Receiving little press attention over the Easter weekend, filings with the Security and Exchange Commission on April 2 revealed that WellPoint Inc. CEO Angela Braly received a boost in total compensation of more than fifty one percent in 2009. Specifically, Braly’s compensation rose from $8.7 million in 2008 to $13.1 million in 2009. The boost was primarily due to a stock option grant and a performance bonus as WellPoint saw its profits surge to $4.7 billion in 2009 as compared to $2.49 billion in 2008.
Back in February, WellPoint came under intense criticism from the White House and Democrats on Capitol Hill after its California subsidiary Anthem Blue Cross announced that it was raising health insurance rates nearly 40 percent for its individual policy owners –individuals whose employer does not offer health insurance, as well as small business owners. This rate increase announcement has been credited for reigniting the health insurance reform debate that led to last week’s historic legislation.
The Indianapolis-based company is the largest health insurer in the nation, based on the number of customers. Blue Cross BlueShield operates in 14 states, including California as well as Unicare in many other states. In California, Anthem Blue Cross insures more than eight million people, 10 percent of which – 800,000 people - hold individual policies. Those increases are due to go into effect on May 1, less 30 days from today.
WellPoint’s public relations people are now borrowing Wall Street’s line that this kind of compensation is needed to keep the “best and the brightest.” Unfortunately, it was Wall Street’s “best and brightest” that brought on near global economic collapse and the deepest recession since the 1930s. Wall Street’s “best and brightest” also required a $700 billion bailout courtesy of the U.S. taxpayer.
As a company that dictates the type of health care millions of Americans receive, and frankly makes its money by denying coverage for life-saving treatments or dropping people when they get sick altogether, WellPoint may want to reconsider mimicking Wall Street’s empty talking point when it comes to executive compensation.
Sometimes imitation is not the greatest form of flattery.