ELI LILLY AND COMPANY | Independent Chair at ELI LILLY AND COMPANY

Status
Filed
Previous AGM date
Resolution details
Company ticker
LLY
Lead filer
Mercy Investment Services, Inc.
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Independent board
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Health Care
Company HQ country
United States
Resolved clause
RESOLVED : Shareholders request the Board of Directors adopt as policy, and amend the bylaws as necessary, to require henceforth that the Chair of the Board of Directors, whenever possible, be an independent member of the Board. This independence policy shall apply prospectively so as not to violate any contractual obligations. If the Board determines that a Chair who was independent when selected is no longer independent, the Board shall select a new Chair who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as Chair. This policy would be phased in for the next chief executive officer (CEO) transition.
Whereas clause
We believe: The role of the CEO and management is to run the company. The role of the Board of Directors is to provide independent oversight of management and the CEO. There is a potential conflict of interest for a CEO to have a non-independent director act as Chair. In August of 2025, the state of Texas sued for allegedly bribing and inducing medical providers to prescribe its most profitable drugs, including the high-demand GLP-1 medications. These inducements were designed to steer providers toward prescribing Eli Lilly?s drugs [3] . In our view, shareholders are best served by an independent Board Chair who can provide a balance of power between the CEO and the Board. Taking this step is in the long-term interests of shareholders and will promote effective oversight of management. As of 2024, approximately 40 percent [1] of S&P 500 firms had an independent chair. ISS reported in September 2025 that 81 percent [2] of investors responding to its policy survey indicated that an independent chair is their preferred model. Pharmaceutical companies are particularly in need of effective and unconflicted oversight because of the industry?s high legal and regulatory risks related to product safety and the industry?s commercial practices. Eli Lilly is not immune to litigation and regulatory attention. An ongoing battle between Michigan and the company continues. The state is trying to investigate Eli Lilly?s pricing practices around insulin; these proceedings go back to 2022 and continue to make news even in November of 2025 [4] . Eli Lilly is one of three pharmaceutical companies named as defendants in a lawsuit filed July of this year on behalf of the University of Pennsylvania and its health system. The suit alleges 20 years of price fixing on drugs that treat diabetes, like insulin. The risk of lawsuits, sustained public controversy and regulatory intervention, whether ultimately found to be justified or not, are strong arguments for the need for continuous, effective and unconflicted board oversight of corporate management. In order to ensure that our Board can provide rigorous oversight for our Company with greater independence and accountability, we urge a vote FOR this shareholder proposal. [1] https://www.conference-board.org/publications/Board-Practices-and-Composition-2024-Edition [2] https://www.issgovernance.com/file/policy/active/policy-survey-summary-2025.pdf [3] https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-sues-big-pharma-drug-manufacturer-eli-lilly-bribing-providers-prescribe [4] https://www.michiganpublic.org/criminal-justice-legal-system/2025-11-06/michigan-supreme-court-hears-arguments-in-eli-lilly-insulin-case

DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.