CFO had humble start: Eli Lilly veteran lands in high-profile, high-pressure role

Derica Rice started figuring out his future the day he glanced in his mother’s refrigerator and actually paid attention to the insulin vials stored there.

Eli Lilly and Co.’s new chief financial officer recalled being home at the end of a summer. He was fresh off an internship with another company and was in casual job talks with Lilly representatives.

He had seen the clear vials his mother, Inez-a Type II diabetic-stored in her fridge, but he never read the name stamped on them. When he finally did, a revelation followed.

“Lilly provided me an extra 25 years with my mother that otherwise would not have been possible,” he said.

That connection helped steer Rice toward a finance job with the Indianapolis drugmaker in 1990. More than a decade and a half later, the Alabama native finds himself working in one of the most demanding executive posts in corporate America at the relatively young age of 41. In February, Lilly named Rice senior vice president and CFO, replacing Charles Golden, who retires at the end of this month. Rice, who had been a company vice president and controller, is the highestranking black executive at Lilly.

The new job also comes with a new paycheck: a $712,000 salary and a bonus that could top $534,000.

Not a bad career track for a selfdescribed “dirt poor” grad student who once chose an internship because it offered a $5,000 scholarship and a free computer.

A roundabout path

Rice had no grand plan to land in Lilly’s executive suite when he started working there. He just needed a professional challenge and a chance to buy a few years to “decide what I want to be when I grew up.”

Then, as he noted, those two or three years turned into 16.

But to even reach that point, Rice had to veer from the career path that led him out of Decatur, Ala.

Rice graduated second in his high school class and became the first person in his family to attend college. He landed an academic scholarship to GMI Engineering & Management Institute in Michigan, where he studied electrical engineering.

In his last year there, Rice went through a change of heart while watching the World Series with his roommates. The group decided engineering bored them.

“I knew more about what I didn’t want to do at that time, versus what I wanted to do,” he said.

Continuing education

He thought he might find some answers in graduate school, so he got a fellowship to earn an MBA in finance from Indiana University.

His first name then led him to his future wife.

The program started with an orientation in St. Louis, and organizers assigned Rice to an all-female hotel suite after mistaking his first name as a woman’s. Rice said family friends he has only met twice suggested the name Derica to his parents.

“I’ve been answering to Miss Rice since I was probably 13,” he said.

Rice quickly became a hero among his male colleagues while living with five women in a suite that week. He also developed a friendship with one of those suitemates that later led to marriage. Robin Nelson-Rice also works at Lilly, as a market research manager.

The Lilly executive made a positive impression on more people than his wife during grad school.

Allyn Curry works with about 600 students each year on job searches in IU’s graduate career services office. Sixteen years later, Rice still stands out.

“He’s one of those people that you meet, and it’s not like you’re meeting a total stranger,” Curry said. “He just had that warm, positive personality.”

He remembers several companies being interested in Rice.

“You could tell he had something special,” Curry said.

‘Shake every hand …’

Even with two college degrees and years of business experience behind him, Rice points to his mother as the smartest person he ever knew. He carried armfuls of her wisdom with him as he climbed the proverbial corporate ladder .

Inez Rice raised seven children by herself on a middle school custodian’s paycheck. Derica’s father, King, died from a stroke when Derica was 11.

Rice said he always told people he “grew up very rich; we just didn’t have a lot of money.” What his mother did have was a strong disciplinary hand and several life lessons to share with her family.

“Shake every hand you meet. You may never know who you may have to beg for a piece of bread one day,” he said, reciting one of her favorite messages.

“Every shut eye ain’t sleep, and every goodbye ain’t gone,” went another. Rice said that one taught him to look beneath the surface of situations and read people “if you really want to understand life.”

Rice describes himself as a basketball junkie, someone who’d watch a game “if your grandmother was playing.” But family provides his true source of comfort.

Both his parents have passed away, so that comfort comes from his siblings; his wife; and their three sons, Solomon, 8, and 7-yearold twins Malachi and Isaiah.

“That’s where I go … people talk about stress in life; I don’t often get too stressed at work,” he said. “If I’m stressed, it’s usually with my home life, just dealing with things there because it matters a great deal to me.”

A good source of comfort might be needed for his new job, one that many say has grown increasingly demanding in recent years.

The promotion

Rice began his Lilly career as an international treasury associate in finance. He moved on to sales and advanced into management. He served as director of finance for Lilly Canada and then general manager of Lilly’s United Kingdom affiliate before becoming executive director of finance for Lilly’s European operations.

The latest promotion plants him in a hot seat, said Nell Minow, editor of The Corporate Library, a Maine-based independent research firm that specializes in corporate governance.

“[CFO is] a much more high-visibility, high-vulnerability, high-energy job than it used to be,” she said.

Experts say part of that stems from Congress’ 2002 passage of the Sarbanes-Oxley Act, which tightened financial oversight in the wake of high-profile corporate scandals at Enron Corp. and elsewhere.

CFOs now work directly with board audit committees and other board members, instead of communicating primarily through the CEO, Minow added.

“I think there’s increased focus on integrity of the numbers, which means there’s increased pressure to get the numbers correct,” said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware. “There’s a lot more scrutiny of the accounting function than there was 10 years ago.”

Rice’s age seems “a little on the younger side” for such a position, Elson said. But he added that the executive has good experience, and he’s following the typical path to CFO through the Controller’s Office.

“They’re usually quite experienced before they become CFO,” he said. “It’s not a position you award lightly.”

Lilly knows that.

Building a career

Rice spent years working with the “sharp edge” of Lilly’s business, which includes sales force and field-level operations, said outgoing CFO Charles Golden.

That experience proved attractive when Lilly looked to replace Golden, 59, who joined Lilly in 1996 after a 26-year career at General Motors Corp.

“In the CFO position, you really have to understand the business in order to determine how well you’re doing,” Golden said. “It’s more than just what shows up on your income statement or your balance sheet.”

The variety on Rice’s resume outweighs any concerns about his tenure with the company.

“If he had come here and spent 15 years just on the controller’s staff in central office, I’d be very worried,” Golden said. “But he’s had a lot of good experience.”

Plus, Rice and Golden spent the past three years working together. Golden involved his protégé in conference calls and other interactions with Wall Street analysts. The two had numerous talks about how the business works, discussions Rice coined “fireside chats.”

“Charlie … allowed me to ask lots of stupid questions,” Rice said. “It’s as important to know what it feels like in the role as it is to know practically and logistically what it’s like to operate in the role.”

The importance of diversity

Rice plans to keep his role on Lilly’s diversity leadership council, which focuses on making sure the company’s work force reflects the marketplace it serves. He said he could probably count the number of black people in management on two hands when he started working for Lilly.

Today, he said, the total “far exceeds that.” But the work isn’t finished.

“It just means that hopefully we’re a mile ahead of where we started,” he said. “Our goal tomorrow will have to be to continue to progress an additional mile.”

He’s a firm believer in the need for a diverse work force in order to serve Lilly’s worldwide patient base. In other words, an employee base that knows how to match the right drug at the right dose to the right patient, as the company mantra goes.

“Our diversity goals are very much linked to our business strategies,” he said.

Even so, Rice said he’s proud to be the highest-ranking black executive at Lilly, mainly because it sets an example “for others who may have questioned whether that goal was actually achievable for themselves.”

But he also stressed that he walks through Lilly’s door every day not as a black man but as another employee focused on the company mission of helping patients.

“That’s how I start and end my day,” he said.