Publicly Traded Health Insurer CEOs Score Big Paydays

From Health Plan Weekly

Centene Corp. CEO Michael Neidorff easily beat his nearest competitors for the fourth year running to become the top-compensated publicly traded health insurer CEO in 2017, earning $25.3 million.

Newly appointed Molina Healthcare, Inc. CEO Joseph Zubretsky came in second in the rankings, earning $20.9 million in total compensation for 2017. Humana Inc. President and CEO Bruce Broussard dropped from second to third place in the 2017 rankings with earnings of $19.8 million last year.

Paul Conley, a consultant at Willis Towers Watson, says that publicly traded company in all sectors are focusing more on stock performance when determining CEO and executive pay. "The companies’ focus has been on shareholder value," he says.

In fact, Centene said it awarded high total compensation to Neidorff to mirror growth in overall shareholder return.

Following Humana Inc. President and CEO Bruce Broussard in third place was Aetna Inc. Chairman and CEO Mark Bertolini in fourth, with $18.7 million in take-home pay for 2017. Cigna President and CEO David Cordani took home $15.3 million, placing him fifth on the list.

"Longer-term trends are pretty similar to the executive labor market as a whole — generally rising levels of pay and increasing emphasis on at least nominal pay-for-performance for both cash and equity awards. Last year’s tax reform removed many of the tax advantages of awarding performance-based pay so it will be interesting to see to what extent this trend continues," says David Tsui, assistant professor of accounting at the University of Southern California.

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