~~Item~~ 1 - ~~Election of Directors~~	11
	~~Board Operations and Governance~~	11
	~~Director Qualifications and Nomination Process~~	19
	~~Director Compensation~~	20
	~~Director Independence~~	22
	~~Committees of the Board of Directors~~	22
	~~Membership and Meetings of the Board and Its Committees~~	23
	~~Board Oversight of~~ ~~Strategy,~~ ~~Compliance~~, ~~and Risk Management~~	25
	~~Highlights of the Company's Corporate Governance~~	25
	~~Communication with the Board of Directors~~	34
~~Shareholder Engagement on Governance Issues~~		34
	~~Management Proposals to Eliminate Classified Board, to Eliminate~~ ~~Supermajority Voting Provisionsand to Give Shareholders the Ability to Amend Bylaws~~	34
	~~Shareholder Proposals~~	35
	~~Shareholder Recommendations and Nominations for Director Candidates~~	35
~~Ownership of Company Stock~~		36
~~Compensation~~		37
	~~Item~~ 2 - ~~Advisory Vote on Compensation Paid to Named Executive Officers~~	37
	~~Compensation Committee Matters~~	38
	~~Compensation Discussion and Analysis~~	39
	~~Executive Compensation~~	55
	~~CEO Pay Ratio~~	65
~~Audit Matters~~		65
	~~Item~~3 -~~Ratification of~~ ~~the Appointment of~~ ~~the~~ ~~Independent Auditor~~	65
~~Management Proposals~~		67
	~~Item~~4 - ~~Proposal to Amend the Company's Articles of Incorporation to Eliminate the Classified Board~~ ~~Structure~~	67
	~~Item~~ 5 - ~~Proposal to Amend the Company's Articles of Incorporation to Eliminate Supermajority Voting Provisions~~	68
	~~Item 6 - Proposal to Amend the Company's Articles of Incorporation to Give Shareholders the Ability to Amend the Company’s Bylaws~~	69
~~Shareholder Proposals~~		70
	~~Item~~7 - ~~Proposal to~~ ~~Amend the Bylaws to Require an Independent Board Chair~~	70
	~~Item~~8 -~~Proposal to~~ ~~Publish an Annual Report Disclosing Lobbying Activities~~	73
	~~Item~~ 9 - ~~Proposal to Disclose~~ L~~obbying Activities and Alignment with Public Policy Positions and Statements~~	75
	~~Item~~ 10 - ~~Proposal~~ ~~to Report Oversight of Risks Related to Anticompetitive Pricing Strategies~~	78
~~Other Information~~		80
	~~Meeting and Voting Logistics~~	80
	~~Other Matters~~	83
~~Appendix A - Summary of Adjustments Related to the Annual Cash Bonus and Performance Award~~		85
~~Appendix B - Proposed Amendments to the Company's Articles of Incorporation~~		88
~~Appendix C - Proposed Amendments to the Company's Articles of Incorporation~~		91


~~Item 1: Election of Directors~~
~~For further information, see page~~ 11


ü			~~Our board approves and actively oversees our corporate strategy.~~
ü			Our board and board committee agendas are structured to engage our directors in informed reviews of strategic and forward-looking issues, as well as in constructive challenges to management initiatives and programs.
ü			Our board reviews the overall state of our compliance program at least annually and reviews our enterprise-level risks, including related to cybersecurity; our Audit Committee oversees the process by which we identify and create mitigation plans for enterprise-level risks.
ü			Our board and Audit Committee receive regular presentations on cybersecurity from our management as part of their oversight of enterprise-level risks; in addition to regular presentations, management updates our board regarding changes to the broader cybersecurity landscape, as well as significant threats or incidents as they arise.
ü			We have a comprehensive code of business conduct, called The Red Book, which applies to our board and all employees worldwide. This code is reviewed and approved annually by the board, and in 2022 we revised The Red Book training to update our Global Conduct in the Workplace procedure to continue to help ensure that we maintain a respectful, safe, inclusive, and professional workplace.
ü			We have a supplemental code of conduct for our CEO and all members of financial management, in recognition of their unique responsibilities to ensure proper accounting, financial reporting, internal controls, and financial stewardship.
ü			~~The charters of our board committees clearly establish the committees’ respective roles and responsibilities.~~
ü			~~We have an annual cap on director compensation.~~


ü			~~Our board membership is characterized by leadership, experience, and diversity.~~
ü			~~We conduct comprehensive orientation and continuing education programs for directors.~~
ü			~~Our board conducts a robust annual assessment of board performance led by the lead independent director, including an annual assessment of each director.~~
ü			We are committed to maintaining an active and insightful board and seek to balance continuity of experience with fresh perspectives. Currently, eight directors have served on the board for more than five years and five directors have served on the board for five years or less.


ü	~~Each of our current board members other than the CEO is independent (12 of our 13 directors as of the date of this proxy statement).~~
ü	•Lead Independent Director:We have a strong lead independent director empowered with clearly defined responsibilities.
ü	•Independent Committees: All standing board committees are composed solely of independent directors and led by independent committee chairs.
ü	•Executive Sessions:Our board holds executive sessions of the independent directors that are presided over by the lead independent director at every regular board meeting.
ü	•Access to Management & Advisors:Our independent directors actively engage in board meetings, have direct access to management, and, along with our board committees, have discretion to hire independent advisors at the company’s expense.
ü	~~Our independent directors lead the board’s process for selecting the CEO.~~
ü	~~Our Compensation Committee (and, in the case~~ •Conflict of ~~our CEO, in consultation with other independent directors and our external compensation consultant) establishes the compensation for our CEO and other executive officers.~~
ü	Interest Management:Our conflict of interest policy requires disclosures of potential conflicts to Lilly and clarifies when Lilly board service must be disclosed to others. •CEO Selection and Compensation: Our independent directors lead the board’s process for selecting the CEO. Our Talent and Compensation Committee (and, in the case of our CEO,	Information as of the date of this proxy statement.


üin consultation with other independent directors and our external compensation consultant) establishes the compensation for our CEO and other executive officers.
•Refreshment: We are committed to maintaining an active and insightful board and seek to balance continuity of experience with fresh perspectives.
•Robust Annual Assessment: Our board ~~values active shareholder engagement. In response to input from our shareholders, we have put forward for consideration at~~conducts a robust annual assessment of its performance led by the ~~Annual Meeting management proposals to amend our articles~~lead independent director, including an annual assessment of ~~incorporation to eliminate the classified board structure, to eliminate supermajority voting provisions in our articles of incorporation, and to give shareholders the ability to amend our bylaws.~~
ü			~~Our bylaws~~each director. These assessments help provide ~~proxy access rights for shareholders holding at least three percent of our common stock for at least three years to nominate to~~ the board ~~the greater of two directors or 20 percent of our board seats.~~
ü			~~We have a majority voting standard~~with valuable perspectives to drive effectiveness and ~~resignation policy for the election of directors in uncontested elections.~~
ü			~~We do not have a shareholder rights plan ("poison pill").~~
ü			~~We have meaningful stock ownership and retention guidelines for our directors and executive officers to foster alignment with shareholders.~~leadership.


ü			~~Our board has a longstanding commitment to corporate responsibility.~~
ü			~~We have strong governance of corporate political spending and transparent policy engagement and recently enhanced our disclosures related to political and lobbying activities.~~
ü			Our board oversees and maintains ongoing engagement with our Compensation Committee, Directors and Corporate Governance Committee, and senior executives on key political, social, and governance matters, including sustainability and human capital management.
ü			~~We enhanced our environmental, social, and governance sustainability reporting in 2021, including the adoption of additional prevalent reporting frameworks, and established new goals.~~


•Bonus Plan Result: In 2022, the company exceeded its annual cash bonus target for revenue and nearly achieved its target for EPS. We also made significant pipeline advances. For purposes of the bonus, the Talent and Compensation Committee adjusted revenue and adjusted non-GAAP EPS to exclude estimated savings from certain discrete and unplanned performance items. See the CD&A for further discussion of the Eli Lilly and Company Bonus Plan (Bonus Plan).			1.20 Bonus Plan Multiple
•2021-2023 Performance Award (PA) Result:We exceeded the two-year EPS growth target set for our PA program. The PA target is based on expected EPS growth of peer companies over a two-year period. As a result of exceeding the EPS growth target set for our PA program, the PA payout was above target. See the CD&A for further discussion on the PA program.			140% 2021-2023 PA Payout
•2020-2022 Shareholder Value Award (SVA) Result:Our total stock price growth exceeded the target range in our SVA program, which is based on expected large-cap company returns over a three-year period. This performance resulted in a SVA payout above target. See the CD&A for further discussion on the SVA program.			175% 2020-2022 SVA Payout
•2020-2022 Relative Value Award (RVA) Result: The RVA measures Lilly’s relative total shareholder return (TSR) against its peers. Lilly’s TSR performance exceeded the peer median TSR for the 2020-2022 performance period resulting in a payout above target. See the CD&A for further discussion on the RVA program.			175% 2020-2022 RVA Payout


~~Item 3: Ratification of the Appointment of the Independent Auditor~~	~~Management recommendation~~	~~Vote required to pass~~
~~For further information, see page~~ 65	~~Vote FOR~~	~~Majority of votes cast~~


~~Item 4: Proposal to Amend the Company's Articles of Incorporation to Eliminate the Classified Board Structure~~	~~Management recommendation~~	~~Vote required to pass~~
~~For further information, see page~~ 67	~~Vote FOR~~	~~80% of outstanding shares~~


~~Item 5: Proposal to Amend the Company's Articles of Incorporation to Eliminate Supermajority Voting Provisions~~	~~Management recommendation~~	~~Vote required to pass~~
~~For further information, see page~~ 68	~~Vote FOR~~	~~80% of outstanding shares~~


~~Item 6:~~ ~~Proposal to Amend the Company's Articles of Incorporation to Provide Shareholders the Ability to Amend the Company’s Bylaws~~	~~Management recommendation~~	~~Vote required to pass~~
~~For further information, see page~~ 69	~~Vote FOR~~	~~Majority of votes cast~~


~~Item 7: Proposal to Amend the Bylaws to Require an Independent Board Chair~~	~~Management recommendation~~	~~Vote required to pass~~
~~For further information, see page~~ 70	~~Vote AGAINST~~	~~Majority of votes cast~~


~~Item 8: Proposal to Publish an Annual Report Disclosing Lobbying Activities~~	~~Management recommendation~~	~~Vote required to pass~~
~~For further information, see page~~ 73	~~Vote AGAINST~~	~~Majority of votes cast~~


~~Item 9: Proposal to Disclose Lobbying Activities and Alignment with Public Policy Positions and Statements~~	~~Management recommendation~~	~~Vote required to pass~~
~~For further information, see page~~ 75	~~Vote AGAINST~~	~~Majority of votes cast~~


~~Item 10: Proposal to Report Oversight of Risks Related to Anticompetitive Pricing Strategies~~	~~Management recommendation~~	~~Vote required to pass~~
~~For further information, see page~~ 78	~~Vote AGAINST~~	~~Majority of votes cast~~



ONLINE	BY TELEPHONE	BY MAIL	AT THE MEETING
Visit the website listed on your notice, proxy card, or voting instruction form	Call 1-800-690-6903 ~~using a touch-tone phone~~ and follow the instructions provided	If you received or requested paper copies of your proxy materials, sign, date, and return your proxy card or voting instruction form	Attend the Annual Meeting, online by live webcast at virtualshareholdermeeting.com/LLY2023 on Monday, May 1, 2023, at 8:30 a.m. EDT


Our directors are elected by the company’s shareholders to oversee the actions and results of the company’s management. The Directors and Corporate Governance Committee, together with our lead independent director, regularly assesses the effectiveness of the board to ensure that directors reflect the skill sets, experiences, diverse viewpoints and characteristics necessary to lead our complex and evolving business. Execution of our robust assessment and refreshment process, guided by key governance guidelines, has resulted in a mix of directors that balance experienced institutional knowledge and fresh perspectives, and reflect a broad range of backgrounds and viewpoints.


			In making its independence determinations, the board considered that Ms. Walker is affiliated with the Goldman Sachs Group, which the company may use for advisory, investment banking or similar services from time to time. In addition, the board considered that some of the current non-employee directors are affiliated with companies or entities to which the company sold products or made payments, or from which the company purchased products or services during the year. Drs. Baicker, Kaelin, Hedley, and Runge are employed at medical or academic institutions with which the company engages in clinical research,


Diversity: The board strives to achieve diversity in the broadest sense, including persons diverse in geography, gender, ethnicity, age, and experience. Although the board does not establish specific diversity goals or have a standalone diversity policy, the board’s overall diversity is an important consideration in the director selection and nomination process. The Directors and Corporate Governance Committee assesses the effectiveness of board diversity efforts in connection with the annual nomination process as well as in new director searches. The company’s current 13 directors range in age from 50 to 72 and include five women and six minority group members (MGM).


7.8 Years Average Director Tenure						Tenure:Our director composition reflects a mix of tenure on the board, which provides an effective balance of historical perspective and an understanding of the evolution of our business with fresh perspectives and insights. Mr. Tai, who joined the board in 2013, will retire from the board following the Annual Meeting.


2023 Nominees

William G. Kaelin, Jr., M.D. Independent Director	David A. Ricks Chair of the Board	Marschall S. Runge, M.D., Ph.D. Independent Director	Karen Walker Independent Director


			~~Ralph Alvarez~~ ~~Age: 66, Director since 2009,~~ ~~Board Committees:~~ ~~Audit; Compensation (chair)~~


~~PUBLIC BOARDS~~	~~PRIOR PUBLIC BOARDS~~	~~MEMBERSHIPS + OTHER ORGANIZATIONS~~
~~Lowe's Companies, Inc.; Traeger, Inc.; First Watch Restaurant Group, Inc.~~	~~Dunkin’ Brands Group, Inc.; McDonald's Corporation;~~ ~~KeyCorp; Skylark Co., Ltd.; Realogy Holdings Corp.~~	~~University of Miami President's Council~~
~~CAREER HIGHLIGHTS~~
~~• Advent International Corporation,~~ ~~a leading global private equity firm~~
~~- Operating Partner (2017 - present)~~
~~• Skylark Co., Ltd.,~~ ~~a leading restaurant operator in Japan~~
~~- Chairman of the Board (2013 - 2018)~~
~~• McDonald's Corporation,~~ ~~a leading global foodservice retailer~~
~~- President and Chief Operating Officer (2006 - 2009)~~
~~QUALIFICATIONS~~
Through his positions at Skylark Co., Ltd. and McDonald’s Corporation, as well as with other global restaurant businesses, Mr. Alvarez has extensive experience in consumer marketing, global operations, international business, and strategic planning. Mr. Alvarez is an audit committee financial expert based on his public company experience, including his prior audit committee service on the Lowe’s board of directors. His international experience includes a special focus on Japan and emerging markets. He also has extensive corporate governance experience through his service on other public company boards as well as several private company boards.


			~~Kimberly H. Johnson~~ ~~Age: 49, Director since 2021,~~ ~~Board Committees:~~ ~~Compensation; Ethics and Compliance~~