The Obscene Salary of A Private Medical Insurance Company CEO

Angela Braly: WellPoint CEO Pay Jumps By 51 Percent
| 04/ 2/10 04:40 PM |

NEW YORK — The president and CEO of health insurer WellPoint Inc. received a 51 percent boost in compensation in 2009, mainly on larger grants of stock options and a performance bonus as profit and shares gained ground.

Angela Braly's overall compensation rose to $13.1 million from $8.7 million in 2008, according to a filing with the Securities and Exchange Commission on Friday. Her salary rose less than 1 percent to just over $1.1 million. She received a performance bonus of $1.5 million, a sharp jump from $73,810 a year prior.

The bulk of her compensation came from a 40 percent boost in restricted stock and stock options, totaling just under $10.2 million. The boost came as the company's stock price steadily gained ground over the year, closing 38 percent higher at $58.29.

Profit also surged in 2009 to $4.75 billion, or $9.88 per share, from $2.49 billion, or $4.76 per share, because of the sale of its NextRx subsidiary to Express Scripts. Even without the sale, the company said it would have earned $6.09 per share.

During the year, the value of Braly's perks rose 72 percent to $292,036, mainly on higher security costs for Braly as the debate over the health care overhaul became more and more heated.

WellPoint, based in Indianapolis, became a focal point for debate in February after complaints spread about planned rate hikes that average around 25 percent for individual insurance policies sold by the insurer's Anthem Blue Cross subsidiary in California.

The Obama administration criticized the increases and used them to re-ignite its push for reform, which passed Congress and was signed into law last month. Administration officials criticized the insurer for asking for such steep rate increases when it made a profit of $2.7 billion in the final quarter of 2009.

Braly, who testified before Congress about the rate hikes, and other WellPoint officials have said the soaring cost of medical care and the weak economy, which pushes healthy people to drop coverage, spurred the rate increases. They said WellPoint actually lost money on its California individual insurance business.

The company also noted that its profitable 2009 was stoked by the $2.2 billion it received from the sale of NextRx.

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Braly has been CEO of WellPoint since May 2007. WellPoint, the largest health insurer based on enrollment, operates Blue Cross Blue Shield plans in 14 states and Unicare plans in several others.

The Associated Press formula for compensation 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, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.