Lilly CEO Profits from stock option, picking up more than $4 million in one move

Eli Lilly's CEO exercises option for 80,000 shares;
transaction by Taurel represents $4.1 million gain

Publisher's Note: In the same time that Eli Lilly was cutting supplies of its products to Canada and American seniors, fighting law suits on a number of fronts, running millions of dollars worth of unnecessary TV commercials, its CEO was profiting from stock options that could only be dreamed of...note the reference to the $1 salary one year. We will be researching to see what other compensataion Taurel was provided that year. And, of course, we regret that last year he had to limp along on $2.8 million salary and that his holdings are worth only slightly more than $45 million.

The option was granted at a stock price of $14.66, and because Lilly's share price since has climbed, Taurel realized a gain of $4.09 million, Lilly spokeswoman Terra Fox said. The gain was measured based on Tuesday's closing Lilly share price of $65.80.

Lilly's executive stock options take three years to vest, during which time they may not be exercised, and they expire in 10 years, Fox said. Taurel had until October to act on the option on the 80,000 shares.

Company rules also bar Taurel from selling newly acquired shares for a year.

This week's transaction boosts Taurel's Lilly share holdings to 688,181, with many of the shares owned indirectly through his children and through trusts or partnerships.

In recent years, Lilly's board has tied executive compensation more closely to company performance. Taurel's compensation last year was $2.8 million.

Lilly's share price dropped below $50 in 2002 after the U.S. patent on its former top-selling drug Prozac expired, leading to the loss of much of its sales to generic competition. Taurel voluntarily took a $1 salary that year.

The stock price since has been driven higher by the launch of several new drugs, including the antipsychotic Zyprexa and other established products.