- Eli Lilly CFO Joshua Smiley resigned after a company investigation found "consensual though inappropriate" personal communications between him and certain employees, the biopharma said Tuesday.
- Smiley worked at Lilly for more than two decades, holding a variety of financial roles before being tapped in 2017 to replace longtime CFO Derica Rice. He will now be succeeded by Anat Ashkenazi, who joined Lilly in 2001 and most recently served as CFO of Lilly Research Laboratories.
- Lilly said it recently become aware of allegations that Smiley had an inappropriate personal relationship with an employee. Following an independent investigation, leadership concluded that Smiley's behavior "exhibited poor judgment" and did not align with Lilly's core values. Smiley's conduct "was not related to financial controls, financial statements or any other business matters or judgments," the company noted.
At large pharmaceutical companies, C-suite departures are often quiet affairs. Small press releases or earnings call accolades thank the executives for their service and wish them well as they head either for another opportunity or retirement.
Yet, one big exception arises when company codes are broken. In early 2019, for example, biotech Vertex announced it had fired Ian Smith, its COO and interim CFO, because of "personal behavior" that violated its code of conduct. Analysts saw the firing as a significant shake-up for Vertex, given that Smith had been the company's CFO for 15 years and was considered integral to its burgeoning success.
Though tight-lipped on details, Vertex had said its decision followed an independent investigation and was unrelated to the company's financial and business performance.
Similarly, Lilly said Smiley is leaving because of personal conduct unrelated to company financials.
Smiley came into the CFO role at a challenging time for Lilly. The company's portfolio of diabetes drugs was under pricing pressure, while its second-best seller, the erectile dysfunction pill Cialis, was close to losing patent protection. Against that backdrop, Lilly disclosed plans to cut about 8% of its global workforce. It recorded a 6% drop in annual revenue in 2018, though the business has been on the rebound with the help of newer products like Trulicity and Taltz.
Ashkenazi will take the reins immediately. Under the terms of a separation agreement, Smiley will be available to help with the transition.
Ashkenazi has been at Lilly for nearly 20 years. She has held the CFO role and other finance leadership positions in several of the company's global business areas. She has led finance for Lilly Research Laboratories since 2016.
In that role, she supervised the CFOs of the company's commercial businesses and other units, including research and development, manufacturing and quality, and general and administrative. Ashkenazi has also been in charge of the corporate strategic planning team and business transformation office.
In a statement, Lilly said it "holds all employees accountable to its core values and strongly believes its executive officers carry an even higher burden in ensuring those values are upheld. Mr. Smiley did not meet that standard."
On Wednesday, the company announced it wouldn’t try to claw back Smiley's past pay, but will be reclaiming his 2020 bonus, and other incentive compensation, per its "executive conduct and recuperation of funds" rules, according to the Wall Street Journal. The company doesn't plan to claw back the past pay because Smiley's departure was unrelated to financial controls or statements.