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WellPoint Inc.'s earnings sank last year, as the health insurer struggled with losses in its Medicare Advantage business, and the total compensation delivered to Chairwoman and CEO Angela Braly slipped as well.
Braly, 50, received 2011 compensation valued at $13.2 million, according to an Associated Press analysis of the Indianapolis company's annual proxy statement. That represents a 2 percent drop compared to 2010.
Braly, who has served as CEO for nearly five years, received a $1.1 million salary in 2011, a total that has stayed flat since 2008. Her compensation also included a performance-related bonus of nearly $1.9 million, stock and option awards totaling about $10 million and $216,279 in other compensation.
That included $7,939 spent on security measures for Braly and her family due to concerns about her safety "as a result of the national health care debate," according to the proxy, which was filed Monday afternoon with the Securities and Exchange Commission.
Health insurers have been targeted for criticism in recent years for churning out large profits and giving their top executives big compensation hikes while the cost of insurance for many people continues to outpace inflation and wage growth. Insurers have said executive compensation makes up a small part of their total expenses, and the biggest driver behind the growing premiums for their coverage is the spiraling cost of health care.
WellPoint runs Blue Cross Blue Shield plans in 14 states and is second only to UnitedHealth Group Inc. in both revenue and enrollment. The insurer earned $2.65 billion, or $7.25 per share, last year on $60.71 billion in total revenue. It also initiated a quarterly dividend that currently stands at 28.7 cents per share.
WellPoint's earnings fell in the final three quarters of last year compared to 2010, capped by a 39 percent drop in the fourth quarter. In total, the insurer's earnings sank 8 percent compared to 2010.
Slower growth in health care use helped the performance of many insurers last year, as they paid out fewer claims than they expected when they set premiums. But WellPoint also took a $150 million hit from its Medicare Advantage business.
Medicare Advantage plans are privately run, government-subsidized versions of the government's Medicare program for the elderly. The insurer took losses when a Northern California plan attracted more customers with a higher risk profile than it expected because a competitor left the market. WellPoint has since discontinued the plan.
That performance didn't turn off investors. The insurer's stock price climbed 17 percent last year to close 2011 at $66.25, while the Standard & Poor's 500 index was largely flat. The price of WellPoint shares has climbed another 10 percent since the start of 2012.
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 SEC.
Braly also made about $6.9 million last year mostly from previously awarded restricted stock units that had vested. That total was not included in her compensation for 2011.