Price Is Named Co-CEO to Ease FHP Transition
As a step in the transition of leadership, FHP International Corp. on Wednesday named Chief Operating Officer Wescott W. Price III to the additional position of co-chief executive officer, effective by July 1.
The Fountain Valley-based company, which operates a health maintenance organization, said that Price will share the CEO’s job with founder and chairman L. Robert Gumbiner until mid-November. Price will then become the firm’s sole chief executive.
The 67-year-old Gumbiner plans to retire from day-to-day operations but will remain as chairman of FHP International and its operating subsidiary, FHP Inc. He will also serve as a consultant to the company, which he founded in 1961.
Larry Selwitz, a health-care analyst at Cruttenden & Co. in Newport Beach, said the creation of a co-chief executive position is a mechanism for an orderly transition in FHP’s management. He said the company has been grooming Price for the position.
Gumbiner “hasn’t been involved in the day-to-day operations for some time now,” Selwitz said. “He has been more involved in (corporate) strategy.”
Price, 50, joined FHP in 1981 as a senior vice president. In 1987, he was named to succeed Gumbiner as president and chief operating officer of FHP Inc. and was appointed chairman of the company’s executive management committee.
In 1985, Gumbiner, who is FHP’s largest shareholder with an 11.7% stake, led an 18-member employee group that acquired the firm after it had been converted from a nonprofit to a for-profit concern. In 1986, the new owners took the company public.
FHP’s revenue has jumped from $500,000 in its first year in business to nearly $700 million for its fiscal year that ended June 30, 1989. FHP has 500,000 members, 7,000 employees, and 45 medical facilities.
FHP EXECUTIVES TO SHARE TOP JOB
L. ROBERT GUMBINER
POSITION: Chief executive officer, FHP International Corp. and its subsidiary, FHP Inc. Largest shareholder, 11.7% stake
AGE: 67
RESIDENCE: Long Beach
FAMILY: wife and four children, three of whom are employees of the company
EDUCATION: M.D., Indiana School of Medicine
BACKGROUND:
* Founded FHP in 1961
* Led employee group that acquired FHP in 1985 after it had been converted to a for-profit concern
* Took firm public in 1986.
WESTCOTT W. PRICE III
POSITION:President of both companies, he will succeed to the CEO position.
AGE:50
RESIDENCE: Rolling Hills
FAMILY: wife and three children.
EDUCATION: B.S., marketing, University of Colorado, MBA, University of Southern California. BACKGROUND:
* President of William Flagg restaurant chain for six years.
* Started at FHP in 1981 as senior vice president.
* In 1987, he was named to succeed Gumbiner as president and chief operating officer of FHP.
