WellPoint CEO received 3 percent raise last year
Friday, March 18, 2011; 7:12 PM
WASHINGTON -- The president and CEO of health insurer WellPoint Inc. received a 3 percent boost in total compensation in 2010 even as the company's profit and enrollment numbers slipped during a transitional year for U.S. health care companies.
The Indianapolis-based insurer awarded Angela Braly a total pay package worth $13.4 million up from $13.1 million in 2009. Wellpoint disclosed the compensation - which includes salary, bonus and other awards - in a filing with federal financial regulators late Friday.
The insurer's profit fell sharply last year compared with 2009, when the sale of its NextRx subsidiary contributed $2.2 billion in after-tax income. Medical enrollment also slid 1 percent last year to 33.3 million members.
In the company's filing, Wellpoint's board of directors highlighted accomplishments by management, including reducing general expenses by 3 percent. Directors also pointed out that Braly and other executives have not received a raise to their base salary since 2008.
Braly's annual salary was flat at $1.1 million, though her performance bonus increased more than 80 percent to $2.7 million.
The bulk of her compensation came in the form of stock awards and options, both of which declined from 2009. Braly received $5.4 million in awards and $3.6 million in options, down 13 percent and 10 percent from 2009, respectively.
A Wellpoint spokeswoman stressed Friday that the company's pay formula rewards executives for improving enrollee health, boosting share prices and meeting other pre-set goals.
"For the CEO, almost 90 percent of total target compensation is based on company performance and is tied to meeting established goals," Kristin Binns said in a statement.
Braly also received more than $591,000 in various "other compensation," including over $281,000 for personal security. Those funds paid for ramped-up security measures, "including personal security during travel, a security-enhanced vehicle and in-home security," according to the company filing.
Braly and the company she heads became a focal point for criticism during the health care overhaul last year, after complaints spread about plans to increase premiums by around 25 percent for individual insurance policies sold by the insurer's Anthem Blue Cross subsidiary in California.
The company later backed off that rate hike.
Shares of WellPoint and other insurers tumbled at the start of 2010, after Congress passed the health care overhaul, which aims to cover millions of uninsured people but will impose a host of taxes and restrictions on insurers. However, the sector's stocks have mostly climbed since last summer, as the overhaul started to unfold and investors saw minimal impact from the first few provisions.
WellPoint's shares slid 2 percent overall to close 2010 at $56.86 per share. That compares with a 12.8 percent increase recorded by the Standard & Poor's 500 index.
Health care use that slowed more than insurers anticipated helped the managed care sector last year. The flu season was mild, especially compared to the final months of 2009, when the swine flu scare hit. Those factors helped WellPoint and other big insurers beat analyst expectations and store cash over the final months of 2010.
Braly has served as CEO of WellPoint since 2007 and replaced Larry Glasscock as chair last March.
Indianapolis-based WellPoint is the largest publicly traded health insurer based on membership. It operates Blue Cross Blue Shield plans in 14 states and Unicare plans in several others.
The Associated Press executive compensation formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The calculations don't include changes in the present value of pension benefits, making the AP total different in most cases from the total reported by companies to the Securities and Exchange Commission.