Blue Shield top executives’ pay changed little in 2011
Nonprofit insurer Blue Shield of California said its outgoing chief executive earned $4.6 million last year, off slightly from a year earlier, as all insurance companies faced new government rules on how customer premiums are spent.
Bruce Bodaken, Blue Shield’s longtime chairman and chief executive who plans to retire at year end, earned $38,348, or 1%, less than he did in 2010. The San Francisco company declined to comment on the value of Bodaken’s retirement pay and benefits or to reveal the pay package of his successor. Paul Markovich, chief operating officer, will take over as CEO Jan. 1.
Separately, Blue Shield said Friday that it had resolved a lengthy contract dispute with Ronald Reagan UCLA Medical Center and other hospitals in the UC health system over reimbursements for medical care. Effective Sept. 1, UCLA’s hospitals in Westwood and Santa Monica will return to the Blue Shield network. The previous contract with UCLA expired Dec. 31.
Blue Shield disclosed the 2011 compensation for its 10 highest-paid executives without any names attached in rate filings with the California Department of Insurance. The state began requiring health insurers last year to report executive compensation to help regulators better examine premium increases.
The compensation for those 10 Blue Shield executives was $14 million last year, nearly unchanged from 2010. A spokesman for Blue Shield said the compensation was similar because “we made comparable progress on our goals for the year.” He said new rules under the federal Affordable Care Act had no bearing on the executive pay.
The new limits on how much of customer premiums can be spent on administration, salaries and expenses went into effect last year. As a result, last month Blue Shield issued $10.8 million in rebates to customers because its spending on medical care as a percentage of premiums collected fell just short of a government threshold.
In the first quarter of 2012, Blue Shield reported revenue of $2.5 billion and a profit of $138 million. It had annual revenue of $9.5 billion last year.
The other big nonprofit health insurer in California, Kaiser Permanente, with nearly 7 million customers, hasn’t yet reported 2011 compensation for its CEO, George Halvorson. He earned $7.7 million in 2010, according to the company’s federal tax filing.
Kaiser also runs 37 hospitals and contracts with several large medical groups in California and eight other states. In 2011, it had operating revenue of $47.9 billion.
Woodland Hills insurer Health Net Inc. paid CEO Jay Gellert $10.3 million last year in salary, stock awards and other compensation. The company said the 35% increase over 2010 was driven largely by changes in stock awards and the value of his retirement plan.
WellPoint Inc., which owns Anthem Blue Cross in California, paid its chief executive, Angela Braly, $13.3 million in salary, stock awards and other compensation for 2011, down 2% from the previous year.
Stephen Hemsley, chief executive of the nation’s largest health insurer, UnitedHealth Group Inc., earned $13.4 million in salary, stock and other compensation last year, up 24% from 2010.
