From Health Plan Weekly
Molina Healthcare, Inc. is pouring
tens of millions of dollars into executive compensation, though the company
reported net losses of $262 million for the fourth quarter and $512 million for
full-year 2017.
The company founder's two sons — J. Mario Molina, M.D., former president and CEO, and John C. Molina, former chief financial officer, both ousted from Molina's board in May 2017 — left with large payouts, including combined severance payments with a total value topping $33 million.
Lisa Rubino, Molina's former senior vice president of Medicare and duals integration, who was "terminated without cause," and Terry Bayer, Molina's former chief operating officer, who retired this year, also received significant payments.
"The severance provisions for the Molina brothers are quite generous, most notably the provision for accelerated vesting of performance-based awards for which the performance targets were not met," says David Tsui, assistant professor at the University of Southern California.
Molina's new president and CEO, Joseph Zubretsky, is making more in total compensation than Anthem, Inc.'s new president and CEO, according to Anthem's preliminary proxy statement. The annual base salary for Zubretsky is $1.3 million. The compensation committee also will pay him a lump sum of $4 million in cash as a sign-on bonus.
Tsui says the compensation for Zubretsky does not strike him as unusual, as it is common for new CEOs to receive relatively large one-time bonuses for reasons like improving incentive alignment with shareholders, compensation for the lost opportunities at previous employers, etc.
He also notes that it is difficult to compare first-year compensation between new CEOs because of differences in the one-time bonuses or grants.
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