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MAY 23, 2005
The BW 50: In The Pink Of Health How CEO Larry Glasscock keeps WellPoint so fit
Glasscock, 57, who followed one of Corporate America's more winding career paths to the executive suite, eventually got the Corvette. Now, as chief executive officer of WellPoint Inc. (WLP ), the $45 billion-a-year health-care company that runs Blue Cross Blue Shield Assn. plans in 13 states, he certainly has no trouble providing for his family. Along with his regular pay, which totaled $5.6 million last year, he reaped a $42.5 million stock windfall in 2003 for merging the company he ran, Indiana health insurer Anthem Inc., with WellPoint in California in a complex deal that closed just last fall. Critics lambaste such payouts for health-care executives, calling them offensive when millions of Americans can't even afford coverage. Glasscock responds: "I think the board ties my compensation to what I produce." And Wall Street clearly believes Glasscock has earned his pay: The company's shares have soared from 73 last October to 135. Legg Mason Inc. (LM ) analyst Thomas A. Carroll describes Glasscock as a "nuts and bolts" manager who is avoiding the operational glitches so common in mergers of this size. With its 28.5 million members, WellPoint is now the nation's biggest health insurer; the company ranks 35th on this year's BusinessWeek 50 list of top performers. FOLLOWING ADVICE Glasscock's story is typical in one way: He managed to meet the right people and knew enough to follow their career advice. He was born in tiny Cullman, Ala., and was raised in a Cleveland suburb where his father had found a job in a battery factory. His mother was a waitress who later owned a small restaurant. The eldest of seven, Glasscock grew up in a two-bedroom house; his dad carved out extra rooms in the attic. "'Modest' would probably be a generous word," he says of family finances. In high school, Glasscock worked at a Ball Corp. factory, making rubber seals for containers. Of his later experience installing fences, he says: "I got paid by the foot. You learn about incentives early that way." Genial and self-effacing, Glasscock also had a talent for networking. After he earned a bachelor's degree in business administration from Cleveland State University in 1970, one of the owners of the fence company introduced him to officials at the bank that became Ameritrust and is now part of KeyCorp. Glasscock started out in human resources and worked there four years before being promoted. During that time, a manager saw some potential and began pushing him: As an eager 24-year-old, Glasscock made presentations to the board. "He just never quit learning," recalls John H. Rogers, his first mentor. Glasscock stayed at the bank for two decades, living comfortably, usually at home for dinner with his wife, Lee, whom he met in high school, and daughter and son. In 1987, Glasscock was recruited to serve on the board of a Blue Cross Blue Shield licensee in southern Ohio, an experience that piqued his interest in health care. "GREEDY GOLDEN PARACHUTES" After a few detours, Glasscock was hired to revive a troubled Blue Cross Blue Shield operation in Washington, D.C., merging it in 1998 with a Maryland affiliate of the Blue network. He was then asked to return to the Midwest to help lead Anthem. Running a health insurer, he says, is much like running a bank: "They are customer-oriented businesses. The computer systems are extremely important. And the distribution systems -- while different -- have lots of similarities." As he found in pulling his Blue giant together, there are big differences, too. Take politics. Glasscock sued John Garamendi, California's insurance commissioner, who held up the merger for most of last year. Garamendi, who declined comment for this story, criticized the deal's "greedy golden parachutes," the hundreds of millions WellPoint execs reaped. Glasscock accused Garamendi of playing politics. The commissioner relented only when WellPoint agreed to ante up $265 million to cover more underserved areas and kids. Even though Glasscock took the better-known WellPoint name after the deal, he isn't moving the company out of Indiana. He runs it from offices near Monument Circle in Indianapolis. No battling heavy traffic to get in at 6:30 a.m., and he hopes he'll soon be home for dinner more often. As an industry leader, Glasscock must wrestle with such pressing public issues as serving America's 45 million uninsured, a challenge, particularly for someone who even admirers such as Carroll say isn't "a visionary kind of CEO." As a partial solution, he is championing the $80-a-month insurance developed at the old WellPoint, mostly for those Glasscock calls the "young invincibles," people aged 19 to 29 who choose not to buy coverage even though they could afford it. The company lobbies for tax credits that would encourage small employers to provide coverage. And it wants to educate the nearly one-third of the uninsured who are eligible for government programs but don't sign up for them. WellPoint added 375,000 members last year. But no insurer wants to lose money on poor, chronically ill people who cost more than they pay in. Glasscock will admit there is only so much his company can do: "We need to work collaboratively with the government and our industry and figure out what the right solution is." Glasscock also will be pressed to keep investors as satisfied as they are now. As WellPoint grows, dramatic gains get tougher. Still, critics could go far wrong by underestimating him. After all, nobody has been more surprised about how far he has come than Glasscock himself.  By Joseph Weber in Indianapolis
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