The CEOs of some of the nation’s largest insurance companies raked in tens of millions of dollars each last year, with insurtech leaders easily topping the list in terms of total compensation, according to data published by AIS Health this month.
Clover Health awarded CEO Vivek Garipalli total compensation of $389.6 million, which consisted entirely of equity awards, in 2021, according to AIS Health’s analysis of insurance company documents and regulatory filings.
Since its IPO in January 2021, Clover Health has suffered financially; the company reported a net loss of $75.3 million in the third quarter. As a result, Garipalli is likely to see only a fraction of those stock awards, said Ari Gottlieb, principal at A2 Strategy Group. “You take them for what they are, which is that they are fantastic numbers for fantastic companies,” he said.
Shares of Clover Health closed at $1.13 on Friday, a 93% drop from its initial public offering of $15.30.
Clover Health announced in August that Chairman Andrew Toy would replace Garipalli as CEO on January 1. The company did not immediately respond to a request for comment.
Similarly, Oscar Health awarded CEO Mario Schlosser total compensation of $60.8 million, also largely based on stock awards. The company announced last month that it will exit nearly all Medicare Advantage markets next year.
Oscar Health closed at $2.68 on Friday, a 94% decline since launching its shares in March 2021.
“Our executive compensation program, which includes Mr. Schlosser, follows the same principles that we apply to our broader employee compensation program,” an Oscar Health spokesperson wrote in an email. “It includes a mix of base salary that recognizes their individual roles and responsibilities, an annual bonus tied to our annual goals, and equity grants tied to our longer-term business goals.”
Last year, Bright Health Group CEO Mike Mikan’s total compensation was $180.8 million, about 99% of which was stock and option awards. Bright Health recently raised $175 million to limit its financial losses, which topped $430 million in the third quarter. Shares of Bright Health closed Friday at 82 cents, 95% lower than its $18 IPO in June 2021.
Bright Health, which declined to comment, stands out in that it gave Mikan a $1.3 million bonus despite the company’s woes, and continues to give him more shares, Gottlieb said. .
New companies tend to focus more on equity compensation and be conservative with pay so they can reinvest that money back into the business, said Ed Steinhoff, chief executive of consulting firm Pearl Meyer.
Among traditional insurers, Florida Blue and Centene offered their top executives the highest compensation.
Guidewell Mutual Holding, the holding company of Florida Blue, awarded CEO Patrick Geraghty total compensation of $24.6 million, including base salary of $1.3 million, bonus of $4.8 million and $18.5 million in other compensation, which generally includes additional executive benefits. His compensation increased by 11.5% compared to 2020.
Centene CEO Michael Neidoff, who died in April, received $20.64 million in total compensation last year, including a base salary of $1.8 million and $12.8 million in stock. Neidorff’s compensation decreased by 17.3% compared to the previous year.
Here’s a summary of how much other major health insurance companies paid their CEOs in 2021:
- Molina Healthcare CEO Joseph Zubretsky: $120 million in total compensation; increase of 12.1%; includes $1.5 million in base salary and $15 million in stock.
- Cigna CEO David Cordani: $19.9 million in total compensation; down 0.3%; includes $1.5 million in base salary and $11.8 million in stock.
- Gail Boudreaux, CEO of Anthem: $19.4 million in total compensation; increase of 13.1%; $1.6 million in base salary and $9.9 million in stock
- Andrew Witty, CEO of UnitedHealth Group: $18.4 million in total compensation; 43.4% increase; includes $1.5 million in base salary and $10.8 million in stock.
- Humana CEO Bruce Broussard: $16.5 million in total compensation; increase of 0.2%; includes $1.4 million in base salary and $9.8 million in stock.
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