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HomeHealthHealth careInsurtech CEOs compensated more than their legacy insurer peers

Insurtech CEOs compensated more than their legacy insurer peers

CEOs at a number of the nation’s largest insurance coverage corporations raked in tens of hundreds of thousands of {dollars} apiece final yr, with insurtech leaders simply topping the checklist by way of complete compensation, based on information AIS Health revealed this month.

Clover Health awarded CEO Vivek Garipalli with $389.6 million in complete compensation, which consisted totally of inventory awards, in 2021, based on the AIS Health evaluation of insurance coverage firm paperwork and regulatory filings.

Since going public in January 2021, Clover Health suffered financially; the corporate reported a web lack of $75.3 million within the third quarter of this yr. As a consequence, Garipalli will seemingly solely see a fraction of these inventory awards, mentioned Ari Gottlieb, principal at A2 Strategy Group. “You take them for what they are, which is: These are fantasy numbers for fantasy companies,” he mentioned. Clover Health shares closed at $1.13 on Friday, a 93% plunge from its $15.30 preliminary public providing.

Clover Health introduced in August that President Andrew Toy will replace Garipalli as CEO on Jan. 1. The firm didn’t instantly reply to a request for remark.

Similarly, Oscar Health awarded CEO Mario Schlosser with $60.8 million in complete compensation, additionally largely primarily based on inventory awards. The firm introduced final month that it could exit almost all Medicare Advantage markets subsequent yr. Oscar Health closed at $2.68 Friday, a 94% decline since its shares debuted in March 2021.

“Our executive compensation program, which includes Mr. Schlosser, follows the same principles we apply to our broader employee compensation program,” an Oscar Health spokesperson wrote in an e mail. “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.”

Bright Health Group’s compensation bundle for CEO Mike Mikan final yr was $180.8 million, about 99% of which had been inventory and possibility awards. Bright Health recently raised $175 million to curb its monetary losses, which exceeded $430 million within the third quarter. Bright Health shares closed Friday at $0.82, 95% decrease than its $18 IPO in June 2021.

Bright Health, which declined to remark, stands out in that it awarded Mikan a $1.3 million bonus regardless of the corporate’s woes, and continues to present him extra shares, Gottlieb mentioned.

Newer corporations are inclined to focus extra on fairness compensation and be conservative on wage to allow them to reinvest that money into the enterprise, mentioned Ed Steinhoff, managing director at consulting agency Pearl Meyer.

Among legacy insurers, Florida Blue and Centene provided their prime executives the very best compensation.

Guidewell Mutual Holding, the holding firm for Florida Blue, awarded CEO Patrick Geraghty $24.6 million in complete compensation, together with a $1.3 million base wage, a $4.8 million bonus and $18.5 million in different compensation, which usually consists of further govt advantages. His compensation grew 11.5% from 2020.

Centene CEO Michael Neidorff, who died this April, was awarded $20.64 million in complete compensation final yr, together with a $1.8 million base wage and $12.8 million in inventory awards. Neidorff’s compensation declined 17.3% from the prior yr.

Here is a abstract of how a lot different giant medical health insurance corporations compensated their chief executives in 2021:

  • Molina Healthcare CEO Joseph Zubretsky: $120 million in complete compensation; 12.1% improve; consists of $1.5 million in base wage and $15 million in inventory awards.
  • Cigna CEO David Cordani: $19.9 million in complete compensation; 0.3% lower; consists of $1.5 million in base wage and $11.8 million in inventory awards.
  • Anthem CEO Gail Boudreaux: $19.4 million in complete compensation; 13.1% improve; $1.6 million in base wage and $9.9 million in inventory awards
  • UnitedHealth Group CEO Andrew Witty: $18.4 million in complete compensation; 43.4% improve; consists of $1.5 million in base wage and $10.8 million in inventory awards.
  • Humana CEO Bruce Broussard: $16.5 million in complete compensation; 0.2% improve; consists of $1.4 million in base wage and $9.8 million in inventory awards.
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