WellPoint hikes CEO’s pay package
WellPoint Inc. revealed Friday that it boosted its chief executive’s compensation 51% last year, even as the health insurance giant prepared massive rate increases in California that embroiled it in a national controversy over skyrocketing health insurance costs.
The proposed rate increases of up to 39% in individual policies turned the insurer into a flash point in the healthcare overhaul battle, breathing new life into President Obama’s effort at a crucial time in the debate.
Chief Executive Angela F. Braly saw her total compensation shoot to $13.1 million, from $8.7 million a year earlier, according to a filing with the Securities and Exchange Commission. At least three other WellPoint executives got compensation increases of as much as 75%.
The hefty packages come as WellPoint’s California subsidiary, Anthem Blue Cross in Woodland Hills, seeks double-digit rate increases for many of its 800,000 members who buy individual policies.
Anthem delayed the hikes until May 1 amid an outcry from policyholders, consumer groups, state regulators, members of Congress and the Obama administration.
California policyholders sharply criticized the WellPoint pay, complaining that they are subsidizing generous packages for millionaire executives.
“It’s unconscionable,” said Mark Weiss, a Century City podiatrist whose Anthem policy will jump 35%. “How much more does somebody need?”
Indianapolis-based WellPoint defended the pay increases, saying they reflected the company’s overall positive performance in 2009. Its stock price rose 38.4% last year to $58.29, from $42.13 in 2008.
The company said compensation for its top executives was at or below the median for comparably sized companies. Premiums are being driven up by rising healthcare costs that are beyond its control, a spokesman said.
“WellPoint wants to attract and retain top talent,” said spokesman Jon Mills. “In order to be the best, to be innovative, to continue delivering the best service, we do have to retain the best quality.”
He added: “We are in no way trying to inflate the salaries and compensation figures but trying to maintain a high level of talent at the organization.”
The bulk of Braly’s increase came from $6.2 million in restricted stock, up from $2.4 million a year earlier. She also got a $1.5-million performance bonus, compared with $73,810 in 2008.
Braly’s salary inched up 1% to $1.1 million. She got stock options worth $4 million, down from $4.9 million in 2008, according to the filing.
Braly also got $292,036 in other compensation, including $150,907 for security-related improvements to her home and car, and personal security when she traveled. The security steps were taken “in light of growing concerns regarding the safety of Ms. Braly and her family as a result of the national healthcare debate,” according to the filing.
The pay of other WellPoint executives also jumped sharply, according to the document.
Finance chief Wayne DeVeydt took home $7.2 million, up from $4.1 million in 2008. Ken Goulet, the head of WellPoint’s commercial business unit, got $4.4 million, up from $2.7 million. Dijuana Lewis, the head of its comprehensive health solutions unit, got $4.5 million, up from $2.7 million.
The pay hikes at WellPoint come at a time when overall CEO compensation has been falling slightly amid the recession and a public furor over executive pay levels.
A survey this week of 200 large companies by the Hay Group, a management consulting firm, showed average CEO pay decreasing 0.9% to $6.95 million last year. It was the second-straight annual drop, according to the firm.