At four newly public startup insurers, CEOs’ total compensation in 2021 easily outstripped pay for executives at large, established payers like UnitedHealth Group and Cigna Corp. But the startups’ filings with federal regulators paint an unintentionally deceiving picture, as the CEOs are highly unlikely to collect hundreds of millions of dollars’ worth of stock awards.
Washington, DC, Dec. 9, 2022 — In AIS Health’s annual roundup of health insurer executive compensation data, four newly public startup insurers stand out. But the stock awards that are largely driving their eye-popping total compensation figures — such as Clover Health Investments Corp. CEO Vivek Garipalli’s $390 million or Bright Health Group, Inc. CEO Mike Mikan’s $181 million — are based in part on the firms’ initial public offering (IPO) stock valuations, which were many times higher than what their shares are now worth. So if Garipalli, for example, could cash in his stock award now, it might be valued closer to $20 million, one executive compensation expert says.
That’s according to Health Plan Weekly, published by AIS Health, the journalism division of Managed Markets Insight & Technology, LLC. (MMIT). The report is based on AIS Health’s annual collection of compensation data from state insurance departments and the Securities and Exchange Commission for the country’s largest health insurance companies by commercial risk enrollment as well as four startup insurers that went public in 2021.
Meanwhile, for the first time since AIS Health began tracking executive compensation in 2018, the CEO of a non-publicly traded Blue Cross Blue Shield affiliate out-earned all of the major public companies’ top executives. Patrick Geraghty, the CEO of Florida Blue and its parent company, GuideWell Mutual Holding Corp., earned $24.6 million in total compensation in 2021, representing an 11.5% year-over-year increase. One reason for his high compensation is an $8.5 million one-time retention bonus that Geraghty earned over the past five years, according to Florida Blue.
Access the full findings from AIS’ Healthcare Executive Compensation Survey.
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Jill Brown Kettler | AIS Health, an MMIT company
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