Last year we posted the Total Compensation for a number of Health Insurance Company CEOs for 2007 & 2008. Those numbers, culled from the companies’ SEC filings (Schedule 14A) appear immediately below. Below that are the numbers for 2009, courtesy of FierceHealthcare.com.
As you can see, the year has brought decreases for some CEOs (but not all). One wonders, discretion being the better part of valor, if the clamor for health care reform in full force during the course of 2009 counseled caution –at least for the time being– with regard to executive compensation. If the timing for further compensation has merely been adjusted so as to backload payments until after the health care reform debate is settled? As the clamor for health care reform has turned into a political clamor for reform of health care reform, I wonder what the 2010 numbers will be. If, perhaps, the wait for the Supreme Court to settle the individual mandate question– when insurers will know whether or not a country full of customers will be ushered into their pool, will influence compensation–and the timing of its public display. Either way, the numbers for 2009 pretty much speak for themselves. And not everyone on this list can be accused of prudence– Ms. Angela Braly of WellPoint received total compensation of $13,108,198 in 2009– which is more than $3 million more than her compensation the year prior. This, of course, is the same Angela Braly who evoked the wrath of many, including Secretary Sebelius, by raising premiums as much as 39% in California amidst allegations of systemic insurance recissions for women suffering from breast cancer. It should be noted, however, that part of her total compensation figure for 2009 included additional security, “in light of growing concerns regarding the safety of Ms. Braly.”
Last year we noted with some amazement that
…it has struck me that Aetna’s Ronald Williams received $24,300,112 last year. That’s $467,309.85 per week. That’s a house. Maybe not a house that Mr. Williams would live in, but a house nonetheless. The man makes a house a week. And interestingly enough, if Mr. Williams were to eschew the purchase of a house on any given week and instead look to deposit the money in a bank– in order to remain FDIC insured (up to $250,000)– he would actually need to open more than one account–every week. Lest we lament the fate of the other CEOs on the list, in 2008 Ms. Braly had to get by on $189,311.76 per week, and Mr. Hemsley had to somehow manage on $62,327.73 per week (but perhaps he was able to save a little from last year when he made $253,164.02 per week).
We’ll leave Mr. Williams of Aetna alone this year, as his compensation dwindled to a mere $18,058,162 in 2009. Though not particularly inclined to hear Mr. Williams’ recession story, he had to make ends meet on $347,272 per week.
I am somewhat interested in Mr. Allen Wise of Coventry Health Care though. Mr. Wise received $17,427,789 in 2009. His first year at the helm, some of that is signing bonus. Nevertheless, it amounts to an astounding 7% of Coventry’s net income. Yes, 7%.
As my own car, a 2003 Ford Crown Victoria, has recently exceeded 100,000 miles, I thought it might be interesting to look at this total compensation in terms of cars. More specifically, my car. I like my car, one of the last of the large American rear wheel drive sedans, and expect (knock on wood) that I’ll be driving it for some time to come. It’s paid off. It came with a full leather interior and eight cylinders of pure speed. In 2009, the list price for the car brand new was $29,115. I’ll suppose (perhaps foolishly, but hypothetically) for a moment that Mr. Wise lacked my haggling skill but liked and wanted the Crown Victoria– en masse.
In 2009 Mr. Wise’s could have bought 11.5 brand new Ford Crown Victorias per week, or 599 for the year. Considering you can’t buy a new car in New Jersey on a Sunday, that’s almost 2 per day. And in case you were wondering, $17,427,789 per year comes out to $47,747 per day. If he tired of the Crown Vic, though anachronistic, he could also purchase a 2011 Mercedes Benz SLK 300 Roadster— each day.
Res Ipsa Loquitur.
Ins. Co. & CEO With 2007 Total CEO Compensation
- Aetna Ronald A. Williams: $23,045,834
- Cigna H. Edward Hanway: $25,839,777
- Coventry Dale B. Wolf : $14,869,823
- Health Net Jay M. Gellert: $3,686,230
- Humana Michael McCallister: $10,312,557
- U.Health Grp Stephen J. Hemsley: $13,164,529
- WellPoint Angela Braly (2007): $9,094,271
L. Glasscock (2006): $23,886,169
Ins. Co. & CEO With 2008 Total CEO Compensation
- Aetna, Ronald A. Williams: $24,300,112
- Cigna, H. Edward Hanway: $12,236,740
- Coventry, Dale Wolf: $9,047,469
- Health Net, Jay Gellert: $4,425,355
- Humana, Michael McCallister: $4,764,309
- U. Health Group, Stephen J. Hemsley: $3,241,042
- Wellpoint, Angela Braly: $9,844,212
Ins. Co. & CEO With 2009 Total CEO Compensation
- Aetna, Ronald A. Williams: $18,058,162
- Coventry, Allen Wise: $17,427,789 (took over from Dale Wolf)
- WellPoint, Angela Braly: $13,108,198
- United Health, Stephen Helmsley: $8,901,916
- Cigna, David Cordoni: $6,593,921 (took over from CEO H. Edward Hanway)
- Cigna, H. Edward Hanway: $18,800,000
- Humana, Michael McCallister: 6,509,452
- Health Net, Jay Gellert: $3,643,342