U.S. Healthcare Founder Quits Aetna’s Board

Leonard Abramson, who made more than $900 million when he sold U.S. Healthcare to Aetna Inc. in 1996, is resigning from Aetna’s board amid questions his presence was a conflict of interest.

Some Aetna shareholders and corporate governance experts had criticized Abramson for having business dealings with the company while he served on its board. That’s a problem, they say, because board members must be independent of the public companies they serve so they are perceived as acting in the best interest of shareholders.

Since the 1996 sale of the managed-care company, of which he was majority shareholder, Abramson has received $3 million a year to consult for Aetna. His two daughters and son-in-law also were paid millions of dollars for doing business with the insurer, according to financial statements the company has filed with the Securities and Exchange Commission.

Officials at Hartford, Conn.-based Aetna, the nation’s largest health insurer, reject the conflict-of-interest charge, pointing out that the Abramsons’ compensation was part of the $8.9-billion deal to buy U.S. Healthcare. They also say no conflict exists because the business dealings with the Abramsons are disclosed to shareholders.

Abramson, 67, a former taxi driver and pharmacist who founded U.S. Healthcare in 1982 and was its chief executive, did not return calls seeking comment. Aetna officials say Abramson, who lives in Jupiter, Fla., never talks to the media.

In a statement released late Tuesday, Abramson said he was too busy to continue serving on Aetna’s board.

Aetna shares fell 63 cents to close at $67.50 on the New York Stock Exchange.