Health Plan Execs Receive Smaller Bonuses as Companies Push Performance-Based Pay, Health Plan Week Reports; Hanway Tops Others in Total Compensation

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Health Plan Week offers detailed compensation information from more than a dozen health plans, and includes tables showing the top-paid executives.

CEOs from several publicly traded health plans saw substantially smaller cash incentives in 2007 as compensation committees placed greater emphasis on performance-based awards, according to AIS's Health Plan Week (HPW). The May 12 HPW issue offers detailed information from more than a dozen health plans, and includes tables showing the top-paid executives. To access this data, visit http://www.aishealth.com/ManagedCare/CompanyIntel.html.

UnitedHealth Group President and CEO Stephen Hemsley saw his annual base pay increase to $1.3 million in 2007 from about $1 million the previous year, according to HPW's analysis of the company's proxy statements. However, his stock-option awards dropped from $11.3 million in 2006 to $8.1 million in 2007, and his total compensation fell from $15.5 million to $13.2 million.

The newsletter also reports that CIGNA Corp. Chairman and CEO H. Edward Hanway was the top-paid health plan executive in 2007 with total compensation of nearly $26 million. While his stock awards fell from nearly $2 million in 2006 to $453,000 last year and his option awards decreased from about $6.0 million to $4.6 million, his bonus, which includes non-equity incentive plan compensation, soared from $11.2 million in 2006 to nearly $18 million. According to CIGNA's proxy statement, Hanway's total 2007 compensation was $25.8 million -- up from $21.0 million a year earlier.

Other top-earning health plan leaders, according to HPW, include Aetna Inc. CEO Ron Williams, who received cash incentives of $1.9 million in 2007, down substantially from the $7.7 million he received in 2006. Williams, however, received $12.8 million in stock-option awards in 2007, which was more than double what he received in 2006. Overall, his total compensation in 2007 was $23.0 million -- up from the $19.8 million reported for a year earlier.

Executive compensation figures for these health plan executives and others are available at http://www.aishealth.com/ManagedCare/CompanyIntel.html. All compensation figures are based on data reported in the company proxy statements and 10-K forms filed with the U.S. Securities and Exchange Commission.

Health Plan Week, formerly called Managed Care Week, is a subscription newsletter, published by Atlantic Information Services, Inc. (AIS), and is in its 18th year as the market leader in independent business news coverage and analysis of the health insurance industry.

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